The following is an extract of the roughly 60 page Expenditure Audit Report dispatched to Aligarh Muslim University (AMU) vide AB(C) 09-10/248 dt. 17.11.2009 from Office of Principal Accountant General (Audit), Uttar Pradesh, Allahabad, India, relating to the Audit of AMU conducted during the period from July 2009 to October 2009 under the supervision of Mr Chopra and Mr Altaf Ali, both Audit Officers, Office of Principal Accountant General (Audit), UP, Allahabad, India. (Please note that the typographical and other grammatical errors in the original report have been preserved in this typed version!)
Note:
1) The Expenditure Audit Report was sent to AMU vide AB (C) 09-10/248 dt. 17.11.2009 by Office of Principal Accountant General (Audit), UP, Allahabad. It has also been sent to Shri Kapil Sibal led Ministry of Human Resource Development (MHRD) vide AB (C) 09-10/249 dt. 17.11.2009 by Office of Principal Accountant General (Audit), UP.
2) The period referred to in the Audit Report pertains to the tenure of Dr P K Abdul Azis, Vice Chancellor, Aligarh Muslim University (formerly Vice Chancellor, Cochin University of Science & Technology, CUSAT, Cochin, Kerala) and the Registrar V K Abdul Jaleel who also hails from Kerala and has been hand-picked and appointed by Dr P K Abdul Azis. Both of them are currently serving as Vice Chancellor and Registar, respectively, of Aligarh Muslim University.
Part-II-A
Part-1: Irregular civil work resulted in excess pay of Rs. 24.34 Lakh.
The VC’s lodge was damaged in arson and violence during student’s agitation on 16/17 September 2007 and in this incident the plaster of building, furniture and AC installations including wiring etc was reported completely damaged. Hence, renovation of VC’s lodge was required and for this purpose the VC sanctioned (September 2007 to October 2008) the following amount:
a) Civil work:- Rs.75.10 Lakh
b) Wood work:- Rs.2.15 Lakh
c) Electrical work:- Rs.10.95 Lakh
d) Miscellaneous work
i. Purchase of furniture Rs.38.77 Lakh
ii. Replacement destroyed/
burnt item of telephone etc. Rs.0.64 Lakh
iii. Installation of ACs and DG sets Rs.34.79 Lakh
Total:- Rs.162.40 Lakh
The VC’s lodge was insured for Rs. One crore to meet out the expenses on damages occurred due such type of incidents against which the university made (February 2008) a claim of Rs.97.42 Lakh. The claim was yet to be received (September 2009) by the University. The VC approved (September 2007) an estimate of Rs.24.54 Lakh for civil work which could be justified to Rs.42.44 Lakh at current rate as the estimate was based on Delhi schedule of Rate (DSR) 2002 and on this basis, VC permitted (August 2007) to invite short term tender locally from four selected contractors. The lowest tenderer M/S Samiah International builders was awarded the work and the university entered (December 2007) into agreement with this contractor at a cost of Rs. 46.53 Lakh which was 74 percent above of the approved estimate. Further, two more estimates for civil works e.g. additional works for renovation and restoration of VC’s lodge, construction of two toilets and three bathrooms for security staff costing Rs.2.21 lakh and Rs.1.80 Lakh respectively were approved in July and September 2008. The contract of these works was awarded to other contractors without inviting tenders and agreements against these estimates were entered at Rs.3.00 lakh and 1.66 lakh respectively. Thus, the university did not maintain the transparency in tendering system as per tender rules and not get the benefits of competitive rates due to non tendering of works.
Against the above three agreements, Rs.70.14 lakh, Rs.3.73 lakh and Rs.1.76 lakh respectively were paid (February 2009) to the contractors. It was also found that wood work at VC’s lodge was carried out as extra item of another work “providing false ceiling and floor tiling and alternation Registrar Office” which was also awarded to a contractor at tendered cost of Rs.6.99 lakh (Estimated cost Rs.4.60 lakh) again selected among three local contractors. The amount paid against this contract was Rs.8.75 lakh i.e. an excess of Rs. 4.15 lakh over the estimate and Rs.1.76 lakh over the agreement cost. The reason for cost escalation was mainly the extra works carried out by the order of VC over the estimate and agreements. As, neither insurance claim was finalized nor any fund was available under the head of ‘VC’s Lodge’, the required payments were made through different heads not pertaining to head ‘VC’s Lodge’ without demanding the fund from UGC. Thus, sanctity of either the estimate or the agreements was not adhered by the university.
