The Great MUDA Robbery: Audit flags 67 administrative lapses in MUDA for 2022-23

• Misappropriation of Rs. 9,41,46,048 detected
• Rs. 96,54,054 to be recovered immediately

Mysore/Mysuru: An audit of the Mysuru Urban Development Authority (MUDA) has revealed startling findings: In addition to massive corruption through the arbitrary allocation of thousands of sites at 50:50 ratio, disregarding rules and laws, officials have also mismanaged regular operations, exposing their complete disregard for accountability.

Auditing various departments is the annual task of Karnataka State Audit and Accounts Department, statutory auditors for all Urban Local Bodies including MUDA. During an audit on Aug. 23 in MUDA Hall, the Additional Director of State Audit and Accounts Department, Mysuru Regional Office, identified 67 types of financial discrepancies for the 2022-23 fiscal year.

These discrepancies have led to misappropriation of Rs. 9,41,46,048 as the auditors objected to various processes carried out by officers in violation of rules and regulations. 

Additional Director ordered MUDA officials to recover Rs. 96,54,054 from total objection amount of Rs. 9,41,46,048 flagged by Audit and Accounts Department. Remaining Rs. 8,44,91,994 will be recovered after removal of hurdles like Court cases, litigations and processes pending within MUDA and other Departments.

Sources told Star of Mysore that the Additional Director and senior Audit officers reprimanded MUDA officials for lapses. MUDA Secretary Prasanna Kumar, Superintending Engineer M. Muralidhar, Chief Accounts Officer Manjula, Zonal Officers and Special Tahsildars were present during the proceedings.

The audit revealed significant discrepancies between annual budget and actual accounts, including lapses such as the failure to withdraw (through refund) Income Tax on amounts from matured fixed deposits. It also highlighted issues with investing grants released under JnNURM Scheme in fixed deposits and failure to remit Property Tax income to Government account.

The audit revealed that taxes were unlawfully imposed and collected on sites and buildings in developed layouts, with no maintenance of registers for Property Tax demands, actual collections and outstanding  details. Additionally, it was found that rent for MUDA’s commercial outlets and shopping complexes across the city had not been collected.

The audit revealed that the lease amount for Nalwadi Krishnaraja Wadiyar Convention Hall (Hebbal CITB Kalyana Mantapa) building has not been collected. Additionally, the maintenance of the ‘DCB register’ and file management related to the allocation of CA sites has been inadequate.

The Additional Director also highlighted issues with the availability, disposal and auction of corner and commercial sites, the issuance of sale deeds for site allotments despite the late payment of 25 percent of the bid amount by bidders and the lack of accurate information regarding the issuance of possession certificates for alternative sites provided as compensation for land acquisition.

Funds collected but not deposited

Funds paid for incentive sites and bit of land were not deposited, leading to a loss. Also, the money collected from issuance of Khata, Khata transfer and the fee payment bank challans have not been credited to the MUDA account leading to a loss of Rs. 78,20,072.

Similarly, the e-Khata fees of Rs. 6,15,355 collected from the general public have not been deposited to the MUDA accounts despite all the applications being processed and deposit challans being issued. Bank challan amount of Rs. 10,41,070 paid by public for building permits has not been credited to MUDA account, suggesting fraud and has been objected by the auditors.

Violation of KTPP rules

The audit also pointed out that Rs. 7,46,557 from the approved action plan was divided and awarded as sub-contracts. The services of Group ‘D’ staff were obtained on an outsourcing basis after continuing with previous tenders, violating the KTPP rules (Karnataka Transparency in Public Procurements (KTTP) Act 1999).

Furthermore, the services of computer operators were extended even after the completion of their contract period (Rs. 66,65,573) and this has been objected to in the audit by the Additional Director.

The audit found that Rs. 64,29,396 deducted from salaries as employee contributions to the New Pension Scheme (NPS) were not credited to the Government account. Additionally, Rs. 50,58,809 from salaries during leave period and pension contributions from officials and employees was not credited to the department accounts,  indicating negligence.

Full salaries paid during suspension

The audit even revealed that more office staff than sanctioned were appointed on an outsourcing basis. Shockingly, full salaries were paid to employees during their suspension periods. (As per rules, suspended employees receive 50 percent of their salary as a subsistence allowance if the suspension is for 90 days.)

Violations where bills for treatment in Government-unapproved private hospitals were covered have also been detected. Additionally, Rs. 1,19,538 was disbursed in excess of the health scheme rate.

At the end of the audit, it was found that MUDA had lapses and discrepancies amounting to Rs. 9,41,46,048 for the 2022-23 fiscal year. The audit team instructed that Rs. 96,54,054 be immediately recovered from the officers concerned and deposited into the MUDA’s account.