The report of the Comptroller and Auditor General (CAG) for the financial year 2024-25 presented in the Bihar Legislature has created a stir in the administrative and financial system of the state. According to the report, various government departments of the state have not deposited 62,632 Utilization Certificates (UCs) of the huge amount of Rs 92,132.75 crore spent over the years in the Accountant General’s Office.
The pending accounting of such a huge amount of government treasury raises serious questions on financial indiscipline and possible irregularities. Five departments have been mentioned prominently in the report, which have the highest amount of UCs pending. They include health, rural development, urban development, education and Panchayati Raj. Let us understand in simple language what is Utilization Certificate, what are the revelations made in the CAG report and what impact it will have on the state system.
What is a utility certificate?
Whenever the government allocates grants-in-aid or funds from the budget to any development work, scheme or institution, it is the legal and administrative duty of the concerned department or agency to submit this certificate within the stipulated time limit. This certificate proves that the sanctioned funds have been used for the same work for which the budget was released. The allocation is considered complete by the Accountant General’s office only after the department gives complete details of the expenditure. Next fund should not be released without depositing UC of previous expenditure.
Big revelations in CAG report
The CAG report tabled in the state Assembly on Thursday (July 23) under the heading “Financial Reporting Practices” said that as of March 31, 2025, the Principal Accountant General (Accounts and Entitlements), Bihar had not received 62,632 outstanding Utilization Certificates (UCs) worth Rs 92,132.75 crore. During this period, the five departments with the highest amount of UC are Health, Rural Development, Urban Development, Education and Panchayati Raj.
The report said that if UC is not deposited, there is a risk of its misuse, hence the state government should keep a close watch on this aspect and hold the concerned people accountable for timely deposit of UC. It was also said that this matter was raised with the Finance Department of Bihar Government, but the reply is awaited from January 2026.
Budget expenditure and surrender amount
Under the “Budget Management” section, the report said that during the financial year 2024-25, out of the total state budget (Rs 3,64,518.87 crore), only Rs 2,87,178.49 crore (78.78 per cent of the total budget) was spent, resulting in a saving of Rs 77,340.38 crore. Of the total savings, an amount of Rs 10,388.35 crore (only 13.43 per cent) was surrendered, which was further said to reflect unrealistic projections and lack of coordination between budget and expenditure. The report said that the budget estimate was increased by 28.81 percent through the supplementary budget, but the expenditure in the financial year 2024-25 was only 1.48 percent more than the original budget.
a lot of expenses at the last minute
It further states that the highest expenditure (39.85 per cent of the total expenditure) occurred in the last quarter of the financial year, which shows that the expenditure was rushed in the end and the prescribed limit was violated. The report also said that during 2024-25, the state government transferred Rs 441.29 crore less than the required central share for centrally sponsored schemes (CSS). Furthermore, SNAs relating to the State treasury [सिंगल नोडल एजेंसी] There was a delay of 167 days and 246 days in transferring the central and state shares respectively, causing additional financial burden on the state exchequer.
MNREGA implementation posts vacant
Under MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) in Bihar, the report notes that in the absence of any baseline survey during 2019-24, the department had no system in place to assess the volume and timing of work demand at the gram panchayat level, as well as detect any local variations in livelihood patterns and work opportunities. It further states that out of 13,798 posts sanctioned for implementing MNREGA in Bihar, 6,086 posts (44%) were vacant.
This figure of vacant posts ranged from 16 percent in the case of District Program Officer (DPO) to 80 percent in the case of Computer Operator. The report further said that as of March 2024, unadjusted advance money of Rs 36.22 crore was lying with different implementing agencies for more than five years.
Found problem here too
The CAG report said that the state government had not made any rules regarding the frequency, place and procedure of the meetings of the ‘State Employment Guarantee Council’ (SEGC). In the absence of such rules, the SEGC held only three meetings during 2021-23, which shows that the scheme was not being monitored properly at the state level. Under the section “Construction, raising and strengthening of embankments” under the Water Resources Department, the report said that due to non-availability of land along the banks of Jhim Jamura and Banke rivers under the Adhwara basin, the objective of building embankments in a piecemeal manner, to protect 5.26 lakh population and 17,400 hectares of agricultural land, could not be achieved, resulting in Rs 28.97 crore being wasted.
every house tap water scheme
Similarly, the report states that the Education Department did not assess and pay service charges of 161 of its buildings within the stipulated time for the period 1995 to 2023, resulting in an avoidable expenditure of Rs 8.47 crore in the form of penalty interest. The report on the implementation of “Har Ghar Nal Ka Jal Yojana” in Bihar states that due to lack of initial survey or not being conducted properly, estimates of identification and coverage of households under the scheme were not reliable.
PHED (Public Health Engineering Department) could not provide facilities to 11.22 lakh households in 46,633 rural wards, including 8.07 lakh households in wards affected by water quality. The report also revealed that in the five public health divisions investigated, contractors were paid Rs 2.31 crore for work that was not actually done. Despite this, the state’s Deputy Chief Minister, who is also the state Finance and Commercial Taxes Minister, Bijendra Prasad Yadav again said that there is “no shortage of funds” in the state.
What are the risks of not depositing UC?
CAG has clarified in its report that until the utilization certificate of a scheme is submitted, the following serious risks remain:
- Manipulation and corruption of funds: It becomes very difficult to ascertain whether the money released was actually spent on land or distributed only on paper.
- Diversion of funds: There is a strong possibility that instead of the work for which the budget was given, the money may have been spent on some other unauthorized item.
- Impact on help received from the Centre: In Centrally Sponsored Schemes, non-deposit of UC on time may stop the next installments received from the Centre, due to which development work may come to a halt.
What recommendations has CAG given?
To remedy this major administrative negligence, the CAG has advised the state government to take the following steps:
- Time limit should be fixed: Strict deadlines should be set by running a special drive to clear all pending UCs.
- Accountability should be fixed: Strict administrative action should be taken against those officers whose UCs are pending for years due to their negligence.
- Ban on issuance of new funds: The allocation of the next installment should be stopped until the previous utilization certificate is submitted.
- Digital Monitoring: UC tracking should be made completely digital and transparent so that pendency can be detected immediately at any level.
Leave a Reply