Audit report flags ₹5-crore cash fraud in Anna University, calls for probe

February 29, 2024 12:53 am | Updated 07:33 pm IST - CHENNAI

A special audit report on the accounts of the Anna University’s University College of Engineering in Kancheepuram (UCEK) has found the “fraudulent withdrawal” of ₹5 crore through the forgery of cheques/documents reportedly by contract staff. This has been attributed to the “gross negligence” of the University officials.

The Consolidated Audit Report of the Director General of Audit/Director of Local Fund Audit Department for 2021-22 - Part III (Universities and Miscellaneous Institutions) was tabled in the Assembly last week.

As per the report, “connivance” of all officials, including the bank officials, could not be ruled out. The report called for a detailed criminal investigation.

“Sheer negligence” on the part of various officials authorised to operate the bank accounts; failure to maintain the cashbook in proper form; failure to periodically prepare the bank reconciliation statement; “carelessness” in keeping the cheque books and fixed deposit bonds enabled the perpetuation of fraud to the tune of ₹500.40 lakh, the report said.

The audit report analysed UCEK’s two accounts between 2018-2019, and 2022-2023, and found that “unauthorised payments were made to unconnected individuals” through the chequebook available with the contractual staff, and by “forging the signatures of authorised signatories.”

The expenditure sanctioned by authorities for issuing cheques to eligible persons/service providers were misappropriated by issuing them to “unknown individuals” - either for the same amount or splitting the amount into smaller amounts totalling to the sanctioned expenditure by forging the signatures of authorised officials.

A sum of ₹23.49 lakh for 2021-22 and 2022-23, sanctioned by and received from the Tamil Nadu government for the implementation of 7.5% preferential allotment of seats to students who have studied from Classes VI-XII in State government schools for admission into various colleges and universities, were received and kept in an account.

Before transferring this amount to the University General Fund Account and Hostel account of the eligible students, the same was misappropriated by issuing cheques with forged signature to various unknown individuals, the report said.

The fixed deposit held by the University with ₹1.30 crore was pre-closed unauthorisedly by the contract staff by issuing forged letters of pre-closer in the name of the warden in the hostel account. “This was done without any authorisation by the competent authorities,” the report noted.

Though there were enough warnings indicating the lapses in the maintenance of records relating to financial transactions, the University “did not take cognisance of those lapses”, and “no measures were taken to tightly monitor the activities relating to finance,” it said.

The report said that its observation was sent to the Registrar, Anna University. “No reply has been received yet”, it said.

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