CAG pulls-up DoT

R Jai Krishna

NEW DELHI: The Comptroller and Auditor General of India (CAG) has pulled up the Department of Telecommunications (DoT) on accounting and management procedures, especially in the case of revenue collections and spectrum issues.

In its report for the year 2006, the CAG Report, which audited the performance of revenue management in DoT, covering various aspects relating to terms and conditions of the licence agreements and enforcement of contractual obligations agreements, collection and accounting of revenue such as entry fees, licence fees, universal service levy and spectrum charges, has pointed out various issues including non-payment of charges by private operators.

The contract conditions on Performance Bank Guarantee in license agreements were not sufficient to act as a deterrent for failure to complete rollout obligations, and Non-consideration of interconnectivity charges of Rs 24. 95 crore by an operator while arriving at AGR resulted in short payment of spectrum fees of Rs 60.76 lakhs in four circles, the report said. It has pointed out the inappropriate calculation of interest for delayed payment of licence fee resulted in short recovery of penal interest of Rs 6.67 lakhs.

The CAG report said that a lack of internal coordination between LF wing and WPF resulted in short remittance of spectrum charges of Rs 17.72 crore

Failure of Wireless and Planning Commission (WPC) wing to effectively scrutinize annual audited accounts and reconcile the same with payment made by operators resulted in short realisation of Rs 2.51 crore and the failure of DoT to communicate the new financial conditions of the revenue sharing regime to MTNL in time resulted in non-levy of interest of Rs 43.51 crore on MTNL for delays in payment of licence fees, the report said.

CAG has said that the DoT did not insist upon the clearance of outstanding amounts while allocating additional spectrum to six operators although they had outstanding dues of Rs 73.94 crore. Similarly, in respect of GSM operators, DoT did not spell out the option of withdrawal of spectrum following inefficient usage, though a similar condition existed for Basic Service operators. It also charged the DoT of not adhering to the guidelines on spectrum allocation, resulting in initial allocation of the 6.2 +6.2 MHz radio frequency to ineligible operators.

Stating that licences of users other than telecom service providers were not renewed in time resulted in non-levy of Rs 3.59 crore, the report says DoT did not collect financial bank guarantees worth Rs 4.99 crores from commercial VSAT operators. However, the CAG has taken into account the wireless monitoring activities being affected due to the delay in completion of a World Bank assisted project for modernization.

CAG has said in his report that failure of DoT to transfer the stipulated amounts of Universal Service Levy from its revenue to the Consolidated Fund of India resulted in short credit of the levy to the tune of Rs 217.54 crore. It also said that revenue shown to have been collected as per the records of the Licensing Financing Wing and as per the books of accounts maintained by the Accounting Wing had not been reconciled for the years 2001-`02 to 2004-`05, which resulted in a net difference of Rs 700.40 crore of revenue shown in these two sets of records.

It has charged the DoT of not realising spectrum dues of Rs 241.60 crore from five Central Government organisations

Recommendations

In order to enhance the performance of DoT operations, the report has recommended the rollout obligations for all services should include the criteria of geographical coverage saying this would facilitate accomplishment of the government’s policy of universal accessibility of telephones.

The CAG has asked the DoT to pay greater attention towards verifying the correctness of AGR statements submitted by the service providers. DOT should strengthen its revenue collection process as well as its monitoring mechanism and should conduct special audits of licensees’ books of accounts on a sample basis for checking the authenticity of their Adjusted Gross Revenue statements.

Another recommendation also said that DoT should take immediate action to realise the outstanding dues from MTNL, and asked it to prescribe proper time schedules for utilisation of additional spectrum allocated beyond the minimum eligibility level.

Asserting the clearance of all outstanding dues against an operator should be made mandatory before allocation of additional spectrum, the report said DoT should have a policy of withdrawal of spectrum from GSM licensees in cases of non-utilisation or under-utilisation. It has advised the department to properly maintain and regularly update its records concerning frequency usages and consequent spectrum use by all network users, renewal of their licenses and FBGs to ensure proper collection and accounting of spectrum related dues.

Asking the results of verification of AGRs done by the LF Wing be communicated to the WPC / WPF wings for appropriate levy of spectrum charges, the CAG has suggested that the department, introduce a proper MIS between the WPC and the monitoring stations for better frequency management and also facilitate curbing illegal / unauthorised use of wireless networks.

Urging the DoT to take prompt decisions/ corrective measures on all infringement reports, the CAG report has said that the department should speed-up the implementation of the National Radio Spectrum Management and Monitoring System.

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