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Parliament


CAG pulls up Defence Ministry for 'deficiencies' in pension disbursement system

CAG pulls up Defence Ministry for 'deficiencies' in pension disbursement system
New Delhi, Jul 28 (UNI) The Comptroller and Auditor General of India (CAG), which carried out performance audit of Defence pension which is disbursed to nearly 25 lakh pensioners every year and amounts to Rs. 60,000 crore, today expressed displeasure at incomplete account of pension expenditure, deficiencies in the pension disbursement system and control deficiencies. In its report, laid in the Parliament today, the CAG also pulled up the department for what it called were inefficiencies in the pension authorisation process. The report took note of the review undertaken to ascertain the efficiency and effectiveness of the pension disbursement system including the budgeting, accounting and internal controls existing in the defence pension system. The CAG observed that every year substantial amount of expenditure was not booked to the pension head of account and was lying under RBI Suspense head because of the inability of the banks to furnish the pension payment scrolls on the basis of which the Principal Controller of Defence Accounts (Pension) would book the amounts to the final head of account. ``This resulted in incorrect depiction of pension accounts, with attendant implications for the revenue deficit figures of the government. The cumulative amount lying in the suspense head at the end of March 2016 was Rs. 6,831.95 crore,’’ the report said. It was also noted by the CAG that the process for authorization of the pension involved several players and multiple stages, often resulting in avoidable delays in issue of the pension payment orders (PPOs). There was a need for review of the authorization process, so that it is less cumbersome and less time consuming. The CAG pulled up the pension sanctioning authorities (PSA) and the pension disbursing agencies (PDA), lack of their integration which has resulted in an inefficient flow of information that is prone to transcription errors and the resultant errors in the pension payments. ( The CAG observed that the transmission errors as well as other mistakes in the banks, which account for nearly 75% of the pension disbursements, had resulted in numerous cases of underpayments and overpayments. Based on test check for one month, cases of 21,434 pensioners were identified who were under-paid amounting to Rs. 106.17 crore. Major reasons for underpayments were non-revision/ incorrect revision of pensions, non-restoration of commuted portion of pension, wrong revision of disability element, and non-revision of fixed medical allowance. Analysis of bulk data for the period 2011-12 to 2015-16 indicated possible underpayment of Rs. 228.85 crore. Similarly, overpayment of Rs. 118.23 crore to 11,973 pensioners based on test audit of the records of one month was observed. Analysis of bulk data for the period 2011-12 to 2015-16 indicated an overpayment of Rs. 518.70 crore. Test audit also indicated several cases of double payments and other irregularities in disbursement of pension such as pensions of multiple pensioners being credited to one account, pension being paid by the PDA without the Pension Payment orders (PPOs), and certain instances of pension being paid from the defence head to the pensioners of other departments. The report pointed out control deficiencies in all the four pillars of the pension disbursement system which adversely impacted the efficiency and effectiveness of the system. Some of the major control deficiencies were: delays in getting information from the units contributed significantly to the delays in processing of the pension cases. The CAG report recommended that RBI should make the reimbursement to the banks conditional upon the proof of submission of the payment scroll to the PCDA(P). It favoured strengthening of the existing monitoring system for timely authorization of the pension and recommended that it could be simplified to make the process less cumbersome and less time consuming. The CAG undertook the review to ascertain the efficiency and effectiveness of the Pension Disbursement System including the budgeting, accounting and internal controls in the defence pension system. UNI VT SHK 1649
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