NFML affairs: Auditor general finds Rs1.07b worth of irregularities

In one instance, company paid Rs90m in unjustified freight.

LAHORE:

The Auditor General of Pakistan has unearthed irregularities and misappropriation worth Rs1.07 billion in National Fertilizer Marketing Limited (NFML) for the period 2008 to 2013, The Express Tribune has learnt.

This is yet another incident of irregularities unveiled by the auditor general. In a separate case, NFML appointed over the same period 700 new employees from top to lower levels in violation of rules, on bogus antecedents and without advertising the posts in national newspapers. These appointments caused a loss of Rs105.88 million to the company.

According to a special audit report, the company management purchased polythene sheets for Rs12.28 million for transhipment storages in Karachi, but the supplier did not provide the sheets despite getting the payment.

NFML management failed to take any action against the supplier for the recovery of the money paid.



The company paid Rs90.34 million in ‘unjustified’ freight charges to cartage (haulage) contractors from 2009 to 2013 against Clause 12 of the cartage contract.

According to the distribution manual, the distribution department is responsible for the physical inflow and outflow of imported fertiliser. During audit, a difference of 8,750 tons of imported urea valuing Rs280 million for the period 2011-12 was found in stocks and sales.

Ex-deputy general manager Uzair Abu Bakr allegedly played a role in disappearance of the stock, but the company did not take strict action against him and only terminated his services without any recovery and accountability.

During inspection, consignments valuing Rs9.30 million were found to be missing at the Jhang regional office, but NFML did not take cartage contractors to task despite the heavy financial loss.

Apart from these, officials of the company distributed imported urea amounting to Rs2.45 million at the regional offices in Jhang and Lodhran through fake dealers, depriving the farmers of subsidy besides causing financial loss to the company.

During an audit of stocks at Phoolnagar, it was detected that urea worth Rs5.36 million was short and in another case urea valuing Rs27.55 million was found missing from the record of stocks for 2013.

NFML management provided Rs4.47 million worth of fertiliser to a party that had strong links with the company officials against approved quota of another party that had deposited demand drafts for the quantity.

The audit team noted that NFML’s Karachi office dispatched excess quantity of urea worth Rs13.02 million by issuing the same sales invoices twice and thrice during 2011.

Similarly, 362,960 bags of imported urea amounting to Rs574 million were dispatched directly from the Karachi port to various storages without issuance of invoices by the management for ‘mala fide’ intention.

The auditors detected that Lodhran and Jhang management booked 1,058 tons of urea in addition to the approved quota for 39 dealers on the instructions of the ex-DGM from August to October 2011.

No approval of the competent authority (managing director) was obtained and allocation was made by the ex-DGM while abusing his authority. This caused a loss of Rs26.50 million to NFML as no action had yet been taken against the accused.

NFML is a state-owned company incorporated under the Companies Ordinance 1984 with the objective of marketing and sale of fertiliser purchased from domestic manufacturers and urea imported by the Trading Corporation of Pakistan.

The company is operating 35 storages and sold 5.44 million tons of fertiliser during 2008-13 through a network of 3,060 dealers.

Published in The Express Tribune, April 29^th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.