The Accountant General of Pakistan (AGP) has detected an overpayment of Rs 151.71 million in four cases of higher, incorrect and unauthorized withdrawal of project alliance by the Education Department during financial year 2014-15, said Audit Report on the accounts of Khyber Pakhtunkhwa Audit Report 2015-16.
The report has been presented in the provincial assembly and the Speaker has referred it to the Public Accounts Committee (PAC) of the house. The PAC of Khyber Pakhtunkhwa is headed by the Speaker Mushtaq Ahmad Ghani.
According to the report, the first overpayment of Rs 94.06 million has noticed in the office of Director due to allowing of higher rates during the financial year 2013-14 in the office of the Directorate of Works, University of Peshawar wherein the contract of the construction of two Academic Blocks was awarded to M/s Nishan Engineering Pvt. Limited. Lahore on the basis of self-prepared Bills of Quantities (BOQ) during 2005-06 when rates of Composite Schedule of Rates (CSR) 1999 were applicable. The record showed that payment of Rs 238.35 million was allowed up to 20th bill, however, comparison of certain rates paid to the contractor even with CSR 2009, reveals that the rates of CSR 2009 for the items concerned found much lower than those paid and accepted in 2005-06. The acceptance and payment of unreasonably higher rates than CSR to contractor resulted in an overpayment of Rs 94.06 million.
The audit held that rates of CSR 1999 and market analysis of the rates was required to have been done before acceptance of higher rates which was not done. So the overpayment to the contractor occurred due to financial mismanagement and undue favour to contractor.
The overpayment was pointed out in June, 2014 and the management stated that it was a special nature building where rich items specifications have been used to maintain best quality of work and to increase the durability of structure. However, in the DAC meeting, the management replied that no overpayment has been made and did not agree and decided to verify the record, but record was produced for verification. The audit has recommended to investigate the matter, fix responsibility and recover the overpayment from the person (s) concerned, because there was no such item paid the rate of which was not available in the CSR 1999 and CSR 2009, nor the rates were approved from the Rate Advisory Committee.
The second overpayment to the tone of Rs 52.86 million was also noticed in the University of Peshawar during financial year 2013-14, which was made to the contractor due to allowing items rates instead of CSR 1999 rates applicable at that time (2005-06). Comparison of the items rates with the CSR 1999 rates shows that these rates were much higher than the scheduled rates, which resulted in overpayment of Rs 52.86 million. The lapse occurred due to lack of internal controls.
The matter was reported to the management in April/May 2015. The management replied that the said project is of a special nature of ornamental uncertainty of rates in the market and developmental works were adversely affected and the CSR 1999 rates were almost obsolete. Most of the rich specifications used in the building were not available in the description of CSR 1999 not even in CSR 2009. Especially specification of major civil works and electrification items were missing in the CSR 1999 and CSR 2009. The reply given by the management was not convincing.
In the DAC meeting held in January 2016, the department repeated the previous reply. DAC did not agree with the reply and decided to refer the para to Public Accounts Committee (PAC).
`The third overpayment of Rs 3.17 million was noticed during financial year 2010-11, in the University of Science & Technology Bannu in the construction of administration, academic blocks and multiple hall was awarded to M/s Surranni Gammon with BOQ rate of Rs 58,600 per ton for providing, cleaning, cutting, bending, placing and fixing of steel. The record shows that the higher rate of Rs 66,000 per ton was allowed to the contractor resulting into an overpayment of Rs 3.17 million.
Audit held that payment was required to have been made according to BOQ rate which was not done. The overpayment occurred due to weak financial controls.
When pointed out in June 2012, the management stated that reply will be furnished later on. However, in the DAC meeting held in November 2015, the management replied that 30% premium over the quoted non-schedule rate was allowed. DAC did not agree as item was non-schedule hence 30% premium was unjustified.
The audit has recommended investigation into the matter, fixing responsibility and recovery of the overpayment from the person n(s) concerned.
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