Enforce strict financial discipline in PSUs

Jammu and Kashmir has been having a distinct place among other states in not enforcing financial discipline in its offices and particularly in its Public Sector Undertakings. No institution worth its name, irrespective of its size and the nature of its operations can effectively survive and contribute by way of performance whether being in production field or in services sector without having updated transparent accounting position. The mess and the rut have been assuming such an alarming position at times that reprimands and strictures have been heaped on many of those who were functioning at the top of such PSUs. The interesting thing, though not anything to be not taken note of, is that despite that, no intent and resolution is in sight from the defaulting ones for bringing about the desired changes and following the Rule Book and the set procedures while dealing with financial matters.
Preparation of Income Expenditure accounts, profit and loss accounts and the Balance Sheet which as per established accounting standards must be done on annual basis without any fail and for arriving at annual figures , quarterly, half yearly projections followed by on actual basis, such accounting exercise is conducted. It is shocking and perhaps unheard of that such pendency was in arrears not for quarters, but for several years, could be for more than two decades which could happen only in Jammu and Kashmir and that allowed with blatant impunity. This has been done even after such PSUs were getting massive funds support in the form of equity, loans, grants etc from the State Government.
What about miscellaneous statements and accounting position on monthly and quarterly basis like reconciliation of accounts, pending liabilities and host of allied factors about these PSUs could well be visualised in the context of the hard core mandatory accounting practice of periodic finalization of accounts conveniently ignored. It is wondered as to how it all has been allowed to go on un-checked and prompt action following the first “skipping” not having been taken. This all has virtually compelled the Governor’s administration to issue fresh and strong worded directives to all concerned Administrative Secretaries to take up for proper resolution of the issues with the respective Heads of these PSUs so as to have more clarity and professional treatment in the financial issues but not taking more time now as time, which by nature is scarce and costly in addition to being volatile, is otherwise required in abundance in Government Departments and offices in dealing and disposing of the issues.
Technically speaking, in the absence of finalization of accounts on yearly basis which also is called ‘yearly closing of accounts’, how many instances of unauthorised payments, unauthorised expenditures, expenses “shown” but not supported by proper sanction, vouchers, receipts etc must have taken place could be anyone’s guess . What about the instances of frauds, irregularities in ‘cash on hand’, details of investments and the dividends, eating away of imprest cash on daily basis, bungling in daily postages and related expenses in the absence of finalisation of accounts? The most important and inalienable constituent of accounts – the audit is treated as an unnecessary entity and in the instant case, nothing is known.
The matter being related to accounts and the unsettled position for years in a row must invite a high level probe immediately and how all these years, the State Finance Department remained silent and how they treated the position of unsettled, untallied and unverified end use of public grants vis-a-vis these PSUs while preparing papers for annual State budget too must be thoroughly investigated . In the meantime, the working of these PSUs must be streamlined and teams of professional accountants arranged to prepare the yearly “final position” right from the day when such finalization of accounts was done last.