On being pointed out the university replied (September 2009) that (i) the tenders were invited on short notice basis of 10 days to avoid delay of publication in National Dailies and also to take up work on priority basis as the same was of an emergent nature and approved by the competent authority (ii) the estimate for the main work was prepared for Rs.24.54 lakh keeping in view the quantum of work/items to be taken up for execution but during the course of execution and at later stage some additions/substitutions were made. The other estimates were also prepared at a later stage due to change of requirement and therefore could not be included while preparing the original estimate.
Reply was not tenable as work should be taken up after arranging the fund and adherence of tender rules properly. Also, the estimates should be based on actual survey reports and too many changes after agreements and during the progress of work or even after that turned the original estimate meaningless on the basis of which competitive rates were obtained from contractors.
Thus, the university not only gave undue benefits to selective contractors but also incurred an excess of Rs.24.34 lakh over the cost of the above two agreements by arranging the fund improperly.
Part-II-A
Misuse of Government money of Rs.19.19 lakh
Para-2 (a) Unauthorized payment of Income Tax Rs.4.72 Lakh.
According to IT rules for salaried class people, the income tax computed for a particular assessment year was to be deducted at source from the salary of each official who were under the purview of taxable income and the employer was responsible for correct deduction and to issue Form-16 on that basis to facilitate each of such official to submit his IT return.
Scrutiny of the pay bill registers and cash book of the University revealed that IT amounting to Rs.82,356 and Rs.44,315 was deducted from salary bills of VC and Registrar respectively during the year 2007-08. The periods of deduction were from July 2007 to February 2008 and September 2007 to February 2008 in respect of VC and Registrar respectively. Scrutiny revealed that VC and Registrar were to deposit Rs.1,53,574 and Rs.1,01,829 respectively as IT during 2007-08 instead Rs.82,356 and 44,315 only were deducted and the university paid the difference of Rs.1,26,671 as IT on behalf of them which was recovered in the year 2008-09 from their salary under the head of account “Salary expenditure (Recovery of pay).”
On being pointed out, the university stated (September 2009) that generally the IT due to an employee was totally deducted from the salary for the month of February, but in certain cases the IT deducted till February was not final due to some unanticipated income received by an individual during the month of March from unforeseen sources or might be due to some miscalculation in working out the amount of IT due. As result thereof, the University after obtaining the approval of VC made the payment of the remaining portion of IT. Further, in previous years also i.e. during 2004-05, 2005-06 and 2006-07, IT amounting to Rs.1.33 lakh, Rs.0.45 lakh and Rs.1.67 lakh respectively was paid as IT on behalf of 52, 19 and 29 employees as it was responsibility of the DDO to make deduction of TDS and its timely remittance to IT account.
The reply was not tenable as the employer was solely responsible to ensure that IT due from individual is deducted from the pay and remitted to IT department within the financial year. Further, any amount/arrears received in the month of March the IT computed on that amount was to be paid in the next assessment year. This indicated that there was complete collapse of financial management and VC and Registrar instead of stopping this frequently financial irregularity, themselves became part of this.
Para-2(b) Unauthorized payment of Transfer Travelling allowances Rs.0.82 lakh
According to paragraph 2(1) of AMU Act XL 1920 amended in 1981, Statutes of the University VC of the University will be appointed by the Visitor (Hon’ble President of India) from the panel of persons recommended by the court as well as by the Executive Council (EC) of the University. He will hold office for a term of five years from the date on which he enters upon his office.
Scrutiny revealed that the VC claimed TTA amounting to Rs.81,654 for four persons, that is, for himself, his wife and two children on his first joining after his appointment as VC at AMU and was paid (July 2007). He was not entitled to TTA as the post of VC was a tenure post and not a transferable post. Further, prior to his appointment in this University he was holding the post of VC in Cochin University of Science and Technology, Kerala (CUST) which was also a tenure post.
In reply, the University furnished the appointment letter sent to the VC in which it was mentioned that the other terms and conditions of his appointment would be governed by the Statutes and Ordinances of the University.
Thus, payment of TTA amounting to Rs.81,654 was not admissible to VC.
Para-2(c) Irregular payment of HTC Rs.0.93 lakh.
As per LTC/HTC rule XVII-B para-1, a government servant was entitled for such claim only when he had completed one year of continuous service on the date of journey.
Scrutiny revealed that VC assumed his office in AMU on 11.6.2007 and claimed HTC on 16.6.2007 for his wife and two children for his hometown Trivendrum by air and the University paid Rs.93,051 against this claim. Further, the claim was for 2006-07 during which period he was VC of CUST but the bill passed for payment for the block year of Rs.2007-08. Also, age of his two children was not mentioned in the claim bill but ignoring this the bill was passed.
