Department of Labour the loss of interest of Rs. 3.74 crores due to a lack of effective monitoring of surplus balances.
Lack of effective monitoring of surplus balances. Failure to effectively monitor the transfer of funds from the district account to the main account of the Board resulted in the loss of interest of Rs. 3.74 crores.
In terms of Section 3 of the Building and Other Construction Workers’ Welfare Cess Act, 1996, a cess shall be levied and collected at such rate not exceeding two percent but not less than one percent of the cost of construction incurred by an employer and the proceeds of the cess collected shall be paid to the Delhi Building and Other Construction Workers’ Welfare Board (the Board). In Delhi, Deputy Labour Commissioners of various districts collect the cess from local bodies, individuals, and other agencies and remit the same to the Board. For this purpose, the Board has a main Savings Bank account in the State Bank of India (SBI). The Board opened (February 2012) 10 Savings Bank accounts for various districts linked with the main account of the Board. As per the decision taken in the meeting of the Board on 8 August 2011, all funds collected through different accounts were to be transferred automatically to the main account on the same day evening. Further, the amount of cess in the main account over and above Rs. 25 lakh was to be converted into Multi Option Deposit (MOD) in multiples of Rs. 50 lakh.
Audit scrutiny of records of the Board revealed that a balance of Rs. 24.04 crores was lying in the account of North-West District as of 1 April 2013 and the bank was not transferring the funds to the main account on daily basis. As a result, funds in the account of the North-West district accumulated to Rs. 77.03 crores (including interest of Rs. 3.68 crores) as of 27 December 2014, when the amount was transferred to the main account by the bank. The Board failed to monitor the transfer of funds by the Bank.
Due to the non-transfer of funds from the district account to the main account on daily basis, the Board could not invest these funds in fixed deposits from April 2013 to December 2014. Had the amount been transferred to the main account on daily basis during the period April 2013 to December 2014 and converted into MOD, the Board could have earned interest of Rs. 7.42 crore. Against this, the Board received only Rs. 3.68 crores as interest in the district account. Thus, non-transfer of funds from the district account to the main account on daily basis resulted in the loss of interest of Rs. 3.74 crores.
The Board states (November 2016) that the matter was being taken up with SBI and efforts made to recover the amount from the bank.
The matter was referred to the Government on 05 December 2016, their reply was awaited.
