CAG pulls up embassy over embezzlement

Audit body notes no criminal action initiated against clerk in Rome

Though the clerk resigned and the Embassy recovered the embezzled money by adjusting the amount against the terminal benefits, the CAG in its latest report said that the action taken against him was ‘inadequate’ as no criminal proceeding was initiated.

“The stated adjustment of terminal benefits of the errant local employee to make good the loss due to embezzlement of government money is questionable as involvement in an act of fraud and cheating would normally disentitle any employee to any form of terminal benefits,” said the CAG.

“There is no evidence that the Ministry (of External Affairs) and the Mission pursued any criminal action against the errant employee so as to establish a strong deterrent against similar fraudulent conduct on the part of its employees,” it added.

The embezzlement first came into light during annual audit of the mission in November 2009. It was found that the local clerk had violated financial and administrative rules and practices and misappropriated € 38,784.95 between June and July 2009.

The clerk resigned just a few days before the annual audit commenced.
According to the CAG report, consular receipts were utilised for meeting day-to-day miscellaneous expenses, which otherwise should have been paid by cheques.

Contrary to administrative instructions, which mandated consular receipts should be deposited on the same or next working day in the bank, the receipts were not deposited in the order in which they were received and entered in the cash book.

Cash was allowed to accumulate in the accounts section and used for defraying various regular expenditures. Only the balance was deposited, that too with delays of varying periods. “The overall laxity that prevailed in the handling of cash receipts facilitated misuse and embezzlement of government money by the local clerk,” the auditor noted.
The CAG came down heavily on the then Head of Chancery (HoC) and noted that he had not complied with instructions requiring him to ensure that there is no discrepancy between the cash reflected in the consular cash book and the monthly cash accounts.

The then HoC had not verified the consular fee shown as deposited in the bank account from the deposit slips before attesting the respective entries in the cash book, it said.
The HoC also failed to perform basic cross checking between paid vouchers and cash book or cash account entries before attesting and verifying them, thus making it easy for the clerk to overdraw significant sums of money.

The Indian Embassy in Rome later constituted a three-member committee to investigate the case and the probe panel’s report too corroborated the audit findings.

The MEA later found that the extent of the government money embezzled by the local clerk had in fact been of the order of € 41,359.60, as some other advances that had not been adjusted had come to light.

The ministry also issued a “non-recordable warning” to the then HoC for his failure to keep an efficient and effective supervisory control over the accounts of the Mission.