On being pointed out the Finance Officer replied (September 2009) that at the time of his joining of the office, the block year of 2006-07 for HTC was operative.
The reply was not tenable because VC was not transferred but appointed and in view of this HTC claim was not admissible to him as per above mentioned LTC/HTC rules.
Thus undue favour was given to VC by the University in paying the amount of HTC for which he was not entitled.
Para-2(d) Unauthorised purchase of car worth Rs.12.72 Lakh
Under the Depreciation Fund Rule[1] of the University, this fund was meant for the special repairs, upkeep and maintenance of the university buildings, roads, furniture, equipment and other property and it could not be utilized for the purposes other than the renewal and replacement in buildings, machinery etc. In addition to this, this fund could be utilized for any other special purpose that may be determined by the EC as per Rule 5(v). Further, under Depreciation Fund Rules (6), a maximum limit of Rs.20,000 only could be incurred in a year by VC.
Scrutiny revealed that University purchased six vehicles during 2007-08 at a cost Rs.41.56 Lakh which included Rs.12.72 Lakh, the cost of Honda Civic car specifically purchased for VC out of depreciation fund. Prior to this purchase for VC, two cars Maruti Baleno and Ambassador HM purchased in the year 2000 and 2002 respectively were under the use of the then VCs. Further scrutiny revealed that these cars were in good condition and smoothly plying in and outside
Thus, the University not only misutilised the Depreciation Fund but also carried out unnecessary purchase of Honda Civic car.
In reply, the University stated that the vehicles were purchased during 2007-08 under rule 5(v) of Depreciation Funds Rule and the previously used cars were not in position to use by the VC.
Reply was not tenable as EC had not approved any purchase/expenditure under Depreciation Fund and the VC himself on behalf of EC under section 19(3) of AMU Act sanctioned the amount treating this purchase as of emergent nature.
Part-II-A
Para-4 Loss of interest amounting to Rs.28.63 lakh due to irregular payment to C.P.W.D
Para 17(a) of Account code of the University stipulates that when the Budget was finally passed by the Executive Council the University shall not incur any expenditure under any head of Expenditure in excess of the amount passed under proper sanction either (i)-by re-appropriation from some other head under which savings are anticipated and that no re-appropriation will be allowed before October in a year, or (ii) by obtaining an additional grant from the Executive Council which should also be communicated to the Accounts Office. Further, as per Section 18, re-appropriation may be made:- a) As between sub-heads under the same department with the sanction of the Deputy Finance Officer (DFO) upto a limit of Rs.5,000/- and thereafter by Finance Officer (FO) provided that the DFO and FO shall not make any re-appropriation to meet expenditure on new and original work of buildings. (b) As between department with the sanction of the FO on the recommendation of the DFO upto Rs.25,000/- and VC on the recommendation of the FO provided that the Chairman of the Department certify that the savings will not be required by him subsequently during that financial year.
Scrutiny of Financial Estimate and Financial statements for the years from 2005-06 to 2008-09 revealed that need based budget estimate in respect of various accounts heads was not prepared in those financial years with the result that budgets were not fully utilized and there were huge unspent balances at the end of financial year during the period 2005-09. Also, diversion from one head to another was regular feature in the University which was evident from the succeeding paragraphs:-
Executive Committee had taken decision (October 2007) that all construction works will be carried out by Central Public Works Department (CPWD) instead of Building Department of University manned by qualified professionals like University’s Engineers, Assistant and Junior Engineers and other skilled and non-skilled employees.
As per clause 8 of Memorandum of understanding (MOU) between CPWD and University (January 2008), 33.33 percent of the sanctioned amount was to be deposited with the CPWD at first instance and remaining amounts in two equal installments as and when demanded by the CPWD and before making payment of IInd and IIIrd instalments the Building Department had to obtain the statement of expenditure from CPWD against awarded works. It was noticed that the grants received for construction works from UGC under fix plan were being invested by way of FDR in the bank earning highest rate of interests. Interests earned were utilized by the University after taking permission from the UGC.
