No objection to CAG audit of KIIFB: FM

Thiruvananthapuram: Denying reports that the state government has declined permission to comptroller and auditor general (CAG) to undertake a comprehensive audit of the accounts of Kerala Infrastructure Investment Fund Board (KIIFB), finance minister T M Thomas Isaac said that the CAG has already begun auditing of KIIFB.
Isaac said that under the Section 14 of the Comptroller and Auditor General (duties, powers and conditions of service) Act, CAG can audit any firm that receives grant or loan from the government. As per the section, where any body or authority is substantially financed by grants or loans from the Consolidated Fund of India or of any state or of any Union territory having a legislative assembly, the CAG shall audit all receipts and expenditure of that body or authority and report on the receipts and expenditure audited by it.
Further, the section also says that where the grant or loan to a body or authority from the Consolidated Fund of India or of any state or of any Union territory having a legislative assembly in a financial year is not less than Rs 25 lakh and the amount of such grant or loan is not less than 75% of the total expenditure of that body or authority, such body or authority shall be deemed to be substantially financed by such grants or loans.
He said that the government has informed KIIFB that CAG has the powers to audit KIIFB as it receives funds from the government. He said that there is also a statutory audit in KIIFB other than the CAG audit. The CAG team has already examined KIIFB documents in two phases and given audit querries to KIIFB, for which answers have been provided. Under these circumstances, the news reports that KIIFB is denying permission to CAG to audit its accounts, are ill-motivated.
There were reports that the government had denied permission for CAG audit citing that this would send a wrong message to the investors and also that as per the KIIFB Act, there is no provision for the CAG audit. Even though the KIIFB mainly acts under the term loans that have been availed from multiple banks, the government gives the guarantee for the returns of such loans. Also, KIIFB is provided grants by the government every year in the form of share from motor vehicles tax and petroleum cess.
As per the KIIFB (amendment) Act, 2016, the government has set apart 10% of motor vehicle tax in 2016-17, increasing it by 10% every year since then, till it reaches 50% in the fifth year. Also, the cess levied on petrol and diesel should be given to KIIFB, before December 31 every year. This year alone, an approximate amount of Rs 2,600 crore would go to KIIFB as government grant under these two heads.