ISLAMABAD – The federal audit authorities have revealed that Pakistan Agricultural Storage and Services Corporation (PASSCO) suffered a loss of Rs 463.496 million in three separate cases by violating rules due to lack of internal control.
Pakistan’s audit report 2009-10 pointed out that the PASSCO suffered a loss of Rs 411.260 million due to the purchase of sub-standard rice in violation of purchase agreement. “PASSCO’s letter dated February 18, 2009 instructed all zonal heads to stop the procurement of super rice with immediate effect.
Further, according to clause four of the rice agreement executed between PASSCO and mills, the rice suppliers should confirm the standards and clear the sample test conducted by the rice experts. The clause 6 (P) stipulated that if the rice was rejected due to not meeting the specification, the miller would be liable to provide the required quantity afresh, the report said.
It adds that the enquiry committee constituted by PASSCO proved that a quantity of 73,186 bags was procured by the heads of Gujranwala and Mandi Bahu Din zones during ban period. According to the analysis report, the contrasting varieties ranged from 10% to 89% against the standard limits of 7% to 10% which resulted into a loss of Rs 411.260 million due to the purchase of sub-standard rice in the violation of purchase agreement, the audit officials said.
The audit report further pointed out that PASSCO suffered a loss of Rs 28.256 million due to the unjustified payment of price differential to Jute Mills in procuring jute bags. “PASSCO accepted the rate of Rs 57.02 per jute bag provisionally after negotiation with the bidders that is the representative of Pakistan Jute Mills Association (PJMA) on January 7, 2008,” the report added.
In April 2008, a difference of Rs 1.88 per bag was paid on the basis of rate Rs 58.90 per bag settled with Punjab’s food department which resulted in the unjustified payment of Rs 28.256 million to Jute Mills on the account of procurement of 15,030,000 bags, the report said. The audit officials pointed out that paying the differential was an open violation of Rule-30 and Rule-38 of the Public Procurement Rules, 2004.
The Audit report further revealed that PASSCO sustained loss of Rs 23.980 million due to non-utilisation of godowns/premises of mill owners. “PASSCO and the rice mills owners entered an agreement in December, 2008 with the aim of using their godowns/stores for the storage of rice or any other dead stock items but PASSCO did not utilise the godowns and shifted stocks to other hired godowns and made a payment of Rs 23.980 million,” the audit authorities pointed out.
