The CAG cited a case involving the Sardar Patel Institute of Public Administration (SPIPA), noting that SPIPA had reported funds of ₹32.81 crore as utilized without actual expenditure. File | Photo credit: The Hindu
India’s Comptroller and Auditor General (CAG) in Gujarat has highlighted weak financial oversight, misreporting of expenditure and extensive reliance on utilization certificates, raising concerns about transparency and accountability in public spending.
The findings are part of the ‘Report of the Comptroller and Auditor General of India on State Finance 2024-25’, tabled in the State Assembly on Wednesday (March 25, 2026), the last day of the budget session.
The audit pointed to systemic problems in financial reporting, including cases where funds were reported as used without actual expenditure. The key case involved the Sardar Patel Institute of Public Administration (SPIPA), which reported utilization of ₹32.81 crore despite the funds being parked in bank accounts.
“SPIPA withdrew the subsidy, deposited the entire amount in bank accounts and submitted a certificate of use that the funds were used for the intended purpose, even though they were not fully used,” the report said.
The CAG found that such practices amount to adulteration and distort the true picture of government expenditure. He added that the funds parked outside the government accounts cannot be considered as used for the purpose of submitting the utilization certificate.
The report also highlighted that the department considered the funds fully spent when transferred to implementing agencies, even if the amounts remained unused or were subsequently returned.
The main problem that was identified was the dependency of certificates on usage. As on 31 March 2025, a total of 4,258 UCs worth ₹7,431.84 crore remained outstanding in 18 departments covering the period 2001–02 to 2023–24.
The auditor warned that delays in submitting UCs increase the risk of embezzlement, misuse and blocking of funds and called for stricter monitoring.
Besides, cases of non-submission of UCs including ₹63 crore released to the municipal body without any corresponding certificates were recorded.
The report also flagged parking of ₹445.19 crore in bank accounts instead of routing the funds through the public account, which is in violation of Article 266(2) of the Constitution.
Concerns have been raised about unadjusted advances drawn through abstract escrow accounts, with 5,378 such accounts worth ₹554.73 crore remaining outstanding. The CAG said this makes the expenditure opaque and prone to misuse.
The audit further pointed to improper accounting practices, including misclassification of ₹1,108.42 crore as revenue receipts instead of reductions in expenses, leading to an overstatement of revenue.
Delays in submission of accounts by autonomous bodies receiving government grants were also highlighted, with the CAG noting that such delays hampered legislative scrutiny.
Regarding tax collection, the report said that although the Gujarat Motor Vehicle Tax Act, 2001 provides for the creation of a local body fund, no such fund has been set up. During 2024–25, ₹4,169.29 crore collected as motor liquor was not transferred to any designated fund.
Published – 25 March 2026 20:25 IST
