An internal audit report of the defence ministry has detected that army commanders have spent money on procuring imported items from agents in a 'non-transparent manner in 'violation' of defence procurement procedures.
The 118-page audit report has also found that a large number of security-sensitive equipment such as bullet proof jackets, night vision devices and parachutes were bought by the northern army commander between 2009 and 2011 from “unlisted and unregistered” vendors.
“A large number of stores in quite substantial quantities have been purchased, from intermediaries acting as trading outfits for importing the product from some foreign Original Equipment Manufacturer (OEM) vendors in a non-transparent manner, in violation of provisions of defence procurement manual,” the report said.
“Under the cover of open tender enquiry, a large number of trading outfits effectively acting as agents in a disguised form, have been able to grab orders for various stores and equipment,” it added.
The audit report has detected a loss of R100 crore incurred by the army commanders while using their Special Financial Powers up to R125 crore for procuring equipment on an urgent basis for the troops.
The audit observed that the army commanders have gone ahead to procure equipment which was available with the force and in some case, they have done so even when surplus inventory was available in the central pool.
It said certain equipment having “serious security implications” such as bullet proof jackets, IED detection devices and binoculars, army headquarters' MGO branch did not give any categorical advise to Command headquarters about the quantity rates and sources for supply of these item.
“Despite the serious security implications, the security sensitive items were procured by the Command headquarters, subsequently from firms which were not registered...,” it observed.