KEONICS procured materials at 'highly inflated rates' causing burden of Rs 47.97 crore on govt CAG

Bengaluru, Mar 19 (PTI) The Karnataka State Electronics Development Corporation Limited (KEONICS) procured materials at highly inflated rates than the prevailing market price causing a "financial burden" of Rs 47.97 crore to the public exchequer, the CAG report said.
    
    The state government tabled the report Wednesday. The Comptroller and Auditor General (CAG) report was on the Karnataka's State Public Sector Enterprises (SPSE) for the year 2022-23.
    The report said the KEONICS procured materials for three user department at a price of Rs 75.81 crore at "highly inflated rates" than the prevailing market price of Rs 27.84 crore.

    It also said that there was no transparency in enrolment of Business Associates (BA) and KEONICS did not enroll Original Equipment Manufacturers (OEMs) or authorized dealers of OEMs as BAs.

    "Procuring departments and KEONICS violated the exemption granted by the Government of Karnataka under the Karnataka Transparency in Public Procurement Act by procuring non-IT equipment,” the report said.

    Payment aggregating Rs 9.36 crore were made to BAs without ensuring actual delivery of equipment to the user department or institution concerned.

    Audit observed instances where payment was made to BAs on "fake delivery challans and fake or forged Third Party Verification (TPV) reports".

    "In 155 out of 347 test checked cases, payments of Rs 85.98 crore were made without TPV," the report stated.

(This story has not been edited by THE WEEK and is auto-generated from PTI)