The Comptroller and Auditor General of India (CAG) report on Urban Loc­al Bodies in Karnataka, rel­eased on Thursday, shows the financial position of the Bruhat Bangalore Mahanagara Palike (BBMP) in poor light.

“The current liabilities and provisions increased from Rs 495.33 crore in 2007-08 to Rs 689.30 crore in 2008-09. It increased to Rs 2,797.33 crore in 2009-10 and Rs 4,906.97 crore in 2010-11,” the report said. There has been an increase of 891 per cent in current liabilities and provisions during 2007-2011.

The Palike, according to the CAG, has replied that the increase in liabilities happe­n­ed because 100 villages and five municipalities were brought under the BBMP fold.
The report, which has found many anomalies in the implementation of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), highlighted that funds released to pay contractors of storm water drains (SWDs) were diverted by the BBMP for refurbishment of the office of the chief engineer, SWD, at Jayanagar.

A scrutiny of the BBMP’s bank statements and records has revealed that it diverted Rs 36.66 lakh for this purpose. “The funds were released in March 2008 and rules pres­c­r­ibe that funds released for projects should not be diverted or utilised for purposes other than those for which these were released,” the report noted.

Replying to the CAG’s objection, the BBMP special commissioner had, in March 2013, said the amount was recouped from the Palike funds. The CAG, however, has found it to be untrue.

Out of the 53 projects under the JNNURM scheme being implemented in Bangalore, the BBMP is implementing 17. Out of these, the CAG had looked into 10.

According to D J Bhadra, Principal Accountant General (General and Social Sector Audit), a notional loss of Rs 149.59 crore, calculated through the findings of the report, has been found in the Palike’s implementation.  The report has found shortcomings not only in the implementation of the SWD projects, but also housing projects for the urban poor, under the scheme. It also said the Palike is yet to achieve the intended progress in property tax collection, to be done using GIS.

The reports point out that all the mandatory and optional reforms at the BBMP level is yet to be achieved. “Financial discipline was poor as evidenced by diversion of funds for other purposes, non-maintenance of statutory records, non-reconciliation of balances, non-maintenance of revolving funs, et al,” the report said.

It recommended that there was a need for measures to achieve optional and mandatory reforms as decided by the State government.