CAG finds fault in railway accounting system

The Comptroller and Auditor General has found several miscalculations of expenditure and other accounting mistakes while verifying the accounts of Railways.
It has also detected inadequate planning, weak links among policy making, planning and budgeting by Railways. It has also found inadequate relationship between budget as formulated and budget as executed.
Besides, CAG has observed the non-compliance of Finance Ministry's suggestions regarding rail budget preparation.
The Finance Ministry had advised Railways to ensure bulk of gross budgetary support be utilised towards the priority projects and implement credible plans for incoming internal and extra budgetary resources in its annual plan.
However, the suggestions were not adequately adhered to by Railways resulting in poor financial management, CAG noted in its latest report tabled in Parliament today.

During 2009-10, Finance Ministry advised Railways to gear up and guard against further slippages on the revenue front.

CAG observed that against the projected gross traffic receipts of Rs 88,356 crore, Railways could garner only Rs 86964 crore in 2009-10.
In 2011-12, Railways could generate only Rs 23,988 crore towards internal and extra budgetary resources against the projection of Rs 35,735 crore leaving a gap of Rs 11747 crore.
"Railways had continuously been incurring expenditure over and above the budgetary provisions sanctioned by Parliament. Instances of miscalculations of expenditure continued to occur regularly in the Railways accounting system," the CAG observed.

Slamming the Railways for its "inaction" to rectify the accounting errors, the CAG observed an increased trend of unsanctioned expenditure as it found an unsanctioned expenditure as of March 31, 2012 was Rs 6205 crore which was Rs 3829 crore in 2008.
"Increasing trend of unsanctioned expenditure indicated the inaction on the part of the administration to get the unsanctioned expenditure regularised," CAG noted in the report.
The cases found by the audit team included miscalculation of expenditure from one revenue grant to another and also from revenue to capital grant and vice versa among others.