Audit Reports

Overview

As on 31 March 2018, Rajasthan had 43 State Public Sector Undertakings (PSUs) consisting of three Statutory Corporations and 40 Government Companies (including three non-functional Government Companies) under the audit jurisdiction of the Comptroller & Auditor General of India. The working PSUs registered a turnover of Rs 69516.67 crore during 2017-18 as per their latest finalised accounts. This turnover was equal to 8.27 per cent of the Gross State Domestic Product (GSDP) of Rajasthan. As on 31 March 2018, the investment (Capital and long term loans) in 43 PSUs was Rs 127732 crore. The power sector received 94.40 per cent of total investment (Rs 40828.27 crore) made during the period from 2013-14 to 2017-18.

This Report is divided into two parts. Part-I relating to Functioning and Performance of Power Sector Undertakings contains a performance audit and five compliance audit paragraphs involving financial effect of Rs 309.05 crore whereas Part-II relating to Functioning and Performance of State Public Sector Undertakings (other than Power Sector) contains two compliance audit paragraphs involving financial effect of Rs 43.35 crore.

Part-I

Functioning and Performance of Power Sector Undertakings

The Power Sector Undertakings registered a turnover of Rs 55605.46 crore (i.e. 6.62 per cent of the GSDP of Rajasthan) during 2017-18. The overall profit earned by the 15 power sector companies was Rs 2750.85 crore in 2017-18 against losses of Rs 12678.18 crore incurred in 2013-14. Of these 15 power sector companies, seven companies earned profit of Rs 2994.36 crore and four companies incurred loss of Rs 243.51 crore whereas remaining four companies incurred marginal losses during the year 2017-18.

A Performance Audit on ‘Procurement and Inventory Management in Ajmer Vidyut Vitran Nigam Limited’ during the period from 2013-14 to 2017-18 disclosed that the Company did not revise its Purchase Manual and Standard Bid Document as per the Rajasthan Transparency in Public Procurement (RTPP) Act 2012 and Rules there under. The Company did not follow the prescribed procedure for assessment of requirement of material. The Company finalised tenders beyond the stipulated period of 120 days. The Company procured prepaid energy meters without online communication facility for recharging valuing
Rs 13.62 crore. The Company violated the specifications prescribed under the Government of India (GoI) order/guidelines for procurement of transformers valuing Rs 1.54 crore. The Company did not fix critical levels of inventory and neither carried out value analysis nor movement analysis of material. The storage rate was not fixed on the basis of actual expenditure incurred on storage. The Company did not conduct annual physical verification of inventory at the ACOS and sub-divisional stores and in 12 out of 15 test checked sub-divisions, physical verification of stores was not conducted during the last ten years. The Company accepted surplus material of Rs 10.47 crore from turnkey contractors without testing of material at Central Testing Laboratory (CTL). The ACOS and sub-divisional stores neither maintained records nor stacked the inventory as per prescribed directions. In physical verification reports of all the ACOS, the stock verifiers pointed out unadjusted shortages of Rs 0.96 crore and excesses of Rs 1.11 crore as on March 2017

An examination of system of ‘Procurement, Management, Condemnation and Disposal of Distribution Transformers in Jaipur Vidyut Vitran Nigam Limited and Jodhpur Vidyut Vitran Nigam Limited’ disclosed that the failure rate of Distribution Transformers (DTs) remained high in comparison to the maximum failure rate specified by the Ministry of Power. The assessment of DTs was not based on the actual requirement framed by the field offices and on-going schemes/works. The Companies were not prompt in depositing the transformers which failed within the guarantee period. Substantial quantity of transformers was lying in stores of the Companies and with suppliers.

Besides, during test check of records relating to Power Sector Undertakings, non-compliance with rules, directives, procedures, terms and conditions of contract and instances of failure to safeguard financial interests of the organization were observed which resulted in loss/extra expenditure/non-recovery/ loss of opportunity to earn revenue worth Rs 173.87 crore.

Part-II

Functioning and Performance of State PSUs (other than Power Sector)

As on 31 March 2018, Rajasthan had 28 State Public Sector Undertakings (other than Power Sector) consisting of 22 working Companies, three working Statutory Corporations and three non-working PSUs (all Companies). The working PSUs registered a turnover of Rs 13911.21 crore (i.e. 1.66 per cent of the GSDP of Rajasthan) during 2017-18. The profit of Rs 447.84 crore earned by working PSUs in 2013-14 transformed into losses of Rs 928.35 crore in 2017-18. Of the 25 working State PSUs, 19 PSUs earned profit of Rs 350.08 crore and six PSUs incurred losses of Rs 1278.43 crore in 2017-18.

An examination of ‘Systemic lapses in monitoring of completion of construction and commencement of production activities and recovery of retention charges’ disclosed that Rajasthan State Industrial Development and Investment Corporation Limited (Company) did not ensure issue of notices on time to allottees who defaulted in completion of construction activities and commencement of production activities. The unit offices did not maintain proper database to monitor and ensure that the allottees commenced construction and production activities as per schedule. Instances were noticed where the Company did not recover retention charges as per Rules and waived retention charges without justified reasons. Non-compliance with rules, directives, procedures, terms and conditions of contract resulted in Loss/extra expenditure/non-recovery/loss of opportunity to earn revenue of Rs 38.85 crore.

Besides, during test check of records relating to Public Sector Undertakings (other than Power Sector), an instance of failure to safeguard financial interests of the organization was observed which resulted in loss/extra expenditure/non-recovery to earn revenue worth Rs 4.50 crore.

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• Report No.3 of 2019 - Public Sector Undertakings, Government of Rajasthan

• Index
• Preface
• Overview
• Introduction-Functioning of Public Sector Undertakings
• Chapter 1 Functioning of Power Sector Undertakings
• Chapter 2 Performance Audit relating to Power Sector Undertakings
• Chapter 3 Compliance Audit Observations relating to Power Sector Undertakings
• Chapter 4 Functioning of State Public Sector Undertakings (Other than Power Sector)
• Chapter 5 Compliance Audit Observations relating to State Public Sector Undertakings (Other than Power Sector)
• Annexures