Irregular Payment of Ad-hoc Bonus 62nd Report Public Accounts Committee 2022-23

Irregular Payment of Ad-hoc Bonus 62nd Report Public Accounts Committee 2022-23

IRREGULAR PAYMENT OF AD-HOC BONUS
MINISTRY OF EDUCATION AND CULTURE
PUBLIC ACCOUNTS COMMITTEE (2022-23)

SIXTY- SECOND REPORT

SEVENTEENTH LOK SABHA

LOK SABHA SECRETARIAT NEW DELHI

SIXTY-SECOND REPORT
PUBLIC ACCOUNTS COMMITTEE (2022-23)

(SEVENTEENTH LOK SABHA)

MINISTRY OF EDUCATION AND CULTURE

Presented to Lok Sabha on: 05-04-2023
Laid in Raj’ya Sabha on: 05-04-2023

LOK SABHA SECRETARIAT
NEW DELHI
April, 2023 /Chaitra, 1945 (Saka)

Contents

COMPOSITION OF THE PUBLIC ACCOUNTS COMMITTEE (2022-23)

COMPOSITION OF THE SUB-COMMITTEE I OF PUBLIC ACCOUNTS COMMITTEE (2021-22)

INTRODUCTION

REPORT PART-1

1. Introductory
2. IITs- NT, Kharagpur and IIT, Guwahati
3. IIMs- IIM, Lucknow and IIM, Kashipur
4. Central Universities: – BBAU, BHU, AMU and Allahabad University
5. MNNIT, ALLAHABAD & IIEST, Shibpur

OBSERVATIONS / RECOMMENDATIONS

APPENDICES

1. Minutes of the First sitting of the Sub-committee I (Civil) of Public Accounts Committee (2021-22) held on 21-02-2022.

2. Minutes of the Eleventh sitting of the Sub-committee I (Civil) of Public Accounts Committee (2021-22) held on 29-04-2022.

3. Minutes of the 17th sitting of the Public Accounts Committee (2022- 23) held on 03 April, 2023.

* Not appended to cyclopedia copy of the Report.

COMPOSITION OF THE PUBLIC ACCOUNTS COMMITTEE (2022-23)

Shri Adhir Ranjan Chowdhury – Chairperson

MEMBERS LOK SABHA

2. Shri Subhash Chandra Baheria
3. Shri Bhartruhari Mahtab
4. Shri Jagdambika Pal
5. Shri Vishnu Dayal Ram
6. Shri Pratap Chandra Sarangi
7. Shri Rahul Ramesh Shewale
8. Shri Gowdar Mallikarjunappa Siddeshwara
9. Shri Brijendra Singh
10. Shri Rajiv Ranjan Singh alias Lalan Singh
11. Dr. Satya Pal Singh
12. Shri Jayant Sinha
13. Shri Balashowry Vallabbhaneni
14. Shri Ram Kripal Yadav
15. Shri Shyam Singh Yadav

RAJYA SABHA

16. Shri Shaktisinh Gohil
17. Shri Bhubaneswar Kalita
18. Dr. Amar Patnaik
19. Dr. C. M. Ramesh
20. Shri V. Vijayasai Reddy*
21. Dr. M Thambidurai
22. Dr. Sudhanshu Trivedi

SECRETARIAT

1. Shri T. G. Chandrasekhar – Additional Secretary
2. Shri Tirthankar Das – Director
3. Smt. Anju Kukreja – Deputy Secretary

COMPOSITION OF SUB-COMMITTEE-I (CIVIL) OF THE PUBLIC ACCOUNTS COMMITTEE (2021-22)

Chairperson: Shri Adhir Ranjan Chowdhury
Convenor: Shri Shaktisinh Gohil
Members: Shri T. R. Baalu
Shri Sudheer Gupta
Shri Pratap Chandra Sarangi
Shri Rahul Ramesh Shewale

Introduction

1. the Chairperson, Public Accounts Committee (2022-23) having been authorised by the Committee, do present this 62nd Report (Seventeenth Lok Sabha) on “Irregular payments of Ad-hoc Bonus”.

