Days before demitting office, comptroller and auditor general (CAG) Vinod Rai has landed another blow on the credibility of the UPA-II government. A constant thorn in the flesh of the Manmohan Singh government, Rai’s team has knocked the base off the UPA’s flagship Mahatma Gandhi national rural employment guarantee scheme (MNREGS), alleging diversion of funds and impermissible works undertaken to the tune of nearly Rs 2,252 crore, among other irregularities.

In its report tabled in parliament on Tuesday, the government’s auditor found that works amounting to approximately Rs 4,070 crore were incomplete even after one to five years of their launch.

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Guaranteeing 100 days of employment to the rural poor each year, MNREGS was launched by the rural development ministry in 2006.

"There were deficiencies in the approval and release of funds by the (rural development) ministry,” the report notes, according to PTI. “Numerous instances were noticed in which the ministry released grants in excess of demand and in breach of its own conditionalities.”

The CAG noted that employment generated declined from 283.59 crore person-days in 2009-10 to 216.34 crore person-days in 2011-12. Completion of works also saw a significant decline in 2011-12 fiscal, the auditor notes.

"In fact, in 2010-11, the ministry relaxed all conditionalities (except furnishing utilisation certificate) associated with the release of funds. No basis for this decision was provided by the ministry," it said. The report noted that Rs 1,960.45 crore was released in March 2011 alone, without exercising proper financial controls.

CAG asked the government to take "decisive steps" to ensure proper implementation of the scheme. "It (government) needs to focus on developing intensive monitoring and evaluation systems," the government auditor said.

Analysing implementation of the programme, the report said that in the test-checked districts of 25 states and union territories, 1,02,100 "inadmissible works" amounting to Rs 2,252.43 crore were undertaken.

These inadmissible works included construction of kutcha roads, cement concrete roads, raised platforms for cattle and other animals and bathing ghats.