Morung Express News
Dimapur | March 28
The Comptroller and Auditor General of India (CAG) has reported significant financial irregularities, governance lapses and implementation failures across multiple departments in Nagaland, with the report tabled in the State Legislature on March 26, 2026. The report covers Performance Audits and test audits of transactions of various Departments of the Government of Nagaland pertaining to Social (including Local Governments Audit), Economic, General and Revenue Sectors.
It revealed that out of 69 sampled construction workers, 66 were migrant workers, none of whom were registered as beneficiaries under the Nagaland Building and Other Construction Workers’ Welfare Board due to the absence of an effective registration system. The audit also found that no construction establishment was registered, while cess amounting to Rs 2.68 crore collected between 2018 and 2022 was either delayed or not remitted to the Board’s account within the prescribed time. In contravention of the BOCW (RECS) Act, the Board spent Rs 1.50 crore on purchasing nine vehicles from the cess fund.
On public health infrastructure, the audit covering 2017 to 2023 found shortages of Community Health Centres in Longleng, Tuensang and Dimapur districts, and Primary Health Centres in Dimapur district, while 52% of Health Sub-Centres were understaffed. Specialist diagnostic tests such as Endoscopy, Bronchoscopy, Stress Test, Arthroscopy, Hysteroscopy and Pulmonary Function Tests were not available in any district hospitals, and emergency and trauma care units were found to be absent in sampled health facilities. Pressure Swing Adsorption oxygen plants installed in 11 district hospitals and eight CHCs remained “largely unutilised,” failing to reduce expenditure on oxygen cylinders. The State is also lagging behind in achieving seven out of 10 SDG-3 targets compared to national achievements.
Regarding urban governance, the audit noted that Urban Local Bodies in the State have been run by government-appointed administrators for the last 15 years with no elected representatives in place.
Only one full function, sanitation and solid waste management and six partial functions out of 18 listed functions were devolved to ULBs, even 22 years after the enactment of the 74th Constitutional Amendment Act. The ULBs’ own revenue ranged between Rs 24 crore and Rs 28 crore, with toll taxes contributing over one-third, but closure of check-gates in May 2022 halted toll collection, forcing the government to release Rs 9.45 crore as salary grants in 2022-23.
The State Government, through a 2016 amendment to the Nagaland Municipal Act, omitted the power of ULBs to levy property tax, further depriving them of revenue. Municipal Account Code remains unprepared even after 22 years, with ULBs following a cash-based system and maintaining only Receipt and Payment Statements. Of 39 ULBs, 10 have no staff and 15 operate with fewer than 10 employees.
On solid waste management, the audit of six sampled ULBs found that they lacked surveys and weighbridges, making waste generation estimates unreliable. Only 6.50% of solid waste collected was processed, with the rest dumped in unsanitary open sites. The 50-tonne-per-day compost plant and sanitary landfill at Kohima, funded under an Asian Development Bank project at a cost of Rs 48.63 crore and commissioned in February 2016, was non-functional.
The audit on modernisation of police forces revealed that the State released only 26% of its share of funds under the scheme, amounting to Rs 2.38 crore against Rs 9.20 crore, while the Government of India released 69% of its allocation. Abstract Contingent bills amounting to Rs 25.50 crore remained unadjusted, and civil works in four districts were not executed despite Rs 1.71 crore being paid based on false measurements. A Resource Management System and Beat Patrolling System costing Rs 7.12 crore remained unutilised.
On GST compliance, the audit found that “no specific guidelines on scrutiny of GST returns were issued by the State Government,” and internal audit to verify correctness of turnover, taxes paid and input tax credit availed had not started. Notices were not issued in 19,815 out of 21,026 cases of GSTR-3B non-filers, while turnover mismatches of Rs 188.21 crore in 30 cases led to a short levy of tax of Rs 1.86 crore.
A pipeline project costing Rs 27.97 crore for providing water supply to Kohima town proved unfruitful as it was never tested or commissioned even a year after its completion in March 2022.
The audit further revealed that the water supply capacity from existing sources to Kohima city stood at 3.36 million litres per day (MLD) during monsoon and 1.23 MLD during the lean season against a demand of 18.71 MLD, leaving a deficit of 82 to 93%. The primary cause of the water shortage was the non-implementation of a water source augmentation project from the Dzukou and Tepuiki streams, which was stalled due to land disputes between two landowner villages.
The School Education Department made an excess payment of Rs 0.94 crore for printing of school textbooks after selecting a firm based on quotation in violation of competitive bidding rules.
The Public Works Department (Roads & Bridges) in Phek Division made an irregular payment of Rs 5.86 crore on short-executed works based on fictitious entries in measurement books and running account bills.
The Water Resources Department utilised Rs 2.48 crore to procure 20 vehicles in violation of the Pradhan Mantri Krishi Sinchai Yojana Operational Guidelines. The audit found that the procurement was made from the scheme’s administrative fund, contravening both the central guidelines and a notification issued by the State Government.
A Sub-Divisional Officer of the Tourism Department recorded “fictitious execution of works in measurement books, leading to a suspected fraudulent payment of Rs 1.36 crore to contractors.” A joint physical verification by audit and departmental officials found that the payment was made without any actual execution of works. The SDO had recorded the measurement books without verifying the execution and authorised the payment. The Tourism Department failed to enforce provisions of an MoU with a local authorities/private entrepreneurs, resulting in non-recovery of rent on government assets amounting to Rs 27.53 lakh. The audit found that the department did not renew the MoU, leading to unrealised revenue charges.
The Rural Development Department sanctioned inadmissible expenditure of Rs one crore to a block in Tuensang, of which Rs 0.84 crore was mis-utilised on construction of fishery ponds in violation of operational guidelines.
The Home (Police) Department failed to recover security charges for police guards amounting to Rs 54.82 crore from banks and institutions despite assurances to the Public Accounts Committee.
The Finance (Treasuries & Accounts) Department reported fraudulent or excess drawal of Rs 0.68 crore by 13 Drawing and Disbursing Officers from 10 departments by inflating pay bills, of which Rs 19.74 lakh is yet to be deposited.
The CAG has recommended that the State Government take steps to recover irregular payments, fix responsibility on erring officials, strengthen internal controls and ensure compliance with relevant Acts, rules and guidelines across all departments.
