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DOCUMENT: CAG’s comments on Goa’s Cyberage Scheme

Posted by egovindia on July 17, 2006

DATE: Mon, 17 Jul 2006 01:08:18 +0530 
SUBJECT: DOCUMENT: CAG's comments on Goa's Cyberage Scheme 

DOCUMENT: Comptroller and Auditor General's comments on the
Cyberage Student Scheme


3.3.1 INTRODUCTION: The State Government had introduced the
"Computer Literacy Programme (CLP)" in all the Government and
the Government-aided high schools from the financial year
2000-01 for the students of VIII to X standards with an aim
to achieve 100 per cent computer literacy.

Under this programme, the State Government had introduced the
"Cyberage Students Scheme" from 2002-03 whereby Government
supplied one computer to each of the students, consisting of
one monitor, multimedia PC along with uninterrupted power
supply (UPS) and necessary accessories with requisite
software and one modem, for internet use was supplied to the

The scheme which was initially started for Class XI students
of Science stream was extended to the students of other
streams of elevanth standard and also to the students of
polytechnic, degree courses, including professional
courses/post-graduates, etc, from 2003-04. The Departments of
Education and Higher Education together had distributed
28,586 computers by the end of March 2005 on which Rs 77.39
crore was spent during the period 2002-05. The scheme was a
100 per cent State Budget Scheme.

The configuration of the computers was decided by the
Education Department. The equipment had a warranty of one
year, and beyond one year the maintenance was to be carried
out by the parents or guardians of the students. The Goa
Electronics Ltd (GEL), state-owned company, was the agency
nominated for the procurement and maintenance of the computer

2002-05, the State Government made budget provision of Rs
11.12 crore, Rs 27.02 crore and Rs 51 crore against which
the expenditure incurred was Rs 6.13 crore, Rs 20.29 crore
and Rs 50.97 crore respectively. During the period 2003-05,
the Department supplied 28,586 computers to the students as

2002-03   XI Science               2806       2806
2003-04   XI (all streams)        10629      10629
2004-05   Degree and professional 15151      15151
          Total (no of students)  28586      28586

Guidelines issued by the Government to the educational
institutions did not contain any clause to restrict the
supply of one computer per family. The Director of Education
had supplied 2806 and 10629 computers to students of eleventh
standard science/all streams in the year 2002-03 and 2003-04
respectively. Similarly, the Director of Higher Education had
supplied 15151 computers to the students of 42 colleges in
Goa such as graduates, diploma holders, professionals etc
during 2004-05.

A test-check in audit revealed 59 families of students in 44
higher secondary schools and 29 families of the students of
19 colleges were supplied with two computers to these

Thus, the government decision to give computers to all the
students without restricting one computers to each family had
resulted in avoidable expenditure of Rs 20.09 lakh on 88
computers and further additions of such cases was also not
ruled out. The department stated (September 2005) that a
clause has now been included in the Guidelines of the Scheme
for 2004-05 restricting supply of computers to the family of
the students who do not possess computers. NON-PROVISION OF EDUCATIONAL CDs: Though supply of
software, CD, Internet connectivity and training on computers
was also envisaged in the scheme, the department did not
provide educational CDs as per the Goa Board Curriculum, and
connecting to the Internet was also not ensured.

In the absence of educational CDs, internet connectivity and
training, the complete benefit that was envisaged under the
scheme was not extended to the students of the scheme
objectives of enabling students to become technology savvy
was also not fulfilled.

Further, modems provided to 25,780 computers at a cost of Rs
1.28 crore remained idle as Internet connectivity was not
ensured. The department stated (September 2005) that under
this scheme, the Government had provided basic hardware and
software, and other requirements like electrical connections
and Internet connectivity are to be procured by the students
at their own cost. The reply was not tenable as modem was
supplied without ensuring capability of the students to incur
the expenditure in obtaining the Internet connectivity,
resulting in the uncertainity in utilization of modems on
which an expenditure of Rs 1.28 crore had been made.

The Director of Education placed (November 2003) an order on
the GEL for the supply of 10,000 computers through the
identified suppliers, to the students of XI standard at a
rate of Rs 18,900 inclusive of all taxes and delivery

An agreement was entered into with GEL in January 2004 for
this supply. The supply order and agreement did not provide
for a clause for restricting payment of statutory duties and
taxes to the actuals paid. Such a clause was important in a
scheme of such a nature, as the computer industry is prone to
several changes, both as regards to technology and prices.

The Government of India announced a reduction of excise duty
on parts and components of computers from 16 per cent to 8
per cent and also removed the 4 per cent special additional
duty on personal computers, with effect from 8 January 2004.

Government of India further reduced the excise duty on the
parts of computers from 8 per cent to nin will effect from 15
January 2004.

In view of the reduction of excise duty, the Director of
Education took up (February 2004) the matter of reduction of
prices of computers supplied with GEL. The company only
reduced the price of 537 computers to Rs 17508, and the
balance 9463 computers were charged at the original rate of
Rs 18,900.

