CAG pulls up FCI for avoidable expenditure of Rs 45.39 cr

The government's official auditor has pulled up the Food Corporation of India (FCI), the nodal agency for foodgrains procurement and distribution, for avoidable expenditure of about Rs 45.39 crore.     

FCI has made wasteful expenses on transportation, advertisement, hiring labours and private godowns. It had also not recovered excess interest charged by the State Bank of India, the Comptroller and Auditor General (CAG) said in a report tabled in Parliament.     

The agency had unduly favoured private millers in the allotment of foodgrain in 2007, which benefited Rs 10.52 crore to Roller Flour Mills and atta chakkies, it added.     

During 2004-05 and 2005-06, FCI had made an excess reimbursement of Rs 7.65 crore (combined for the two years) on transportation in Punjab and Haryana. It had paid higher rates for delivery of rice beyond eight kilometres in these two states.     

During 2000-06, the agency had spent Rs 6.76 crore on transportation of foodgrains from Zira, Punjab, to the railhead, which could have been minimised by proper planning, it said.     

This apart, FCI had incurred wasteful expenditure of Rs 1.66 crore between July 2004 and October 2006 due to hiring of a private godown when it had sufficient space in its own godown in Pune, CAG report detailed.

On advertisements, it said, FCI had incurred an extra expense of about Rs 3.02 crore for releasing advertisements through private agencies, instead of the Directorate of Advertising and Visual Publicity during 2000-07.     

CAG further said that the agency had spent Rs 1.10 crore on purchase of 26 new vehicles between October 2004 and March 2005 without taking the approval of the Board of Directors.     

It was also observed in Audit 2006 that on the cash credit availed by FCI East Zone, the Kolkata-based SBI charged interest of 16.75 per cent per annum as against prevailing rate of 8.15 per cent during September 2005 to March 2006.     

This could be not be detected by FCI due to absence of proper internal control system.      

FCI could not recover about Rs 5.54 crore due to non-maintenance of records for claims of damaged gunny bags during 1998-2005, it added.