Funds Misuse Case: Karnataka Govt. Asks All State-Run Bodies To Ensure Records, Review Bank Accounts Monthly

The Karnataka Government has issued a notification directing all public sectors, state government-funded departments, boards, and corporations to ensure proper accounts log sheet and rightly managed use of funds. According to the reports, the latest order by the state government came after alleged financial irregularities were found at the Karnataka Maharshi Valmiki Scheduled Tribes Corporation Limited.

The Opposition party in the state, BJP, is continuously flagging alleged scam and mounting pressure on the Chief Minister to step down. Earlier, Tribal Welfare Minister B Nagendra had to resign from his post after allegations of misuse of funds at the Corporation for Scheduled Tribes made the headlines. The saffron wing has also announced to round up Chief Minister Siddaramaiah's residence to protest on July 3 against alleged ongoing corruption in the state.

Taking cognizance of the same and to avoid any irregularities, Chief Secretary of Karnataka, Rajneesh Goel issued a circular in the name of heads of all state government-run departments. The directive also mentions a regular review of the status of funds, and verifying term deposits, and specified the manner in which government bodies can invest funds.

"All heads should ensure to conduct a thorough review of opening and closing balances of all bank accounts every month," the June 25 circular reads.

It is also directed that they should "Obtain a monthly basis third-party physical confirmation, such as from internal auditors, visiting the banks and confirming the bank balance held by the entities in all types of accounts".

The Government has also advised all departments to "invest all term deposits in joint accounts and the same concept can also be adopted in case of high-value transactions in operative accounts". The CEO's should compare all bank account reports every month in the board meetings and "such reports should highlight any discrepancies or issues identified during the verification process", the circular added.

The alleged Karnataka Maharshi Valmiki Scheduled Tribes Corporation Limited funds misuse case is being investigated by a Special Investigation Team (SIT).

According to media reports, a senior official allegedly forced Chandrashekaran P, a superintendent at the Scheduled Tribes corporation, to divert funds to a parallel account at Union Bank of India in March. Later, Chandrashekaran committed suicide, which is also under suspicion, and the six-page suicide note which was recovered by the police said that the transactions were done on the "oral instructions of a minister".

Till now, the SIT has made some arrests including JJ Padmanabh, managing director, and Parashuram G Duragannavar, accounts officer, along with bank officials in the financial irregularities case.