CAG concerned about state public sector companies
Shillong, September 22: The CAG report presented to the Assembly recently highlighted that as of March 31, 2020, Meghalaya had 18 public sector enterprises (SPSEs), which included 16 SOEs (15 in operation and one not in operation). ) and two statutory companies.
During the period 2019-2020, the state government provided budget support of Rs 263.53 crore to SPSE in the form of equity (Rs 35.53 crore), loans (Rs 2.70 crore) Rs) and grants / subsidies (Rs 125.30 crore). The main beneficiaries of budget support in 2019-2020 were four companies in the electricity sector, which received a budget allocation of Rs 231.97 crore (87.99%) in the form of equity (Rs 1 118, 18 crore), loans (Rs 2.70 crore) and grants / grants. (Rs 111.09 crore).
Overall power sector SPSE losses over the past four years have more than doubled from Rs 234.92 crore (2016-17) to Rs 478.54 crore (2019-20). In addition, the net worth of Meghalaya Power Distribution Company Limited (MePDCL) was negative at Rs 934.25 crore due to the complete erosion of its equity by the accumulated losses.
The CAG notes that “the accumulation of huge losses by 7 of the 17 active SPSEs had eroded public wealth, which is a source of concern and the state government must review the operation of these SPSEs to improve their profitability or close their operations.
Most importantly, the CAG says: “The losses of companies in the electricity sector must be critically examined to increase their income and reduce their losses. “
What the CAG also raises as a point of concern is the backlog of SPSEs.
The Forest Development Corporation of Meghalaya and Meghalaya Transport Corporation were last audited in 2015-16, leaving them four fiscal years in arrears.
The various verticals of companies in the electricity sector, namely MeECL, MePGCL, MePDCL and MePTCL, have all been behind schedule for two fiscal years. They were last audited in 2017-2018. Without up-to-date accounting and auditing, how do these companies know their financial situation, asks the CAG report.
The other 10 SPSEs all have one-year arrears. The CAG has repeatedly mentioned that up-to-date accounting ensures that SPSEs maintain their financial statements transparently and capture the operating, investing and financing activities of state-owned enterprises.
CAG audits are intended to deter any potential fraud that could be overlooked by internal audits. External audits are essential to ensure that companies represent their financial position fairly and accurately and in accordance with accounting standards, the CAG report says.