National Fertilizer Secretariat in hot water over subsidy scandal

National Fertilizer Secretariat in hot water over subsidy scandal

National Fertilizer Secretariat in hot water over subsidy scandal

Written by Hassaan Shazuli

07 Dec, 2020 | 10:12 am

COLOMBO (News1st): A state audit has exposed a scandal at the National Fertilizer Secretariat that saw billions of rupees going to waste and more than 22,000 metric tonnes of unsuitable fertilizer released to the market.

The report had been published by the national audit office last month.

Billions of state funds wasted

In 2018, the government at the time introduced a scheme to sell fertilizer at subsidized rates to farmers.

Importers were offered subsidies to avoid incurring losses, as stocks had already been procured by that time.

But the National Fertilizer Secretariat had “overpaid” importers by Rs 959.2 million after failing to verify the quantity of existing stocks.

They had relied on “stock certificates issued by private chartered accountant firms”, the state audit revealed.

Another wastage, worth Rs 2.4 million, had taken place between the last quarter of 2019 and the second quarter this year.

This was owing to mistakes committed by the fertilizer secretariat and a pricing committee appointed to decide the subsidy.

“…the government had to bear huge losses were observed as a result of the decisions of the pricing committee,” according to the report.

The national fertilizer secretariat had also paid excessive subsidies for imports made at a low cost.

Lab reports “faked” to sell unsuitable fertilizer

The National Fertilizer Secretariat had prepared “fake” laboratory reports to release nearly 22,634 metric tonnes of sub-standard fertilizer to the market.

This had taken place in the case of imports made by 11 fertilizer companies between February 2018 and June 2019, the national audit office revealed.

“…the officers who were in charge of the above files and supervised the subject files had acted to cause loss to the government,” the report read.

On many occasions, accurate lab reports that indicated defects in the stocks had been removed from the files of these companies and had been replaced with fake ones.

This was to release fertilizer stocks, with elevated levels of heavy metals such as lead, chromium, and arsenic — contrary to national standards — to the market.

“Conduct a formal investigation referring to the Criminal Investigation Department in respect of officers responsible for the inclusion of fake laboratory test reports into files,” the auditor general recommended.

Subsidy worth Rs 1.07 billion had been paid fraudulently as a subsidy to fertilizer importers after releasing the substandard stocks to the market.

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