Fifty-six sacks of Vulnerable Group Development (VGD) rice were recovered from a godown in Duoshuo union of Baliadangi upazila on Monday afternoon.
Upazila nirbahi officer Md Moniruzzaman also sealed off the union parishad godown for possessing the rice illegally.
The UNO said following allegations from locals, a team led by him raided the godown.
According to the allegation, union parishad chairman Mokhlesur Rahman Chowdhury was distributing rice 24/25 kilograms to each beneficiary instead of 30 kg.
Later, 56 sacks of VGD rice sanctioned for distribution among poor people were recovered from there, he added.
There is a total of 269 beneficiaries in the union under the programme, said the UNO.
Contacted, the UP chairman said the rice was not distributed among only 23 beneficiaries due to various reasons while the rest of it was used for other projects.