Funds Worth ₹125 Crore In Gram Panchayats Misused; PWD's Audit Report Discloses Illegality

The panchayat system has come into existence with the ambition that decentralization of power will enable sustainable development at the grassroots level. However, crores of rupees have been spent in gram panchayats, which function as the local administrative system of the government at the grassroots level. A total of ₹125.79 crore has been spent in 5,957 gram panchayats in the state. 

The Karnataka State Audit and Accounts Department has found that there was a misuse of funds. At the end of 2022-23, ₹6,664.11 crore was spent in 4,44,048 particulars in gram panchayats. The amount has been objected to as the Public Works Department (PWD) department has identified irregularities to the tune of ₹665.53 through the audit report of the accounts department.

Negligence of executive officers? 

The Gram Panchayats are required to rectify the errors and irregularities recorded in the audit reports as per Section 246(6) of the Karnataka Panchayat Raj Act, 1993 with regard to the settlement of genuine objections. 

An official from the PWD department speaking to Republic said, "According to the Panchayat Raj Act, such cases of misappropriation of funds should be rectified within three months and a report should be submitted to the taluk authorities. The Executive Officer of the Taluk panchayat has the power to take action against the gram panchayat officials or the guilty for not giving proper report. However, such cases are recurring as most of the officials have not taken action against the guilty."

What is the solution?

The central government has decided to conduct the audit of gram panchayats through audit online software. Based on the recommendations of the 15th Finance Commission, the Ministry of Panchayati Raj will be able to bring uniformity in the audit of local bodies and use web-based software to carry out audits of accounts within the stipulated time frame to curb cases of misappropriation of funds. However, the ZP Chief Executive Officer and the Taluk Executive Officer have to take legal action.

Misappropriated money

District Amount (in lakhs)

Chikkaballapura 1449.50

Kolar 578.62

Bangalore 1148.94

Ramanagara 11.54

Davanagere 1501.90

Tumkur 33.06

Shivamogga 40.55

Chitradurga 57.33

Chamarajanagar 8.02

Chikkamagaluru 60.61

Kodagu 5.49

Mandya 20.12

Mysore 29.89

Hassan 50.73

Udupi 6.92

Bagalkot 15.35

Belagavi 3896.52

Dharwad 1130.69

Gadag 455.88

Haveri 357.31

Vijayapura 1505.82

Yadgir 30.03

Bidar 19.78

Kalaburagi 34.33

Koppal 93.60

Ballari 36.83

Total 12579.36

Violation of rules included

-List of uninvestigated beneficiaries

- Receipts were tampered with. 

-Amount of cost inflated amounting to illegal payment.

-Immovable/movable property transaction not maintained. 

-Lapses in grant records

A beneficiary stated, "As per the audit report carried out for the year 2022-23, the list of beneficiaries under the MNREGA scheme has not been submitted for scrutiny by the awareness and quality control teams of gram panchayats. Ten illegal transportation costs have been paid. It was found that the receipts were tampered with and misused."

Non-maintenance of grant records and non-maintenance of movable/immovable property, misappropriation of cess without crediting the cess to the respective head of account were also reported.