The Auditor General of Pakistan has unearthed massive financial irregularities in the expenditures of the Cabinet Division and its attached regulatory bodies, during financial year 2006-07, official sources told Business Recorder.
The interesting aspect of these irregularities is that some of the supporting documents are missing from the files, which makes it impossible to work out the nature of expenses. The sources said that the amount allocated for entertainment for the current fiscal year was about Rs 1.5 million, which had been spent during the first half, and now finances are being arranged from the budget of attached departments.
The main observations and findings during the course of audit reveal that there are certain control weaknesses, which suggests that the overall risk is at medium level. "The findings consist of issues regarding non-compliance at various stages, unauthorised utilisation, irregular retention, non-utilisation and transfer of funds to avoid lapse of funds, irregular expenditure and non-availability of supporting documents, non-recovery of rent from government employees, late payment of utility bills and mismanagement of abandoned properties," the report says.
Moreover, some performance-related issues of the regulatory authorities, namely PPRA and Nepra, are also incorporated with the findings. During the audit, it was observed that Rs 16 million were provided by Information Technology and Telecommunication Division to Cabinet Division to undertake the project for development and production of indigenous speech secrecy equipment during 2000.
This amount was deposited in a PLS Account No 29616-8 (National Bank of Pakistan Main Branch Civic Center, Islamabad that was opened on December 13, 2000. The bank statement provided to the team reflected a balance of Rs 17,502,914 as on July 17, 2004 and the latest bank statement of the account was not provided to the audit team despite several verbal and written requests. The audit team is of the view that this is in contravention of the terms of internal audit procedure that requires the Controlling Officer to make sure that the total expenditure is kept within the limits of the authorised appropriation and that the funds allotted to spending units are expended in the public interest and upon the objectives for which the money was provided. The management responded that the project is still in progress as it is of a sensitive nature and requires sufficient time for completion and that the amount may be allotted to the concerned quarters after completion of the project.
It was recommended that the activities relating to the project may be planned in such a manner that these are completed well within time and the amount should be allocated during the progress phase and not after the completion of the project, to give a more rational picture of the ongoing cost.
NON-COMPLIANCE OF TOSHAKHANA RULES During the course of audit of Toshakhana, the audit team was not provided the list of gifts received with the name of recipients submitted by the Chief of Protocol Ministry of Foreign Affairs during 2006-07.
However, the management produced a list of gifts and names of recipients provided by the President Secretariat during the visit of President of Pakistan to UAE and Saudi Arabia from January 20-24, 2007 and March 27-29, 2007.
The audit team collected information from different sources regarding the details of visits of the various friendly countries dignitaries to Pakistan during 2006-07 and the visits by the President, Prime Minister and Ministers to some friendly countries during 2006-07.
This contravenes the terms of clause 2 of Cabinet Division O.M No 9/8/2004-TK June 25, 2007 that requires that, if the Chief of Protocol, Ministry of Foreign Affairs, or his representative has been attached to a visiting dignitary or a foreign delegation, it shall be his responsibility to supply to the Cabinet Division, the list of the gifts received, together with the names of the recipients.
In the case of other delegations or visiting dignitaries with whom the Chief of Protocol or his representative is not associated, the Ministry sponsoring the visit shall be responsible for supplying the details of gifts received and the list of recipients to the Cabinet Division.
In the case of outgoing delegations or visits abroad of our dignitaries, it shall be the responsibility of the ambassador of Pakistan and/or head of the Pakistan mission in the country concerned to report the receipt of the gifts, together with the name of the recipients to the Cabinet Division through the Ministry of Foreign Affairs.
The management replied that during the year 2006-07 Ministry of Foreign Affairs forwarded only one list of visit of the Prime Minister to Yemen and Saudi Arabia in December, 2006. The management informed that the Ministry of Foreign Affairs also did not furnish the list of the recipients who visited Saudi Arabia, Egypt, Jordan, Syria and UAE from January 20-24, 2007 and to Saudi Arabia from March 27-29, 2007 with the President''s entourage.
The Cabinet Division did not provide the records relating to the payment of salaries, allowances, medical bills and TA/DA of federal ministers for the year 2006-07 with a plea that maintenance of record is not the function of Cabinet Division.
This is in contravention of rules that requires that every officer responsible for the collection of Government dues or expenditure of Government money should see that proper accounts are maintained in such form as may have been prescribed for all financial transactions of government with which he is concerned and render accurately all such accounts and returns relating to them as may be required by Government, Accountant General or the Controlling authority concerned.
Management replied that according to the Rules of Business 1973, Cabinet Division is only concerned with the preparation of budget for Cabinet (Ministers/Ministers of State). The Cabinet Division has been making budgetary provisions for pay and allowances and TA/DA in respect of Cabinet, SAPM and Advisors to the Prime Minister who avail the status of Ministers/Minister of State under Demand No 1 with the concurrence of Finance Division.
Cabinet Division is not required to maintain accounts of payments/expenditure incurred by Ministries/Divisions, concerned with the ministers respectively. The team recommended that all accounts should be so kept and the details should be completely recorded and that the initial records of payments, measurement and transactions in general are so clear, explicit; and self contained as to be verifiable where necessary as satisfactory and convincing evidence of facts.
Audit requested the management of Emergency Relief Cell to provide the bills/vouchers relating to payment of Rs 2,151,000 to CDA to carry out the maintenance/payment of utility bills in respect of Islamabad heliport ERC, Cabinet Division during 2006-07.
The management of ERC transferred an amount of Rs 15,968,000 vide cheque 0740127 June 20, 2007 in the local currency account No: 207547 maintained with Habib Bank Limited PTV Branch, Islamabad for the purchase of spare parts of helicopters, but the amount remained unutilised and was lying in the bank account as on July 31, 2007 and no letter of credit was opened for the purchase of spare parts.
It is also pertinent to mention that the management had already transferred an amount of Rs 12,300,000 vide cheque No 0451404 December 5, 2006 for the same purpose in the same account out of which Rs 761,000 remained unspent as well.
It is contrary to the interest of the State that money should be spent hastily or in an ill -considered manner merely because it is available or that the lapse of a grant could be avoided. In the public interest grants that cannot be profitably utilised should be surrendered. The existence of likely savings should not be treated as an opportunity for introducing fresh items of expenditure, which might wait till next year.
The team recommended that the funds should be transferred once the expenditure is imminent and the approval of the competent authority has been obtained. During the scrutiny of Pakistan Railway bills from 26-11-2005 to 31-12-2005, for transportation of flour donated by Turkey, it was observed that 25 percent surcharge was included in the bills that were paid by the management of ERC without keeping in view the reduced rates.
As per the notification No 2-M R/2080-R/G-II November 26, 2005 of Pakistan Railways Headquarters, special reduced rates on transportation of flour, cooking oil and sugar were introduced when booked as relief goods on behalf of ERC and had to remain operative up to December 31, 2005. The audit team recommended that the excess payment should be recovered from Pakistan Railways and appropriate policy should be framed to avoid such instances in future.
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