Scrutiny revealed that some construction works were not started by the CPWD till the date of 31 May 2009, but entire amount was given to CPWD as advance in the month of March 2009 and also for some other construction works amounts were paid to CPWD even before commencement of works. CPWD had not spent the amounts of first installment; however without demand the building department released IInd and IIIrd installments to CPWD. Non-follow up of MOU by the University resulted into loss of interest to the tune of Rs.28.63 Lakh (as per enclosed annexure)
Para-II-A
Para-10 Irregular purchase of Furniture Rs.39.74 Lakh
The VC sanctioned (July 2008) Rs.54.24[2] Lakh for purchase of furniture for VC’s lodge and Registrar’s chamber which was completely damaged during student’s agitation occurred on 16/17 September 2007. As the fund was not available under the head ‘Pool Furniture’ against the allocated amount of Rs.50.00 lakh during 2008-09 the VC ordered for the arrangement of the same by re-appropriation as under:-
Rs. In Lakh
| Sl. No. | From the head | To the head | Amount |
| 1. | Enhancement in the rate of daily wagers | Pool furniture | 30.00 |
| 2. | Unforseen expenses | Pool Furniture | 24.24 |
Purchase was carried out on the basis of the comparative statement prepared by obtaining quotation from four firms in respected of furniture made of different wood materials
e.g.
Rose wood, Teak wood, Red wood and Mahogany and Royal Koas
The detail of quotation are as under:
| Sl.No. | Name of Firm/Specification | Top Furniture, Kottakal, Kerala | Tip Tops Furniture, Kottakal, Kerala | Mozart Global, Kottakal, Kerala | Kohinoor Sofe Works |
| 1 | Rose wood | 49.39 | 47.04 | 48.45 | NQ |
| 2. | Teak wood | 49.95 | 49.09 | 44.38 | NQ |
| 3. | Red wood & Mahogany | 30.54 | 25.08 | 20.95 | NQ |
| 4. | Royal Koas | No Quotation (NQ) | NQ | NQ | 7.73 |
Scrutiny revealed that University purchases (January 2009) furniture for VC’s lodge from a Kerala based firm at a cost of Rs.39.74 Lakh without inviting tender in violation of the University’s purchase rules which stipulated that invitation[3] to tenders should be used for procurement of goods of estimated value of Rs.25 lakh and above. The central purchase committee (CPC) of the University opted (August 2008) for M/s Tip Top furniture, Kottakal, Kerala justifying this firm as lowest bidder and after some negotiation (August 2008), the CPC decided to purchase furniture of Rose wood for drawing and dining rooms costing Rs.7.38 lakh and 6.74 lakh respectively and the rest portion was covered by the furniture made from Red wood and Mahogany costing Rs.21.37 lakh. The purchase of above furniture of the two types of wood on higher cost could not be justified as cost of furniture quoted by M/s Royal Koas wood was far less than the cost of approved furniture. Also, no member either in the negotiation committee or in the CPC had the expertise in recognizing the wood material and also no expert was outsourced for this purpose. Further, the incident took place in September 2007 and the University had enough time for placing demand in the next year’s i.e. 2008-09 budget estimate (BE) but instead of doing so the university made the provision by diverting the amount from other heads.
On being pointed out, the university replied (September 2009) that the purchase of furniture from Kerala based firm was done on the recommendation of CPC and the expected expenditure on furniture for VC’s lodge could not be included in the BE of 2008-09 which was placed for consideration before Finance Committee in March 2009 as CPC constituted in November 2007 could not take decision on the required estimated amount.
The reply was not tenable as the University had sufficient time to foresee the expenditure as well as inviting the open tender to maintain the transparency and to get benefit of competitive rates.
Thus, the university gave undue benefit to a supplier by not only violating the purchase and financial rules but also incurred an extra expenditure of Rs.32.51 lakh in comparison with the local bidder M/s Royal Koas wood.
Part-II-A
Part-11 Excess expenditure on purchase of furniture Rs.130.99 Lakh.
Scrutiny revealed that the provision of Rs.149.00 lakh for purchase of furniture was made in the financial estimate under the head ‘Furniture’ in the non plan during the financial year 2006-07 to 2008-09 while, University incurred a total of Rs.279.99 Lakh on purchase of furniture in these years. Year-wise details were as under:-
Rs. in Lakh
| Financial year | Sanctioned amount | Expenditure incurred | Excess |
| 2006-07 | 55.00 | 63.84 | 8.84 |
| 2007-08 | 44.00 | 108.39 | 57.76 |
| 2008-09 | 50.00 | 107.76 | 57.76 |
| Total | 149.00 | 279.99 | 130.99 |
Thus, an excess expenditure of Rs.130.99 lakh (Rs.279.99-149.0 lakh) was incurred against sanctioned estimate. This excess expenditure was met by re-appropriating the required amount from the Savings of Other Contingent Expenses of various departments.
