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CAG indicts Delhi private schools of financial irregularities

Thursday, 17 March 2011 - 7:25pm IST | Place: New Delhi | Agency: PTI

The Comptroller and Auditor General (CAG) has indicted 25 unaided private schools in the capital city for accounting malpractices including faking losses

The Comptroller and Auditor General (CAG) has indicted 25 unaided private schools in New Delhi for accounting malpractices including faking the loss.

"The schools did not follow the accounting standards while preparing their final accounts. There was no prescribed
accounting format," the CAG said in its 64-page report submitted to Delhi High Court on Thursday.
The report, relating to financial year of 2006 to 2009 was filed in pursuance of an order of the High Court on a petition of a parents association challenging the city government's decision to allow the schools to hike the tuition and the development fees.

The findings of the CAG, which would come up for hearing on Friday, said "there was no evidence of scrutiny of annual
accounts and other returns to ascertain that the receipts and expenditures of the schools were in consonance with the
projected budget estimates of the schools and any fee hike was not unreasonable.

"Inspection of the schools by the Department of Education (DoE) was inadequate. The DoE made only 10 visits in 25 schools during 2006 to 2009 against 75 envisaged in the Act. Due to weak governances by the DoE, the schools continued to enhance the fees despite having surplus funds."

The report dealt with the accounts of 25 schools, out of 1211 private schools, which were randomly selected from various parts of the national capital and they include DPS RK Puram, Modern School, Barakhamba Road, and and Amity International.

The CAG said the schools, which earned profits, used to prepare accounts showing losses by transferring the surplus funds into the next financial year.

"The total cumulative revenue surplus as on March 31, 2009, was Rs93.79crore and the average cumulative revenue surplus per school during 2004 to 2009 ranged from Rs2.51crore to Rs4.42crore. Schools build up deficits when they
overspend their budgets and carry forward the overspend to future years," the report said.
It suggested proper monitoring by the DoE of the accounts of the schools which are not only shying away from giving admissions to poor children but also not paying salaries to their staff and teachers on the lines of their counterparts in government schools.

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