55.52% of Haryana's XV-FC grant activities not initiated, CAG finds

This audit examined the financial management and service delivery of Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs) in Haryana for the period ended March 2024, with a specific focus on the utilization of Fifteenth Finance Commission grants.

Who it concerns: Government of Haryana, specifically Panchayati Raj Institutions (Zila Parishads, Panchayat Samitis, Gram Panchayats) and Urban Local Bodies (Municipal Corporations, Councils, and Committees).

What the auditor found

• Under-utilization of XV-FC grants: PRIs utilized only ₹ 1,338.07 crore (58.71%) out of ₹ 2,278.95 crore transferred during 2021-24.
• Irregular procurement: ₹ 6.90 crore in procurement bypassed mandatory e-tendering and prescribed procedures.
• Inadmissible expenditure: ₹ 1.73 crore was incurred by PRIs out of XV-FC grants.
• Non-compliance with guidelines: Tied grants of ₹ 5.27 crore were released despite non-preparation of prescribed development plans.
• Deductions for non-developmental activities: ₹ 1.91 crore was deducted from XV-FC grants by Block Development and Panchayat Officers.
• Missing Utilisation Certificates: ₹ 144.66 crore in Utilisation Certificates were not submitted by PRIs as of March 2024.
• Withdrawal by ex-Sarpanches: ₹ 23.77 lakh was withdrawn from XV-FC grants by ex-Sarpanches despite dissolution of Panchayats.
• Manpower shortages: ULBs had only 23.87% of sanctioned regular posts filled; PRIs had 41% shortfall in Zila Parishads and 20% in Panchayat Samitis.
• Service delivery failures: Non-functional street lighting in 6 of 8 inspected sites in Fatehabad; non-maintenance of public toilets; and improper solid waste management.

Also in the document

• CAG found that 55.52% (2,365) of the 4,260 activities planned under XV-FC grants were not initiated, and 15.96% (680) were abandoned.
• CAG reported that PRIs accounts are largely maintained manually, with audit coverage by the Director, Local Audit being negligible (no audits for Zila Parishads and Panchayat Samitis, and only 22-30% of Gram Panchayats audited).
• CAG noted that ₹ 3.95 crore in payments were made to vendors through intermediary bank accounts, reducing transparency.