Massive fertiliser import scam under the subsidy scheme exposed
An unprecedented financial scam in fertiliser imports under the subsidy scheme has been exposed during a government audit query.
Revealing details, a recent Auditor General’s report noted that the National Fertiliser Secretariat (NFS) has overpaid millions of rupees in the payment for the purchase of chemical fertiliser stocks from importing firms under the government’s subsidy scheme.
It has been observed that the usual formal stock verification had not been carried out with the participation of officials from the Department of Agriculture or the NFS.
A sum of Rs 1.41 billion has been overpaid to 11 importing companies for the stock imported under the subsidy scheme during the period 2018-2020. Importers had been provided with subsidies to meet losses for already imported stocks in 2018 the year the subsidy scheme was introduced. The market value of each type of fertiliser should be determined using a price formula prepared on the recommendation of the Pricing Committee and subsidies should be paid to the importing companies based on that value.
Without the use of such a common pricing formula, the subsidy had been paid by the NFS using different prices for the stocks available with the imported companies, the report revealed.
As a result, the fertiliser subsidy of Rs. 959.23 million had been overpaid without verifying the existing initial stocks in 2018. The 11 fertiliser companies had imported stocks on 253 occasions during the last quarter of 2019 and the first two quarters of 2020 which were subject to an audit check.
In 213 of those cases, the invoice price remained less than the price set by the Pricing Committee.
However the action taken by the NFS to make payments at the higher price determined by the Pricing Committee for these stocks imported at a lower price resulted in an overpayment of approximately Rs. 456.27 million during the 2019-2020 period.
The stock verification of the methods used by those firms and the limitations faced by the firms in the stock verification as well as not specifically establishing the stock values in those verification reports had been used by some officials to carry out financial misappropriations, the audit inspection observed.
The audit query has also found false laboratory reports submitted to release nearly 22,634 metric tonnes of sub-standard fertiliser to the market.
This scandal took place in the imports made by 11 fertiliser companies between February 2018 and June 2019, the audit report revealed.
On many occasions, accurate lab reports that indicated defects in the stocks had been removed from the files of these companies and had been replaced with forged reports.
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