K'taka orders audit of rural works under 14th FC grants

In a first, Karnataka has ordered an audit of rural development works carried out with the 14th Finance Commission grants on the suspicion that the money may have been misused, especially in critical areas such as water supply.

Between 2015 and 2018, the government has pumped Rs 6,145.77 crore of grants under the 14th Finance Commission into gram panchayats.

While the audit has been ordered based on a directive by the Centre, the state government appears to have its own reason for doing so.

In April, for instance, the Rural Development and Panchayat (RDPR) department noticed that not a single gram panchayat had reported how the grants had been spent. Alarm bells rang when it was found that gram panchayats showed low expenditure, prompting authorities to order a social audit.

Karnataka has 6,025 gram panchayats of which only 629 reported a paltry 53% expenditure of the 14th Finance Commission grants for the 2017-18 fiscal. In the 2018-19 fiscal, only nine gram panchayats have reported expenditure so far. This is according to the Union Ministry of Panchayati Raj dashboard that has data on the 14th Finance Commission grants.

The social audit will cover a gamut of works carried out and assets created in the 2017-18 and 2018-19 financial years, in which period gram panchayats received Rs 3625.76 crore for water supply, sanitation, solid waste management, community assets creation, roads, footpaths, streetlights, burial grounds and so on.

The audit will be similar to how it is done for Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) works. In fact, the audit will be done by the Social Audit Directorate under MGNREGS.

Auditors have been ordered to check whether or not the works carried out are of the required or estimated quality, that the 14th Finance Commission grants were used effectively along with other funds and that citizens were made aware of the works being done and the assets created.

Former RDPR minister Krishna Byre Gowda hailed the decision to order a social audit. "It can’t be ruled out that gram panchayats, at their level, may have diverted funds for unspecified purposes," he said. "For instance, it is stipulated that 20% of the funds should be used on water supply. An audit will reveal how much was actually spent and where."

Low expenditure of the 14th Finance Commission grants is not restricted to rural areas. Between 2015 and 2018, urban local bodies received Rs 3534.16 crore of which only 56% has been spent, according to government data.