The failure of the department in providing a suitable clause
in the supply order/agreement for the levy of duties and
taxes, prevailing at the time of delivery, resulted in the
non-availment of benefits of Rs 34.28 lakh due to the
reduction of duties and consequent extra expenditure to that
extent. The department stated (September 2005) that the
clause on the decrease in taxes and duties was not made in
the agreement to claim the benefit of reduction in the
duties. It was further stated that the GEL had passed on the
benefit of a reduction in excise duties to the Government
after the announcement of the Union Budget. The reply of the
Department was not tenable as GEL had given an excise duty
benefit only of Rs 7.47 lakh on 537 computers instead of a
benfit of Rs 34.28 lakh that was to be passed on 1463
additional computers. NON-INVITATION OF TENDERS: The State Government
extended the Cyberage Students Scheme to students of the
aided colleges, polytechnics, engineering colleges, etc, in
February 2004 and, accordingly, the Director of High
Education Department has placed a supply order for 15,000
computers to M/s Goa Electronic Ltd i.e. 4500 Pentium IV and
10,500 AMD Athlon on the same terms and conditions as
negotiated by the Director of Education for purchases made by
them in the year 2003-04.

Goa Electronics Ltd, the procuring agency, placed the supply
order for 15,000 computers on the same nine suppliers
(proportionately) who had supplied to the Education
Department in 2003-04 at the old rates agreed as per
contracts for 2003-04 supplies.

Since there was a fall in the prices of the computers due to
reduction in Excise duty, the Government should have advised
the GEL to invite fresh tenders for the year 2004-05 to get
better quality computers at a much lesser cost or should have
renogiated the prices. This resulted in depriving the
Government in obtaining better rates or better configuration
within the same funds that were expended. FUNDS DRAWN TO AVOID LAPSE OF BUDGET PROVISION:
Though the GEL had invited tenders in ks
December 2004 for the year 2004-05 for the supply of
computers to the Class XI students, the Government delayed
finalisation of the bids and in March 2005 ordered fresh
invitation of tenders to take advantage of the reduction in

To avoid a lapse of the budget provisions, the Directorate of
Education sanctioned Rs 23.43 crore for the procurement of
11,000 computers and Rs 15.09 crore were withdrawn from the
Treasury on contingent bills.

Till July 2005, payemnts had not been made to GEL as the
Government had not finalized the tenders. The Department
stated (September 2005) that, based on the preliminary
estimates, the Government decided to draw 70 per cent of the
estimated expenditure on the basis of advance bills from GEL
in view of paucity of time for implementing the scheme. The
reply is not acceptable since funds were drawn even before
the finalization of the contract for the supply of computers.

awarded the maintenance contract of the computers under the
scheme to GEL since 2003-04. Scrutiny of the records of the
GEL revealed that GEL had not attended the complaints
relating to computers lodged by students, promptly. It was
seen that 1127 complaints registered by 97 higher secondary
schools (HSS) between April 2004 to August 2004 were attended
to after a delay ranging from seven days to more than two
months. These complaints were of the nature of keyboard not
functioning, CPU/monitor/mouse/speakers not working,
computers not booting, UPS not functioning and application
software not working.

Though the Monitoring Cell of the Directorate of Education
had attended about 7100 complaints registered in teh cell and
about 6000 in GEL, it was noticed that no returns were
prescribed by the Director of Education for GEL and its
supplies, to monitor the efficiency and problems in handling
of complaints. The Department stated (September 2005) that
complaints were later rectified in a period ranging from
seven days to two months from the date of lodging of

Further, the monitoring cell which was constituted in January
2004 in the Department of Education with one
officer-in-charge and eight engineers/technicians on contract
basis, became non-functional as the services of eight
engineers/technicians were terminated between May 2005 to
(g) of the agreement made in November 2003, by the GEL with
the Government, the GEL had to carry out preventive
maintenance of the computers once in a quarter and submit the
report for each computer in the prescribed format to the
Director of Education/Higher education.

No such reports were rendered by the GEL to the Department.
It was also noticed that the GEL and their suppliers had not
carried out preventive maintenance of 13,433 computers and
15,151 computers supplied by the Director of
Education/Directorate of Higher Education, during 2003-05.

The Department has also not initiated any action for such
lapses against the GEL. The Department stated (September
2005) that the preventive maintenance from 2004-05 was
carried out by GEL. The reply is not tenable as GEL had
admitted (September 2005) that they have not carried out
preventive maintenance as they have found the process
cumbersome due to non-availability of the students at the
location and on account of the large number of installations.

3.3.6 EVALUATION: The evaluation of the scheme was not
carried out by the Government at any stage to assess the
performance of the programme. The scheme was extended to
college students also without getting any feedback from
existing beneficiaries.

The Department stated (September 2005) that the Government
was working upon the modalities to give the task of
evaluation to either Goa Unviersity or Goa Institute of
Management and the proposals received from them were under
scrutiny and the feedback received after evaluation would be
made applicable to the sceme from the next academic year.

3.3.7 CONCLUSION: The STate Government had introduced the
scheme of supplying computers to students of higher secondary
schools and colleges in 2002-05, with the objective of making
the students computer literate. Despite issue of computers to
28,586 students, the impact of the scheme was not measurable
as the Government had not obtained any feedback or carried
out an evaluation, even after three years of its
commencement. Deficiencies in the contract resulted in the
Department being deprived of competitive and better rates and
the benefit of reduction in Excise duty. The system of
preventive maintenance and attendance of complaints was


* The State Government should carry out an evaluation of the
scheme and fine-tune it based on the results of the
evaluation and feedback obtained.

* Agreement with suppliers should be redrafted to ensure the
department avails of the benefit due to decrease in duties
and taxes.

* A complete review of the system of maintenace of computers
should be carried out with a view to ensure sustained
availability of the assets to beneficiaries on a long-term

[SOURCE: Report of the Comprtoller and Auditor General of
India. For the year ended 31 March 2005. Government of Goa.
Pp 56-60.]


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