ISLAMABAD: The Public Accounts Committee (PAC) on Wednesday ordered a two-year performance audit of the Utility Stores Corporation (USC).
The direction came after the auditor general of Pakistan (AGP) informed the committee that the audit of government subsidies to the USC during Covid-19, as well as USC’s financial year report, was ready for presentation before the parliament.
The USC officials had earlier briefed the PAC regarding the losses endured by the corporation as well as the sale of substandard edible oil at its outlets.
But auditors pointed out that under the Pakistan Standard and Quality Control Authority (PSQCA) rules, it was mandatory for the USC management to get quality control certification before displaying edible oil on shelf.
USC Secretary Afzal Latif maintained that the PSQCA certification was required for manufacturers and not for retailers. Being a retailer, USC was not under any obligation to get certification, he stated.
Further clarying the issue, USC MD Umer Lodhi stated that there was no tradition or rule of quality test for a retail outlet. He, however, said that in case of any complaint by the user, the USC management can ask the manufacturer for a replacement of substandard goods.
Meanwhile, the audit report further pointed out that the USC management did not replace the expired items, which resulted in Rs353 million loss for the national exchequer.
The USC management replied that the provision against slow moving and obsolete items was made in accordance with the International Accounting Standard (IAS) and in the light of the approval of the Board of Directors.
It said that the USC had entered into agreements with the vendors/suppliers under which they were legally bound to lift back the slow moving and damaged/expired items.
The PAC directed the audit officials to get the replacement of the expired items verified with the USC. PAC Chairman Rana Tanveer Hussain also asked the Auditor General (AG) Javed Jahangir to conduct the performance audit of the USC for two years and submit a report within a month.
