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CAG reveals: Non-existent companies given contracts

The Tourism Ministry’s office in London issued contracts to the tune of about Rs 97 lakh to “non-existent firms” without inviting open tenders, the CAG has found, not ruling out misappropriation of funds.

The CAG, in its report tabled in Parliament, states that audit scrutiny of records for the period of 2010-11 revealed that in two cases involving the Tourism Ministry’s London office did not invite open tenders though the value of work was more than Rs 25 lakh.

Work was worded and payments released to the firms whose whereabouts were not verifiable, it said.

As per the General Financial Rules, 2005 (GFR), invitation to tenders by advertisement should be used for procurement of goods and services for estimated costs valuing above Rs 25 lakh.

Citing two cases, the CAG observed that awarding contracts without adhering to the provisions of GFR to the firms, whose existence is not verifiable through records, indicated poor monitoring on the part of the Ministry of Tourism.

Further, the CAG has also not ruled out the possibility of misappropriation of funds by the London-based Tourism office in the two cases.

“Failure to follow transparent, competitive and fair procurement process by GOITO, London, resulted in award of contracts and consequent payments of Rs. 97.44 lakh to non-existent firms,” the report stated.

On being pointed out by the CAG, the Tourism Ministry has replied that disciplinary action has been initiated against the then Director of the Tourism office at London, the report further added.

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