Hyderabad: A govt audit and Aadhaar-based verification of outsourcing employees have uncovered alleged irregularities involving over Rs 1,100 crore in provident fund (PF) contributions in the state, putting hundreds of private manpower agencies under the scanner.The scrutiny, covering around 1.6 lakh outsourcing employees working across govt departments and institutions, has also thrown up suspected cases of ghost employees and raised questions over the monitoring of agencies handling workers’ salaries and statutory benefits.According to preliminary findings, over 60% of outsourcing employees either did not have provident fund accounts or their PF contributions had not been regularly deposited.The alleged irregularities came to light during an audit of payments made to outsourcing agencies and an Aadhaar seeding exercise to verify employees.Under the outsourcing system, govt departments release payments to agencies covering salaries, the employer’s provident fund and Employees’ State Insurance (ESI) contributions, agency commission and goods and services tax. Agencies also deduct the employee’s share of PF and ESI from monthly salaries.However, the scrutiny found that in several cases, PF contributions deducted from employees, along with the employer’s share released to agencies, were allegedly not deposited with the Employees’ Provident Fund Organisation (EPFO).Based on audit reports and payment records examined over several years, the suspected diversion has been estimated at over Rs 1,100 crore.For an employee with a basic salary of Rs 15,600, the combined monthly PF contribution works out to about Rs 3,900. Over a year, this amounts to Rs 46,800 per employee, excluding interest. Applied to thousands of workers whose PF contributions were allegedly not deposited, the amount involved could exceed Rs 31 crore a month, or over Rs 375 crore annually.The Aadhaar verification exercise also reportedly exposed discrepancies between the number of employees shown on agency payrolls and those actually working, raising suspicions that bogus or ghost employees were being used to draw salaries and other payments.As scrutiny intensified, several agencies allegedly shut down or stopped operations, complicating efforts to trace those responsible and recover the money.Govt has recommended legal action against agencies found to have violated PF norms and sought recovery of the amounts due. It has also asked the regional PF authorities to initiate proceedings against agencies that failed to deposit statutory contributions.The findings have raised questions over whether govt departments and officials responsible for monitoring outsourcing contracts regularly verified PF challans and electronic contribution returns submitted by agencies. Labour representatives have demanded that officials responsible for lapses should also be held accountable.The controversy has also revived the debate over scrapping private outsourcing agencies. Critics argue that removing intermediaries could save agency commissions and GST, increase workers’ take-home pay and reduce the scope for manipulation of PF and salary payments.The immediate challenge, however, would be recovering the money due to thousands of employees and fixing responsibility for what could emerge as one of the biggest irregularities detected in Telangana’s outsourcing system.
