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CAG sniffs scam in NGO funding

In its first-ever audit of the Ministry of Environment and Forest (MoEF), tabled in Parliament on Friday, the Comptroller and Auditor General (CAG) has indicated the presence of an organised scam in the giving of grants by the ministry to non-governmental organisations (NGOs).

business Updated: Nov 28, 2010 23:57 IST
Debobrat Ghose

In its first-ever audit of the Ministry of Environment and Forest (MoEF), tabled in Parliament on Friday, the Comptroller and Auditor General (CAG) has indicated the presence of an organised scam in the giving of grants by the ministry to non-governmental organisations (NGOs).

Outstanding queries

The November 26 report shows that no accounts have been maintained for more than 20 years against grants released to NGOs and expenditures incurred thereon. The total value: R597 crore.

The CAG has pulled up the ministry for the the fact that 7,196 utilisation certificates were outstanding till March 2010.

Utilisation certificates are records that track whether the money granted to NGOs has been used for the purpose for which it was sanctioned.

In the last 10 years (1999-2009), 4,723 utilisation certificates amounting to R426.8 crore were ‘pending adjustment’.

“This is a major flaw we found during our audit, as there is no account of the expenditure made against the grants given to NGOs by the ministry,” said principal director of audit, CAG, Raj G Viswanathan.

The proportion of value of outstanding certificates between 1981 and 1989 was 17.5%, which rose to 71.5% during 1999-2009.

The report also pointed out that despite having a financial advisor, the MoEF did not conduct internal audits of any of the units that came under its jurisdiction.

“There are cases of misutilisation of funds, and fraud can’t be ruled out as most NGOs took the first instalment and disappeared,” Viswanathan said. “More than 93% of the projects for tree plantation failed to achieve the target.”

It only gets worse. “Some officials have even started NGOs in the name of their wives or children and usurped the grant,” an environment ministry official claimed, on the condition of anonymity.

“This could not have been possible without the connivance of department officials and NGO promoters,” he said.