"The schools did not follow the accounting standards while preparing their final accounts. There was no prescribed accounting format," said the CAG report, which runs into 64 pages.
The report for years 2006-09 was filed on the court's direction over a parents' association petition that challenged the Delhi government's decision to allow the private schools to hike their tuition and development fees.
The CAG report will be taken up by the court on Friday.
Justice A.K. Sikri and Justice Siddharth Mridul on March 8 asked the CAG to submit the report by March 18.
"There was no evidence of scrutiny of annual accounts and other returns to ascertain that the receipts and expenditures of the schools were in consonance with the projected budget estimates of the schools and any fee hike was not unreasonable," reads the CAG report.
"Inspection of the schools by the director of education (DoE) was inadequate. The director made only 10 visits in 25 schools during 2006 to 2009 against 75 envisaged in the law. Due to weak governances by the DoE, the schools continued to enhance the fees despite having surplus funds," said the report.
The audit report was only against the accounts of 25 out of the 1,211 private city schools.
The CAG said the schools, which earned profits, used to prepare accounts showing losses by transferring the surplus funds into the next financial year.
"The total cumulative revenue surplus as on March 31, 2009, was Rs.93.79 crore and the average cumulative revenue surplus per school during 2004 to 2009 ranged from Rs.2.51 crore to Rs.4.42 crore. Schools build up deficits when they overspend their budgets and carry forward the overspend to future years," the report said.
It suggested proper monitoring by the government of the accounts of the schools which were not only shying away from giving admissions to poor children but also paying salaries to their staff and teachers on the lines of their counterparts in government schools.
The CAG also pointed out lapses of chartered accountants who audited the accounts of the schools.
"Our scrutiny of audited accounts of the unaided private schools revealed that none of the auditors had qualified the audit reports in significant cases of non-compliance with the directions of the DoE and provisions of the DSE (Delhi School Education) rules by the schools."
"As this amounts to professional lapse, the matter may be taken up with the Institute of Chartered Accountants of India for suitable deterrent action," the report said.
The schools had recently enhanced fees by 15 percent without assessing the actual requirement, it said, adding the parents were not apprised of the actual demand arising out of the implementation of the Sixth Pay Commission.
They should have first considered their surplus money and then, if required, raised the fees.
"The five schools with the most surpluses were DPS, Summerfield School, Vasant Valley School, Modern School and ASN School and their surpluses ranged from Rs.58.67 crore to Rs.9.26 crore during 2006 to 2009."
Schools did not admit students belonging to the economically weaker section (EWS) category to the desired extent, the CAG said, adding the process lacked transparency in dealing with the issue.
The CAG asked the DoE to monitor the efforts made by schools to ensure admission of the poor children.
"The school should display the information on the DoE's website for adequate publicity," said the court. IANS
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