Rs 19 crore advances unsettled? – This line of the audit team alerted me

Jarnail Singh
I took over as Administrator of Manipur University (MU) on 12 October 2018. Within one week, central government on its own, sent an audit team to MU for a summary audit of accounts. The audit team’s arrival aroused suspicion of administration and faculty members. I was happy that a summary audit would bring out financial irregularities, if any, which will help in improving MU’s financial administration.
After a summary audit, the team met me on 26th October 2018 and gave a paper containing about a dozen audit observations. One of these observations was that, at the end of 2017, there were about Rs 19 crore unsettled advances, some as old as 10 years, against faculty / non-faculty employees, contractors, etc. Mention of Rs 19 crore unsettled advances alerted me. In the Manipur government, where I worked, I had never seen even one rupee advance unsettled for so long. Rule 323 of the General Financial Rules (GFR) stipulates that any employee who takes advance must utilize within 15 days and submit receipts and settle in advance.
However, if the employee does not incur any expenditure, then he should return the advance within 15 days, and definitely within two months. If not returned, the unsettled advance should be returned with interest. In MU, interest will be 10% as UGC charges 10% interest rate on unutilized funds by the university. Also an employee cannot be given fourth advance if there are three unsettled advances against him. But quite a few in MU had more than half a dozen unsettled advances. One VC had taken 15 advances without settling any. It seemed MU administration had not been following financial rules.
On my advice, the Finance Officer (FO) analyzed advances and found that advances amounting to Rs 6.65 crore were on account of capital account and advances of Rs 11.99 crore were outstanding against employees. Advances for capital accounts were given for civil works to contractors which would be settled when works progressed. Non-settlement of advances against employees was serious and FO prepared a list of employees and outstanding advances, with 10% interest per annum. Letters were sent by FO to concerned employees. After receiving letters, a few reacted with anger as if the FO had committed a crime in reminding them of outstanding advances. It seemed that from 2010 onwards, the FOs and Registrars had not taken actions to settle these advances and asked for vouchers/receipts for advances taken. Non-submission of vouchers and receipts by advance-takers prevented scrutiny of expenditures incurred by them and hence genuineness of expenditures incurred remained under cloud.
Some employees informed that they had submitted receipts and vouchers to the then FOs but settlements of bills were not done. They could be right. But responsibility for not settling advances lay with FO and employees who took advances. The FO should have also asked employees to either return advances taken or submit receipts. If such reminders had gone, employees would have been aware of financial rules and been careful to settle advances. Some faculty members had taken advances for holding seminars, conferences and some had taken advances for students’ study tours as had been the practice till then. It is also right that without advances it would have been difficult to undertake study tours, or organise seminars and conferences. But these advances should have been settled in time. Now after five to 10 years, it was difficult to get receipts and vouchers as some of those who had handled events had left MU. As per financial rules, settlement of advances had to be done by submitting valid receipts and vouchers bearing dates when expenditures were incurred. Otherwise such advances would remain unsettled. The Vice-Chancellor has no discretion to waive off the requirement of receipts.
In November 2018, MU adopted a ‘no-nonsense’ approach and started recovering unsettled advances as per financial rules. There were a few cases (names withheld) where individuals adopted an ‘uncooperative’ attitude to settle advances. A few indulged in lengthy correspondences showing their ignorance about financial rules. MU used methods available under GFR to recover advances from such individuals. Ms. Sandhyarani Ningthoujam MFS, the then FO, did excellent work in settling / recovering advances which ruffled feathers of those who thought they were above the financial rules. When I left MU on 30th November 2020, settlement of advances was going on. It would be a miracle if all advances, some as old as ten years, would ever be settled and face audit scrutiny. I hope, in future, the MU administration would follow the financial rules properly and avoid such a situation.
The writer is former Chief Secretary of Manipur and also worked as Administration of Manipur University