(a) whether an internal audit report of his Ministry has detected a huge loss on procurement of certain equipment for
the troops;
(b) if so, whether the said equipment were purchased from the funds meant for emergency purchases;
(c) whether the Government has conducted any inquiry to find out the facts in this regard;
(d) if so, the outcome thereof; and
(e) the steps taken by the Government in this regard?
MINISTER OF DEFENCE (SHRI A.K. ANTONY)
(a) to (e): Internal Audit of defence expenditure is routinely conducted by the Defence Accounts Department (DAD).
Audit of procurements under financial powers delegated to various authorities under Ministry of Defence, including
special financial powers delegated to Army Commanders, was undertaken by the DAD. Reports of this Internal Audit
have been shared with the concerned Services / Agencies. Responses received are being examined and internal audit
conclusions will be arrived at. Necessary follow-up action will be taken seriously.
STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF LOK SABHA STARRED QUESTION NO. 122 FOR ANSWER ON 3.12.2012
Internal audit of all Defence expenditure is routinely conducted by the Defence Accounts Department (DAD). The major
findings of this exercise are periodically compiled and published in the Internal Audit Report (IAR) published by the
Controller General of Defence Accounts (CGDA). No case of loss on procurement of equipment for troops has been reported
in the latest Internal Audit Report of the CGDA for the year 2011-12.
2. However, a special audit of procurements undertaken under financial powers delegated to authorities below Ministry
level has been conducted under directions of the Ministry during June 2011. The scope of the audit has covered a number
of agencies under the Ministry of Defence and includes cases of procurement of equipment for troops, among various other
items.
3. As per normal audit procedure, copies of these reports have been shared with the agencies concerned. Replies have
been received in some cases and these are under examination. In some cases observations are not being pursued further
in light of replies received. Some of the observations are advisory in nature. In many cases, these audit reports have
made observations of instances of deviations from procedure. By their very nature, quantification of financial loss may
not be possible in case of such observations. As the internal audit conclusions have yet to be arrived at, full
quantification of loss is not possible at this stage.
4. It is clarified that under the Defence Services Estimates no funds are earmarked for emergency purchases. However,
financial powers are delegated to various authorities to enable them to fulfil their responsibilities in various emergency
situations that may arise, such as the outbreak of war or in the event of natural disasters. In any case, these become
operative only with formal proclamation of such a situation by the government. Apart from this, special
financial powers have been delegated to Army Commanders for Counter Insurgency (CI) Operations / Internal Security (IS)
Duties / Siachen Glacier / Aid to Civil Authorities / Special requirement for Strike Corps. Sanctions issued under these
powers have also been included in the special audit.
5. So far no inquiry has been instituted by the concerned agencies and no misuse of stores / powers have been established
/ reported by the concerned agencies based on the Internal Audit Reports of CGDA.