Bengaluru: The Karnataka State Audit and Accounts Department has flagged several irregularities in the utilisation of funds under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) and the 15th Finance Commission grants across gram panchayats in the state. The findings, contained in the department’s consolidated audit report for the 2023-24 financial year, point to diversion of funds, non-compliance with scheme guidelines and large amounts of unspent allocations. The audit period corresponds to the time when Priyank Kharge held the Rural Development and Panchayat Raj portfolio.
According to the audit report, funds earmarked for specific purposes under MNREGS and the 15th Finance Commission were allegedly diverted to other works in several gram panchayats. The report also noted that grants amounting to Rs. 1,764.83 crore under the 15th Finance Commission remained unutilised as of March 2024.
The audit further observed that while Rs. 5,127.61 crore was spent under MGNREGS during the financial year ending March 2024, the implementation of the scheme did not fully comply with the prescribed guidelines. The report stated that the mandatory 60:40 ratio between wages and material expenditure was not maintained in several cases. Instead, funds meant for wages and material were allegedly diverted towards purchases and other expenditures that were not envisaged under the scheme.
Auditors also pointed out serious deficiencies in record maintenance. Under MNREGS guidelines, every gram panchayat is required to maintain nine statutory registers and produce them for audit. However, the required records were reportedly not produced before auditors in several instances. The report also noted the absence of inspection and monitoring records relating to MGNREGS works, making it difficult to assess whether the scheme’s objectives had been achieved. The department has recommended corrective measures to ensure compliance with the guidelines.
The audit also raised concerns over the implementation of the 15th Finance Commission grants, which are intended to support rural infrastructure and civic amenities. As per the guidelines, 90 per cent of the grants are meant for creation of public assets, while 10 per cent is earmarked for operation and maintenance. In addition, 25 per cent of the allocation is to be spent on Scheduled Caste and Scheduled Tribe welfare works and 5 per cent on programmes benefiting persons with disabilities.
The report found that the allocation meant for the welfare of persons with disabilities was not effectively utilised in many gram panchayats. It also highlighted that a substantial portion of the Finance Commission grants remained unspent at the end of the financial year.
In addition to unspent funds, the audit detected diversion of nearly Rs. 4.25 crore across various schemes in violation of financial rules and programme guidelines. Referring to the Karnataka Financial Code, 1958, the report noted that grants released for a specified purpose cannot be diverted to other works without approval from the competent authority. It also stressed that action plans must be prepared and approved before scheme implementation.
The audit found that several gram panchayats failed to adhere to these provisions and instead diverted funds released under one scheme to unrelated activities. A total of 261 gram panchayats across 10 districts were found to have diverted funds amounting to Rs. 4.25 crore for purposes not permitted under the respective scheme guidelines.
The report cited several specific examples. In Halachera Gram Panchayat in Kalagi taluk of Kalaburagi district, Rs. 20 lakh released under the 15th Finance Commission was transferred to the water management account and utilised for drinking water works, an expenditure the audit classified as being outside the approved guidelines.
In Badavanahalli Gram Panchayat of Tumakuru taluk, payments amounting to Rs. 14.69 lakh for works under the 15th Finance Commission were made through cheques instead of the mandatory e-Gram Swaraj portal. The audit also found that another Rs. 15.99 lakh was spent on streetlights and purchase of materials without preparing the mandatory action plan.
Similarly, in Hirebevanur Gram Panchayat in Indi taluk of Vijayapura district, Rs. 35.33 lakh released under the escrow mechanism for a specified purpose was transferred to another development account and spent on unrelated works. The audit has objected to the entire amount, stating that it constituted diversion of scheme funds in violation of the prescribed norms.
