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Meghalaya Right to Information Movement had organized a public hearing on purchase of CGI Sheets in Rural Housing Scheme/PMGY of Government

of Meghalaya on 4th May 2010 based on its RTI findings. In that hearing we showed how the supplier short supplied inferior quality CGI sheets leading to an estimated loss of Rs. 9,26,36,105.80 to the public during the period 2003-2006. This loss or misappropriation was approx. 52% of the total sanctioned amount for the scheme in the period 2003-206 Based on these findings, MRTIM submitted complaints to the Chief Minister, Dr. Mukul Sangma and the State Vigilance Commissioner Mr. W.M.S. Pariat, who is also the Chief Secretary. In the complaint, we demanded: 1. An independent and official enquiry. 2. Summoning of all records from SAIL and Housing Department including Invoices and Challans. 3. Initiate criminal proceedings against those public servants and supplier, who allowed this criminal breach of trust, misappropriation, cheating and fraud to take place. Rather than take cognizance of our complaint and the RTI evidence and initiate an independent inquiry both the Chief Minister and the Commissioner & Secretary Housing Mr. P. W. Ingty (who held the same post during the period when the scam was taking place) made claims in the press and in assembly rejecting our findings. They claimed: 1. That all the transactions with O.B. Tariang, the dealer were approved by Planning & Finance Department. 2. CGI sheets were sample checked and weighed to confirm weight and quality 3. The scheme was audited by the office of the Accountant General (Audit) and no discrepancy was detected.

PRESS RELEASE BY MR. P. W. INGTY, Commissioner & Secretary, Housing

Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM

NOTICE THE CLAIM ABOUT AUDIT FINDING NO DISCREPANCY As our complaints only elicited, press statement from the CM and Housing department defending governmental action and the dealer. MRTIM decided to file further RTIs to find out status of our complaint. As the govt. had referred to the Audit Reports of the Accontant General, we also decided to file RTI with the office of the Accountant General (audit). In this public hearing we intend to show, how every claim of the govt. regarding our complaint was wrong. We would also share some new facts which show that the NOTICE THE CLAIM implementation of the RHS in Meghalaya was riddled ABOUT AUDIT with corrupt practices from top to bottom and how our FINDING NO intial estimate of corruption was a gross underDISCREPANCY estimation.

PRESS REPORT about Dr. MUKUL SANGMAs statement in the Assembly

Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM

1. Information received from AG office confirms our finding That OB Tariang, Supplier, in collusion with Directorate of Housing was defrauding the exchequer through short supply of inferior quality CGI sheets AG office provided us with the copy of the original Challan from SAIL which when we compared with the Challan submitted by OB Tariang to the Housing department, showed discrepancy in both quality and quantity of CGI Sheet delivered. We place before you two random samples to establish our claim. On 17/11/2004 according to SAIL invoice Mrs. O. B. Tariang lifts 17.050 Mt of Class VIII CGI sheet in Truck No. AS01C1682 17.50 MT of CGI Sheet lifted ORIGINAL SAIL CHALLAN OF MRS. O.B. Tariang QUALITY LIFTED CLASS VIII

DATE OF LIFTING 18/11/2004

TRUCK NO. AS01C1682

But, in Challan submitted to Director Housing, in Challan No. OBT/S/04-05/66 dt. 18/11/04 she delivers 18.766 MT of class III CGI sheet in the same Truck No. AS01C1682.

DATE OF DELIVERY 18/11/2004

SAME TRUCK NO. AS01C1682

CLASS III delivered

18.766 MT of CGI Sheet delivered

Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM

4.890 MT LIFTED CLASS VIII LIFTED

TRUCK NO. AS189516

LIFTED ON 10/02/05 On 10/2/2005 according to SAIL Challan Mrs. O. B. Tariang lifts 4.890 Mt of class VIII CGI sheet from Guwahati in Truck No. AS18 9516. But, in the Challan submitted to Director Housing / DC Housing William Nagar Challan No. OBT/S/2005/4 dt. 10/02/205 she delivers 17.500 MT of Class III CGI sheet in the same truck AS18 9516

CLASS III DELIVERED

17.500MT DELIVERED DELIVERED ON 10/02/05 TRUCK NO. AS189516

Although Dr. Mukul Sangma and Mr. P. W. Ingty try to create an impression that Audit found nothing wrong in the purchase of CGI Sheets, but Audit inspection reports as well as final Audit report also refer to the discrepancy being pointed at by us. Auditors also base their findings on SAIL Challans, which the Meghalaya govt. is loath to summon (more about their reluctance later). First, Audit Inspection Report on the Transactions of the Director of Housing, Meghalaya, Shillong for the period from August 2004 to October 2005 para 5 they notice this fraud and call it Extra Avoidable Expenditure.

Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM

AUDIT INSPECTION REPORT

Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM

Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM

There are two important objections audit raises:

Audit is saying the same thing as what we have showed in our comparison of the challans. This is the prima facie evidence of short supply of inferior goods. Thats why in our complaint we had demanded that Government call for SAIL Challans. Even Audit found it objectionable that government did not call for SAIL original SAIL challans. Even the comments of the Housing Department to audit report verges on ridiculous:

Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM

Housing Director refuses to call for original challan from SAIL as suggested by the AUDIT as he thinks they would yield negative results as in they would reveal the fraud. His reply is rejected by the audit and in 2006-2007 final audit report available on internet they refer to this scam.
5.1.10 Quality Controls During 2002-07, the DoH procured 2,979.43 tonnes of CGI sheets (cost: Rs.12.77 crore) from a Shillong based dealer of the SAIL for distribution to the rural habitations of three test-checked districts under the Rural Housing Scheme. The rates of the sheets having the same thickness (0.63mm) and size (300mm X 800mm) were fixed taking into account the classes, such as, IS 277 Class I, II, III, etc. But no record in support of any system/mechanism prescribed/adopted by the Department to check the classes of sheets procured from the dealer for distribution to the rural populace before making payment to the dealers was produced to Audit.

http://www.cag.gov.in/html/cag_reports/meghalaya/rep_2007/civil_chap_5.pdf If MRTIMs allegations were false, the best way to prove that would have been to call for SAIL challans. If we could get it by RTI from SAIL as well as AG office, govt. could also have done it. Govt knew through the Audit report that AG office had those documents. But Govt knew that SAIL challans would indict the corruption, so after MRTIMs complaint, the govt. for the sake of record asked OB Tariang to supply original SAIL challans, which she insultingly refused to provide.

Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM

Refusal to provide because of Trade Secrets

Although MRTIM is making a serious complaint, Mrs. O B Tariang refers to her Trade Secret and insults the govt. and people by refusing to provide original SAIL challans. Her trade secret in this case we have shown is short supply of inferior quality CGI sheets. More than her Trade secret it is govts meekness before her that is shocking. Mr. P. W. Ingty, Commissioner Secretary, Housing, accepts Mrs. O. B. Tariangs Trade Secret argument and considers it her right. He as the person who was Commissioner & Secretary during the period of scheme too, knows that original SAIL challans would reveal all the collusion between the supplier and the Housing Department.

Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM

Although Chief Secretary rejects Mrs. Tariangs trade secret argument, but he too fails to order calling for original SAIL challans. Because he refuses to acknowledge evidentiary value of original SAIL challan, he calls MRTIMs prima facie evidence, circumstantial and thus finds no need for an independent enquiry. This notesheet with Chief Minister to Chief Secretarys signature proves how the governance in Meghalaya is all about saving and defending the corrupt. If you notice much is made of involvement of District Commissioners and District Housing Officers, in doing the quality checks on the CGI Sheets. This Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM 10

points to the massive extent of the CGI sheet scam. This fictitious quality check of making class VIII sheets into Class III & Class I sheet and overweighing the short supply is the next chapter.

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2. Directorate of Housing and the District Housing Offices had no means of checking the quality and quantity of CGI sheets. In the report submitted to the Government after the MRTIMs complaint, Housing department rubbished our claim about short supply and inferior quality.

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Although SAIL challans clearly show short supply and inferior quality, Housing Department was manufacturing paper work about quality and quantity checks. Their lie is nailed by the Audit report, which Chief Minister so conveniently referred to. Inspection Report on the Transactions of the Director of Housing, Meghalaya, Shillong for the period from August 2004 to October 2005 para 5 they notice this fraud and call it Extra Avoidable Expenditure.

