Thursday, Nov 27, 2014

Negative balances in over 70K EPFO accounts: CAG

ENS Economic Bureau | New Delhi | Posted: February 19, 2014 5:04 am | Updated: February 19, 2014 5:07 am

Raising a red flag over negative balances in subscribers’ accounts, the Comptroller and Auditor General (CAG) of India on Tuesday pointed to the possibility of unauthorised withdrawals from provident fund accounts.
“More than 70,000 subscribers’ accounts had negative balances totaling Rs 45.06 crore, which is indicative of withdrawal in excess of balance,” the CAG said in a performance audit of the EPFO, adding that the possibility of unauthorised withdrawals can’t be ruled out.

Based on accounts examined till March 2012, the audit revealed the highest number of such cases were in Madhya Pradesh (19,291 accounts involving Rs 13.51 crore), Gujarat (27,874 accounts worth Rs 11.27 crore) and Punjab (9,341 accounts with Rs 10.23 crore) had the highest number of accounts with negative balances. “Prudence demands that the balance in subscribers’ accounts should always be positive,” said the CAG.

The EPFO, however, said, it is trying to identify the reason for such negative balances and will recover the funds from the concerned officials. Pulling up the EPFO for delay in timely refunds and transfer of deposits, the performance audit also revealed that the number of inoperative accounts as well as unclaimed deposits has risen sharply between FY07 and FY12.

Inoperative accounts are those that do not register any activity for more than three years. The number of such accounts more than doubled to 73,00,262 in FY12 from 25,12,793 in FY07.

Red Flag
The Comptroller and Auditor General (CAG) of India the possibility of unauthorised withdrawals can’t be ruled out

The EPFO, however, said, it is trying to identify the reason for such negative balances and will recover the funds from the concerned officials

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