61 cases of misappropriation awaiting action for years in Karnataka: CAG report

Bengaluru: Even as embezzlement at the ST Development Corporation is under investigation, a Comptroller & Auditor General (CAG) report revealed on Tuesday that the Karnataka government has not concluded 61 cases of misappropriation or theft, some of which are 25 years old.

These 61 cases involve misappropriation amounting to Rs 42.88 crore of taxpayers’ money. According to the CAG, 39 of these cases are awaiting departmental and criminal investigation. In 19 cases, departmental action was initiated but not finalised. Only three cases have seen finalisation of criminal proceedings, but money is yet to be recovered.

“Further, in 15 cases of theft, misappropriation, loss of government materials and defalcations, departmental action was pending for more than 25 years”, the CAG said in its State Finance Audit report for the year ended March 2023, which was tabled in the Assembly.

The CAG also pointed to “inadequate internal control as well as monitoring mechanisms” in the government. “In spite of the finance department issuing instructions to administrative departments to furnish audit information on institutions substantially financed by the government, there was increase in the number of institutions not furnishing the required information (sic)”, it said.

Inoperative PD accounts

The audit found Rs 562 crore parked in 18 inoperative personal deposit (PD) accounts. In total, there were 29 inoperative accounts in 2022-23. According to the CAG, 21 of these PD accounts were inoperative since 2011-12.

PD accounts should not have negative balances, the CAG said. “There were, however, 12 PD accounts with negative balances amounting to Rs 5,963.79 crore”, it said.

Returns on investments

In 2022-23, the government invested Rs 72,799.77 crore. The returns were Rs 425.33 crore.

The government told the audit that it does not expect returns for every investment as money is spent in public interest to provide benefits like infrastructure, employment creation etc.

However, the government invested Rs 43,211 crore in loss-making companies such as NWKRTC, KKRTC and KSFC.

State PSUs

As of March 2023, Karnataka had 127 state public sector undertakings (PSU). As many as 60 of them had accumulated losses of Rs 46,814.47 crore. Of these, the net worth of 40 PSUs had been “completely eroded”, the CAG said. At least 56 of all PSUs incurred losses as per their latest accounts.