Rs. 55.91 lakh irregularities flagged in SIHM Project at Nongmaiching Ching

Serious financial irregularities have been flagged in the establishment of the State Institute of Hotel Management (SIHM) at Nongmaiching Ching in Imphal, with an audit report pointing to questionable payments, including Rs. 34.47 lakh paid for works that a field inspection reportedly found had never been executed.
The findings are part of the Audit Report on the General, Social, Economic and Revenue Sectors for the year ending March 31, 2023.
The SIHM project, intended to strengthen hospitality education infrastructure in Manipur, was taken up under the Central Financial Assistance scheme for setting up new Institutes of Hotel Management. The Union Ministry of Tourism had accorded administrative and financial sanction of Rs. 12 crore for the project.
According to the audit report, the construction work of the institute was initially entrusted to the Manipur Development Society (MDS) in March 2014.
In June 2015, MDS submitted a Utilisation Certificate (UC) for Rs. 1 crore to the Tourism Department, claiming that the amount had been spent from its own resources on works such as an RCC approach road, compound fencing and land development. The agency requested reimbursement of the amount.
However, during a field inspection conducted on May 28, 2018, the then Director of Tourism, accompanied by representatives of the Manipur Infrastructure Development Agency (MIDA), reportedly found that no work related to the SIHM project had actually been started by MDS.
Following the inspection, the executing agency for the project was changed from MDS to MIDA in July 2018.
Despite the inspection findings, MDS again sought release of the claimed amount. The Tourism Department subsequently asked the agency to furnish details of the works along with measurements and photographic evidence.
Instead of pursuing the earlier claim of Rs. 1 crore, the Project Director of MDS later submitted a revised claim of Rs. 34.46 lakh, stating that the amount had been spent on constructing compound wall fencing on the eastern and western sides and a main gate.
The audit report noted that two separate bills had been submitted for the same work, each reflecting different completion dates, raising doubts about their authenticity.
The audit further observed that the department processed the payment without insisting on essential supporting documents such as tender papers, work orders and measurement books.
Consequently, the Tourism Department released Rs. 34.47 lakh to MDS, despite the earlier field inspection reportedly confirming that no work had been carried out.
The audit categorically stated that payment based on such fictitious bills was not acceptable.
The report also highlighted excess payment in connection with the construction of compound fencing under the SIHM project.
The work had been awarded to a local contractor in July 2019 at a tendered cost of Rs. 69.82 lakh, with a stipulated completion deadline of January 2020.
Initially, the project was handled by MIDA, which paid Rs. 32.81 lakh to the contractor as the first Running Account (RA) bill in September 2019.
Later, the remaining work was transferred to the Manipur Police Housing Corporation Limited (MPHCL) in December 2019.
Audit scrutiny revealed that MPHCL paid an advance of Rs. 25 lakh to the contractor in March 2020. Subsequently, the contractor received another Rs. 33.45 lakh in July 2023 as the second RA bill.
However, the advance amount was not adjusted against the contractor’s bill, resulting in a total payment of Rs. 1.26 lakh — exceeding the tendered amount by Rs. 21.44 lakh.
MPHCL reportedly informed audit authorities in September 2023 that the advance payment had not been recovered due to oversight and that the contractor had been asked to refund the excess amount.
However, the audit noted that no further reply had been received from the department as of May 2024.
The audit findings raise serious questions over financial oversight, verification procedures and accountability in the execution of the SIHM project, particularly regarding payments made without adequate documentation and the failure to adjust advance payments.