Sub: Shortcomings in the procedure for procurement of NS items chargeable to Revenue

 

     1. Procurement of items may broadly be categorized under (i) stock items and (ii) non-stock items.

  1. For procurement of stock items and its distribution/disposal and accountal thereof, detailed guidelines are available.  These are uniform in nature and covers entire Indian Railways.  But for non-stock items, detailed guidelines are not available.  In some other Railways for instance Southern Railway, Central Railway and Western Railway, detailed guidelines are available for its procurement.  In some Railways, detailed guidelines are not available, leading to the possibility of misuse of the system.

     3.  The following steps should ordinarily be followed for procurement of NS items Chargeable to Revenue.

(i)     Making out a proposal for the proposed purchase.  The proposal should justify the need for purchase, along with expected amount of expenditure.

(ii)   Obtaining finance concurrence for the proposed expenditure. Necessity of finance concurrence may be waived up to a certain limit for certain materials, for instances materials necessary for running train servic            

(iii) On receiving finance concurrence, appropriate sanction of the competent authority should be obtained. Such authority should be decided by the SOP/DOP of the Railway.

(iv) Based on sanction, requisition to be prepared.

(v)   Requisition to be vetted by finance, which covers –

(a)   Availability of fund.

(b)   Correctness of allocation of expenditure.

(c)   Correctness of the description of material with that of letter of sanction.

(d)   Correctness of the quantity and cost of the material with that of letter of sanction      

   (vi)        Vetted requisition is sent to COS, who initiates purchase process, either by tendering or by quotation tendering.

        4.         Depending on circumstances, nature of material and frequency of procurement, certain stages, as mentioned above, in some Railways; are done away with and the abridged procedure is stated below: -

(a) Requisition is prepared along with a Note Sheet justifying the                               proposed purchases.

(b) Separate finance concurrence is not taken on the proposal    (Note Sheet). Vetting of requisition covers both concurrence of proposal and vetting of requisition.

© On obtaining competent authority’s sanction requisition which is normally signed by an authority subordinate/junior to the

Sanctioning Authority is sent to COS along with a photocopy of letter of sanction for starting procurement process.

        5.         In SER (undivided), Electrical, Mechanical and Engineering Branch procure NS items chargeable to Revenue without following the detailed guidelines:

Procedure being followed is detailed below: -

i)        Requisition is prepared.

ii)        Requisition is vetted by finance (mostly AOs sign on behalf of Sr.DAO/DAO).

iii)       If the value of requisition is upto 1 lakh, it is signed by JAG Officer. If it is from Rs.1 lakh to Rs.5 lakh it is signed by SAG and beyond Rs.5 lakh it is countersigned by the PHOD /Co-ord.HOD who also gives an essentiality certificate.

          Requisition of amount up to which Zonal Railway can procure, is countersigned by the PHOD/Co-ord HOD and that is accepted as sanction.

6.       Presently the following is the delegation of power for purchase of NS items.

Sl.No.46  - Local purchase of direct petty purchase of non/stock items.

SAG/DRM – Rs.5000 per item, but not exceeding Rs.5000 in aggregate per month.

AGM  - Full power.

7.         Shortcomings in the system:  The followings are the drawbacks in the system: -

(i)           Materials/articles are being procured without proper sanction.  Officers are exercising powers to sanction, which they don’t enjoy.

(ii)            Finance concurrence is not being obtained.  It prevents finance from examining the proposal to see whether there is any justification to procure the material.

(iii)                                 Wasteful and avoidable expenses take place, since there is no system of obtaining finance concurrence.

(iv)                                Many restrictive articles like furniture, AC machine etc. gets purchased. Accounts office restricts its role by vetting the requisition, which only signifies that there is fund for the proposed expense

(v)     Since in the matter of NS items, the indenter and the consignee/user is the same person/authority and since there is no system of issuing

Issue Note and Receipt Note with copies to Accounts for proper accountal of material; there is every scope for making fictitious entries in records to show the use of materials.

In SER, booking of expenditure under PU-28 has shown wide fluctuation with the change of incumbent. It only shows that there are avoidable purchases in this category.

Further, in Railways all essential materials for running services are procured as stock items.  For small items, like stationery etc. and for other petty purchases, ACOS/DCOS/DyCOS have imprest Account.  It leaves little field for purchase of non-stock items. Procurement of NS items should be an exception and should be treated accordingly.  Liberalization of this power, may, it is apprehended, lead to wasteful expenditure.

8.       Solution:

(i) There may be uniform policy for procuring NS items covering all Railways.

(ii) Proper finance concurrence and sanction from competent authority in terms of SOP/DOP should be obtained.

(iii) Finance Officers need to be more orthodox in attitude, since, they deal with public money.

9.       In case of sanctioned works, covered under Works, Machinery & RSP, proper procedures are being followed.

 

B.N.Majumdar

               FA&CAO/P

                                                                                                                                           CLW/CRJ