PU overpays Rs 4.5 cr in garb of higher interest rate on PF
Violating the guidelines of the ministry of human resource development (MHRD) and University Grants Commission (UGC), Panjab University paid higher rates of interest to general provident fund (GPF) and contributory provided fund (CPF) resulting into overpayment of Rs 4.49 crore.chandigarh Updated: Dec 02, 2014 11:45 IST
Violating the guidelines of the ministry of human resource development (MHRD) and University Grants Commission (UGC), Panjab University paid higher rates of interest to general provident fund (GPF) and contributory provided fund (CPF) resulting into overpayment of Rs 4.49 crore.
The irregularity has been highlighted in Comptroller and Auditor General (CAG) report tabled in Parliament on November 28.
In February 2004, the MHRD after consulting the union ministry of finance issued directions that all autonomous organisations under its jurisdiction should not pay interest on GPF/CPF at a rate higher than that notified by the government. However, lesser rate of interest than the rate notified could be paid depending on the financial position of the organisation. The instructions were reiterated by the UGC in April 2004.
The audit pointed out that the university had paid interest on GPF/CPF accumulations at the rate of 9% as against the notified interest rate of 8% from April 2011 to November 11. From December 2011 to March 2012, the subscribers were paid interest at the rate of 8.6%. This resulted in overpayment of Rs 4.49 crore to the GPF and CPF subscribers.
In its reply submitted in March 2013, the university stated that the CPF/GPF was maintained by the university and the rate of interest on it was determined by the syndicate on the basis of interest earned on the deposits of the GPF/CPF balances as per its regulations approved by the central government. The income generated from fund balances were used only for the payment of interest to GPF/CPF subscribers.
The report pointed out that the reply of the university was not in consonance with the MHRD/UGC instructions of 2004, which places restriction on all autonomous organisations on payment of rates of interest. Further, since the university is substantially financed by government grants, its regulations cannot override the instructions of the Centre.
Audit department referred the matter to the ministry in June 2013 and their reply is still awaited.
When contacted, finance and development officer Vikram Nayyar said they have explained their stand to CAG. “We passed on to the subscribers whatever interest was given by the bank.”