In reply the University stated that the VC sanctioned the purchase of particular furniture and the re-appropriation from savings of one head to another where excess fund needed was made by the order of VC.
The reply was not tenable as mentioned the above paragraph.
Part-II-B
Para-1 Excess payment of Rs.9.22 lakh due to irregular installation of Central Air Conditioning
As 23 old installed split/window Air Conditioners (AC) 23 were completely damaged during the above incident, new ACs were required to be installed in the renovated VC’s lodge. For this purpose, tenders were invited through website for installation of Central Air Conditioning covering the area of 6000sq.ft in the VC’s lodge, in response to this the following firms through their authorized dealers visited VCs lodge, surveyed and submitted their proposals as under:-
| Sl. No. | Name of Firm | Amount |
| 1 | Hi Tech Engineer-Blue Star | 32.34 |
| 2. | Saran Aircon Pvt. Ltd, Delhi-DAIKIN | 24.59 |
| 3. | Carrier AC & Refrigeration Ltd.
| 24.98 14.28 |
| 4. | M/s Chill Point, Aligarh-LG | 10.99 |
| 5. | Cosmic Services, Aligarh-LG | 10.44 |
Of the above, proposals mentioned at sl no. 1, 2 and 3 (1) were for VRF/VRV system or based on latest technology. A consulting committee[4] set up by the VC went through these proposals and opted the VRF/VRV system. This committee negotiated with two firms Daikin
Scrutiny revealed that VC sanctioned Rs.24.59 lakh for installation of Centralised AC in VC’s lodge and the supply and installation work was awarded (November 2007) to the Blue Star firm as per above decision and the firm carried out the work accordingly and was paid the agreed amount of Rs.23.50 lakh (February 2008). Scrutiny further, revealed that the energy consumption cost was computed to Rs.12.44 lakh on imaginary basis as the electricity bill in respect of VC’s lodge prior to 16/17 incident or after the installation of present system was never raised.
In reply, the university stated that VC desired for Central AC as this place was visited by the high dignitaries and person of eminence; hence, VC’s lodge must have quality fixtures of national/international norms. Also, the VRF system could be operative at ambient temperatures as high as 520C and could deliver any capacity between 10 percent to 100 percent to exactly match varying cooling requirement resulting in greater power saving.
Reply was not tenable as comparison should be made with the quoted present system in which cheaper option of Rs.14.28 lakh was available for Centralized AC capable in giving the cooling effect. Further, prior to the installation of present system high dignitaries were used to visit AMU and the old system was equally successful.
Thus, university could save Rs.9.22 Lakh if opted for cheaper option.
Part-II-B
Para-3 Loss of interest due to wrong investment of Provident Fund Rs.7.79 Lakh.
1(a) An investment of Rs.51,60,64,176 from the head AMU PF account was made in Canara Bank, Main Branch, Aligarh on 28.02.2009 at the rate of 9 percent for 33 months after obtaining rates of interest from different banks. It was, however, noticed that Central Bank, Dodhpur,
(b) The provident fund committee of the University headed by the VC decided to invest (March 2008) an amount of Rs.8 crore on account of PF amount deducted from the salary of officials of the University in Shreyas Gramin Bank, Aligarh[5] (Gramin Bank) for the period of three years from 31.03.2008 to 31.03.2011 at the rate of 10 percent per annum. Scrutiny, further, revealed that the amount so invested was withdrawn from the above bank after six months and reinvested in the State Bank of India (SBI), AMU Branch, Aligarh with maturity date on 24.07.2011 with the plea that the SBI was paying interest at the rate of 10.5 percent.
This decision of the University resulted into an immediate loss of Rs.7.79 lakh in respect of the amount of interest earned as the Gramin Bank paid Rs.32.21 lakh only as interest amount instead of Rs.40 Lakh that would had been earned as interest at the rate of 10 percent per annum if the invested amount of Rs.8 Crore was not withdrawn from the Gramin Bank.
[1] Resolution No.5 of the Finance Committee dated 9.7.1959 adopted by Executive Council. Resolution No. 13 dated 22.06.1959
[2] VC’s Lodge-Rs 28.77Lakh (2). Registrar’s Chamber-Rs 12.70Lakh (3) Transportation Charge-Rs 12.77Lakh Total – Rs 54.24Lakh
[3] Paragraph 6.9 Chapter 6; Accounts of Purchase, Receipt and Opening of Tenders
[4] Member in Charge, Electricity; Assistant Finance Officer (AFO) Purchases; AFO Audit; Electrical Engineer (S/S); Electrical Engineer (W&M)
[5] A public sector Regional Gramin Bank
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