2. The Sub-committee I (Civil) was constituted by the Public Accounts Committee (2021-22) (17th Lok Sabha) to examine the subject “Irregular payments of Ad-hoc Bonus”, in detail. The Sub-committee I took up the subject for detailed examination and report thereon.

3. The Sub-committee I (Civil) of Public Accounts Committee (2021-22) took oral evidence of the representatives of the Ministry of Education on “Irregular payments of Ad-hoc Bonus” and examined the subject at their sittings held on 21.02.2022 & 29.04.2022. Due to paucity of time, the draft Report on the subject could not be finalized. Thereafter, the subject was carried forward to next PAC (2022-23). The draft Report was considered and adopted by the Public Accounts Committee (2022-23) during their sitting held on 28 March 2023. The Minutes of the Sittings of the Sub-committee / Main Committee form Appendices to the Report.

4. For facility of reference and convenience, the Observations and Recommendations of the Committee have been printed in bold and form Part- II of the Report.

5. The Committee thank Sub-committee I (Civil) for taking oral evidences of the concerned Ministry and obtaining information on the subject.

6. The Committee would like to express their thanks to the representatives of the Ministry of Education and Culture for the cooperation extended by them in furnishing the requisite information to the Committee.

7. The Committee also place on record their appreciation of the assistance rendered to them in the matter by the Committee Secretariat and by the Office of the Comptroller and Auditor General of India.

ADHIR RANJAN CHOWDHURY
Chairperson,
Public Accounts Committee

REPORT

Part-1

INTRODUCTORY

This Report is on the subject “Irregular Payment of ad-hoc Bonus” based on Para 8.1 of Comptroller and Audit General Report No. 2 of 2021.

2. Ministry of Finance (MoF), Department of Expenditure, issued Office Memorandum (OM) for the grant of Non-Productivity Linked Bonus (ad-hoc bonus) to Central Government employees annually. Orders for the grant of this ad-hoc bonus, to the Central Autonomous Bodies (CABs) funded by Central Government, are issued separately every year. Audit observed that OMs for the grant of ad-hoc bonus to Central Government employees were issued for the period from 2015-16 to 2017-18. The Ministry of Finance issued orders for the grant of ad-hoc bonus to Central Autonomous Bodies for the year 2014-15. However, no such orders were issued by Ministry of Finance to the Central Autonomous Bodies, for the period from 2015-16 to 2017-18. Despite this, Audit noticed that 13 CABs paid ad-hoc bonus to their employees, amounting to ?15.87 crore, during the years 2015-16, 2016-17 and 2017-18 (Dept, of Higher Education Rs. 15.28 cr. to 11 CABs, Dept, of School Education Rs. 0.32 cr. to 1 CAB and Ministry of Culture Rs. 0.38 cr. to 1 CAB). This was done without the requisite orders from the Ministry of Finance.

3. When asked about the comments of the Ministry of Education (MOE) on the aforesaid audit findings, the Ministry in their written replies agreed that Audit has correctly pointed out the irregularity. Further, on being asked about the corrective measures taken to obviate the recurrence of such, lapses in future, MOE stated as under:

“At Ministry level, instructions from IFD vide Note dated 20.01.2017 enclosing the instructions of Department of Expenditure vide their O.M. dated 09.01.2017 for not releasing ad-hoc bonus to the employees of CABs from the year 2015-16, were sent to all the Bureau Heads in both the Departments under this Ministry for strict compliance.”

