Karnataka’s Higher Education Department paid Rs 146.23 crore as grants to two private colleges for five years since 2018-19, violating the law, the Comptroller and Auditor General (CAG) of India has found.

Bhoomareddy College of Engineering and Technology (BVBCET), Hubballi, and Sri Jayachamarajendra College of Engineering (SJCE), Mysuru, are the two institutions the CAG named in a report tabled in the legislature last week.

In 2013, the Government passed laws to establish private universities in the state.

The report stated, “KLE Technological University, under Act No. 22 of 2013 and JSS Science and Technology University, under Act No. 43 of 2013, were established in 2013. Two Grant-in-Aid (GIA) engineering colleges – BV Bhoomareddy College of Engineering and Technology (BVBCET), Hubballi, and Sri Jayachamarajendra College of Engineering (SJCE), Mysore – became part of these Private Universities through notifications dated 04 April 2015 and 16 January 2016, respectively.”

However, as per section 5 of both Acts, the institutions have to be self-financing and “shall neither demand nor be entitled to any maintenance, grant-in-aid, or any other financial assistance from the State or any body or corporation owned or controlled by the State”.

The compliance audit of the commissioner of collegiate and technical education for the fiscal year ending March 2023 revealed that SJCE and BVBCET received grants in violation of the norms, even during the Covid years, when the Government cut budgetary allocations across departments.

Starting in 2018-19, SJCE received Rs 95.93 crore over a five-year period. The highest amount was Rs 23.07 crore, received in 2020-21. BVBCET received Rs 50.30 crore during the same period.

Although the Government stopped the grant-in-aid for BVBCET in March 2023, a subsequent order issued in February 2024 extended the grant until the 2022-23 batch of students completed their course at the college.

In SJCE’s case, instructions were issued in November 2019 to continue the grant without specifying any timeframe for exiting the grant-in-aid regime.

“Release of GIA for both institutions contradicted the provisions of both the GIA Code and the Acts establishing the Universities. Since private Universities were formed to impart quality education with autonomy, the continuation of financial assistance was in violation of regulations. This resulted in the irregular release of GIA to two institutions to an extent of Rs 146.23 crore,” the CAG report said.