At least 128 solar power plants installed at a cost of Rs 9.70 crore on police establishments in Jammu and Kashmir have been defunct since 2014. The reason: the spare parts needed to repair them were impounded by the Commercial Taxes Department because tax was not paid on them by the Home Department. The problem has been unresolved since January 2015.

More than 1.3 lakh ration cards printed by the Food Civil Supplies and Consumer Affairs department between 2015-’18 were not distributed among consumers, costing the public exchequer Rs 1.07 crore. They were valid only until June 2018, so cannot be distributed now.

These are just two of the many instances of failures of governments of the erstwhile state pointed out by the Comptroller and Auditor General of India in its latest audit findings relating to Jammu and Kashmir.

These instances are part of the report on “Social, General, Economic and Revenue sectors” for the year ending March 31, 2019. It was tabled in the Parliament in March.

While the audit was carried out in 2018-’19, it includes instances from earlier years that had not been reported in the previous reports. In August 2019, Jammu and Kashmir was downgraded from being a state and given the status of a Union Territory. It is now headed by a lieutenant governor.

Scroll.in examined some of the key instances highlighted by the report.

Non-existent schools

Over the past ten years, Jammu and Kashmir’s education department has not established a single secondary school in educationally backward areas of the erstwhile state despite having the funds available.

In 2008, a Central government scheme to establish at least one quality secondary school in every Educationally Backward Block was launched across India. The scheme, implemented in the Jammu and Kashmir from 2009, was financed by the Union government in the ratio of 90:10 – the state government had to put in only 10% of the funds.

The first instalment of Rs 25.82 crore of the grant-in-aid from the Central government was released in February 2010. In June that year, the state government released its own share of Rs 2.87 crore for the project. In December, 2010, the entire amount of Rs 29.23 crore, including interest of Rs 54 lakh, was put at the disposal of J&K Noor Society – the state body implementing the scheme, which was known as the Rashtriya Madhyamik Shiksha Abhiyan.

Ten years after the scheme was launched, not a single school had been established in Jammu and Kashmir. By the end of December 2018, the total unutilised amount under the scheme had shot up to Rs 44.13 crore, including an interest of Rs 12.57 crore that had accumulated on the amount in the savings bank account of J&K Noor Society since 2010.

According to the audit report, the failure of the education department to take timely action to use the funds to establish “model schools” resulted in the intended beneficiaries being deprived of “quality education...and non-utilisation of total available funds of Rs 44.13 crore”.

The report has recommended the Jammu and Kashmir government refund the unutilised amount to the Central government and fix responsibility for the scheme not being implemented effectively.

Undisbursed relief

The audit is equally critical of the Jammu and Kashmir government’s finance department. Under the Jammu and Kashmir Financial Code, for a government department to withdraw funds from the government treasury, its Drawing and Disbursing Officer is required to submit bills and claims to the Treasury Officers. Once the bills and claims are cleared, the funds from the Treasury are transferred into the bank accounts of the Drawing and Disbursing Officer.

After receiving the funds, the DDO makes payments to the bank accounts of beneficiaries by issuing an official notice of a transaction to the bank known as Bank Advice.

According to Jammu and Kashmir Financial Code, funds should be withdrawn from the Treasury only when they are required for immediate disbursement. The code prohibits funds to be withdrawn in order to avoid budget grants lapsing.

In addition, according to instructions issued by the finance department on December 9, 2016, all bank accounts of Drawing and Disbursing Officers of a government department that had a zero balance on the date the instructions were issued and which had been inoperative for more than two years were to be closed with immediate effect.

In case a Drawing and Disbursing Officer’s bank account had been inoperative for more than two years but had a positive cash balance, the account was to be closed and the money was to be transferred to the official bank account of the Finance Secretary, of the Jammu and Kashmir government.

These instructions were certainly not adhered to. While auditing 1,138 bank accounts of 131 Drawing and Disbursing Officers of three selected government departments, the audit found that the amount of accumulated balances in these accounts had risen from Rs 116.41 crore in 2014 to Rs 399.94 crore in 2019.

The audit gives several examples where the funds meant for different beneficiaries were not disbursed and accumulated in Drawing and Disbursing Officers’s accounts.

It pointed to the case relating to compensation for the victims of the 2014 floods that wreaked havoc in Jammu and Kashmir. Five years after the floods, in March 2019, an amount of Rs 5.48 crore meant for the victims was undisbursed.

“Scrutiny of the records [in February 2019] revealed that compensation payments had not been credited into the bank accounts of the beneficiaries due to incomplete/ incorrect details communicated to the Bank by eight DDOs out of 58 DDOs of the Revenue Department selected for test check,” the audit report said.

Lack of accountability

At least ten autonomous bodies falling under the purview of the Comptroller and Auditor General of India had not furnished the annual accounts to the body to be audited, the report said.

Two autonomous bodies of the erstwhile state of Jammu and Kashmir – the Ladakh Autonomous Hill Development Council and the Leh and Ladakh Autonomous Hill Development Council, Kargil – have not submitted their annual accounts to the auditor since they were constituted. The Ladakh development council was set up in 1995 and the Leh and Ladakh hill council in 2005 in response to the region’s demands for greater autonomy from Kashmir.

“Non-submission/delay in submission of accounts by these bodies receiving substantial funding from the State Budget is a serious financial irregularity persisting for years,” the audit report said.

In 2018-’19 alone, both the councils received a total amount of Rs 1,144.19 crores as grants. By failing to present their audited accounts, the state legislature has been deprived “of the opportunity to assess their activities and financial performance”, the audit report notes.

The auditor is not either impressed by the functioning of regular government departments as well. Based on the results of the audit, 49,523 audit observations/paragraphs recorded in 11,531 Inspection Reports were pending on March 31, 2019.

The instructions laid down by the government direct the heads of the departments/authorities to provide prompt response to the Inspection Reports issued by the Principal Accountant General (Audit).

However, the fact that responses are pending to a large number of audit observations indicated lack of “adequate response” of the government departments to the audit.

“The government may look into this matter and revamp the system to ensure proper response to the audit observations from the Departments in a time-bound manner,” the report recommended.

Losses on every front

In its performance audit section, the report paints a grim picture of one of the oldest government-owned undertakings, the Jammu and Kashmir State Road Transport Corporation. With a total financial implication of Rs 737.57 crore, the audit of the 45-year-old corporation for the period of 2014-2019 “brought out instances of certain deficiencies in planning, operational performance, internal controls etc”.

The audit report noted that the corporation registered a 33% increase in losses between 2014-’19 despite an additional capital infusion of Rs 41 crore in that period. From registering a loss of Rs 1,229.56 crores in 2014, the corporation, which was set up for the transport needs of the public and goods in the erstwhile state, recorded a loss of Rs 1,639.01 crore in 2019.

Likewise, the corporation also failed to improve the availability of its vehicles to the public. Despite the addition of new 142 vehicles between 2014-2019, the strength of the overall fleet of the corporation decreased by 133 vehicles. In addition to that, 40% to 62% of the corporation’s fleet consisted of aged vehicles which as per government’s own norms are due to be scrapped.

The corporation was also unable to properly utilise its manpower, bleeding the public exchequer massively. “Services of drivers/conductors were not utilised effectively, as the drivers/conductors remained attached with the vehicles detained at workshops despite the required staff available at the workshops, resulting in payment of Rs 44.95 crore to staff remaining idle,” the auditor said.