RIL is not helping in KG-D6 audit, it reports again

A month after Petroleum and Natural Gas Minister Veerappa Moily had said there was no problem in the audit of the KG-D6 gas block, owned by Reliance Industries Limited, the Comptroller and Auditor-General has again lodged a complaint with the government that the company is not helping it in the inspection, withholding information on important issues.

In a communication to the Petroleum Ministry, CAG has said that despite requests for access to all modules of systems applications and products (SAP), the Mukesh Ambani-owned company has only allowed restricted access to financial and material management modules, while rejecting the request for access to human resources, sales and distribution and project system modules. “Access to running queries and reports has not been provided in respect of all the modules, including financial and material management.”

On July 19, 2013 Mr. Moily virtually gave RIL a clean bill. “I don’t know. That I must find out. We are getting cooperation from everybody. There is no problem at all. The question is we should not destroy them; then you get destroyed yourself, I am telling you. This is what is going to happen. If you destroy somebody, you get destroyed yourself,” he said. The Hindu was the first to report, on July 18, that CAG had complained to the Ministry about RIL’s failure to cooperate in the audit for the period from 2008-09 to 2011-12.

“The operator had stated on May 20, 2013 that its SAP team is working for providing additional access and in order to provide continued support, persons have been nominated. However, as on date, no additional access has been provided, and the persons nominated are either not readily available or do not have sufficient SAP authorisations so as to resolve audit queries,” CAG said in the communication submitted to the Ministry by the Office of the Principal Director of Audit Economic and Service Ministries.

It said it needs to verify from SAP some important things like common purchase orders against which expenditure is booked to the KG-DWN-98/3 block on an allocation basis. Access to other material management components such as inventor and consumption accounting is required to verify the cost of purchase and the corresponding amount booked in the block, the date of purchase and the actual date of consumption. For example, the production-sharing contract requires inventory to be valued through the first-in, first-out method. But the operator is valuing the material using the weighted average method, which requires quantification by reference to purchase cost.