Tuesday, February 1, 2011

PAC calls for reduction of wholesale corruption in ASC and CSD(I)

Military chiefs quizzed on canteen, ration irregularities
Gen VK Singh and AM PV Naik come out after appearing before PAC
The chiefs of the army and air force as well as the vice chief of the navy were Wednesday questioned by parliament’s Public Accounts Committee (PAC) over alleged irregularities in defence-run canteens as pointed out by the government auditor last year, but the meetings remained inconclusive.

PAC chairman Murli Manohar Joshi said the armed forces’ chiefs would be called again on certain issues they could not answer in Wednesday’s meeting.

This was the first time that the army and air force chiefs have appeared before the PAC, which oversees government spending. The meetings are usually attended by the defence secretary and vice chiefs of the services.

General V.K. Singh and Air Chief Marshal P.V. Naik deposed separately before the PAC, which is chaired by senior Bharatiya Janata Party (BJP) leader Murli Manohar Joshi.

The naval chief, Admiral Nirmal Verma, is on a ‘pre-scheduled’ four-day visit to Indonesia and was represented by his deputy, Vice Admiral D.K. Deewan.

Army officials, who accompanied their chief, made a presentation on how the services manage canteens and distribute rations to their personnel. The air force chief, Air Chief Marshal Naik, also made a presentation before the PAC.

The service chiefs, according to sources, maintained their stand that unit-run canteens (URC) were beyond the purview of the committee because they have their own internal audit mechanisms to keep a watch on them.

But Joshi denied this point was raised. ‘We didn’t discuss it. We are seeking their cooperation and want that public funds should be used properly and in a transparent manner. We are overseeing if the rules are being followed in spending the money from the consolidated fund of India.’

He said the service chiefs were satisfied with the meeting and denied that there was a rift between armed forces and the PAC over the CAG report.

Asked if they chiefs have accepted the CAG findings, Joshi said: ‘We cannot say that. PAC will come with its own report.’

The committee had called the services chiefs for a hearing after a Comptroller and Auditor General (CAG) report pointed out irregularities in the supply chain management of rations by the Canteen Stores Department (CSD).

The CAG, in its report in August last year, had criticised the services over the way the CSD and its unit-run canteens (URCs) function and the lack of transparency in their accounting methods.

The PAC later sought answers from the defence ministry, which in turn wrote to the service chiefs on the alleged irregularities.

Air Chief Marshal Naik told reporters here Tuesday that the URC is ‘beyond the purview’ of the PAC. ‘We have given our replies to them,’ he said.

He, however, maintained: ‘We all must remember one thing that we all are subject to parliament. That is the system of our governance. Nobody is exempt.’

There are some 3,600 unit-run canteens, which operate on soft loans extended by the military and operate from military premises. The CAG report said the concessions given to the canteens resulted in a loss of Rs.441 crore to the government from 2002-03 to 2008-09.

The CAG report had criticised the existing methods of ration procurement by canteens and castigated the military, saying there were ‘systemic deficiencies’ in running the canteens.

It said existing procedures were not enough to ‘realistically’ assess the requirements of dry rations. -via Sify

PAC to grill service chiefs
Miffed over norms violation in buying ration, attempt to thwart CAG probe. J Gopikrishnan.
The Public Accounts Committee (PAC) has summoned the three service chiefs on January 12 in the wake of Comptroller and Auditor General (CAG) findings about “gross nationwide irregularities” in the supply of ration by the Canteen Stores Department (CSD).

The Government auditor had criticised the forces for not providing information and relevant papers for audit of the rationing supply chain of forces. The information was not provided even to the Defence Secretary when CAG sought information through him. “This attitude has forced PAC to summon the Army, Air Force and Navy service chiefs,” said sources.

The CAG report, tabled in Parliament on August 2009, squarely blames the armed forces for “gross irregularities” and “blatant violation of procedures” in procurement of ration for armed forces. The report also blames the forces for non-cooperating with the auditors by not providing documents. “They did not furnish details to even the Defence Secretary when CAG sought details through the Government,” the sources added.

Finding a series of irregularities in the purchase of essential commodities for the forces and noting the “non-cooperation” by the forces in auditing, the CAG recommended that the Ministry of Defence (MoD) and forces’ headquarters should intervene to plug the huge losses. Sources said the forces were reluctant to implement the CAG report recommendations.

According to sources, the PAC decided to summon the three service chiefs after the Army, Navy and Air Force did not submit a satisfactory reply to its queries on the steps initiated in the light of CAG recommendations.

“Public Accounts Committee chairman Murli Manohar Joshi has decided to summon the three service chiefs for seeking their response to the Comptroller and Auditor General’s report and reasons for not implementing the (CAG) recommendations. In their past responses, the forces had cited practical difficulties in coordinating with private vendors due to large network,” said the sources.

“So PAC took the stand that the forces should be made accountable for the leak of public money in purchase of rations for units,” they added.

“The MoD and Army Headquarters should take urgent steps to strengthen the procurement procedure so that wide variations between provisioning and procurement are avoided. The Ministry and APO should consider introduction of such risk-purchase clauses in central procurement contracts that cover local purchases made by supply depots in case of non-performance of central contract,” CAG had recommended.

The detailed CAG report — which studied the rationing system from 2005 to 2008 — found that there was always a single vendor in most high-value purchases. “There exists a case for expanding the vendor base for supply of fresh rations. The risk of existence of cartels affecting the quantity and quality of rations is too serious to be ignored. The MoD should set clear targets regarding expansion of vendor base and (the) progress should be closely monitored. The list of vendors should be put up on ASC website,” said one of the main recommendations by CAG.

Finding “abnormal variations in rates” of vegetables, fresh fruits and meat, CAG recommended that the MoD should investigate and provide an assurance that these variations “do not arise from any fraud or corrupt practices” in the procurement of fresh rations in Army. The report suggested that the last purchase price of these rations be also displayed on the ASC website, which could be accessed by the supply depots.

“The Ministry should develop a set of guidelines containing the dos and don’ts in such negotiations and hold procurement officers — including financial advisers — accountable for any significant deviation from the laid-down norms of tendering,” said the report, blaming the corrupt style of buying rations.

Putting the responsibility on MoD and headquarters if foul play continued in the purchase of ration, CAG stated: “It is strongly recommended that the Ministry and Army Headquarters should immediately draw up a detailed plan to computerise the management of supply chain of both dry and fresh rations. The power of IT should be leveraged to create a networked system connecting all supply depots and supply points. Issues, receipts, inventory management, procurement and other aspects of supply chain management should be brought under this system. Contracted prices of various items should be published on the dedicated website to be created for this purpose.” -via The Pioneer
Corruption in the Indian Armed Forces

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