CAG flags serious lapses in spending of Odisha DMF fund meant for mining-affected areas' benefits

Bhubaneswar, The Comptroller and Auditor General has flagged several lacunae in the sanction and execution of projects under Odisha's District Mineral Foundation, meant for the interest and benefits of the mining-affected people and areas in the state.

In one of its reports, presented in the Odisha Assembly on Monday, the top audit authority flagged significant systemic shortcomings in the assessment, collection, and monitoring of District Mineral Foundation contributions in test-checked mining circles and works divisions.

Incorrect application of prescribed DMF contribution rates, failure to reassess contributions after final royalty assessments, and non-levy of interest on delayed payments collectively resulted in a substantial loss in DMF collections, it said.

Such contributions refer to a mandatory financial payment made by mining leaseholders in Odisha to DMFs.

Although six districts collected ₹22,568.17 crore towards DMF contribution, including interest, and sanctioned 17,435 projects worth ₹20,947.52 crore from DMF funds during 2015-16 to 2023-24, none of the six DMFs prepared a perspective plan and master plan, the audit report said.

The six audited districts are Sundergarh, Keonjhar, Jajpur, Mayurbhanj, Dhenkanal and Nabarangpur.

"As many as 9,739 projects worth ₹17,926.79 crore were sanctioned from DMF in Keonjhar and Sundargarh districts during 2015-16 to 2023-24. Out of this, expenditure of ₹983.32 crore was made towards implementing projects in 976 non-affected villages, whereas not a single project was implemented in 488 directly affected villages and 96 indirectly affected villages," the report said.

Of the ₹1,164.43 crore utilised in Jajpur DMF, 43.54 per cent, that translates to ₹507.02 crore, was used in indirectly affected areas, exceeding the prescribed limit of 40 per cent, it stated.

Out of the six selected DMFs, Mayurbhanj, Dhenkanal and Nabarangpur districts had not opted for a flexi deposit/auto sweep account for surplus DMF funds during 2015-2024, resulting in an interest loss of ₹9.49 crore. Similarly, Keonjhar DMF incurred an interest loss amounting to ₹84.51 crore.

DMF funds of ₹171.79 crore from Jajpur, Keonjhar and Sundargarh districts were released to the MGNREGS director for the payment of additional wages to job seekers, which violates the Ministry of Rural Development guidelines, the CAG said.

"Out of total administrative expenditure of 99.81 crore in Sundergarh DMF, ₹25.01 crore was irregularly utilised for other than administrative expenditure, like engagement of vehicle for police patrolling, renovation of municipality office, renovation of reading room at collector's residence, inauguration charges and organisation of school function etc," the auditor pointed out.

In Jajpur, Keonjhar and Sundergarh DMFs, implementing agencies had not returned the unspent amount of ₹470.25 crore and the interest earned thereon, amounting to ₹26.51 crore, to the DMFs after project completion.

Similarly, the implementing agencies of Dhenkanal and Mayurbhanj had not returned interest amounting to ₹87 lakh to their respective DMFs.

Furthermore, an expenditure of ₹136.77 crore was made for constructing a hockey stadium out of DMF funds in Sundergarh, and the project does not fall under any activities permissible under the scheme guidelines, the audit said.

The CAG further pointed out that ₹109.45 crore from Sundargarh's DMF was paid to a private hospital in Rourkela against a requisite payment of ₹98.85 crore, resulting in an excess payment of ₹10.60 crore during the Covid pandemic.

The auditor advised the Odisha government to ensure proper maintenance of accounts of DMF funds as per the codal provisions and refund of accrued interest thereon by the implementing agencies.

It recommended that the state government ensure timely completion of projects sanctioned and full utilisation of funds released within the financial year and submission of utilisation certificates.

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