Audit Flags Misuse Of Bihar’s Contingency Funds And Irregular Flow Of Central Welfare Grants

The Comptroller and Auditor General (CAG) of India has flagged the Bihar government for misusing the state's Contingency Fund. A new revelation shows that ₹8.37 crore was withdrawn for expenditures unrelated to emergencies, in violation of constitutional provisions.

According to the State Finances Audit Report for 2023–24, withdrawals were made for routine administrative needs such as salary arrears, festival advances, and the purchase of furniture. 

These are not classified as unforeseen expenditures under Article 267(2) of the Indian Constitution, which governs the use of contingency funds.

“Expenditure met from the Contingency Fund included items such as advances for Diwali celebrations and office furnishings. These do not qualify as urgent or unforeseen,” the report states in Chapter IV (Section 4.1, Page 115).

The fund, which functions as an imprest and is meant to address urgent requirements pending legislative approval, is constitutionally mandated to be used solely for exceptional and unforeseen events.

In a separate but related issue, the audit also reported irregularities in the operation of Single Nodal Agency (SNA) accounts -- a financial mechanism established for streamlined disbursement of Centrally Sponsored Schemes (CSS).

During 2023–24, the state government received ₹18,231.24 crore as the central share for CSS under the Comprehensive Financial Management System (CFMS), while the Public Financial Management System (PFMS) recorded ₹18,173.89 crore as actually transferred to SNAs. The state share amounted to ₹12,673.60 crore (Section 4.19, Page 135).

However, the Accountant General’s office did not receive detailed vouchers or supporting documentation from these SNAs for a significant portion of the expenditure processed through Grants-in-Aid bills. 

The amount lacking expenditure substantiation stood at ₹22,470.94 crore.

“Detailed vouchers and supporting documents of actual expenditure were not received... This raises serious concerns about accountability and traceability of funds,” the report noted (Section 4.19, Page 135).

The CAG emphasized that both the misuse of contingency funds and opaque operation of SNA accounts weaken financial transparency and undermine legislative control over public resources.

No departmental responses were appended to these observations in the audit report.