2 Karnataka engineering colleges getting govt funds even after private-university affiliation, finds CAG

In an alleged financial irregularity of Rs 146.23 crore, the Karnataka government continued grants to two former aided engineering colleges even after they became part of private universities, reveals a recent report by the Comptroller and Auditor General of India (CAG).

The auditor found that the state Commissioner of Collegiate and Technical Education released Rs 95.93 crore and Rs 50.3 crore to Sri Jayachamrajendra College of Engineering (SJCE), Mysuru and BV Bhoomareddy College of Engineering and Technology (BVBCET), Hubballi, respectively, over a five year period between 2018-19 and 2022-23. The institutes had ceased to be eligible for the Karnataka state funds as they had joined two private universities – JSS Science and Technology University and KLE Technological University, respectively.

The CAG found these payments in violation of the state’s grant-in-aid code as well as the laws establishing these universities as they stipulate that these institutes will be “self-financing” and won’t be entitled to any maintenance, grant-in-aid or any other financial assistance from the state. “Since the private universities were formed to impart quality education with autonomy, the continuation of financial assistance was in violation of regulations,” says the report.

While the two private universities were created in 2013 as part of the state’s efforts to promote higher education in applied disciplines such as technology, health and management, the two aided colleges were annexed to them between 2015 and 2016. The audit team found that while the state stopped the fund flow to BVBCET Hubballi in 2023, only to issue a directive in February 2024 to extend the grants until the 2022-23 batch completes its course, allowing the staff on the government payroll to be retrenched by 2025-26.

The state informed the auditors that it intends to continue the aid to BVBCET Hubballi till the end of 2025-26. However, no end date was determined to discontinue the financial support to SJCE Mysuru. CAG termed it an “unacceptable” response.

CAG Report: Staff PhD, scholarship irregularities

Among other financial irregularities at the state’s higher education department, CAG found that the state failed to recover Rs 5.72 crore in salaries paid to staff members who were deputed to pursue PhDs but didn’t complete their research in the stipulated time.

The state exchequer also lost Rs 3.96 crore as many of 53,581 students across 60 polytechnics and two engineering colleges who were provided with tuition fee exemptions at the time of admission never applied for scholarships. These students were supposed to pay Rs 18.47 crore in fees between 2020-21 and 2022-23, but only paid Rs 13.38 crore. While an amount of Rs 1.89 crore was recovered through scholarships, the remaining money is yet to be recovered. With many of these students having already graduated, the state is unable to recoup around Rs 1.14 crore.

“The inability to monitor the recovery of exempted fee by the respective principals/ HODs/ registrars/ concerned courses’ subject coordinator of the institution led to loss of Rs 3.96 crore, which could impact further development and availability of resources for these institutions,” concludes the report.