Rs 116-cr Smart City fund scam: Lapses in opening of account by civic body led to fraud, says audit report

A recent report of the Principal Director General of Audit (Central) has flagged several lapses in the opening and operation of the bank account by the MC in IDFC First Bank after the closure of Chandigarh Smart City Company Limited (CSCL).

The audit was conducted after the scam came to the notice of the authorities and an FIR was registered.

After scrutinising the records and applicable rules, the audit report observed that the government’s investment policy was not adhered to while opening the account and investing the funds.

It said at least 60 per cent of such funds should be placed with public sector banks.

The directions also advised that the practice of inviting competitive bids for bulk deposits be discontinued and that such deposits be placed with banks with which the department had regular business, including public sector banks.