Government auditor CAG today rapped state-owned FCI for incurring avoidable expenses of Rs 534 crore, mainly on buying gunny bags and transportation of foodgrains.
The Comptroller and Auditor General (CAG) has found irregularities in management of gunny bags in Punjab and improper planning of movement of stocks in north eastern states.
"Compliance audit of the operations of the Corporation (FCI) brought out avoidable or extra expenditure amounting to Rs 534.04 crore mainly due to non-adherence to extant instructions and inefficient operations in procurement of gunny bags and movement of foodgrains," the auditor said in its latest report tabled today in the Lok Sabha.
With regard to management of gunny bags, the CAG said the Punjab region of the Food Corporation of India (FCI) purchased 25.87 crore gunny bags for Rs 1,147.53 crore from 2012-13 to 2016-17.
While auditing, CAG found out that FCI failed to recover 223.58 crore on account of interest on advances given to state government agencies for procurement of gunny bags as well as on account of reimbursement of cost of gunny bags at higher rates than prescribed.
CAG audited accounts for five years ending March 2017 in four districts in Punjab which carries out 31 per cent of total procurement in the state. The audit was to assess whether the demand and purchase of gunny bags were in accordance with the actual requirement.
FCI also did not recover Rs 2.86 crore from Container Corporation of India (CONCOR) as it failed to pursue pending claims for damages, short and rain effected gunny bags.
That apart, the auditor found that FCI did not verify the issue of bank guarantee by the state government, which resulted in irregular reimbursement of guarantee fee to state government agencies amounting to Rs 145.74 crore.
While auditing the transportation of foodgrain in Assam and NEF Shillong region covering Meghalaya, Tripura and Mizoram, the CAG found that FCI incurred avoidable expenditure of Rs 117.10 crore due to improper planning for movement of stock.
"Supply of foodgrains in excess of requirement at a station and non-adherence to distance measurement before awarding contract resulted in avoidable expenditure of Rs 12.96 crore," it added.
In Uttar Pradesh too, the CAG found that FCI made excess payment of Rs 14.10 crore to the state government and its agencies during 2010-11 to 2016-17 due to reimbursement of inadmissible elements as part of mandi labour charges on procurement of wheat.
FCI is the government's nodal agency for procurement and distribution of foodgrains. The Corporation is engaged in procurement of various foodgrains, building up and maintenance of food stocks, movement and delivery to distributing agencies.
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