audit para spl 14

7/30/2019 Audit Para Spl 14

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Loss of Interest due to belated raising of claims.

Absence of mechanism to monitor raising of bills results in loss of interest of Rs. 9.86 crore to the

company

Punjab State Grain Procurement Corporation

Limited (the company) growing food grains

procuring agencies of the State Government

procure paddy for the central pool on behalf of

Food Corporation of India (FCI) by availing cash

credit limit from the banks and stores paddy at the

millers premises in joint custody of the Company

and the miller. After getting the paddy milled, the

resultant rice is delivered to FCI by the

miller/company as per the movement plan

conveyed by the FCI and the FCI in turn reimburses

to the procuring agencies the cost of rice, which

includes the minimum support price bonus andother elements of incidentals as per the

provisional/final rates conveyed by the

Government of India (GOI) for each Kharif

Marketing Season (KMS).

The provisional rates of custom milled

rice issued by the GOI IN October 2008 and

November 2009 for the KMS 2008-09 and 2009-10

respectively included incentive bonus. To regulate

the payments for rice delivered by the Company,

the Regional Office of FCI in Punjab prepared the

cost sheet and circulated

It is correct that all the procurement agencies after

taking cash credit from banks; procure the paddy

for central pool. After procuring the paddy the

entire rice delivered to the central pool, in which

all the MSP, Bonus & other incidental charges are

included for Kharif Marketing Season (KMS). which

are fixed by the government of India.

During KMS 2008-09 & 2009-10 the bonus

included in the rates of the custom milling rice.

During this period the F.C.I while giving inspection

to the procurement agencies, along with relative

things it was informed. But in KMS 2008-09 therates of Bonus were Rs. 74.63 & Rs. 1.44/quintal as

interest on bonus. Similarly in the KMS 2009-10

the bonus was Rs. 74.63 and interest was Rs.

1.40/quintal.

State agencies also have to certify that the amount

of bonus has actually been paid to the farmers.

As per this certificate the F.C.I has to make

payment of bonus and interest. The rice which was

delivered to the Central pool the bills thereof was

to be


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(November 2008) to the field office with copy to

the company inter alia indicating that the

provisional rates of rice were inclusive of bonus of

RS. 74.63 And interest on bonus of Rs. 1.44 per

quintal for both KMS 2008-09 and 2009-10.

Reimbursement of bonus and interest thereon was

to be made on delivery of rice to the FCI and on

production of documentary evidence of payment

of bonus to the farmers.

It was observed that the company had

no system to ensure timely raising of

supplementary bills. Though the company had

made payments of bonus up to march 2009 for

KMS 2008-09 and along with purchase of paddy

for KMS 2009-10, the amount on account of bonus

was not claimed immediately on delivery of rice to

FCI in any of the five district offices of the

company selected for audit. There was nouniformity in raising claim bills to FCI. The first bills

for claims of bonus were raised as per detail

below:

PUNGRAIN

2008-09 Ferozepur June 2009

Sangrur June 2009

Moga November 2009

Ludhiana March 2010

Patiala May 2009

2009-10 Ferozepur February 2011Sangrur May 2010

Moga August 2010

Ludhiana Not Prepared

Patiala July 2010

submitted to the F.C.I but the F.C.I told orally that

the payment of bonus will be made only after

delivery of entire rice.


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For CY 2008-09 first bills were raised between

May 2009 and March 2010. District Office

Ludhiana of the Company raises single bill for

whole of CY year 2008-09 after completion of

delivery. And for CY 2009-10 Ferozpur raised first

bill in February 2011 where as district office

Ludhiana did not prepare bonus bills for CY 2009-

10 at all so far i.e. March 2011.

The Company raised the bonus bills

amounting to Rs. 97.66 crore for CY 2008-09 with

a delay ranging between 7 and 516 days. Similarly

the bonus bills for CY 2009-10 amounting to Rs.

98.03 crore were raised with delay ranging

between 3 and 455 days.

Thus, due to weak internal control mechanism

the Company failed to monitor the timely raising

of bills for bonus and interest thereon by thedistrict offices. The delayed raising of bills

resulted in loss of interest of Rs. 9.86 crore to the

company as detailed in Annexure A-3 to the para

In this regard following audit observations may

please be attended to the earliest:

1. When the cost sheet was for 2008-09 and2009-10 received and when it was

circulated to the field offices? Copies of

the cost sheets may also be supplied toaudit.

2. How the payment of bonus was made tothe farmers i.e whether by separate

As it has been stated above that the F.C.I had

refused to pay the bonus on the ground that it will

be paid only after full delivery of rice. Due to this

reason the bill regarding bonus were submitted late

by 3 to 455 days, due to this late submission

thereof the F.C.I is responsible instead of Pungrain.

The Head Office of Pungrain has not issued specific

instruction to field office to raise claim of bonus intime nor it has given any instruction as to whether

the amount of bonus was included in other costs of

rice.


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cheques or in cash during KMS 2008-09 and 2009-10?

3. Were any instructionsever issued to thefield offices to raise bonus bill along with

regular bills or immediately after delivery

of rice to FCI so as to minimize the loss of

interest at CC rates? If Yes, the copy of

such directions be supplied to audit. If not,

the reason for not issuing the instruction

be intimated.

4. The manner in which the timely raising ofbonus bills was ensured at HO beintimated?

5. Up to which months the payment of bonusto farmers was completed in both the crop

years be intimated.

audit para spl 14

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