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As Bihar reconciles accounts, AG set to audit Rs 600-cr fraudulent funds transfer records

The fresh audit by the office of the accountant general will be important, as the fraudulent funds transfer went undetected during the previous audit.

india Updated: Aug 16, 2017 19:00 IST
Arun Kumar
Arun Kumar
Hindustan Times, Patna
Bihar scam,Funds trasfer fraud,NGO Srijan
Police raiding the office of NGO Srijan in Bhagalpur to which government funds were found transferred. (HT File photo)

As the government faces an opposition onslaught over the issue, its various departments have got down to the task of reconciliation of bank accounts to ascertain the exact quantum of government money fraudulently diverted to the account of an NGO in Bhagalpur.

Simultaneously, the office of the accountant general (AG) is preparing to start its audit of the government accounts, following reports of irregularities received from the Bhagalpur district magistrate. The quantum of illegal transfer of government funds is already estimated to be over Rs 600 crore.

“The district magistrate has asked for some time to arrange for the documents we will require before our team goes there for examination of accounts. The process will get underway once we get a communication from the district administration, in this regard,” said DK Sinha, secretary to the AG.

The audit will be important, as the fraudulent fund transfer went undetected during the previous audit. “We verify adherence to laid down financial norms on the basis of documents. If the bank documents are fudged, we cannot investigate that deeply. Now, we will examine things more carefully,” he added.

In 2014, doubts about possible irregularity first surfaced after the water resources department issued an order for keeping all the government money in the personal deposit (PD) accounts. Soon, the accounts were opened across the districts and the money started being transferred to them through cheques.

However, according to highly placed sources, it was detected that in Saharsa the government account had been left with just Rs 2-crore, while the special land acquisition officer had issued a cheque worth Rs 153-crorre.

Strangely, three days later, Rs 151-crore arrived in the account through Srijan Mahila Sahyog Samiti. IG, economic offence unit (EOU), Jitendra Singh Gangwar, who heads the probe, also corroborated the fund transfer by the NGO from Bhagalpur after a gap of two years.

“It was exactly the suspicion of some foul play that it was decided to keep the money in the PD account, as in any case interest was not accruing to the government,” said an official.

The strategy of Srijan was simple - to make hay in connivance with bank and government officials. Huge sums of money got fraudulently diverted to the account of the NGO, which multiplied the capital through self-help groups and other activities, including grant of loans, without having to invest anything. who all were the main beneficiaries is not known yet.

The only consolation for the government departments was that their principal amount remained intact through a ‘tacit arrangement’ for timely transfer of funds back to their accounts whenever required.

“The reconciliation exercise is on and of Rs 600-700-crore estimated defalcation, the departments have reconciled around Rs 302-crore, while a couple of departments are still in the process of doing so,” said Gangwar

In the government, land acquisition is a big exercise done at two levels. One is through district land acquisition officers, who are under the control of the revenue department. Another is through the special land acquisition officers, who are under the WRD and deal with various projects. In the Bhagalpur case, the special land acquisition officer was posted at Naugachia and had jurisdiction over Bhagalpur, Saharsa, Purnea.

The investigation is on and the probe so far has confirmed how the doctored e-statements and forged cashbooks took the entire system for a ride for such a long time. Why there was no alarm and if there was from time to time, why it was not taken seriously is something the investigators now have to find out. As politics hots up over it, pressure will only mount.

In his Independence Day address, chief minister Nitish Kumar also said that he had asked for a thorough probe. “There are people who misused government funds meant for various schemes in a society in Bhagalpur. I assure the people of the state that guilty, whether they are government or bank employee or any other person, will not be spared at any cost,” Kumar said.

First Published: Aug 16, 2017 19:00 IST