CAG audit finds over ₹40,000 crore meant for higher education in India has either lapsed, gone untransferred, or remained unaccounted for in terms of documentation.

DU Beat analysed the financial audit reports of the Comptroller and Auditor General (CAG) of India for the years 2022–23, 2023–24, and 2024–25. The CAG findings highlight the scale of financial irregularities within the Department of Higher Education – a department that directly affects millions of college students across the country.

The Comptroller and Auditor General of India is the supreme constitutional authority responsible for auditing all receipts and expenditures of the Government of India and state governments. This article examines three financial audit reports, each presenting the key findings of a different audit. Together, these findings highlight how funds allocated for higher education were either left unutilised, remained untransferred, or were inadequately documented.

CAG AUDIT 1 (2022-23, Report no. 4 of 2025)

Rule 62(2) of the General Financial Rules (GFR), 2017 mandates that if any department or ministry realises it will not be able to utilise its allocated funds, it must surrender them immediately rather than wait until the end of the financial year. Accordingly, a deadline of 21 March 2023 was set for all departments to surrender their savings. However, out of the total savings of ₹3,41,264.33 crore across all departments, ₹31,701.89 crore was not surrendered to the government.

A department-wise analysis shows that the Department of Higher Education not only failed to utilise its entire budget but also did not surrender ₹1,535.91 crore of unspent funds. In comparison, the Department of School Education and Literacy, listed immediately above it in Row 13, had a significantly larger amount of unspent funds – ₹14,659.28 crore – but surrendered almost the entire amount in accordance with the rules.

CAG AUDIT 2 (2023-24, Report no. 16 of 2025)

Every Indian taxpayer pays a Health and Education Cess – a dedicated tax levied over and above the base tax – at the rate of 4% to support the government’s initiatives in healthcare and education. Of this 4%, 1% is earmarked for health and credited to the Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN), 2% is allocated to primary education through the Prarambhik Shiksha Kosh (PSK), and the remaining 1% is meant for secondary and higher education and is to be credited to the Madhyamik and Uchchatar Shiksha Kosh (MUSK).

However, between 2018–19 and 2021–22, no funds were transferred to MUSK. During these four financial years, the government collected ₹10,327.50 crore, ₹9,810.25 crore, ₹8,973.75 crore, and ₹13,187.50 crore, respectively, for the fund, yet transferred nothing to it.

In 2022–23, the government collected ₹15,453.50 crore but transferred only ₹14,250 crore.

In 2023–24, ₹17,789.75 crore was collected, while ₹37,833.33 crore was transferred, indicating a substantial catch-up from previous years. However, even after this transfer, of the total ₹75,542.25 crore collected for MUSK between 2018–19 and 2023–24, only ₹52,083.33 crore was credited to the fund, leaving a cumulative shortfall of ₹23,458.92 crore.

The CAG audit also found that the Department of Higher Education’s failure to surrender unspent funds was not an isolated instance. After failing to surrender excess savings in 2022–23, the department repeated the lapse in 2023–24, retaining ₹688.18 crore – more than half of its total savings for the year – instead of surrendering the amount as required.

Total short-transferred education cess: ₹23,458.92 crore
Total non-surrendered savings: ₹688.18 crore

Total amount: ₹24,147.10 crore

CAG AUDIT 3 (2024-25, Report no. 6 of 2026)

This clause states that whenever the government provides a one-time grant to an institution, the sanction order must require the recipient to submit a Utilisation Certificate (UC) confirming that the funds were used for their intended purpose. This is not optional – it is mandatory, as it is the primary mechanism for verifying how public funds have been spent. If a grantee fails to submit the certificate, the ministry has the authority to withhold future grants until compliance is ensured.

For the period from 2007–08 to 2023–24, a total of 3,530 utilisation certificates, amounting to ₹14,359.76 crore, remained outstanding. Of these, 2,934 certificates, worth ₹14,218.20 crore, pertain to just the last three financial years. In other words, ₹14,218 crore of the total ₹14,359 crore in pending utilisation certificates accumulated during the most recent three-year period.

While pending utilisation certificates do not, by themselves, indicate that funds have been misappropriated, they do point to significant delays in financial reporting and compliance, highlighting gaps in oversight and accountability.

₹40,042.77 crore. That is the total amount that was either not transferred to its designated fund, not surrendered in accordance with financial rules, or remained unsupported by pending utilisation certificates across the three CAG audit cycles examined. While these findings do not necessarily indicate that the money was misappropriated, they point to significant lapses in financial management and oversight within the Department of Higher Education.

The scale of these irregularities raises broader questions about the department’s administrative efficiency, particularly in the wake of controversies such as the NEET paper leak and the CBSE OSM fiasco. It also prompts a larger question: how effectively is India’s higher education system being governed, and who, beyond the CAG’s audit reports, is ensuring accountability for the finances of one of the country’s most important departments?

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Image Credits – The Probe staff

Name – Kaustubh Dwivedi
Mail – [email protected]