Shimla: The financial accounts of the Himachal Road Transport Corporation (HRTC) have come under scrutiny after the Comptroller and Auditor General (CAG) flagged several serious irregularities in the corporation’s accounts for 2021-22.
The audit raised questions over discrepancies related to passenger income, Himachal special road tax, current liabilities and revised pay scales for employees.
One of the most significant issues highlighted by the CAG relates to an estimated liability of Rs 563.10 crore arising from the revision of pay scales for regular and retired employees. According to the audit findings, HRTC had made no provision for this liability.
According to the CAG’s final observations, HRTC included Rs 1.72 crore collected from passengers as passenger accident insurance in its passenger income. However, the corporation’s Board of Directors had decided in January 2010 to create a separate Passenger Accident Insurance Fund, for which a separate account was required to be maintained.
Accounting Errors in Special Road Tax
The CAG also identified serious accounting discrepancies related to special road tax. The state government had granted a 100 percent concession in special road tax for stage carriages for the year 2020-21. Despite this, HRTC’s Mandi regional office created a liability of Rs 39.66 lakh during 2020-21.
Instead of reversing this liability in 2021-22, the corporation created a liability of Rs 7,032 lakh under special road tax and credited an equal amount to the related account.
Liabilities and Losses Incorrectly Reported
According to the audit observations, the incorrect accounting resulted in an overstatement of passenger income, current assets and current liabilities by Rs 39.66 lakh. The loss was also understated by the same amount.
While commenting on HRTC’s financial position, the CAG found that current liabilities related to passenger and goods tax and special road tax had been understated by Rs 24.15 crore.
The Chamba and Tara Devi regional offices had made inadequate provisions of Rs 3.23 crore and Rs 20.92 crore, respectively, for special road tax. As a result, liabilities were shown lower, while losses were overstated by Rs 24.15 crore.
Rs 563 Crore Pay Liability Not Provided For
The CAG’s most significant objection concerns the revision of employee pay scales. At its meeting held on April 23, 2022, the Service Committee decided to implement pay scales for HRTC’s regular employees at par with those of Himachal Pradesh government employees. The pay scales of retired employees and the resulting pension were also to be revised.
The Board of Directors approved the decision at its 151st meeting held on June 18, 2022. According to the CAG, the estimated liability arising from the revision of pay scales with effect from January 1, 2016, amounted to Rs 563.10 crore. However, the corporation made no provision for the liability in its financial accounts.
