The Comptroller and Auditor-General has pointed to malpractices in a trust controlled by law minister Salman Khurshid and asked the government to recover Rs71.50 lakh with interest.

A sting operation conducted by a TV channel too had alleged irregularities by the Dr Zakir Husain Memorial Trust.

However, in a press statement on Friday, the minister's wife, and project director of the trust, Louise Khurshid, reiterated that the trust had not misappropriated funds. She also said that the document was merely an excerpt from an internal inspection report and not theCAG report, which is placed before Parliament.

Louise Khurshid also filed a civil defamation suit in the Delhi high court against the TV group. In its inspection report on the 'Transaction Audit and Grants-in-aid released by the Ministry of Social Justice and Empowermentfor the year 2011-12', a copy of which is available with ET, CAG has said that it detected irregularities during its inspection.

The auditor went into the charge of "misappropriation of grant ofRs71.50 lakh" and "irregular release of further grant of Rs68.25 lakh". The funds were allocated to UP-based non-governmental organisation under the scheme of 'Assistance to disabled persons for purchasing aids and appliances'.

As per the guidelines of the scheme, camps were to be held for the distribution of aid and appliances. CAG, which inspected the records relating to the utilisation of government grant, listed the following irregularities in its inspection report.

In the test check reports to the ministry, the NGO had claimed that it conducted camps at Bareilly, Siddharth Nagar and Shahjahanpur on January 15, 2010, January 25, 2010 and February 15, 2010.

But in letters addressed to district magistrates of these districts on April 1, 2010, the trust said that it intended to conduct camps in these areas. "This indicates that camps were not held before April 2010. It also shows that wrong information was furnished by the Trust to the ministry," the report said.

The ministry had directed special secretary, department of disabled welfare of Uttar Pradesh, to confirm the veracity of the test check reports submitted to the trust for the release of grants during 2009-2010.

District officials informed the ministry through two letters - on September 16, 2011 and October 7, 2011, that no camps were held in Allahabad. In the remaining 13 districts, the trust claimed that camps were held during January-March 2010.

But records show that the aid and appliances for the camp were purchased four months later, in July. The report, which is critical of the Centre's approach, said "instead of recovering the grants along with interest, the welfare ministry released Rs68.25 lakh for 2010-11 for implementing the scheme in the same 17 districts of UP for which a grant ofRs71.50 lakh was released during 2009-2010. (Economic Times)