CAG Report Flags Fraudulent Payment Under Student Scholarship Scheme In Odisha

Bhubaneswar: After large-scale irregularities in Maharashtra, Haryana, Tamil Nadu Karnataka and Punjab, the Comptroller and Auditor General of India (CAG), in its report tabled in the Assembly, observed fraudulent payment in Post-Matric Scholarships (PMS) and the Medhabruti scheme implemented by two different departments of the Odisha government.



>> 5,185 beneficiaries of 15 ineligible institutions, were granted PMS, amounting to Rs 15.79 crore, during 2016-20 due to lack of detailed procedure for inspections of institutions by District Welfare Officers (DWOs), before issue of User IDs for the scholarship portal.

>> During 2017-21, 2,996 students of 22 sampled institutes in six sampled districts, were paid PMS amounting to Rs 7.36 crore, even after their discontinuance of the courses.

>> One institute had applied for scholarships on behalf of discontinued students and was successful in getting the scholarship funds credited to the bank accounts of the students amounting to Rs 2.36 crore and subsequently, transferring the same to the institute’s bank account, through suspected fraudulent means.

The Ministry of Social Justice and Empowerment, in its revised guidelines issued in May 2018, made it mandatory for the inspection of private educational institutions by officials nominated by the district collectors. The CAG, however, noted that there was no provision for inspection of private educational institutions, for sanctioning PMS and eight of the 16 institutes, affiliated with the National Council of Vocational Research and Training (NCVRT) and Bharat Sevak Samaj (BSS), verified during the joint verification were non-existence.

>> Details of any inspection carried out by the concerned DWO of Mayurbhanj and inspection reports therein, were also not available, except in two cases.

>> The other eight institutes, in Mayurbhanj district, had stopped functioning from 2020, after rejection of their applications by the DWO, on instructions of the SSD Department. However, by then, 29 students, from seven of these institutes, had received PMS, amounting to Rs 7.13 lakh, during 2017- 18 and 2018-19.

>> It was noted that these 29 students had also been paid PMS, amounting to Rs 4.71 lakh, from other institutes.

It also mentioned about one institute in Mayurbhanj running without physical infrastructure (classroom, workshop, staff room, etc.) and instead using those of a neighbouring institute.

>> In case of the other seven institutes of the district, the infrastructure was found to be inadequate, in comparison to the number of students admitted. For example, in one institute, only classroom was available for 792 students and the institute had no workshop for students.

>> Besides, it was also seen that 288 beneficiaries, belonging to the ITET Vocational Training Centre, were granted PMS at a rate applicable for hostellers, despite the fact that the institute had no hostel available.

>> Details of teaching staff, as well as hostel records, were not produced to Audit, to ascertain if the institutes were functioning.


The CAG also found that the PMS has been granted to the students, even if they discontinued their studies. On analysis of the PRERANA and OSSP database, as well as the payment files submitted by the SSD Department, DWOs of the eight test-checked districts and 69 sampled institutions, it was found that 2,996 students, of 22 sampled institutes, in six sample districts, had left their courses midway, during 2017-21. However, those students had been paid PMS, amounting to Rs. 7.36 crore, even after their discontinuance of the courses

Sakuntala Sudharsan Institute of Technology (SSIT) in Mayurbhanj district was running three-year diploma courses, wherein 1,369 students had taken admissions during 2016-20. The audit analysed the semester results of the 2016-19 and 2017-20 batches and found that 138 and 142 students, respectively, had not cleared their final examinations and had discontinued their studies. However, they were paid PMS, amounting to Rs 2.36 crore.


The audit analysis of the PRERANA database revealed Rs 14.17 crore was released against applications, purportedly submitted by 69 applicants belonging to 14 institutes, in three districts. However, their names were not found in the registers and the principals also confirmed that no such students had been enrolled in their institutions. “Of 69 beneficiaries, 52 beneficiaries of 11 institutes were paid Rs 10.07 lakhduring the period 2018-21, but they were not registered on the PRERANA portal. No explanation was available with the Department/ DWO on this serious lacuna. In case of the remaining 17 beneficiaries pertaining to six institutes, it was seen that, although they were all registered on the PRERANA portal, details of only six students were forwarded to the DWO and payment of Rs 2.31 lakh was made. The institutes did not forward the applications of the remaining 11 students, to the DWOs, but payment of Rs 1.79 lakh was made to those students. Thus, there was a significant lack of checks and balances, at the levels of the DWOs, as well as the Department, leading to irregular payments.”

>> The authorities of the institutes had utilised the documents of the students for siphoning the scholarship amounts

>> The DWOs and the Department had not exercised due diligence, while disbursing the PMS amount of Rs 14.17 lakh, since this was done without ensuring student registration on PRERANA portal and in the concerned institutes.

The CAG was also found that 11,880 students were granted both PMS (Rs 6.91 crore) and Medhabruti (Rs 6.80 crore) during 2017 to 2021, contrary to the guidelines of both scholarship schemes and attributed it to non-interlinking of softwares meant the schemes. Although 56 nursing students of Jharsuguda, Kalahandi and Mayurbhanj districts got scholarships under the National Health Mission amounting to Rs 32.97 lakh during 2018-21, they also received PMS of Rs 35.18 lakh during the same period.

Similarly, 1,668 students who had pursued different courses at the same stage in four sampled districts were granted PMS amounting to Rs 3.71 crore during 2017-20 due to a lack of validation controls in PRERANA software.

It has recommended the state government to investigate the suspected fraud in the payment of PMS in all districts to fix responsibility on the defaulting officials. The SC/ST development department, implementing agency of the PMS, has also been asked to frame detailed guidelines for inspection of institutes, prior to their registration on the scheme portal.

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