Punjab held back Rs2b sugarcane fund

LAHORE:

An audit report has revealed that Punjab's finance department did not release over Rs2 billion fund earmarked for the development of sugarcane sector in the last provincial budget in violation of the Punjab Sugarcane (Development) Cess Rules, 1964.

As per the rules, a fund — the Sugarcane Development Fund — is created in each district of the province. The fund of each district is operated by the concerned DCO.

The Finance Department releases funds to the respective DCO after deduction of 10% of the total collection of the cess for the Sugarcane Research and Development Board and deduction of 2% collection charges.

According to the Auditor General of Pakistan report, it transpired during the audit of the finance department's civil accounts of June, 2023 that there existed a liability of Rs20,335,026,047 under "G-11212-Deposits on Sugarcane Development Cess Fund". "The Cane Commissioner of Punjab had deposited an amount of Rs5,090,152,163 in Account-I for the purpose of subsequent distribution of funds.

"Although the Finance Department had not released the authority for payment, the DAO Faisalabad and Vehari made payments of 55,286,766 and Rs. 28,682,577 respectively."

Additionally, 2% collection charges were also not incorporated in the budget. The auditor said it is of the view that lapse occurred due to weak administrative and financial controls. It said the matter was further reported to the Administrative Department and during a departmental account committee (DAC) meeting held on January 30, 2025, it was decided that the para should be kept pending until the SOPS/policy are formulated in consultation with stakeholders.

"As regards the remaining paras, neither any reply was received nor a DAC meeting convened till the finalization of this report despite issuance of reminders in November and December 2024."

The audit recommended proper allocation and utilization of the Sugarcane Development Cess Fund, in accordance with the specified rules. "[These allocations and utilizations] are imperative to ensure the intended developmental projects are carried out efficiently and transparently," it added.