Tuesday, May 30, 2023

CAG detects financial irregularities in departments

Comptroller and Auditor General (CAG) report, which was tabled on the last day of the first session of the 14th Nagaland Legislative Assembly (NLA), detected financial anomalies in departments including fraudulent/excess drawal of money in finance department (treasuries & accounts), evasion of Nagaland Value Added Tax in finance (taxation) department, loss of revenue due to non-renewal of licence in finance department (Nagaland state lotteries) and default in payment of motor vehicle taxes in the Motor Vehicles Department.
Finance department (treasuries & accounts): CAG report stated that failure of the drawing and disbursing officers and treasury officers to exercise prescribed checks resulted in fraudulent/double/ excess drawals amounting to Rs2.78 crore. It pointed out that test check of pay bill vouches of various departments by Audit revealed that 28 DDOs of 17 departments had misappropriated Rs.2.78 crore by fraudulently drawing pay and allowances. The money was withdrawn by inflating the net total of pay bills, double drawal of pay and allowances, arrears, etc in violation of the prescribed Financial Rules.
In this regard, CAG has recommended that the state government probe all such matter of all the departments. It also recommended initiating disciplinary action against the erring officers responsible for the fraudulent drawls.
Motor vehicles department: CAG found out that the department failed to invoke the provisions of Nagaland Motor Vehicles Taxation Act, 1967 and Nagaland Passengers and Goods Taxation Act, 1967 to recover the outstanding motor vehicles tax from vehicle owners resulting in shortfall of tax collection to the tune of Rs.9.37 crore.
According to the report, the Public Accounts Committee (PAC) had recommended the department to take action against the defaulting vehicle owners. However, despite the recommendation, CAG detected that during scrutiny (September 2021) of VAHAN portal in respect of Nagaland, out of the 1,33,377 vehicles registered under eight regional/district transport offices during 2016-21, 12,050 vehicles defaulted in payment of Motor Vehicle Tax and Goods/Passengers Tax.
Default in payment of Motor Vehicle Tax and Goods/Passengers Tax by 12,050 vehicles amounted to Rs.9.37 crore as on March 31, 2021, the report stated.
CAG recommended that the department make effective use if the VAHAN software for detection of tax defaulters and invoke the relevant provisions of the Acts/Rulesa and recover the tax dues from the defaulters.
Finance (Taxation) Department: CAG detected that 21 dealers evaded Nagaland Value Added tax of Rs.4.59 crore by utilising invalid/obsolete C Forms. In addition, an amount of Rs.7.90 crore was also payable by them as penal interest, the report stated.
CAG recommended the government to instruct the department to realise the amount and initiate action against the officials whose negligence led to short realisation of revenue.
Further CAG found out that three dealers defaulted payment of tax amounting to Rs.2.23 crore and were also liable to pay interest of Rs.1.62 crore. CAG recommended that assessing authorities exercise due diligence while assessing the self-assessed returns submitted by the dealers to avoid evasion of tax. It also suggested initiating time hound recovery of the tax and penally in those and monitoring at higher levels.
Finance department (Nagaland State Lotteries): CAG detected that the State lotteries sustained revenue loss of Rs.2 crore due to flaws in implementation of the Nagaland Prohibition of Gambling and Promotion and Regularisation of Online Games of Skill Rules, 2016.
The report stated that royalty receivable by the state government also remained un-assessed as the active licensees neither maintained the designated accounts nor the department had any technical expertise to monitor and analyse the gross revenue of the licensees.
CAG recommended the state government to take legal steps in any Court of Law to stop the illegal operation of online games without renewing the licences. It also asked the government to ensure that the licensees maintain designated accounts to resist the drainage of State revenue.
Further, CAG recommended recovering the licence fee and penalty from defaulting license holders and also ensure that the department utilised the latest technology and technical expertise to analyse the gross revenue of the licensees earned from the online games of skill.


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