Shillong, Sep 22: The CAG report placed before the Assembly recently pointed out that as on March 31, 2020, Meghalaya had 18 State Public Sector Enterprises (SPSEs), which included 16 government companies (15 working and one non-working) and two Statutory Corporations.
During 2019- 20 the state government had provided budgetary support of Rs 263.53 crore to SPSEs in the form of equity (Rs 135.53 crore), loans (Rs 2.70 crore) and grants/subsidy (Rs 125.30 crore). The major recipients of budgetary assistance during 2019-20 were four power sector companies, which received budgetary allocation of Rs 231.97 crore (87.99 per cent) in the form of equity (Rs 118.18 crore), loans (Rs 2.70 crore) and grants/ subsidies (Rs 111.09 crore).
The overall losses of power sector SPSEs in last four years have increased by more than two folds from Rs 234.92 crore (2016-17) to Rs 478.54 crore (2019-20). Further, the net worth of Meghalaya Power Distribution Company Limited (MePDCL) was negative at Rs 934.25 crore due to complete erosion of its equity capital by the accumulated losses.
CAG notes that “accumulation of huge losses by 7 out of the 17 working SPSEs had eroded public wealth, which is a cause of concern and the state government needs to review the working of these SPSEs to either improve their profitability or close their operations.
More importantly, the CAG states, “The losses of the power sector companies, need to be critically reviewed to increase their revenues and decrease their losses.”
What the CAG also raises as a point of concern are the accounting arrears of the SPSEs.
The Forest Development Corporation of Meghalaya and the Meghalaya Transport Corporation were last audited in 2015-16 which leaves them with arrears of four accounting years.
The different verticals of the Power sector companies namely the MeECL, MePGCL, MePDCL and MePTCL are all in arrears for two accounting years. They were last audited in 2017-18. Without an up-to-date accounting and auditing how do these companies know their financial statues, queried the CAG report.
The other 10 SPSEs all have arrears of one accounting year. The CAG has repeatedly mentioned that up-to-date accounting ensures that the SPSEs maintain their financial statements in a transparent manner and capture the operating, investing and financing activities of the state-owned enterprises.
The CAG audits are meant to deter any possible frauds that could be overlooked by internal audits. External audits are crucial to ensure that companies represent their financial positioning fairly and accurately and in accordance with accounting standards, the CAG report states.
