Diagnosing internal control failures in India’s petroleum subsidy programs: A COSO-COBIT Governance Analysis

This study investigates systemic internal control failures within India’s petroleum subsidy programs, particularly Liquefied Petroleum Gas (LPG) and Public Distribution System (PDS) kerosene schemes. Using the COSO Internal Control Framework (2013) and COBIT (2019) governance principles, alongside forensic data analytics and selected case studies, this paper identifies recurring issues in beneficiary verification, delivery validation, invoice oversight, and IT governance. Despite reforms like Aadhaar-based deduplication and Direct Benefit Transfer for LPG (DBTL), vulnerabilities in real-time monitoring, audit trail consistency, and inter-agency data integration persist. Notably, over 35 million fraudulent LPG accounts were removed, highlighting both progress and past systemic flaws. This research proposes a robust governance model leveraging artificial intelligence, geo-mapping, and control matrices to enhance transparency and accountability. The model is designed to be replicable for other developing nations reforming public welfare distribution systems.