The Accountant General (AG) has found that several “loss-making” Public Sector Units (PSUs) in the State routinely paid undue incentives to employees. No economic or legal criteria justified the extra payments and they put the State’s finances under considerable strain.
In a communique to the government, Amar Patnaik, Principal Accountant General (PAG - Economic and Revenue Sector Audit), said the “irregular” payments were made “disguised” as “performance allowance or production incentive” to circumvent the provisions of the Bonus Act, 1965, and relevant government orders.
He asked the government to “act tough” on the chief executives and head of finance wings who authorised such illegal payments. The PAG demanded that they be held personally responsible for the misspending of public funds and the money recovered from them.
A recent audit by the PAG had thrown light on how loss-making PSUs paid incentives to its employees in gross violation of laws. His auditors found that the worst violators in the category were the Kerala State Road Transport Corporation, Kerala Handicraft Development Corporation, Kerala Small Industries Development Corporation, and Kerala Bamboo Corporation.
“These PSUs” routinely approached the government for ratification after the undue payments had been disbursed.
The government, out of its moral obligation to PSU employees, would ratify the ex gratia payments as “special cases.” It would also routinely issue a token direction to the PSUs to comply with the provisions of the Bonus Act in the “future.”
However, the PSUs would ignore the direction and make the same undue payments the next year and again approach the government for ratification.
The PAG found that the Finance Department’s views were not sought or often “over-ridden” to authorise the irregular payments.
For example, in the case of the KSRTC, the Finance Department told the PAG that “since the KSRTC is a loss-making unit, no sanction has been accorded to pay performance allowance to its employees nor ratified the action of the Administrative Department in this regard.” But still the money was disbursed.
Auditors said the continuing cycle of irregular payments should be halted.
