Undue delays cost ONGC Rs 604 cr: CAG

The Comptroller & Auditor General (CAG) has slammed Oil & Natural Gas Corporation Limited (ONGC) for undue delays between technical completion of orders and their business closure which cost the public sector giant Rs 604 crore.

The business closure of maintenance orders has to be done within the same month of technical closure, so that the costs are absorbed within the financial period. In its recent information systems audit of selected Central public sector enterprises, the CAG “observed that there were undue delays between technical completion of orders and their business closure. 88 per cent of the cases were delayed beyond 365 days (723,609 cases) with a possible impact on the financial accounting of that particular period. The cost (value) of such delayed orders was estimated to be Rs 604.09 crore.”

It went on to add that 245,525 orders which were technically completed during the period January 2014 to August 2021 were yet to be closed (March 2022) with the business completion.

The ONGC management/Ministry accepted the audit observation, the CAG said.

In its defence, the ONGC management stated (January-March 2022) that most of the anomalies were in the maintenance orders created during the initial period. After imparting training to the end users, such anomalies or gaps in the system reduced considerably, it added.

More than 70 per cent of the orders for critical equipment were now auto-generated and they were in the process of reviewing existing and new maintenance plans for all critical equipment across the plants of ONGC.

The management further stated (March 2022) that due diligence would be done to fix up the desirable ratio of planned/unplanned orders, and the guidelines would be revisited.

The management also assured to implement a background process to update the closed status for those orders after the settlement of their cost and the review of task lists and maintenance plans.