Only 24% of companies under the Employees? Provident Fund Organisation (EPFO) fully contribute employees? contributions and furnish returns, as reported by FE on Tuesday. But even if your employer is among them, there is still a chance you will be short-changed at the time of settling your PF account. A review of accounts in EPFO?s field offices by its internal audit wing has found that 90% of PF accounts are inaccurately reconciled.
An analysis of the audit wing?s study shows that nearly 91% of accounts in the North Zone are inaccurate, 75% in the East Zone and 72% in the West Zone. Employees whose accounts fall in some offices can safely bet that their accounts are flawed: Jalandhar (99.66% inaccurate), Noida (98.26%), Gurgaon (96.05%), Ahmedabad (91%), Chandigarh (96%), Nizamabad (97.42%), Bhopal and Gwalior (93.3%).
Worse, a large number of accounts show negative or residual balances. A negative balance occurs when employers have not paid contributions, but employees? claims have been settled. Residual balances occur when an account?s final claim has been settled, but it still has a balance. In a plea for more staff to be sanctioned by its board?s executive committee, the EPFO also points to ?a high risk of fraudulent and irregular payments? that increased from 1995 to 2007.
Though data entry and processing is computerised in field offices, the inaccuracy levels have been attributed to failure by supervisory officers to properly reconcile accounts. To be fair, claims handled by section supervisors, who are responsible for monitoring accounts officers? work, have gone up by 310% from 1,320 in 1984-85 to 4,100 in 2006-07.
There are problems with the Employees? Pension Scheme as well. Since inception in 1995, the number of pensioners has gone up by 3,216% (2007). Since pension payments are made every month, EPFO has to reconcile them with disbursing banks on an ongoing basis. The shortage of staff has resulted in huge backlogs.
Admitting that improper maintenance of accounts is worrying stakeholders, EPFO adds: ?There is also apprehension that field offices? accounts that are later supplemented to head office for consolidation do not reflect the true and correct picture of the accounts. The error factor in reconciling the members accounts, the huge backlog in reconciliation of pension payments, all will lead to a situation where the organisation will not be able to keep its house in order??