Based on the UPSC Prelims 2026 Question Pattern

Mr. B is a District Magistrate (DM) in a district where a comprehensive social welfare scheme for elderly pensions is being implemented. during a routine audit, he discovers that approximately 15% of the beneficiaries are "ghost entries" (fake names created by local officials to embezzle funds). Local political leadership pressures him to ignore these findings until the upcoming elections are over, fearing a scandal. However, stopping the funds immediately for investigation could delay payments to thousands of genuine, poor beneficiaries who rely on that money for food.

What should Mr. B do in this situation?

1. Immediately stop all payments for the entire district until every beneficiary is physically verified.
2. Order a "Social Audit" where beneficiary lists are read aloud in Gram Sabhas to identify fake names through community participation.
3. Submit a formal report to the State Welfare Department and the Vigilance Commission, while continuing payments to verified accounts to ensure the vulnerable do not suffer.