The Hindu : Kerala News : Irregularities in fund use by Kozhikode district panchayat

Online edition of India's National Newspaper
Monday, Apr 12, 2004

Kerala

Kerala

Irregularities in fund use by Kozhikode district panchayat

By P. Venugopal

THIRUVANANTHAPURAM, APRIL 11. The Local Fund Audit Department (LFAD) has found `serious irregularities' in the transfer of over Rs. 26 lakhs to a society called `Skill Development and Computer Centre' by the Kozhikode district panchayat from its Plan funds.

The district panchayat transferred Rs. 5.5 lakhs to this society through the District Literacy Mission and Rs. 14.5 lakhs directly in 2001-02, in addition to Rs. 6.4 lakhs in 2002-03. The total funds given to the society under various programmes of the district panchayat thus came to Rs. 26.4 lakhs.

When the LFAD sought clarification on these fund transfers, the district panchayat wrote back saying that the society was actually formed by the district panchayat itself. It was also stated that the society was functioning under the direct control of the district panchayat.

However, the LFAD could find no mention in the bylaws of the society that it was an institution working under the direct control of the district panchayat. The society was registered under the Societies Registration Act of 1860. The district panchayat had no legitimate role in the administrative and financial matters of the society. Also, the Government's prior sanction was not obtained by the district panchayat in forming the society.

According to the LFAD's report on the subject, the Government, in an order issued in September, 1998, had stipulated that the panchayats should use the facilities and services of Government industrial training centres, polytechnics and engineering colleges for undertaking training programmes for developing the skills of the people.

"There are many such institutions within the jurisdiction of the Kozhikode district panchayat. There is, therefore, no justification for the decision to transfer Plan funds to a society," the report says.

The district panchayat, further, did not obey a Government stricture, issued on June 6, 2002, against giving assistance from its Plan allocation to cooperative societies and charitable societies.

The LFAD report notes that the selection of beneficiaries under the training project taken up by the society too was against the rules prescribed for the purpose.

As per the Kerala Panchayat Act, the selection of beneficiaries of any project undertaken by the panchayat should be done by the grama sabha. However, in this particular case, it was entirely done by the society.

"This is against the concept of decentralisation of powers," the report says. Part of the office space provided to the district panchayat by the Government was also allotted to the society against the rules. The furniture, computers and other equipment needed for the society's functioning too were bought by the district panchayat using its Plan funds. A scrutiny of the vouchers showed that huge amounts were spent to settle food bills.

The salaries of a director and 17 other persons employed by the society are being paid by the district panchayat from its Plan allocation.

To a query from the LFAD, the district panchayat admitted that the society had collected Rs. 3.68 lakhs as fees from its trainees.

However, this amount was not remitted in the society's bank account.

"It is not clear on what basis the fees were fixed. Remuneration to the guest trainers called by the society was not according to any fixed norm. There were also several vouchers to justify huge amounts spent on travel allowance, food etc. For many other expenses, there were no vouchers at all," the report says.

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