PESHAWAR: The Auditor General of Pakistan (AGP) has detected a loss amounting to Rs.1466.311 million in five cases in the accounts of Home & Tribal Affairs Department during financial year 2018-19, said a audit report on the accounts of Khyber Pakhtunkhwa 2019-20.
The audit report has already been presented in the provincial assembly of Khyber Pakhtunkhwa wherein the Speaker has referred it to Public Accounts Committee (PAC) of the house.
In first case, a huge loss of Rs.1330.108 million due to short supply of various items and non-imposition of penalty on suppliers was detected.
During audit of the Inspector General of Police, Khyber Pakhtunkhwa Peshawar for the financial year 2017-18, it was observed that against the total amount of Rs.1542.867 million which was paid in advance for the supply of various items, the POF (Pakistan Ordinance Factory) WAH could only supply items valuing Rs.212.944 million, leaving a balance of Rs.1329.923 million.
Similarly, an amount of Rs.3.708 million was also incurred on purchase of miscellaneous items, but the suppliers failed to complete the delivery within the stipulated time, and the penalty of Rs.185,417 was not imposed/ recovered on the suppliers.
The non-imposition of penalty was the violation of Para 1.1 to 1.3, the agreement signed with suppliers shall come into force on the date on which both parties sign the agreement. This agreement shall be for supply of arms and ammunition, duly agreed by both parties as per the description and approved specification. The agreement was valid for the financial year 2017-18.
Furthermore, the terms of the contract must be precise, definite and there should be no room for any ambiguity. It should state the quantity, quality, specification, time limit, penalties, and the security to be lodged. Provisions must be made in contracts for safeguarding government property entrusted to a contractor.
Audit has attributed the loss to non-adherence to rules and regulations and when pointed out in June 2019, the department stated that detailed reply will be furnished after consulting the original record.
In the Departmental Accounts Committee (DAC) meeting, the management replied that the payment was made in June 2018 with a delivery period of 09 months which is completed in March 2019, but the POF authorities have not completed the delivery, along with revision of the contract/ agreement by the IGP KP for avoiding such inordinate delay.
Audit has recommended the implementation of DAC decision.
In another case a loss of Rs.72.930 million was due to short supply of furniture items and non-imposition of penalty on the supplier.
During audit of the IGP KP Peshawar Office for the financial year 2017-18, it was observed that against the total amount of Rs.99.252 million, paid in advance to M/S SAW Mills for supply of furniture items, the supplier could not supply items valuing Rs.56.677 million, leaving a balance furniture valuing Rs.65.929 million.
The supply was required to be completed within the stipulated time but the suppliers failed to complete the delivery within the targeted period, and the penalty of Rs.4.492 million was not imposed
The lowest rates of some items of Pak-German Wood Working Centre were ignored and the purchase was made at higher rates due to which the government sustained another loss of Rs.2.039 million.
Audit has attributed the loss to non-adherence to rules and regulations and when pointed out, the department stated that detailed reply will be furnished after consulting the original record.
In the DAC meeting, the reply of the management was not convincing and it was decided to stand the Para till complete supply, along with imposition of penalty.
Audit has recommended not only the ensuring of complete supply, rather also the recovery of penalty.
In the third case, a loss amounting to Rs.58.079 million was occurred due to ignoring approved rates.
During audit of the IGP KP Peshawar for the financial year 2017-18, it was observed that a sum of Rs.761.59 million was paid to POF WAH as an advance payment for the purchase of arms and ammunition on the agreed rates of the financial year 2017-18.
The bills were pre-audited by the Accountant General (AG) Office and cheque was submitted to the concerned, who failed to cash in time. The finance department again released the funds equal to the amount but the purchase was made at higher subsequent year rates, due to which the government sustained loss of Rs.58.079 million.
Audit has attributed the loss to non-adherence to rules and regulations, and when pointed out, the department stated that detailed reply will be furnished after consulting the original record.
In the DAC meeting, the reply of the management was not convincing and the para was allowed to stand till detailed verification regarding payment on higher rates than the agreed rates of the same financial year. No verification was made till finalization of the audit report. So, the audit has recommended the implementation of the DAC decision.
Another loss of Rs.3.921 million has been occurred due to less-deduction of DPR charges and Professional Tax from the contractors in violation of the letter of Excise & Taxation Department.
During audit of the Superintendent Central Prison Peshawar for the financial years 2017-18 and 2018-19 it was observed that an amount of Rs.106,043,567 (Rs41,752,302 + Rs64,291,264) was paid to various contractors on account of supply of ration items, uniform and bedding & clothing, but Income Tax was deducted @ 4.5% instead of @ 7.75%.
The deduction of income tax at lesser rates resulted into a loss of Rs.3,446,416/- (Rs2,089,466 + Rs1,356,950) to government. Similarly, DPR at the prescribed rate was not deducted from the payment so made to the contractors, which resulted into a loss of Rs.212,088 (Rs128583 + Rs83505). Besides, Rs.104,955,369 (Rs63,291,192 + Rs41,664,177) were paid to various contractors during the Years 2017-18 and 2018-19. However, Professional Tax of Rs.262,000 (Rs142000 + Rs120,000) was not recovered.
The lapse was occurred due to weak financial controls and when pointed out, the department stated that detailed reply will be furnished after consulting the original record.
The matter was reported to the department for arrangement of DAC meeting. However, no DAC meeting was convened till finalization of the audit report. So, the audit has directed the recovery of the amount.
Copyright Business Recorder, 2022
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