Audit Reveals Irregularities in Nagaland Agri Dept, Flagged Excessive Payment of Rs 7.20 Cr for Farm Machinery

In a recent report, the Comptroller and Auditor General (CAG) of India highlighted significant irregularities in the Nagaland Agriculture Department's procurement and distribution of agricultural machinery. The audit report covers the fiscal year ending March 31, 2022, and reveals deviations from approved targets and financial norms.

Non-compliance with Financial Assistance and Cost Norms

The CAG's audit discovered that the Nagaland Agriculture Department did not adhere to the financial assistance and cost norms prescribed for the procurement of agricultural machinery. The approved financial assistance per beneficiary, set at Rs 1.25 lakh, was not followed. Instead, an expenditure of Rs 3.41 crore was incurred on five items that had not been approved by the Government of India (GoI).

Additionally, the audit revealed that the department made an excessive payment of Rs 7.20 crore to the supplier without receiving the full quantity of items, raising concerns about accountability and financial oversight.

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Failure to Adhere to Inspection and Compliance Rules

The General Financial Rules (GFR) of 2017 stipulate that all materials must be inspected for quantity, quality, and condition upon receipt. These details should then be recorded in stock registers, and certified by the store officer to confirm receipt and quality compliance.

However, the audit found discrepancies in this process, indicating lapses in quality control and inventory management.

Operational Guidelines and Deviations

The Sub-Mission on Agricultural Mechanization (SMAM) operational guidelines specify that financial assistance for machinery and equipment procurement should not exceed Rs 1.25 lakh or 100% of the machinery's cost per beneficiary. However, the department procured machinery at costs exceeding this limit, resulting in an excess of financial assistance to some beneficiaries.

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Supply Orders vs. Financial Assistance

Instead of providing financial assistance to beneficiaries, the Nagaland Agriculture Department issued supply orders totaling Rs 21.79 crore to three suppliers in November 2018. This action deviated from the approved financial assistance model.

Excess Procurement and Free Distribution

The department procured 49 tractors at a cost of Rs 4.90 crore, 350 power tillers at a cost of Rs 7.63 crore, and 1,652 brush cutters at a cost of Rs 8.46 crore, all in violation of the operational guidelines. These items were then distributed free of cost, leading to the denial of intended benefits to numerous beneficiaries and exceeding the maximum permissible financial assistance limits.

Lack of Documentation and Accountability

The audit also highlighted a lack of essential documentation, including manufacturer invoices, e-way bills, and consignment notes or lorry receipts. This absence of records raised questions about the authenticity of supply and payment verification.

Recommendations for Investigation and Accountability

The CAG report recommends that the Nagaland State Government initiate an investigation to identify the officers and officials responsible for the irregularities in the procurement process. Additionally, it calls for measures to ensure compliance with the physical and financial targets approved by the Government of India.

These findings underscore the importance of transparent and accountable procurement processes in government initiatives, particularly those aimed at supporting the agricultural sector and benefiting farmers. It remains to be seen how the authorities will address these discrepancies and rectify the situation to fulfill the intended goals of the program.

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