The Ministry of Defence has objected to a sudden and unusual surge in the use of secret funds by the Army’s Military Intelligence (MI) and sought details from the Service on the funds that are spent on pursuits not exactly military in nature.
Objections relate to spending during the period when relations between the defence ministry and the Army were at an all-time low over then Army Chief Gen VK Singh’s date of birth.
Government sources confirmed that a top Defence Ministry official has asked the MI to explain the nearly 33 per cent increase in spending of secret funds during the financial year ending March 2012 over the previous year.
In terms of figures, the government wants to know how Rs 67 crore was spent under a particular head during the last financial year as compared to an expenditure of Rs 49 crore in 2010-11.
As per laid down norms, secret funds of the MI, like those of other snooping agencies such as the Intelligence Bureau and the Research and Analysis Wing, are not subject to audit by the Comptroller and Auditor General.
In the case of the Military Intelligence, an internal audit is conducted at a high-level and the file is cleared by the Defence Secretary. The audited report remains secret and is neither tabled in Parliament nor can it be accessed through the Right to Information Act. Funds are allocated under the budget and have to be spent as per the mandate of the agency.
Some weeks ago, the Defence Ministry returned the file to Military Intelligence with objections after perusing through it in order to clear the internal audit report for the expenditure of Rs 67 crore.
Spending of such funds is usually made by formations for intelligence and counter-intelligence operations in areas where the Army in deployed. Objections relate to part of the funds, allegedly not used for the purposes mandated.
“The spending is being examined to see if the mandate of the MI was exceeded in any manner,” well-placed sources said.
As per the practice, the Defence Secretary clears the audited report to complete the process of government overseeing use of slush funds. Unusual spending by the MI of funds with a specific mandate attracted attention of the internal auditors. The issue is expected to lead to some changes in the way the MI spends its money.
Sources said new Army Chief General Bikram Singh has directed all regiments and units to account for every paisa spent and scrupulously follow established accounting norms.
Sources said the ministry is also against the MI’s Technical Support Division whose work came under the scanner after reports of phone-tapping of top Ministry officials surfaced in the media earlier this year. The IB was called by the Ministry to electronically “sweep” the rooms of the Defence Minister and other top officials in the South Block.
- Spending surged when the Army Chief’s age row was at its peak
- Unusual spending by the MI of funds with a specific mandate attracted the attention of internal auditors
- Secret funds of the MI, IB and RAW are not subject to audit by the Comptroller and Auditor General
- For the MI, an internal audit is conducted and cleared by the Defence Secretary, but the report remains secret