CAG flags INR 5.86 crore irregular payment in Nagaland PWD Phek project, citing false bills, fictitious entries, and lapses in oversight.
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KOHIMA — The executive engineer (EE) of Public Works Department (Roads and Bridges), Phek division, made an irregular payment of INR 5.86 crore to a contractor for short-executed works based on false bills and fictitious measurements recorded in measurement books (MBs) and running account (RA) bills.
This was stated in the report of the Comptroller and Auditor General (CAG) of India on Social (including Local Governments Audit), Economic, General and Revenue Sectors for the year ended March 31, 2023.
According to the report, the project ‘Upgradation of road from Satheri to Chepokita under Phek district, Nagaland (22 km)’ was approved in February 2014 by the Union Ministry of Road Transport and Highways (MoRTH), at a cost of INR 21.70 crore under the Central Road Fund (CRF).
Examination of records in May 2023 revealed that the government of India released INR 21.70 crore in 11 instalments between March 2015 and June 2022 to the state government. In turn, Nagaland government released the same amount in 12 instalments between 2015 and October 2022 to the department.
Also read: INR 2.48 crore spent on vehicles using irrigation scheme funds in Nagaland — CAG report
The chief engineer of PWD invited tenders in June 2014, and the work—stipulated for completion by July 2016—was awarded in the same month to M/s Vertex Construction, Dimapur, for INR 20.46 crore. The project cost was later revised to INR 21.69 crore in April 2022.
Further scrutiny revealed that the work, which commenced in August 2014, was completed after a delay of six years in April 2022. The contractor was paid INR 21.69 crore through 11 RA bills.
To ascertain the actual execution of the work, a joint physical verification was conducted in May 2023 by audit and departmental officials, which revealed that 15 items of work, valued at INR 5.85 crore, were short-executed.
The audit observed that in all cases, the sub-divisional officer (SDO) recorded in the MBs that the works were executed, indicating a violation of Paragraph 341 of the NPWD Code, which requires proper scrutiny of the description and quantities of work to ensure correctness of bills submitted by the contractor.
It was further observed that these fictitious measurements were approved by the EE, indicating a lapse in monitoring and failure to verify the correctness of quantities before passing the bills for payment. As a result, excess payment of INR 5.86 crore was made to the contractor based on false bills and fictitious measurements recorded by the SDO and approved by the EE, in violation of NPWD Code provisions.
The report stated that incorrect utilisation certificates were submitted to MoRTH to secure funds and claim amounts in excess of actual expenditure.
While accepting the findings, the department stated in August 2023 that the contractor had carried out additional widening of earthwork up to 11 km outside the scope approved in the Detailed Project Report (DPR). However, the EE and SDO failed to exercise due diligence in verifying the claims and certified short-executed works as completed.
The audit recommended that the state government fix responsibility on the SDO and EE for making false entries and releasing payments without actual execution of work. It also recommended initiating action against the contractor for submitting false claims and taking steps to recover the excess amount paid.