Mumbai: Even as Maharashtra kept its fiscal deficit within the Fiscal Responsibility and Budget Management (FRBM) limit, the Comptroller and Auditor General (CAG) has raised serious concerns over the quality of the state’s financial reporting, warning that several accounting and treasury practices are undermining transparency, legislative oversight and public accountability.Chapter III of the CAG’s State Finances Audit Report for 2024-25 paints a picture of systemic weaknesses in financial reporting rather than isolated irregularities.The audit says increasing reliance on off-budget borrowings, delayed utilisation certificates, parking of funds outside the Consolidated Fund, pending contingent bills and delayed accounts of autonomous bodies have together obscured the state’s true financial position.Among the most significant findings is the sharp rise in off-budget borrowings, which stood at ₹28,640 crore as on March 31, 2025.Since these borrowings are raised through state-owned PSUs and agencies instead of the Budget, they dilute fiscal transparency and prevent the Legislature and citizens from getting a complete picture of the state’s liabilities, the audit observed.The CAG also flagged 12,829 pending Utilisation Certificates (UCs) involving ₹40,097.59 crore, saying the absence of UCs weakens assurance that public money released as grants was spent for the intended purposes.The report noted that non-submission of UCs violates provisions of the Maharashtra Treasury Rules and General Financial Rules while exposing deficiencies in financial monitoring and internal controls.Another area of concern is the continued use of Abstract Contingent (AC) bills. As on March 31, 2025, 1,698 AC bills worth ₹3,532.05 crore were awaiting adjustment through Detailed Contingent bills.The audit noted that 268 AC bills worth ₹35.18 crore were drawn in March 2025 alone, indicating a year-end rush to book expenditure, contrary to principles of financial propriety and treasury rules.The report is equally critical of the state’s handling of Virtual Personal Deposit Accounts (VPDAs). According to the audit, despite their introduction to improve fund management, large sums continued to remain parked without actual utilisation.The CAG said ₹20,993.06 crore remained in VPDAs beyond March 31, 2025. Had this amount been returned to the Consolidated Fund at year-end, Maharashtra’s revenue deficit would have reduced from ₹29,994.76 crore to ₹9,001.70 crore.Instead, retention of the balance inflated the reported revenue deficit by ₹20,993.06 crore, the audit said, while questioning a government resolution exempting VPDAs from treasury rules governing year-end lapsing of funds.The audit also found ₹15,298.83 crore lying unspent in Drawing and Disbursing Officers’ bank accounts despite the VPDA mechanism, reflecting continued weaknesses in fund-flow management and internal controls.In another accounting lapse, the CAG said the government did not provide interest of ₹762.49 crore on several interest-bearing deposits, including pension and disaster response funds.This understated revenue expenditure and overstated Public Account balances, thereby distorting the state’s financial position.The report further noted that ₹3,277.58 crore of National Pension System contributions remained parked instead of being transferred promptly to the designated pension fund manager, contrary to Government of India guidelines.Transparency issues extended to statutory bodies as well. The CAG found 74 annual accounts of 26 autonomous bodies pending submission for audit as on March 31, 2025, delaying legislative scrutiny despite continued government funding to several of these institutions.The audit also highlighted weak follow-up on financial irregularities.Cases involving misappropriation, losses and theft worth ₹52.18 crore remained pending, with 151 of the 201 cases dating back more than 15 years, indicating weak internal controls and delayed accountability.To restore credibility in financial reporting, the CAG has recommended bringing all borrowings on-budget, enforcing strict timelines for submission of utilisation certificates and detailed contingent bills, restricting March-end AC bill withdrawals, ensuring unspent balances are returned to the Consolidated Fund, and preventing retention of government money in DDO-operated bank accounts.