4. Details of the corrective action taken by the 13 CABs to recover the amount of ad-hoc Bonus paid, the Ministry of Education in their written replies submitted as under:-

IITs- IIT, Kharagpur and IIT, Guwahati

Department of Expenditure, Ministry of Finance has been issuing orders for payment of Non-Productivity Linked Bonus (ad-hoc bonus) to eligible Central Government Employees as well as employees of the Autonomous Bodies till 2014-15. Though, the DoE issued orders for payment of ad-hoc bonus to the Central Government employees for the year 2015-16, 2016-17 and 2017-18, but the same was not extended for the Autonomous Bodies. As per the prevalent practice, whenever DoE issues orders for ad-hoc bonus in respect of Autonomous Bodies, MoE endorsed the same to the IITs, which are Autonomous institutions under MoE for appropriate action.

Since, DoE had not issued orders for payment of Non-Productivity Linked Bonus (ad-hoc bonus) from the year 2015-16 onwards, most of the IITs approached to this Ministry with the request to extend the orders of payment of bonus for the year 2015-16 and 2016-17 to their employees. This Ministry vide O.M. dated 03.11.2017 had taken up the matter with the Department of Expenditure, Ministry of Finance. In response, DoE, MoF vide O.M. dated 25.7.2018 had clarified that it was decided with the approval of Hon’ble Finance Minister not to issue orders for payment of ad-hoc bonus in respect of employees of Autonomous bodies, fully or partly funded by the Central Government, for the accounting years 2015- 16 and 2016-17. Accordingly, the above position was conveyed to the all IITs vide letter dated 03.10.2018. Presently, D/o Expenditure do not extend the ad- hoc bonus order applicable to Central Government Employees to employees of Central Autonomous Bodies.

The Audit however observed that NT Kharagpur and NT Guwahati had however paid Rs. 164.95 lakh and Rs. 48.49 lakh respectively as ad-hoc bonus to the employees. The matter was taken up with both these Institutes by this Division.

IIT Guwahati vide letter dated 8-12-2020 had informed that as per the decision taken by the Board of Governors of the Institute during its 104thmeeting held on 04.09.2020, recovery of the bonus amount from the salaries of the employees have been started from the month of November’ 2020. I IT Kharagpur, vide letter dated 28-5-2021 informed that the Institute has started the process of recovery of Non-Productivity Linked (Ad-hoc) Bonus paid to Group B, C and D employees during the accounting year 2015-2016, 2016-2017 and 2017-2018 in easy instalments.

The above two IITs have informed the following latest position of the recoveries-

Read More: https://loksabhadocs.nic.in/

PART-II

OBSERVATIONS AND RECOMMENDATIONS

The Government of India grants non-productivity linked bonus (ad-hoc bonus) equivalent to some days emoluments for a particular accounting year for Central Government employees in Group C and all non-gazetted employees in Group B categories. The Department of Expenditure, Ministry of Finance, issues orders in this regard. The non-productivity-linked bonus is given to those employees who are not covered by any productivity-linked bonus scheme. Payment of ad-hoc bonus is also extended to eligible employees of central para-military forces, armed forces and to the employees of the Union Territory Administration. The expenditure incurred on account of the non-productivity linked bonus is met from within the sanctioned budget provision of concerned Ministries / Departments for that financial year.

2. The Committee note that the Department of Expenditure, Ministry of Finance had issued orders for the grant of ad-hoc bonus to Central Autonomous Bodies for the year 2014-15. However, no such orders were issued by the Department of Expenditure to the Central Autonomous Bodies (CABs), for the period from 2015- 16 to 2017-18. Despite this, 13 Central Autonomous Bodies under the Department of Higher Education, Department of School Education and Ministry of Culture paid ad-hoc bonus to their employees, amounting to Rs. 15.87 crore, during the years 2015-16, 2016-17 and 2017-18. The Committee further find that these Central Autonomous Bodies under the Ministry of Education and Ministry of Culture had neither sought the approval from their respective administrative Ministries / Departments nor sought any clarification from the Department of Expenditure before releasing the ad-hoc bonus to their employees. The Committee are perturbed to note that CABs had paid the bonus to their employees in similar way as was being paid till 2014-15.The Committee viewed this lapse as a sheer administrative and procedural negligence on the part of the CABs. The Committee, therefore, desire that responsibility of the Officers concerned with this lapse may be fixed so as to avoid recurrence of such matters in future. The Committee also desire that the Ministry of Education should devise a mechanism for close monitoring of the flow of expenditure so that such lapses are identified timely at the level of budget sanctioning / controlling authorities. Besides, budget controlling authorities also should be more vigilant before sanctioning any amount, failing which, they may be held responsible for such acts of omission.

