AGP detects Rs 116.15 million financial irregularities in TCKP

The Auditor General of Pakistan (AGP) has detected irregularities to the tune of Rs 116.15 million in the Tourism Corporation Khyber Pakhtunkhwa (TCKP) in 12 cases during financial year 2015-16, said AGP Report on public sector enterprises (PSEs) of Khyber Pakhtunkhwa.
The report has already been presented in the provincial assembly that had referred it to the Public Accounts Committee (PAC) of the house. The KP PAC is headed by the Speaker KP Assembly and comprising of the representatives of all parliamentary parties in the house.
The largest irregularity identified by the AGP in the audit was irregular retention of the funds to the tune of Rs 42.26 million of the annual development programme (ADP).
During the audit of TCKP for the year 2015-16, it was observed that the construction of Rest House at Nathiagali and day time facility at Lake Saiful Malook costing Rs 26.01 million and Rs 15.28 million respectively was approved through an umbrella PC-1.
The funds were released by the Finance Department during the year 2012-13 and 2013-14. However, the TCKP management could not start the construction of projects and funds of Rs 41.29 million were retained in violation of rules.
Furthermore, an amount of Rs 3.38 million was transferred by TCKP to the Deputy Commissioner (DC) Chitral under Development sub-Scheme namely, 'acquisition of land for construction & commissioning of youth centre' on May 15, 2013. The DC Chitral returned an amount of Rs 971,032 to TCKP that was also retained by the later illegally.
Thus the retention of development funds amounting to Rs 42.26 million was held irregular. Audit was of the view that non-adherence of the rules by the management resulted into irregular retention of government funds. The matter was reported to the management in October 2016, but no reply was received till finalisation of the report. SDAC (Special Departmental Accounts Committee) meeting was not convened by the Principal Accounts Officer (PAO) despite repeated requests.
Therefore, the audit has recommended investigation into the illegal retention of PSDP funds at appropriate level for fixing responsibility. The second case detected by the AGP was the irregular payment of Rs 23.84 million without extension of contract during financial year 2015-16. It was observed that three projects at Thandyani, Bahrain and Batakundi valuing Rs 33.89 million were awarded in January 2013 to three different contractors for construction of buildings without technical sanction from Communication & Works (C&W) Department.
All three contractors failed to complete the projects as per schedule. An amount of Rs 23.84 million was paid to the contractor after expiry of the stipulated period without extension by competent authority and the management did not impose penalty of Rs 3.39 million on said contractors for delay in completion of projects.
The audit was of the view that projects were inordinately delayed for a period of about more than three years without any extension by the competent authority. Payment of Rs 23.84 million made to contractors without granting any extension and non-recovery of LD charges was held irregular.
The matter was pinpointed to the department in October 2016, but no reply was received and SDAC meeting was also not convened by the PAO despite repeated requests by the audit. Therefore, the audit has recommended investigation into the matter to fix responsibility for payment without extension in agreement and recovery of penalty from the contractor or the persons at fault.
In third case, a loss amount to Rs 8.76 million due to sub-standard construction work 'namely Rehabilitation of Chitral Rest House (Garam Chishma) to M/s A.Q. Khan in May 2013 that was requested completion up to June 2014. But, the work was actually completed and handed over to TCKP in February 2015. LD charges of Rs0.88 million (8.76x10%) were not deducted from the defaulting contractor.
A team of Planning and Development (P&D) Department declared the work as sub-standard by raising certain deficiencies that were not rectified. The performance bond was also expired and not renewed.
The audit after completion of the procedural requirements has recommended investigation into the matter to determine actual loss on sub-standard construction and fix responsibility to make good the same.