Audit report: GMCH-32 causes loss of ?86 lakh as it failed to float tenders for services

The local audit department, in its special audit, has pointed out that the Government Medical College and Hospital (GMCH), Sector 32, has caused a financial loss of nearly ?86 lakh to the government exchequer.

A special audit was conducted recently, and it was found that a loss of ?86 lakh has been incurred to the government exchequer. On hiring four contractors for providing technical and other skilled services, round-the-clock security and fire prevention services, housekeeping, and sanitation services and paramedical services, the special audit report concluded that four contracts for outsourcing manpower have been extended for many years without the approval of the competent authority. Had new tenders been finalised in a time-bound manner, the expenditure to the tune of ?86.36 lakh could have been saved on the government exchequer.

In 2018, the department said the secretary of medical education and research conveyed the advice of the UT finance department dated August 27, 2018, that GMCH should review all outsourcing contracts and immediately take the services of GeM, which is presently at 1.18%, to avoid loss to the exchequer. However, GMCH-32 continued to outsource the services, including housekeeping and sanitation, paramedical, technical and other services, round-the-clock security, and fire prevention, from existing contractors from October 2018 to March 2020 and paid ?86.35 lakh in excess administrative charges paid over and above 1.18%.

The report observed that if the services had been hired through the GeM portal, an amount of ?86,35,906 paid more than administrative charges could have been saved.

Furthermore, the report stated that it was clarified to GMCH-32 that services of manpower provided to educational institutions for security or housekeeping or cleaning are exempted from service tax, but GMCH had paid the service tax on these services amounting to ?1.66 crore to the outsource agencies providing manpower for security and housekeeping. The report remarked that necessary steps to recover the amount of service tax amounting to ?1.66 crore paid to outsource firms should be taken at the earliest.

The audit department advised inviting fresh tenders in the future well before the completion of the existing contract, and contracts should be awarded on the expiry of existing contracts to avoid unnecessary extensions.