By Arun Kumar Das

New Delhi, Aug 21 (IANS): In a critical observation on Indian Railways' accounting system, a parliamentary committee has pulled up the national transporter for not following its own rules and regulations for efficient execution of projects and proper accounting of financial transactions.

The Public Accounts Committee (PAC), in its latest report, has found that a total expenditure of Rs 51,667.83 crore was booked up to March 2013 in 305 works registers in respect of 144 projects -- excluding 10 projects each in Northern Railway and East Coast Railways -- maintained by accounts office. However, the expenditure mentioned in the books of Executives was only Rs 35,960.86 crore.

Pointing to inadequacies in the accounting system and also glaring lapses on the part of officials, the committee has strongly recommended initiating disciplinary action against those responsible for these and sought to be apprised of the action taken by the ministry in this regard within a period of three months. It has also called for the strengthening of the Railways' internal mechanisms.

Pointing out that the variation in expenditure of Rs 15,706.97 crore was not reconciled, the PAC, headed by Congress MP Mallikarjun Kharge, was appalled to note the reply of the Railways that the arrears in reconciliation were due to staff shortage, shortage of time, etc.

Further, the PAC has also taken note that out of 5,737 on-account bills in respect of 164 projects, only 619 bills were passed after preparation of material reconciliation.

The committee has observed that the completion records were not prepared for 674 projects completed prior to march 2011. This included 92 projects commissioned during 2008-09 to 2010-11 and 466 projects were commissioned 20 years ago.

The committee was shocked to observe that there was no explanation by the ministry as to why completion reports of 78 projects commissioned 24 years ago were not prepared.

Raising serious doubts over the books of accounts opened for such a long period, PAC opined that "there is a possibility of adding on expenditure even after completion of actual work".

The PAC in its report said that if the test-checked cases in the audit report revealed non-preparation of completion reports of 78 projects commissioned 24 years ago, it can well visualise that what would be the quantum of non-completion reports in the entire railway zones.

The committee has therefore recommended that after taking stock of the total non-completion reports, chief accounting authority in the Railway Board as well as the concerned accounting authorities in all the railway zones should be held responsible for this lapse and suitable punishment awarded to them.

Besides it has suggested tor a robust internal control system to assess and verify the cost of completed projects in the books of accounts should be evolved by the ministry.

It has found that in none of the 93 major projects involving new lines, gauge conversion and doubling completed during 2007-08 to 2011-12, the productivity test was carried out by zonal railways.

Thus the mandatory test to assess the actual financial returns of the projects was not carried out in all the 93 projects reviewed in audit across the zonal railways.

So how the 5,118 bills were passed without material reconciliation statement while the ministry stated that they have a sound mechanism for monitoring the supply of materials and utilisation, the PAC asked.

The committee has found that out of 525 works relating to monthly review of expenditure revealed that while plan-wise monthly review by accounts office was conducted in respect of 367 works, the same was not conducted for the remaining 158 works, work-wise monthly review by accounts office was not conducted in respect of 210 works.

The committee is constrained to note that in the absence of periodical review of works, how could the Railways exercise control over expenditure.

Railways undertakes various projects from time to time for augmentation of network capacity including renewal and replacement of depleted assets while incurring expenditure on such works, it is essential that the utilisation of the resources have to be properly accounted for and periodically monitored, it said.

Quoting the CAG reports of 2014, the committee said Indian Railways is, in general, not following its own rules and regulations laid down in the financial code and engineering code for efficient execution of projects and for proper accounting of financial transactions.