Essential items prices: audit to verify USC's claims yet to see the light of day

The Auditor General of Pakistan (AGP) has not yet started the special audit of Utility Stores Corporation (USC) to verify price differential claims of 11 essential items although the Economic Co-ordination Committee (ECC) of the Cabinet believes that prices mentioned in documents were incorrect, well-informed sources told Business Recorder.
The ECC, in its meeting held on February 13, 2017, had ordered special audit of sale of 11 items on the basis of which USC submitted claims of Rs 1.03 billion. Ministry of Finance was directed to request the AGP to conduct an audit and submit a reportt to the ECC within two weeks "We are waiting for the audit team. We don't know who will conduct audit and which ministry was tasked to approach the Auditor General," said the USC managing director, Waseem Mukhtar.
He maintained that the audit team should complete its task as early as possible so that USC could submit its claims to the ECC for payment. According to official documents, Prime Minister had directed the USC to maintain subsidized prices [as of April, 2016] of 11 essential items which include black gram, Daal Channa, Daal Masoor, Mash (Shell), Masoor (Whole), white gram, Daal Mash (washed), Daal Moong (washed), sugar, ghee (utility) and oil (utility) till date. Total financial impact of maintaining subsidized prices on these items till November 2016 stood at Rs 1.3362bn. After defraying the claim pertaining to Ramazan Relief Package - 2016 end claim on account of 11 essential items against the amount of Rs 1.4792bn released as upfront for Ramazan - 2016, balance claim on account of maintaining subsidized prices of these items up to November - 2016 worked out to Rs 1.0352bn.
Ministry of Industries & Production informed the ECC on February 13, 2017 that they had earlier requested Finance Division for the release of Rs 1.0352bn to USC. Finance Division was advised to seek the ECC's approval for the release of the claims.
Accordingly, Ministry of Industries and Production solicited the approval of the ECC for the release of Rsl.0352bn to USC on account of maintaining subsidized prices of the 11 essential items as per direction of the PM Office. During ensuing discussion, the USC managing director informed the meeting that they had purchased sugar at the rate of Rs 73.00 per kg and it was being sold in utility stores at Rs 65 per kg. The ECC chairman said that the sugar was being sold in the open market at Rs 65 per kg. Minister for Commerce also stated that sugar price was, a couple of days back, noted at slightly over Rs 64 per kg. The ECC observed with concern that the claim of the USC for grant of subsidy of Rs 8 per kg for the sugar was not justified, and argued that there was a need to ascertain the reasons for enhanced cost of sugar as compared to prevailing market price. The ECC decided to carry out a special audit with regard to the subsidy being claimed by the USC in respect of all the 11 essential items and bring back the case to the ECC for consideration.
The committee has directed Finance Division to request the AGP to conduct a special audit of the cost incurred by the USC and the subsidized prices of the 11 essential items, within 15 days, and submit a report to the ECC of the Cabinet. The report must highlight cases where the USC incurred more on an item than its prevailing market price, and state reason for difference. The ECC further directed Finance Division to issue the Terms of Reference (TOR) for the special audit to the Auditor General of Pakistan.