AGP flags Rs18.66bn inventory discrepancy in Pakistan Railways

The Auditor General of Pakistan (AGP) has uncovered an unexplained inventory discrepancy of Rs18.66 billion in Pakistan Railways, citing weak internal controls and irregularities in stores management.

According to the audit report, prepared by the Directorate General of Audit Railways Lahore for the period from 2016-17 to 2022-23, the Material Accounting System (MAS) recorded inventory worth Rs4,804.73 million as of June 30, 2023, while the financial statements showed inventory valued at Rs23,462.07 million, leaving a gap of Rs18,657.34 million.

The audit also found incorrect inventory reporting of Rs23.46 billion, unauthorised adjustments of Rs1.41 billion in the MAS, and scrap sales worth Rs1.47 billion carried out without market surveys, reserve prices or proper tender documents, including fraudulent sales of Rs82.33 million.

It further highlighted track material worth Rs876.26 million deteriorating due to poor storage, undisposed scrap and surplus stock worth Rs2.49 billion, and overstocking caused by procurement of Rs966.38 million without required stock assessments.

The AGP recommended strengthening inventory controls, investigating fraudulent scrap sales, recovering losses from those responsible, introducing standard operating procedures for the Material Accounting System, and improving storage facilities.