CAG report flags irregularities in Osmania University’s RCUES works

A CAG report flagged serious irregularities in works executed by Osmania University’s RCUES, including tender violations, unregistered contractors and missing quality checks. It also highlighted failure to recover Rs.86 lakh and delays in completing a key AP government project.

Hyderabad: An audit report by the Comptroller and Auditor General of India (CAG) flagged serious irregularities in the works executed by Osmania University’s Regional Centre for Urban and Environmental Studies (RCUES).

The RCUES, as per the report, split works worth Rs.71.56 lakh and Rs.45.35 lakh into 77 and 47 minor works respectively to bypass e-procurement tender requirements and awarded them to agencies through limited quotations. However, the rules mandate that each work costing more than Rs.1 lakh is to be awarded and executed through open tenders on the e-procurement platform.

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The audit observed that some of the contractors to whom works were awarded were not registered as government contractors. It noted that work quantities were not accurately measured or recorded in measurement books, raising doubts about the correctness of the work, and that payments were made without verification by the Engineering division.

After carrying out the works, the report said no quality checks were conducted by line departments like CPWD, PWD, TSEWIDC and UBD, compromising the overall project quality. Additionally, statutory deductions such as Value Added Tax (VAT), Goods and Services Tax (GST), Income Tax, seigniorage charges and National Academy of Construction charges were not recovered from work payments.

Further, the CAG observed that RCUES failed to recover Rs.86 lakh that it had spent on the Andhra Pradesh government’s GIS Master Plan Project under AMRUT for Adoni Package VIII and Chilakaluripeta Package XXVI, which was commissioned for professional fees of Rs.75 lakh and Rs.85 lakh respectively. The project was granted in November 2018, with a duration of six months.

The project execution commenced in anticipation of receipt of funds from the AP government, which released only Rs.75.78 lakh till 2020-21. Further, a sum of Rs.1.28 crore was diverted from the Plan funds received from the State government towards establishment charges of RCUES.

The Town and Country Planning department, Andhra Pradesh, issued a show-cause notice to RCUES for non-completion of the project as per agreed timelines and reiterated the need to recover the consultancy charges released to RCUES along with liquidated damages, it said.

In response to the notice, RCUES requested the DTCP to allow two more months for completion of the project. However, RCUES had not completed the project as of February 2024, it said.

“Improper cost estimation for the project and staff, and unsettled advances led to delays, causing a potential loss of Rs.86 lakh to RCUES and liability to repay funds to DTCP with penal interest,” it added.