6 CHAPTER IV -Transaction Audit Observations

CHAPTER IV 4. Transaction Audit Observations Important audit findings emerging from test check of transactions made by the State Government companies are included in this Chapter. Government companies Bangalore Electricity Supply Company Limited 4.1 Blocking up of funds Procurement of line materials in excess of requirement resulted in blocking up of funds of Rs. 4.90 crore. The Company invited (March 2005) tenders for procurement of line materials to meet the requirement of the first quarter of 2005-06 as well as for regularising 60,000 unauthorised Irrigation Pumpsets (IP sets). The total cost of the line materials was assessed at Rs. 28.80 crore, based on the lowest offer received. The Central Purchase Committee (CPC) placed (July 2005) purchase orders on the two bidders, Dhanalaxmi Engineering Enterprises and Ratnatray Enterprises for a total value of Rupees five crore, the limit up to which it was vested with powers. The supplies were to be made between August 2005 and January 2006. The Board, approved (September 2005) the procurement of balance quantity of line materials for Rs. 23.72 crore with delivery schedule between December 2005 and March 2006. The delivery schedule was extended to August 2006 and subsequently up to December 2006. Audit observed (February 2008) that the Board of Directors, while approving the procurement of balance materials in September 2005, did not consider the fact that only 14,670 IP sets were ...