Even the final Audit Report of 2006-2007 remarks on this: http://www.cag.gov.in/html/cag_reports/meghalaya/rep_2007/civil_chap_5.pdf


5.1.10 Quality Controls During 2002-07, the DoH procured 2,979.43 tonnes of CGI sheets (cost: Rs.12.77 crore) from a Shillong based dealer of the SAIL for distribution to the rural habitations of three test-checked districts under the Rural Housing Scheme. The rates of the sheets having the same thickness (0.63mm) and size (300mm X 800mm) were fixed taking into account the classes, such as, IS 277 Class I, II, III, etc. But no record in support of any system/mechanism prescribed/adopted by the Department to check the classes of sheets procured from the dealer for distribution to the rural populace before making payment to the dealers was produced to Audit. The DHOs of three test-checked districts stated (September 2007) that screw gauge and measuring tapes were used for measuring thickness and size of the CGI sheets for random check. The DoH stated (October 2007) that the class of the CGI sheets was checked against the sample supplied and the technical personnel conducted random physical checking to ascertain the quality. In the absence of weighing machines till November 2004 (weighing machines were installed in three districts during December 2004 and March 2005), the correctness of payments made to the dealers for the CGI sheets and the quality of sheets distributed to the rural populace remained doubtful. Since there was no recorded evidence about the quality of sheets, Audit could not ascertain the quality of the sheets procured for supply to the beneficiaries of the testchecked districts.

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The directorate of Housing and their lies are further proved by contradictory remarks made by present Director of Housing Mr. H. B. Marak. In reply to MRTIMs complaint, he claims that there was quality check, the same Mr. Marak in his reply to the Audit claimed the contrary. He was explaining why the department after supposedly supplying Class III and Class I quality CGI sheets in till 2006 went back to supplying inferior quality class VIII CGI sheets:

Curious thing is the various paper work which the department manufactures to hide the Short Supply of Inferior CGI sheets. Although the original SAIL Challans make it clear that only Class VIII sheets were being lifted from SAIL and delivered to the districts, District Officials and Mr. Kutty, Assistant Engineer, in Shillong were certifying class VIII CGI sheets as Class III & Class I. As Audit report makes it clear that Housing Department had no means to check the quality and quantity of the supply. But the illegality does not only end with short supply of inferior goods, but extends into other areas of unaccountability. Unauthorised opening of Savings Bank Account But the most shocking discovery we made through our RTI queries was the existence of an Unauthorised Savings Bank Account operated by Director Housing through which all the funds for the scheme were routed. Director of Housing Late Mr. V. A. Sangma with active approval of Mr. P. W. Ingty, Commissioner & Secretary Housing, opened a savings Bank Account no. 13294 in Vijaya Bank Laitumkhrah. This is contrary to all financial norms of the government. This Savings bank account allowed the officers to indulge in improper financial transactions away from governmental scrutiny. This anomaly was discovered by the Audit. In its initial Inspection Report on the Transactions of the Director of Housing, Meghalaya, Shillong for the period from August 2004 to October 2005 para 4 they notice this illegality and call it Unauthorised parking of funds in savings bank account.

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This bank account was opened without any sanction from the finance department only with the notesheet approval by Mr. P. W. Ingty that he continued to do even after Audit raised objection. Notice the letter is about opening a current account.

First the current account transforms into savings bank account and second they have no permission from the Finance department for this action, only notesheet approval from Commissioner & Secretary Mr. P. W. Ingty. This is done again and again throughout this period First in 2003.

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Then in 2004

Then in 2005

In 2007, even after Audit objection, Mr. P. W. Ingty continues this unauthorized practise:

Savings Bank Account in Vijaya Bank was opened on 17th December 2003. This account was supposed to be a joint account between Director of Housing and Housing Commissioner Meghalaya State Housing Board. Curiously within two days of opening the account, there is a notification by Mr. Ingty allowing Housing Commissioner Meghalaya State Housing Board, to go on a sick leave, leaving the Director Housing Late Mr. V. A. Sangma to operate this account individually as both Director Housing & Housing Commissioner. Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM 17

Now, with almost a private bank account at their disposal Housing department indulges in many unexplained transactions. There is money taken out as cash, money is paid out to Director Housing and many individuals named and unnamed. Look at some of the pass book transactions to see these misdemeanors.

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Most transactions are a cash transaction where it is not known who is receiving the money. There is also mysterious transfer of money to unnamed account holders. Also the money is being paid to Self. This unaccountability becomes stark when you look at some of the chequebook counterfoils.

