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The Comptroller and Auditor General of India (CAG) in its draft report has detected major irregularities and diversion of funds by the Jute Commissioner’s office and the National Jute Board (NJB) between 2014 and 2018.
CAG said that the diversion charge is serious in the sense that it is 'against the financial propriety’ of the Government of India as the funds diverted by the Jute Commissioner’s office form part of the Consolidated Fund of India (CFI) which is collected by way of levy of cess on jute manufacturers under the Jute Manufacturers Cess Act of 1983. The central auditor has devoted six of its major observations on the questionable ways of functioning of the Jute Commissioners Office.
In a strong message, the CAG has observed NJB to request the Jute Commissioner’s office to refund the amount spent in settling the bills of private lawyers and that such practices should be stopped in immediately and has accused it of ' non-disclosure’ of legal expense.
NJB does not show expenses for private lawyers of the office of the Jute Commissioner in their budget to the Textile Ministry while requesting for funds at the beginning of the respective financial year. Thus, such expenses remain undisclosed to the parent Ministry (Textile Ministry). In CAG’s opinion this should not be the case as the funds are part of CFI.
The CAG is giving final touches to the inspection report on the accounts and records of NJB for 2016-17. It shows that a three-member audit team consisting of members from the Office of the Director General of Commercial Audit and ex-officio member Audit Board – I, Kolkata had conducted a compliance audit on the accounts and records of NJB Kolkata for 2016-17. The audit was done between December 13, 2017 and January 5, 2018.
The five-part inspection report deals in great detail how the Jute Commissioner’s office had passed a resolution at the ninth meeting of NJB on February 2015 and had diverted funds to the tune of Rs 10.2 million to engage private lawyers as it had to face a number of legal cases as a regulatory authority. The Government pleaders’ were either ineffective or not available. CAG observed that the Jute Commissioner’s office did not have the budget to make such engagements. The country’s premier audit body had asked NJB to settle the bills of the private lawyers from their budget, the amount being Rs 10.2 million. CAG observed that the private lawyers were engaged on short notice and this was beyond the scope of law.
CAG said, “There is no possibility of 'short notice’ unless the matter is taken up at the eleventh hour. The Office of the Jute Commissioner passed on the burden of legal expenses to NJB reason(s) thereof is/are best known to them. But, it is nothing but 'non disclosure of legal expenses both reasons and outcome of those legal cases to the Government".
NJB was created in April 2010 by merging Jute Manufactures Development Council and National Centre for Jute Diversification with the objective of cultivation, manufacture and marketing of jute and jute products. The Board consists of 34 members and has three regional offices located in New Delhi, Hyderabad and Chennai with head office in Kolkata.
The second big irregularity identified by CAG is a payment of incentive of Rs 20.4 million disbursed by NJB to a few jute mills manufacturing diversified and value added jute products under an 'Incentive Scheme for Acquisition of Plant and Machinery’ (ISAPM) since 2013. In three cases CAG found that NJB had given undue favours to mills in terms of utilization of owned source and bank finance. CAG found instances where machines financed from owned source were installed prior to submission of LOI and without excise installation certificates.
In course of audit CAG had also identified 'unfruitful expenditure’ of Rs 41.6 million by NJB on a land in Noida, Uttar Pradesh. Erstwhile NCJD had purchased a 40,000 square meter of land from Noida Authority on a 90-year lease in December 1997 for an office building. The lease rent fixed was Rs 8.16 lakh per annum. While construction was supposed to have started within six months, NJB did not start any construction work and was paying extension charges. Until July 2009, NJB incurred an unfruitful expenditure of Rs 73.9 million. After a series of deliberations between NJB and the lesor which the CAG inspection report had put down in detail in terms of lease rent, extension charges, penal interest the unfruitful expenditure was restricted to Rs 41.6 million. CAG has sought a suitable reply from NJB.