Guntur: On the use of special bills by the State government, the Comptroller and Auditor General of India (CAG) has observed that the treasury system is part of the internal control framework of the financial management.In its report on State Finances Audit for the year ending March 2021,
CAG said while an internal control framework exists, the operation of special bills reflects the failure of internal controls in expenditure management.
CAG recommended the operation of special bills through the back-end of the CFMS bypassing the controls of the treasury system be stopped immediately and all the transactions should be made through the established standard operating procedure.
According to CAG, the issue regarding special bills was detected during a treasury inspection conducted by the Officer of the Principal Accountant General (Accounts and Entitlements), Andhra Pradesh, in March 2021 in respect of certain accounting entries effected centrally at the AP Centre for Financial Systems and Services (APCFSS) through the back-end of CFMS (Comprehensive Financial Management System), thus bypassing the controls in the ordinary work flow of financial accounting entries.
The apex accounting body said initial examination by audit showed that for the year 2020-21, 54,092 accounting entries were processed centrally at APCFSS through the back- end of CFMS. “They were processed through special bills in the CFMS, which is not an authoritative type of a bill in the AP Treasury Code. The gross amount transacted through the special bills was Rs 48,284.31 crore, including adjustments between the consolidated fund of the State and the public account,” the CAG observed.
The finance department divided the accounting entries made in the special bills into 14 categories. During audit, it was found that in respect of five categories totalling Rs 26,839.60 crore, the finance department informed CAG that the entries were a consequence of the government orders on schemes and local bodies.
While the relevant government orders were provided to CAG, no valid reason was given as to why these entries could not be carried out in consonance with the treasury code, through the CFMS and the treasury system.
CAG said in respect of 16,688 entries amounting to Rs 9,124.57 crore, the finance department had not given any explanation as to why they were even necessitated in the first place.Further, there were 1,006 accounting entries, with a debit of Rs 8,891.33 crore to the Consolidated Fund of the State, which were made without requisite sanction orders or budget release orders, while 25,734 entries totalling Rs 3,428.81 crore, were only supported by internal documents of APCFSS as the basis, which were not valid as per the treasury code.
In its report, CAG further observed that the government took a decision to entrust and fund two welfare schemes not through the budget but through market loans raised by the AP State Development Corporation (APSDC) for the year 2020-21.
In line with these decisions, the entire budget provisions of Rs 10,895.67 crore made for these two welfare schemes was withdrawn and adjudged back to the Consolidated Fund of the State through 15 special bills. Later, the same amount was transferred from Personal Deposit Account of APSDC to the Personal Deposit Account of eight corporations through three special bills.
CAG said the transactions could have been done using the authorised nil payment bills by the Drawing and Disbursement Officer with an authorised order approving the accounting entry. It further observed that deductions of electricity charges in respect of Panchayat Raj Institutions at source from their 14th Finance Commission Grants (General Funds of PRI) were done through 10,597 special bills, amounting to Rs 854.19 crore, based on the government orders.