Valmiki corporation ignored finance department directive to remit funds to government

BENGALURU: The alleged Rs 90 crore Maharshi Valmiki Scheduled Tribes Development Corporation scam could have been averted had the Scheduled Tribes (ST) welfare department adhered to a finance department order issued in 2023 to consolidate all funds back in the treasury.

Instead, the ST department continued to maintain several accounts across private and public sector banks.However, only now, all boards and corporations have complied with the directive, said additional chief secretary (finance) LK Atheeq. He told TOI the only exception is Valmiki corporation. “That money is yet to be recovered as sleuths have frozen the account. We will have to wait till the investigation is com-pleted,” Atheeq said.
On Feb 28, 2023, the finance department had issued a circular directing all boards and corporations which work for the welfare and development of castes and communities to remit corpus and grants released by the govt back to the treasury account or the personal deposit (PD) account of thegovt as it is popularly known.
The rationale was to consolidate funds and avoid misuse by individuals. “It helped the govt keep track of where the money was going, with proper checks and balances,” said an official, adding that while the boards and corporations were drawing simple interest of 4% to 5%, the govt was tak-ing loans at 8% to 9% to replenish these accounts.
Multiple bank accounts
However, as is the case with most govt decisions, none took cognizance of the directive. “Most departments, including the ST welfare department, continued to maintain multiple individual accounts,” an officialsaid. The finance department too eventually decided not to pursue the matter.
In May this year, chief minister Siddaramaiah, while reviewing the state’s finances, warned all department-run welfare boards and corporations to remit funds back to the treasury. On May 29, three days after the whistleblower in the scam died by suicide, a “reminder” was again issued to all departments.
The order stated: “… All boards and corporations have continued to maintain their accounts in various banks without depositing the money to the PD account of the govt. This has led to reports that a lot of money is being misused and scammed.”
The reminder was sent to all major departments, including social welfare, minority welfare and backward classes. The order went on to state that CEOs of boards and corporations would be held responsible for further delays in depositing the money back to the treasury.