There are many countefoils like these. But best of all according to audit none of these transactions are routed through Cash Book. Housing department is not able to reply to any Audit objections and this audit observation makes its way into the final audit report of 2006-2007.
5.1.8.3 Unauthorised Opening of Bank Account According to Rules 4 and 8 of the Meghalaya Treasury Rules, 1985, unless otherwise prescribed, moneys credited to Government Account shall be held either in a State Treasury or in the Bank. A Government officer may not, except with the specific permission of the Government, deposit in a bank, other than the State Bank or its agent for the purpose of Government transactions. It was noticed that since 21 April 2004, the DoH had been maintaining a joint savings bank account with the Vijaya Bank, the other joint holder of the account being a State autonomous body, viz., Meghalaya State Housing Board. Permission of the Government for opening the joint account, as required under the Treasury Rules, was, however, not obtained. The DoH stated (October 2007) that Government sanction was usually received on the night of 31st March and the amount had to be drawn immediately to avoid lapse of sanction. As all the nearby State Banks were extremely busy, the amount was temporarily deposited in the nearby nationalised bank and subsequently, expost facto approval for opening bank account was sought.

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The reply is not acceptable because the Treasury Rules do not permit operating of such joint account in any bank. 5.1.8.4 Compliance with Rules According to Rule 103 of the Meghalaya Financial Rules, 1981, the Head of the office is personally responsible for the accuracy of the cash book and cash balance. The cash book should be closed and balanced each day under the dated initial of the Head of the office or his authorised representative. The balance of each column at the end of the month should also be verified with the balance of cash in hand and a certificate should be recorded in the cash book under the signature of the officer responsible for the money. Scrutiny of cash book of the DoH for the period from 2002-07 revealed that the analysis of closing balance was never done and recorded in the cash book. The certificate of physical cash verification at the end of each month was also not recorded regularly thereby violating the provisions of the Financial Rules. Failure to maintain the cash book as per prescribed provisions was not only indicative of serious deficiency in operational control but also fraught with the risk of fraud or misappropriation. The DoH stated (October 2007) that provisions of rules regarding maintenance of cash book were being complied with.

http://www.cag.gov.in/html/cag_reports/meghalaya/rep_2007/civil_chap_5.pdf How govt. dealt with the complaint of MRTIM Meghalaya Right to Information Movement filed complaint with the Chief Minister and State Vigilance Commission on-----. Although Chief Ministers office misplaced our complaint, office of the SVC circulated our complaint officially. Although our evidence convinced the junior officers, who first took a look at our complaint, suggest an independent investigation by Anti Corruption Bureau. But this very sensible suggestion is immediately shot down by Higher officials who merely ask for a report from Housing Department itself. This is against all tenets of natural justice as they are asking the accused to investigate ones own action.

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Now based on the report submitted by Housing Department, which naturally defends its action and action of the supplier, SVC who is the Chief Secretary refuses to endorse any independent enquiry. And this is the action which is endorsed by the Chief Minister.

Moreover, based on Housing report full of holes, SVC/Chief Minister do not even call for SAIL Challans and choose to accept Suppliers trade secret argument. Also, the Chief Secretary considers SAIL Challans to be circumstantial evidence. Only if he would have compared the invoice submitted to the govt by the supplier and SAIL challans and seen how on the same day, the same truck Public Hearing on CGI Sheet Supply under RHS/PMGY by MRTIM 22

starts from Guwahati carrying class VIII CGI sheet, transforms its cargos quality and quantity, he would not have called the evidence circumstantial. Anomalies in CGI sheet purchases were noticed by Audit in almost all its reports and pointed out, yet the Chief Minister while replying to the house chooses to be economical with truth.

These are merely few of the glaring corrupt practises indulged in by the Housing Department and the Supplier, there are many more issues which were revealed by our RTI and which need to be investigated and which our detailed RTI queries have revealed 1. Contract for supply being given not to the lowest bidder. 2. New Contract being given to supplier even when the supplier fails to honour the older contract. 3. Over inflated transport billing 4. Over purchase of CGI sheet while older stock was lying idle. 5. Overpricing due to double taxation. If we add all the unaccounted/unnamed transactions from unauthorized bank account, inflated transport costs, the estimated misappropriation will rise much more than the earlier estimate of Rs. 9,26,36,105.80.

MEGHALAYA RIGHT TO INFORMATION MOVEMENT 24/11/2011

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