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Can't audit Ghaziabad Development Authority accunts, UP housing dept to CAG

30th September, 2016

The Economic Times

The Uttar Pradesh unit of the Comptroller and Auditor General has come face to face with the state government with the latter's housing and urban planning department refusing permission to audit the accounts of Ghaziabad Development Authority and other development authorities. The housing department and GDA bosses reportedly told the CAG team that it did not have any right to conduct its audit and it was capable of doing it.The matter has now reached the Raj Bhawan for a solution.

The Uttar Pradesh unit of the Comptroller and Auditor General has come face to face with the state government with the latter's housing and urban planning department refusing permission to audit the accounts of Ghaziabad Development Authority and other development authorities. The housing department and GDA bosses reportedly told the CAG team that it did not have any right to conduct its audit and it was capable of doing it.The matter has now reached the Raj Bhawan for a solution.
About three months ago, when the CAG's state head, auditor general Vinita Mishra, sought details of the GDA's expenditures, principal secretary, housing, Sadakant, and the authority's vice-chairman refused permission. CAG officials say that this was unprecedented as it has been auditing the accounts of development authorities in the past -- both in UP and other states.
However, this time the housing department and the GDA argued that the CAG can audit only consolidated funds of the state and the funds that the development authorities receive from the state government don't fall under this category. Therefore, the CAG team can't audit the GDA accounts, the housing department reportedly told the CAG team. UP's development authorities get 2% of stamp duty charged by the state government for developing infrastructure and other projects.
However, auditor general Mishra refuted this claim with the contention that all kinds of receipts worth Rs 1 crore and above fall under the category of consolidated funds. "The CAG may, with the previous approval of the President or the governor of a state or the administrator of a Union territory having Legislative Assembly as the case may be, audit all receipts or expenditures of any body or authority where the grant or loan to such body or authority from the Consolidated funds of India or of any such body, in a financial year Rs 1 crore," she replied to the housing department. Since the fund received by the GDA was much more than Rs 1 crore, CAG had full right to audit its accounts, the AG said.
However, when the housing department and GDA didn't budge, the AG approached Governor Ram Naik for a solution. CAG Shashi Kant Sharma, during his recent visit to the city, also raised this matter with the governor. Naik in turn sought legal opinion on the issue and during the course of investigation it came to light that the state legislature of UP during 2014-15 and 2015-16 allotted Rs 376 crore and Rs 541 crore respectively as 2% per cent of the stamp duty directly to the department of housing and urban planning for onward distribution to various development authorities.
"The said fiscal practice adopted by the state government shows that the 2% stamp duty charged on the instruments under section 39 of the UP Act, 1973 is treated by the State Legislature and state government as the consolidated fund and hence the CAG has absolute powers to audit the income and the expenditure," the governor was informed. After going through the correspondence between the state government and the AG UP, the governor has concluded the stand adopted by the UP government was 'untenable' and it must allow audit of the development authorities including, the GDA, say the Raj Bhawan sources.
Naik has also written to chief minister Akhilesh Yadav and also spoke to him to draw his attention towards the housing department and GDA's 'invalid' objection to the CAG auditing. However, he is yet to get any response, say the governor house sources, adding "now, he has written to President Pranab Mukherjee, Prime Minister Narendra Modi, Union home minister Rajnath Singh and Union finance minister Arun Jaitley."
 

Keywords: Ghaziabad Development Authority

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