The Comptroller and Auditor General of India has said the Andhra Pradesh Government should ensure that the budgeting process is more transparent and result-oriented.
In its report on State Finances for the year ended March 2012, the CAG said the basic assumptions in budgetary formulation have to be more accurate and all the departments should make efforts to submit realistic budget estimates.
This should be done keeping in view past trends in receipts and expenditure in order to avoid large-scale savings/excess, re-appropriations and surrenders at the fag end of the year.
The CAG found that several State Government departments were not compliant with the applicable rules and regulations, especially those relating to compilation and submission of accounts for audit and reporting utilisation of funds placed at their disposal for implementation of various socio-economic development schemes.
Internal controls were not functioning as envisaged as evidenced from the non-reconciliation of receipts and expenditure with those booked by the Principal Accountant General.
It further said the Government had not given adequate attention to the various account heads.
“Operation of over one lakh personal deposit accounts and locking up of about Rs 23,483 crore in these accounts has affected the transparency of Government accounts,” the CAG observed.
FUND UTILISATION
Saving a sixth of the budgetary allocation and non-utilisation of funds allocated for various developmental programmes raises serious questions about the Budget formulation exercise, the report noted.
While this could show a healthy picture as far as fiscal indicators are concerned, it has had an adverse impact on implementation of various policy initiatives announced and taken up by the Government.
The CAG further said the Government needs to take a closer look at the factors that affect its fiscal indicators and ensure that proper accounting treatment is given to various transactions, especially those relating to debt.
The Government needs to prepare an action plan to complete projects in the pipeline for several years, especially those relating to irrigation, within a specified time frame. The CAG suggested that the Government prioritise capital expenditure, especially in socio-economic sectors.