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Food Commissioner’s Dept failed to maintain required stocks of rice, audit reveals
The Food Commissioner’s Department (FCD), which is directly responsible for maintaining 100,000MT of rice per year to ensure food security, stored under 700MT of its own stocks in 24 warehouses during the eight years between 2012 and December 2019 because the Treasury did not pass money to make necessary purchases, a national audit reveals.
Among the buildings that stood empty were warehouses renovated and upgraded to scientific standard at a total of Rs 300mn, said the National Audit Office (NAO) report on the FCD’s maintenance of buffer stock and warehouse utilization, recently presented to Parliament.
The FCD is tasked with maintaining buffer stocks purchased from millers and releasing rice to the local market to control prices during shortages. This was consistently not done, the NAO states.
Between 2012 and 2015, the FCD failed to ask the Treasury for money to buy buffer stocks. Between 2016 and 2019, however, it sought Rs 256mn, Rs 1.1bn, Rs 1.1bn and Rs 2.4bn (for each respective year)–and received nothing.
The FCD owns 120 warehouses with a capacity of 286,946MT but runs only 24, the report says. Two others are inoperable while forty are leased out to public and private institutions. Twenty-eight are used for free by still more Government bodies and 20 are under District Secretariats.
Between 2012 and December 2019, the Department did not maintain any of its own buffer stocks except for a mere 661MT procured in 2012 to evaluate the success of the “scientific warehouses” pilot project.
Under this initiative, six warehouses in the FCD’s Veyangoda complex were redeveloped to be able to store 34,300MT of rice in edible condition for up to one year without application of chemicals. Two of these were upgraded in 2016-2017, and a further two as recently as 2018-2019.
The Department had failed to collect at least Rs 111.1mn in warehouse rents as at December 2019, the NAO records. Cases were filed against just six of the offending institutions and persons to recover Rs 5.9mn. None were settled at the time of the audit.
The FCD is owed further Rs 7.3mn from millers as penalties for failure to supply rice under agreements signed in 2012 and 2013. The case was referred to the Attorney General’s Department in 2017 but there has been no legal action.
After modernizing the six warehouses, measures were taken in 2017 to increase electricity voltage to 1,000 at a cost of Rs 13mn. Separate meters were installed. However, payments were made on a single bill which meant the number of units consumed appeared to be “very high”. In 2017, the electricity cost for the Veyangoda premises was Rs 794,000. In 2018, this shot up to Rs 5.9mn and it was Rs 3.5mn in 2019–despite the warehouses remaining idle.
The report reveals that two more warehouses were reconstructed at Shravasthipura in Anuradhapura for Rs 30mn in 2018-19. They were closed up as at December 2019, with no action taken to put them to use.
Similarly, two warehouses were rebuilt in Boossa, Galle, during the same period for Rs 50mn. Another two were reconstructed at the warehouse in Medawatta, Matara, in 2018. None of them were put to use as at December 2019, the audit says. The total value of these warehouses, according to financial statements, is Rs 369mn. ReplyForward