CAG Flags Irregularities in Odisha’s PM Poshan Scheme—More Mid-Day Meals than Students Highlights “High Risk” of Misappropriation

A performance audit by the Comptroller and Auditor General (CAG) has flagged widespread irregularities in the implementation of the Pradhan Mantri Poshan Shakti Nirman (PM POSHAN) scheme in Odisha, including inflated meal counts, financial mismanagement, poor monitoring, and infrastructure gaps across multiple districts.

The audit, tabled in Odisha Assembly on 31 March 2026, examined the implementation of the Integrated Child Development Services (ICDS) and Mid-Day Meal (MDM) scheme in six districts – Rayagada, Balangir, Jharsuguda, Mayurbhanj, Ganjam, and Puri – covering the period from 2018 to 2023. It identified lapses in fund utilisation, foodgrain distribution, attendance reporting, infrastructure, and monitoring mechanisms that affected delivery of nutritional support to school children.

One of the most significant findings involved inflated reporting of meals served to students. The CAG examined records from 642 schools across five districts and found that 42 schools showed higher meal distribution figures than actual student attendance.

“In these 42 schools, 82,270 MDMs for primary students and 1,36,546 MDMs for upper primary students were shown in excess of actual attendance,” the audit noted. This led to inflated consumption of 287.09 quintals of rice valued at ₹9.12 lakh and additional cooking costs of ₹14.33 lakh. The audit recommended investigation into possible misappropriation of foodgrains and funds arising from the inflated figures.

Financial Irregularities in Odisha Mid-Day Meal Scheme

The CAG also found serious financial irregularities in fund management. Despite directions to maintain a single State Nodal Account, district authorities maintained multiple accounts and parked unspent funds amounting to ₹92.14 crore. This violated central government guidelines aimed at improving transparency and cash management.

The audit further noted that while four districts later remitted the funds after audit observations, ₹26.06 crore remained unreturned from Ganjam and Puri districts as of May 2025.

In another financial lapse, the audit found that ₹3.52 crore in interest earned on scheme funds was not deposited in government accounts until audit intervention. The Central agency was unaware of the interest amount, as it was neither reflected in official portals nor reported to authorities.

The audit also highlighted discrepancies in distribution of food security allowances during the COVID period. In one case in Mayurbhanj district, ₹1.19 lakh meant for 179 students was transferred to the personal bank account of a headmaster, with no records showing distribution to beneficiaries. The audit noted that misutilisation of funds could not be ruled out.

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Further irregularities were detected in stock management of rice, including manipulation of records and unaccounted foodgrain stock of 28.24 quintals. The audit also reported a case where ₹2.27 lakh was withdrawn from a school account without documentation, indicating possible misappropriation of funds.

The audit further noted that disposal of empty gunny bags was not carried out across districts between 2018 and 2023. Approximately 27.55 lakh gunny bags worth ₹2.20 crore remained undisposed, leading to potential revenue loss.

The audit also flagged cases where schools without infrastructure reported mid-day meal expenditures. A joint inspection conducted in December 2023 found that Ambadhuni and Denguni primary schools in Rayagada district had no physical infrastructure. Despite this, headmasters reported expenditure of ₹3.05 lakh and use of 55.94 quintals of rice for 248 students between 2018 and 2023.

The audit noted that absence of records made it impossible to verify whether meals were actually served, and there was a “high risk” of misappropriation.

Operational Lapses and Inconsistencies in Odisha PM POSHAN

In addition to financial issues, the CAG highlighted operational lapses affecting students. During 2018 to 2023, students were deprived of 3,479.62 quintals of rice and ₹1.87 crore cooking cost during examination days when meals were not provided. Similarly, mid-day meals were not served in 416 schools during national and state observance days, affecting 1,51,654 meals, in violation of government instructions.

Infrastructure gaps were a major concern. Joint inspections between July 2023 and January 2024 revealed absence of drainage facilities in 19 out of 60 schools, lack of kitchen facilities in 18 out of 50 schools, and non-installation of handwashing systems in 35 schools. Weighing machines were missing in 44 schools, while only seven schools used LPG for cooking. Nutritional gardens were found in only six schools despite funds being released to 39 schools.

Foodgrain distribution was also affected by supply issues. In four districts, 90,602.99 quintals of rice were lifted, but only 86,288.85 quintals were distributed, leaving 4,314.14 quintals undistributed for up to three years, denying dry rations to students during the pandemic.

The audit also identified procurement and contract irregularities. In Ganjam district, two agencies provided cooked meals for more than four years and two years respectively without valid contracts. In Puri, agreements with a meal provider were renewed late and without performance evaluation, raising accountability concerns.

Another point of concern in the audit is hygiene violations. In 25 schools, safety protocols were not followed during meal service. In 35 schools, teachers did not taste meals before distribution, as required under guidelines. It further highlighted that only 43.42% of students received health checkups between 2018 and 2023, while coverage for deworming tablets was only 46.8%.

Monitoring and inspection mechanisms were found to be weak across all levels. The audit observed that shortcomings in implementation persisted due to poor oversight, depriving children of intended benefits.

Based on the findings, the CAG recommended stronger monitoring mechanisms, realistic planning for foodgrain requirements, accountability for misreporting, improved infrastructure, and stricter financial oversight. The audit concluded that weak monitoring and implementation failures limited the effectiveness of the PM POSHAN scheme and resulted in students being deprived of nutritional benefits intended under the programme.

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