3. The Committee are perturbed to find that The Asiatic Society, Kolkata which is an Autonomous Body fully funded by the Ministry of Culture not only have justified the irregular payment of ad-hoc bonus to their employees from 2015-16 to 2017-18 but also continued payment of the irregular bonus for two subsequent years also i.e., for the period from 2018-19 and 2019-20. Further, the Committee are astonished to note that The Asiatic Society, Kolkata have not yet initiated recovery of the unapproved irregular payment of ad-hoc bonus from their employees even after the issue was flagged by the C&AG and the subject taken up for examination subsequently by the Committee. It is further alarming to note that The Asiatic Society have not responded to the rigorous pursuance of the matter by the Ministry of Culture. According to the Committee, this depicts sheer negligence on the part of the Asiatic Society, Kolkata, as well as Ministry of Culture. The Ministry of Culture cannot absolve themselves from not taking responsibility for the whole issue despite being a nodal Ministry in this case. The Committee express grave concern over the laxity shown by the Ministry in monitoring such irregular payment of ad-hoc bonus by the Asiatic Society, Kolkata to its employees. In the opinion of the Committee, the Ministry of Culture should have timely monitored such issue and taken remedial / penal measures. They, therefore, recommend that the Ministry of Culture should make all out efforts to settle this issue with the Asiatic Society, Kolkata and make them understand that paying of ad-hoc bonus by them to their employees is irregular and they should make every possible effort to recover the ad-hoc bonus dispersed at the earliest.

The Committee further observe that the ASK made payment of ad-hoc bonus to its employees by taking reference to the instructions issued by Ministry of Finance till 2014 regarding payment of ad-hoc bonus to the Central Government employees and on the ground that the employees of ASK are at par to the Central Government employees. However, the Ministry of Culture did not agree with this contention of ASK since it is an Autonomous body fully funded by the Ministry of Culture and the employees of ASK are not at par with that of Central Government Employees. The Committee are constrained to observe that as per regulation 4 A (1) of the Asiatic Society, there is a Standing Finance Committee (SFC) of the society to consider and advise the council (ASK) on all matters having financial implications. The SFC advised the ASK that the society shall not make any further payment of ad-hoc bonus unless any specific orders are issued by the Ministry of Finance. The SFC further stated that ASK shall take immediate steps in recovering the amount of Rs. 38.15 lakh paid to the employees towards ad-hoc bonus for the years 2015-16, 2016-17 and 2017-18. Since ASK has not yet started recovery of the irregular payment of bonus to its employees, the Committee recommend that taking into account the recommendations of SFC, the ASK should take earnest steps to recover the irregular payment of Rs. 38.15 lakh from its employees, failing which, stringent action may be taken against the budget controlling authorities in ASK. Further, a mechanism should be placed by the Ministry of Culture to ensure that all orders regarding benefits are issued only after they are received from the Ministry of Finance.

