The Auditor General of Pakistan has unearthed billions of rupees irregularities, embezzlement, financial mismanagement and cases of non-recovery from contractors and dismissed employees in Zarai Taraqiati Bank Limited (ZTBL). Some of the cases including recruitments are already under investigation by the National Accountability Bureau (NAB).
These financial and administrative irregularities have been pointed out in 21 paras of audit of FY 2017-18, conducted in 2018-19. According to Auditor General of Pakistan, the annual audited accounts are required to be provided to the audit for review each year. Contrary to this, the management failed to provide audited accounts of the organisation for the year 2017 till December, 2018.
The audit report reveals that during the audit of ZTBL (head office) for the year 2017, bank manager and other staff approved/sanctioned many loan cases in favour of different borrowers and embezzled the amount. On inquiry by the head office, the charges were established/approved against the accused employees who were punished. The aggregate amount of punishment was approximate of Rs 9.01 million. Later on the management conducted complete internal audit of the branch in which it was established that the bank suffered a loss of Rs 631.66 million. The matter was reported to the management on September 11, 2018 and to POA on October 18, 2018. The management in its reply of September 19, 2018 stated that some of the employees were in litigation and case was referred to NAB for investigation. However, according to the Audit, the reply was not convincing as no document was produced by the management in support.
During DAC meeting held on December 31, 2018 the management explained that case been referred to NAB for detailed investigation. Audit informed that amount was revised from Rs 9.01 million to Rs 631.66 million in the light of case referred to NAB.
Loss, due to embezzlement of funds through NIFTs of Rs 37.78 million in ZTBL Khairpur Mir branch. DAC in its meeting held on December 31, 2018 directed the management to vigorously follow up the case in FIA for early finalization.
During the audit of ZTBL head office for the financial year 2017 it was observed that management incurred Rs 10.380 billion over and above the approved budget of Rs 639 million. The DAC, in its meeting held on December 31, 2018 directed the management to submit the matter to the BoD for ratification of excess expenditure in this case.
During audit of ZTBL for the year 2017, it was observed that management decided to refurbish and remodel all floors of ZTBL main building Islamabad in 2009. The EoI was called on February, 15, 2009 and in response 17 firms showed an interest and submitted company profile on March 9, 2009. No bidding documents were prepared by the management and a questionnaire was developed for bidders, which did not include the evaluation criteria/method to shortlist the firms as required under PPRs. The then President ZTBL called for the presentation to all firms and M/s Zaheer A Sheikh & Associate (another consultant who originally did not submit bid) was allowed by the management to participate in the presentation. After two or three presentations, the management shortlisted M/s Zaheer A Sheikh & Associates and consultancy contract was awarded to the said firm.
On December 31, 2019, the DAC directed the management to hold a fact finding inquiry in the case and furnish its report to audit and Ministry with 45 days.
Other irregularities noted by audit are as follows: (i) irregular procurement of land in Bahawalnagar Zone, Rahimyar Khan Zone and Chillianwali branch Sargodha worth Rs 45.28 million; (ii) irregular hiring of second lowest contractor, ie, M/s Capital Builders Islamabad, worth Rs 75.14 million; (iii) irregular grant of Rs 61.03 million to defaulters; (iv) irregular procurement of vehicles of Rs 196.26 million despite Finance Division's ban;(v) irregular payment of personal pay - Rs 32.16 million; (vi) non-recovery of advances from dismissed/severance employees - Rs 6.02 million; (vii) non-recovery of advances from ex-employees - Rs 43.55 million; (viii) non-recovery of penalties imposed by SBP - Rs 58.05 million; (ix) loss due to payment of additional markup of preference shares - Rs 1.906 billion and irregular purchase of ZTBL shares by the SBP; (x) loss due to unjustified writing off the project loans - Rs 270.28 million; (xi) loss due to procurement of penaflex sign boards at higher rates - Rs 26.52 million; (xii) excess cost incurred due to non-preparation of cost estimates - Rs 13.52 million; (xiii) procurement of land at higher rates - Rs 11.53 million; (xiv) unjustified payment of Special Asset Management (SAM) incentive - Rs 45.32 million; (xv) loss due to irregular writing off project loans - Rs 107.62 million; (xvi) loss due to late verification of degree of Ms Arifa Malik - Rs 2.95 million; and (xvii) loss due to non-recovery of penalty and official vehicle from employee - Rs 9.18 million.
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