Large govt funds in Haryana parked outside treasury system: CAG report

Gurgaon: A comptroller and auditor general (CAG) report on Haryana's finances has flagged glaring violations in how govt departments handled public money. According to it, several offices continued to park funds in private bank accounts despite treasury rules requiring them to be kept in nationalised banks, preferably State Bank of India.The findings have drawn sharper scrutiny against the backdrop of a Rs 590-crore fraud that surfaced at IDFC First Bank's Chandigarh branch, where govt-linked funds were allegedly siphoned off through forged fixed deposits and manipulated account records.
CAG — in its 2023-24 report that was tabled in the Assembly on Monday — reiterated that depositing govt funds in private banks is prohibited because it "bypasses treasury oversight, weakens financial control and increases exposure to fraud". It recorded instances of departments opening separate bank accounts outside the treasury framework, keeping grants and scheme money in these external accounts, and often failing to reconcile balances.The report warned that these practices obstruct legislative oversight and create a "high risk of fraud and embezzlement". A senior govt official said the IDFC case reflected the kind of vulnerability the audit cautions against. "The recent case involving Rs 590 crore in govt funds misappropriated at IDFC First Bank became a textbook example of the very financial risks the audit warns about," he added.According to the allegations, deposits and fixed deposits linked to urban local bodies (ULBs) department, state entities and public schemes were maintained with IDFC. Police suspect that bank staff, allegedly in collusion with intermediaries, issued fake FD receipts and manipulated records, and then withdrew or diverted the funds without the govt's knowledge.The issue raised eyebrows because govt records showed large sums parked in IDFC accounts, but when departments attempted withdrawals, the balances did not match — indicating that the money may have been transferred out without authorisation.Chief minister Nayab Singh Saini told the assembly on Monday that the govt had de-empanelled IDFC First Bank on Feb 18 and directed that the entire amount, along with interest, be transferred to a nationalised bank. "The money is completely safe. Every single rupee will be recovered," he said, adding that a probe had been ordered to establish whether the irregularity was limited to bank employees or involved others.Saini said the case had been handed to the anti-corruption bureau (ACB), and a high-level committee ordered to conduct a detailed inquiry. He also said the bank wrote to SEBI on Feb 21, acknowledging irregularities by certain employees and that action had been initiated against those concerned.The CM added that a significant portion of the funds placed with the bank had been invested in FDs, and maintained that departments keeping funds in such accounts was nothing new. "No one found guilty will be spared," he said.Former Congress MLA Neeraj Sharma accused the state govt of allowing nearly Rs 590 crore to be deliberately placed at risk. He referred to safeguards introduced in 2012-13, including the personal ledger account (PLA) system to keep surplus departmental funds within the state treasury and instructions limiting deposits to govt banks.Calling it "a corruption driven by personal motives", he demanded a time-bound probe to fix accountability and sought disclosure on whether relatives of politicians received jobs or benefits linked to the bank.