THIRUVANANTHAPURAM: The state government has decided to engage a private chartered accountancy firm for account reconciliation process of funds received through various payment modes towards
Chief minister disaster response fund (CMDRF). The move which upsets the present public fund auditing mechanism has triggered reservations regarding the monetary expertise of department of finance. The government had linked the CMDRF account number in the name of principal secretary, finance to various payment gateways and also opened accounts in 13 different banks and has received contributions from payment app and mobile wallet.
As per the order issued by department of finance, Varma and Varma, a private firm has been entrusted to reconcile the accounts and submit a detailed report. The firm will be paid Rs 2,000 a day for the work. Finance minister
Thomas Isaac said that a private firm is being engaged for the accounting of CMDRF because the finance department is over-burdened. "We are going for a private firm because around 1 lakh cheques and drafts are being received. The staff of finance department is not sufficient. Around 15 staff are already working on this, but we need expertise in reconciling, so we gave it to Varma and Varma," he said.
When asked about the possibility of data mining for nefarious purposes in future, finance minister said that the whole exercise was transparent. "It's a short-term measure. All bills will come in 2-3 weeks. Drafts and cheques are being deposited in many banks and we don't want to make a mistake. Besides, it's very transparent. Everything should be in
public domain. We want to be double sure of the money being received and hence decided to engage a private firm,'' said Thomas Isaac.
Economists have sounded alarm over the unprecedented move. "This is not a rational decision to employ a private firm to reconcile the account of CMDRF. The chief minister has always stressed on governance efficiency and we are passing through a time when that efficiency is utmost required. Finance department has the most number of eligible promotional posts. Instead of making use of that, a private firm is called for work which is unjustifiable," said Mary George, financial expert and former chairperson of public expenditure review committee. She also said that the move will repel more investment. "The amount we have so far received hardly matches our actual requirement, this means there should be more inflow of funds. Engaging a private firm for accounting exercise dents the trust of people who contribute their money towards CMDRF and it might repel further contribution," she said.
Account reconciliation is a key component in financial reporting and it involves comparison of account balances in independent systems, investigation of discrepancies and verification of statements and reports. As on Thursday, CMDRF receipts show Rs 1520.5 crores of which Rs 1276.73 crores came through cash, cheque and RTGS. An amount of Rs 191.57 crore was received through electronic payments and Rs 52.2 crores was received through UPI(Unified payment interface),VPA (Virtual payment address) and QR payment.
BA Prakash, another noted economist and chairman of 5th state finance commission said that by-passing the set standards of public fund audit system is an unjust move. "The move lacks transparency and creates suspicion in public. The mechanism we have for local body funds and government funds shall be made use of in case of CMDRF as well. Employing a private firm is not a reasonable decision," said B A Prakash.
