CAG flags gaps in Gujarat’s financial oversight; ₹7,400 crore in UCs pending

Weak financial oversight, misreporting of expenditure, and large-scale pendency of utilisation certificates have been flagged in Gujarat by the Comptroller and Auditor General of India (CAG), raising concerns over transparency and accountability in public spending.

The findings are part of the “Report of the Comptroller and Auditor General of India on State Finances for 2024–25”, tabled in the State Assembly on Wednesday (March 25, 2026), the final day of the Budget session.

The audit pointed to systemic issues in financial reporting, including instances where funds were shown as utilised without actual expenditure. A key case involved the Sardar Patel Institute of Public Administration (SPIPA), which reported utilisation of ₹32.81 crore despite the funds being parked in bank accounts.

“SPIPA withdrew the grants, deposited the entire amount in bank accounts, and submitted utilisation certificates indicating that the funds were used for the intended purpose, even though they were not fully utilised,” the report stated.

The CAG observed that such practices amount to falsification and distort the true picture of government expenditure. It added that funds parked outside government accounts cannot be treated as utilised for the purpose of submission of utilisation certificates.

The report also highlighted that departments treated funds as fully spent upon transfer to implementing agencies, even when the amounts remained unspent or were subsequently returned.

A major concern flagged was the pendency of utilisation certificates. As of March 31, 2025, a total of 4,258 UCs worth ₹7,431.84 crore across 18 departments, covering the period from 2001–02 to 2023–24, remained outstanding.

The auditor warned that delays in submission of UCs increase the risk of misappropriation, diversion, and blocking of funds, and called for stricter monitoring.

In addition, cases of non-submission of UCs were noted, including ₹63 crore released to a municipal body without any corresponding certificates.

The report also flagged the parking of ₹445.19 crore in bank accounts instead of routing the funds through the Public Account, in violation of Article 266(2) of the Constitution.

Concerns were raised over unadjusted advances drawn through Abstract Contingent bills, with 5,378 such bills amounting to ₹554.73 crore remaining pending. The CAG said this renders expenditure opaque and prone to misuse.

The audit further pointed to incorrect accounting practices, including the misclassification of ₹1,108.42 crore as revenue receipts instead of reduction in expenditure, resulting in an overstatement of revenue.

Delays in submission of accounts by autonomous bodies receiving government grants were also highlighted, with the CAG noting that such delays hinder legislative scrutiny.

On cess collection, the report observed that although the Gujarat Motor Spirit Cess Act, 2001 provides for creation of a Local Authority Fund, no such fund has been established. During 2024–25, ₹4,169.29 crore collected as motor spirit cess was not transferred to any designated fund.