4. The Committee note that except The Asiatic Society, Kolkata, recovery of irregular payment in respect of rest of the 12 Central Autonomous Bodies has either been completed or partially recovered. However, the Committee observe that Indian Institute of Management-Kashipur and National Institute of Open Schooling had initially justified that they had followed the Central Government Rules and they were not partly nor fully funded by the Central Government, hence, the payment of ad-hoc bonus to their eligible employees was in order. Indian Institute of Technology -Guwahati had countered that the bonus paid to its employees for the years 2015-16 and 2016-17 would be adjusted against its own development fund. Similarly, Indian Institute of Technology-Kharagpur had earlier replied to the Audit that for the year 2017-18, the ad-hoc bonus had been disbursed out of its own resources. The Committee, therefore, recommends that the Central Autonomous Bodies alongwith the Ministries of Education and Culture should consult the Ministry of Finance to find a justifiable alternative / solution regarding payment of ad-hoc bonus from their own resources / fund to their eligible employees at par with the Central Government employees.

5. The Committee are perturbed to note that this matter was not flagged by the Internal Audit Wing of the Ministry of Education / CABs as well as the Ministry of Culture for such a long period. The Committee are astonished to note that the matter came to the notice of the aforesaid Ministries / CABs only when it was pointed out by the O / o C&AG. The Committee feel that the existing internal control as well as the budgetary mechanism in the said Ministries / CABs need to be strengthened to avoid recurrence of such lapses in future. The Committee also desire that the Internal Audit Wings in the Ministries / CABs be strengthened so that such matters which have large financial implications do not remain un noticed for such a long period. The Committee are of the view that had these issues been pointed out by the Internal Audit Wing of the Ministries as well as CABs concerned, the irregular payment of bonus would have been stopped even during the first year of payment to the employees. It should not have been repeated for further 2-3 years. The Committee would, therefore, expect that the Internal Audit Wings in the Ministry of Education / Culture / CABs, henceforth, be more vigilant and prompt in detecting such cases timely in order to avoid loss to the exchequer. Further, Internal Audit Wing be established in all the CABs and all the bonus and payment related files may be routed through this wing and Internal Audit of the institute is done by IAW on annual basis to curb recurrence of such errors in future. The Committee would also desire to be apprised of the latest mechanism put in place for co-ordination between the Finance Division of the Central Autonomous Bodies with the Ministries concerned as well as with the Ministry of Finance before according any financial decision.

6. As regards the recovery of irregular ad-hoc bonus paid, the Committee observe that out of total amount of Rs. 6,75,350 which was required to be recovered from the employees of NIOS f 4,29,626 are still to be recovered. During evidence held on 29.04.2022 a representative of NIOS apprised the Committee that for recovery of ad-hoc bonus paid to its employees, a number of 20 instalments have been made, out of which, recovery in five instalments to the tune of Rs. 2,45,724 has been done. Recovery of the balance amount, which is Rs. 4,29,629 is going on, and will be done in due course. The Committee would desire to know the date when the decision for recovering the amount in 20 instalments was taken, at what level such decision was taken and whether the NIOS apprised the Ministry of Finance about this decision. The Committee would also like to know the present status of recovery of the remaining amount and urge that it should be recovered at the earliest.

7. Further, the Committee find from the Audit para that Asiatic Society, Kolkata has paid ad-hoc bonus totalling Rs. 38.15 lakh for a period of three years i.e. 2015- 16 to 2017-18. However, representative of Ministry of Culture had informed the Committee that the ASK were making the payment till 2021-22 without bothering about the issue pointed out by Audit in November 2020. The ASK in February, 2022 had stopped further payment. The Committee are aghast to observe that till February, 2022 the amount of ad-hoc bonus paid by ASK would be much more than the amount pointed out by the Audit in their review conducted in 2020. The Committee, would like to be apprised of the total amount of ad-hoc bonus paid till February, 2022 and the status of recovery thereof.

