According to the annual report of the Office of the Auditor General, NA and the Ministry of Defense have flouted Financial Procedures Act, Public Procurement Act and their respective regulations, which has ultimately left a transaction of Rs 1.61 billion unsettled in the army´s account as of yet.[break]
At a meeting of the Parliamentary Public Accounts Committee (PAC) on Sunday, which was summoned to grill NA´s Financial Administration Division staffers, top officials of the Office of AG expressed dissatisfaction against NA for not following the existing norms, acts and regulations. This had led to a heated debate.
“NA has failed to furnish details of construction works on time,” said Assistant Auditor General Sukh Dev Bhattarai to the five-member PAC sub-committee, adding “It is difficult to obtain details from NA as it maintains strict confidentiality.”
However, Brigadier General Amir Bista, NA account coordinator, argued that the AG office should make such laws known to the NA if it wants the latter to comply with it.
“The unsettled amount dates back to many years and NA has been complying with the existing laws,” Bista claimed.
Bhattarai expressed concern that the AG office has not been able to make a proper assessment of the demand and supply chain of several industries run by NA. Currently, the industries run by NA like Sundarijal Arsenal Factory, Multipurpose Plastic Industry, Swayambhu Gunpowder Plant and Sunachuli Emulsion Plant have not set any criteria for raw material production and consumption.
Radha Krishna Paudel, director at the AG office, apprised PAC members that NA´s Office of the Director General of Development and Construction has been granting building construction works without estimating the cost and calling for tenders.
“NA furnishes cost estimate for one particular work but the amount is used for a different purpose,” Paudel said, adding almost all construction works have been carried out without preparing a cost estimate.
However, NA refuted the allegations and said construction works were being carried out through proper bidding.
The AG office claimed eight NA units have made a purchase worth about Rs 280 million this fiscal without preparing a purchase plan as warranted by the existing laws.
“NA´s 17 units have made a purchase of about Rs 830 million this year without calling for bids, which is against the Public Procurement Act,” said Paudel.
Bhattarai also expressed concern over longstanding Letter of Credit (LC) dues of about Rs 57 million, which still remains unsettled by the NA. The AG office also objected to advance payments made by NA to clear electricity, telephone and water bills amounting to about Rs 15 million against budgetary principles.
MA-60 deal overdue
MoD account shows unsettled amount of Rs 390 million, which was paid by NA for the procurement of two MA-60 aircrafts from China. The deal was suspended after the fall of royal regime, but the Chinese company is unlikely to return the lock-up money. Although MoD has sent several requests to the aircraft company to procure other items in lieu of MA-60, any such deal is yet to materialize.
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