CAG report on local bodies opens a can of worms

Points to lacunae in tax collection and project execution by BBMP

But to realise that goldmine, the Palike has to update the database.

Addressing the media, Keerti Tewari, accountant general, (Local Bodies Accounts and Audit) said the BBMP has no proper database on the number of properties in the City.

“There has been an abnormal delay in conducting the physical survey of properties based on digital mappings of the area. Despite having facilities of GIS (Geographical Information System), the Palike has failed to collect comprehensive data of the properties,” she said.

Tewari said the CAG report has found many instances of incorrect declaration of property tax where the taxpayer has fudged the documents. There are also errors in entering the actual details of the property.

These have led to shortfall in collection of tax to the tune of Rs 207.35 crore between 2008 and 2010. Even in the implementation of Self Assessment Scheme (SAS) of property tax during the year 2008-09, it was observed that there was 28 percent reduction in tax collection.

No revision

BBMP has not revised its property tax rates and still follows the rates fixed during the year 2000. This, despite a steady increase in market value of properties in the City with the boom in residential apartments, shopping malls and multiplexes.

According to the Karnataka Municipal Council Act, the tax rates have to be revised every three years.

The CAG report found that the BBMP had 160 bank accounts with more than Rs 1,065 crore in them without the money being transferred to the nodal bank accounts. These accounts were operated in the name of individuals giving rise to chances of misappropriation of funds. Cash book in respect of bank accounts were either not maintained or were incomplete.

The report found that the BBMP chief engineer did not follow procedures leading to extra payment of Rs 39.49 lakh on road-widening and road strengthening work from Mysore Bank Circle to High Grounds Police Station.

The road-widening work of existing Bellary Road from High Grounds Police Station to Windsor Manor Circle was executed through four contractors between September and December 2008. Although the road deteriorated during the defect liability period of four-seven months since its completion, the commissioner failed to invoke the defect liability clauses in the agreement, causing a loss of Rs 87 lakh.

The report said that the BBMP commissioner had failed to take possession of the requisite land before commencement of work providing utility cable ducts and chambers on either side of Hosur Road, Palace Road, Race Course Road and Sheshadri Road, which resulted in wasteful investment of Rs 4.31 crore on partially constructed cable ducts. It was also found that the Palike’s chief engineer took improper action in excavation for the foundation of culverts and inflated the estimated rate for two desilting works which led to excess payment of Rs 90.25 lakh to two chosen contractors.

“The audit was conducted on random basis where all the records were not checked. There will definitely be more irregularities if there is a thorough audit conducted,” said Tewari. This year’s audit will again be conducted in BBMP and the accountant general’s office will concentrate on infrastructure projects related to road widening, she added.