The Delhi Common Wealth Games (CWG) investigations by Central Vigilance Commission (CVC) are revealing irregularities and fraudulent practices adopted by the organization committee members. The estimated figure for misappropriation of funds is Rs 8000 crore (Rs 80,000 million). The investigations have recently commenced and the problems reported in the media are:
- Purchase contracts signed with varying rates for the same product;
- Prices over-inflated in some contracts;
- Contracts given to relatives and friends;
- Sub-standard products purchased;
- Vendor payments made without confirming quality and delivery;
- Payments made to non-existent vendors.
Final investigation report is awaited; however preliminary findings indicate various wrongdoings. In my view, the organization committee members ignored the Prevention of Corruption Act and government procedures for contracts and tenders. The results may show cases of fraudulent contracts and transactions, accepting bribes and contravention of procedures.
From the perspective of purchasing process, the following control issues are apparent:
- Improper and inadequate vendor selection and evaluation procedures were followed.
- Conflict of interest was not disclosed while signing contracts with related parties.
- Tenders were not given to bidders quoting lowest price of the product.
- Vendors did not deliver the contracted quality and quantity as per the delivery schedule.
- Vendors were not penalized for sub-standard quality or late delivery.
- Vendor payments were not linked to delivery of products or completion of deliverables.
- There was no segregation of duties. The same officials authorized the contract and approved payments.
An independent evaluation of contracts by risk managers may have prevented misappropriation of funds. A periodic audit by government agencies could have highlighted these issues at an earlier stage. As Comptroller and Auditor General (CAG) group is required to conduct periodic audits of all government expenses, it is surprising that these issues were not discovered earlier.
This clearly indicates mis-utilization of public funds. Indian public is expecting an explanation from the government. The government’s commitment to reducing corruption will be determined by the actions it takes on the findings mentioned in the final report.
Let us wait and watch.