CAG finds ₹21.41 crore misappropriated at Export Inspection Agency, Chennai

This audit examined the compliance of accounts and records for six Economic and Service Ministries of the Union Government and their Central Autonomous Bodies for the period ended March 2024, with specific findings covering 2022-23 and 2023-24.

Who it concerns: Ministry of Commerce and Industry, Ministry of Housing and Urban Affairs, Ministry of Micro, Small and Medium Enterprises, Ministry of Petroleum and Natural Gas, Ministry of Textiles, and Ministry of Tourism, along with their attached offices and Central Autonomous Bodies.

What the auditor found

• Misappropriation of ₹21.41 crore at Export Inspection Agency, Chennai, where cheques were drawn for private parties without receipt of goods or services.
• Non-recovery of ₹1.69 crore in user fees and loss of financial interest in assets worth ₹5.45 crore by Alappuzha Coir Cluster Development Society due to violation of scheme guidelines.
• Avoidable expenditure of ₹2.41 crore by Spices Board, Kochi, due to high power demand contracts and low power factor penalties.
• Undue benefit of ₹7.69 lakh to the Executive Director of Footwear Design and Development Institute, Chennai, through fake invoices, forged tickets, and unauthorized claims.
• Irregular payment of ₹6.91 crore in electricity duty by CPWD, Ghaziabad, despite constitutional exemption, which is currently being pursued for refund or adjustment.
• Overestimation of project costs by CPWD by ₹513 crore (2017-2024) due to incorrect calculation of Contractor’s Profit & Overhead including GST.
• Avoidable expenditure of ₹44.28 crore by CPWD in Delhi projects due to improper estimates and payment of new items at market rates.
• Recommendations include conducting market surveys for Schedule of Rates, preparing region-wise rates instead of using Delhi rates, and realistic assessment of labor components.

Also in the document

• CAG reported a misappropriation of ₹21.41 crore at the Export Inspection Agency in Chennai, citing cheques issued to private parties without corresponding goods or services received.
• CAG found that CPWD overestimated project costs by ₹513 crore between 2017 and 2024 due to a calculation error in profit and overhead charges that included GST.
• CAG identified avoidable expenditure of ₹44.28 crore in CPWD Delhi projects resulting from improper estimates and the execution of new work items not in the original agreement.