The Comptroller and Auditor General (CAG) has flagged major financial irregularities in Uttar Pradesh’s AYUSH department, revealing that patients were illegally charged admission fees at five government AYUSH medical colleges despite a government ban. The audit also pointed to large-scale violations of procurement norms, resulting in significant losses to the state exchequer.
According to the report, the state government had abolished the ₹35 admission fee at all health centres—except hospitals attached to medical colleges—in August 2012. However, the Government Homoeopathic Medical College and Hospital in Moradabad continued to collect the fee between 2018-19 and 2022-23, charging 7,034 patients a total of ₹2.46 lakh in violation of the order.
Similar illegal collections were reported at AYUSH colleges in Pilibhit, Lucknow, Prayagraj and Banda, where thousands of patients were charged admission fees despite the prohibition. The audit observed that the continued recovery of these charges reflected weak financial oversight and non-compliance with government directives.
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The CAG report also highlighted serious irregularities in the procurement of AYUSH medicines. Both the Allahabad High Court and the Supreme Court had directed that medicines must be purchased through a transparent tender process rather than through a nomination-based system. Despite these clear judicial orders, the AYUSH Society continued to procure medicines using the old nomination method between 2018-19 and 2022-23.
During this period, medicines worth over ₹497 crore were purchased without following the mandated tender procedure. When the procurement rates were compared with those of the Employees’ State Insurance (ESI) Corporation, the audit found that in purchases worth ₹86 crore alone, the state suffered a direct loss of about ₹30 crore due to higher prices.
The report stated that the failure to adopt competitive bidding not only violated court orders but also deprived the government of the benefits of price discovery and transparency. It further noted deficiencies in monitoring mechanisms and internal controls within the department.
Financial experts said the findings point to systemic lapses in compliance, procurement planning and supervisory checks. They warned that such practices undermine public healthcare delivery and reduce the resources available for patient services.
The audit has recommended strict adherence to government orders on patient charges, implementation of e-tendering for all drug purchases and fixing accountability for officials responsible for the violations. It also called for recovery of the illegally collected admission fees and the excess amount paid in procurement.
The revelations are expected to trigger departmental inquiries and possible administrative action against those found responsible. Officials indicated that the findings would be examined and corrective measures taken to strengthen financial governance in AYUSH institutions.
The case underscores the need for robust audit compliance, transparent procurement systems and stronger financial controls in public health institutions to prevent recurrence of such irregularities.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