The Committee would also like to know whether the issue of paying ad-hoc bonus till February, 2022 by ASK was under the notice of Ministry of Culture, and if so, why the Ministry did not take any action to stop such payment between the period from 2020 to 2022. Since, it was Government money, Ministry of Culture should have not permitted the ASK to expend it irregularly for such a long period (from 2015-16 to 2021-22). This clearly indicates that Ministry of Culture does not have any control over the expenses of ASK. This is a matter of grave concern to the Committee that the ASK had paid ad-hoc bonus for a prolonged period of 7 years without giving due consideration to the directions issued by Ministry of Finance, issue having been pointed out by the Audit in 2020 and the matter regularly being pursued by Ministry of Culture with them. The Committee thus recommend that henceforth, budgetary monitoring, internal financial control mechanism in Ministry of Culture as well as in ASK be strengthened and effective steps be taken for stricter monitoring and control over irregular expenditure in future. The Committee would also emphazise the Ministry of Culture to stop the grant of their Autonomous Bodies, in case any irregular expenditure is incurred by them recurringly without taking permission from the Ministry in future.

8. The Committee are astonished to note that no recovery has been made as yet by the ASK despite the case being pursued by Ministry of Culture with them from time-to-time through letters / emails dated 25 / 11 / 2020, 24 / 02 / 2021, 26 / 03 / 2021, 08 / 07 / 2021 and 20 / 12 / 2021. Since no recovery was made by the ASK, Ministry of Culture vide their letter dated 08 / 03 / 2022 again requested ASK to start recovery of ad-hoc bonus paid. The Committee are astonished to know that since issuing of instructions every month by Ministry of Culture to ASK, has not produced any tangible result, the Ministry has not taken any stringent measures against the budgeting authorities of ASK. The Committee are perturbed to note that the ASK vide its letter dated 22 / 04 / 2022 requested the Ministry of Culture for waving off the bonus already paid to its employees for the years 2015-16 to 2019-20 without giving any reason / justification in support of their request. The Committee have been informed that the Ministry of Culture had not acceded to this request of the ASK and asked them to furnish ATN after settling recovery of the bonus paid to its employees. The Committee are aghast to note despite several reminders to ASK for recovery of ad-hoc bonus paid, the position is still the same, which clearly indicates that the matter has not been addressed by the ASK with due seriousness. While deprecating the lackadaisical approach of the ASK towards resolving this issue, the Committee recommend the Asiatic Society, Kolkata to recover the irregular payment of bonus from its employees without any further loss of time, failing which, the responsibility of the General Secretary of the ASK, who approved all payments / expenditures of the society be fixed and suitable punitive action meted out against him for not doing so. The Committee would like to be apprised of the details of recovery from the Asiatic Society, Kolkata within one month of the presentation of this Report to Parliament.

9. The Committee observe from the replies of the Ministry of Education / Culture that the decision for paying irregular ad-hoc bonus by the Autonomous Bodies to their employees was taken at the higher levels i.e. at the level of Vice-Chancellor, Director as well as General Secretary of the concerned Autonomous body. All those decisions were taken without any sanction from the Ministry of Finance. The Committee are perturbed to note that without the sanction of Ministry of Finance, how the Ministry of Education / Culture could manage to release fund to the Autonomous Bodies for paying ad-hoc bonus for their employees and under which head of account the grants were being issued to them. The Committee desire to know as to whether any responsibility has been fixed against the aforesaid authorities for sanctioning / releasing such ad-hoc bonus. As the entire episode of irregular payment of ad-hoc bonus is reflective of financial negligence and lack of accountability on the part of the concerned officers in the said Ministries / Autonomous Bodies, the Committee desire that in order to avoid such lapses in future, the Ministries / Autonomous Bodies should hold monthly meetings to review the flow of expenditure to ensure effective fiscal discipline and avoid such a loss to exchequer. The Committee are again of the view that if such issue had been noticed by the internal Audit Wing of the Ministries / Autonomous Bodies the loss incurred could have been avoided. The Committee therefore, desire the Ministry of Education / Culture should review the functioning of their Internal Audit Wing so that such mistakes could be detected and rectified in a timely manner.

ADHIR RANJAN CHOWDHURY
Chairperson,
Public Accounts Committee

Source: https://loksabhadocs.nic.in/