CAG highlights NRHM irregularities in Uttar Pradesh

Funds worth Rs. 1768.12 crore were not shown in State Health Society accounts, says report

In a damning indictment of large-scale financial irregularities in the implementation of the National Rural Health Mission (NRHM) scheme in Uttar Pradesh during the erstwhile Mayawati regime, the Comptroller and Auditor-General (CAG) has noted that funds worth Rs. 1768.12 crore received from the Centre “through the treasury route” were not shown in the accounts of the State Health Society (SHS).

The CAG found that funds totalling Rs. 1546.09 crore for undertaking civil construction works and procurement of kits and vehicles during 2008-11 were released through an unauthorised agency, which was allegedly set up in violation of NRHM norms.

Difference in accounts

The State government did not take strong steps to ensure an effective sanctioning procedure. The executive committee of the SHS became all powerful in matters relating to purchases. Only one Principal Secretary-level officer (Principal Secretary, Health and Family Welfare) was involved in deciding high value contracts, against three such officers, including the Finance and Planning departments in the Expenditure Finance Committee, before Cabinet approval, the CAG said in a report.

The report for the year ending March 31, 2011, tabled in the Legislative Assembly here on Wednesday, said the total expenditure on NRHM schemes between April 1, 2005 and March 31, 2011 was Rs. 8657.35 crore. But the “accounts of the SHS did not reflect a fair representation of the financial activities of the NRHM.” The CAG detected a difference of Rs. 358.18 crore between receipts of funds from the Centre and that acknowledged by the SHS.

The NRHM is funded by the Centre and Uttar Pradesh in the ratio of 85:15, with the State Health Mission (SHM) headed by the Chief Minister authorised to achieve its goals. The programme was implemented by the SHS and the State Programme Management Unit (SPMU) through district health societies and ‘Rogi Kalyan Samitis.'

The report says prescribed books of accounts for advances disbursed by the SHS and for expenditures of Rs. 4938.74 crore were not maintained. As a result, the “correctness of such amounts booked in accounts, along with an outstanding advance of Rs. 816.71 crore, was not ensured.” Deficient accounting and loose financial controls led to “financial mismanagement with aggregate impact of Rs. 396.63 crore.”

Money for undertaking civil works and procurement under the scheme was released not to the executing agencies, but to the unauthorised agency. The CAG found that Rs. 1546.09 crore for civil works and procurement during 2008-11 was released by the SHS through the Programme Management Society, an unregistered society, under the Director-General, National Programmes, Monitoring and Evaluation (DGNPME).

Eyebrows have also been raised on the selection and award of NRHM works on a nomination basis. The report says this was in violation of a Supreme Court judgment, the guidelines framed by the Central Vigilance Commission and the NRHM framework.