Rs 323m embezzled in Utility Stores Corporation

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Pointing to serious malpractices in the Utility Stores Corporation (USC), the audit officials have unearthed illegal appointments of 780 persons and embezzlement, losses and serious financial irregularities amounting to Rs 323 million in the financial year 2009-10.

According to an audit report on the accounts of USC, a no objection certificate (NOC) had been obtained from the prime minister’s task force for 3,520 posts whereas 708 employees were appointed in excess in seven categories of the approved strength.

BBA, LLB, BIT and other degrees were not equivalent to a master degree but the gazetted posts had been filled with under-qualified persons. Recruitment committee for appointment in BPS-10 to 16 officials was not constituted while surplus staff had been appointed in Lahore Zone, which debarred the candidates of other parts of the country in violation of the Article 4 of the constitution, the report said.

The auditors also pointed out that USC’s head office in violation of the Finance Division’s instructions provided Rs 254.345 million as gratuity to non-entitled employees during 2008-09 and 2009-10.

In an audit objection regarding embezzlement worth Rs 15.485 million, the report says, “In USC Regional Office Nawab Shah, 46 employees embezzled an amount of Rs 15.485 million during the period from January 2009 to October 31, 2010. The USC management neither registered FIRs against employees nor lodged insurance claim with the National Insurance Corporation Limited. Furthermore, no action was initiated against the area manager.”

In another case, a store in-charge embezzled an amount of Rs 9.500 million in connivance of the regional officer. In Ghazi Attock Region, a huge quantity of flour was supplied from Taxila Flour Mill during July 13, 2009 to July 29, 2009. The report said the bank deposit slips of Rs 3.800 million provided by the former store in-charge were found bogus. A detailed probe further discovered that the sale proceeds of Rs 9.500 million were not deposited by the aforementioned official.

Another audit objection points to a loss of Rs 39.703 million due to supply of wheat without obtaining advance payment. The USC head office in Islamabad shifted a quantity of 12, 000 metric tonne wheat to the Peshawar Zone against the actual requirement of 600 metric tonne.

As result of insufficient storage capacity, 2153 metric tonne was stored at M/s Qureshi Flour Mills Peshawar, without obtaining the advance amount as required under agreement. The owner of the mills refused to release the wheat and obtained a stay order; therefore, the wheat could not be lifted / recovered which indicated that the flour mills utilised the wheat in production and sold out the same that resulted in loss of Rs 39.703 million.

In a yet another case, store items were provided to 35 franchises of private parties without taking advance. The credit sale of franchises was against the policy while some of them have discontinued their business and others move the courts against the corporation. The whole process resulted in loss of Rs 8.802 million, the report added.