PESHAWAR: The Auditor General of Pakistan (AGP) has detected irregularities, wasteful expenditures and losses to the tone of Rs.322.062 million in Small Industries Development Board (SIDB) Khyber Pakhtunkhwa during financial year 2018-19, said Audit Report 2019-20 on the accounts of public sector enterprises of the provincial government.
The audit report has already been presented in the provincial assembly wherein the Speaker has referred it to the Public Accounts Committee (PAC) of the house.
According to the report a wasteful expenditure amounting to Rs.22.454 million has been detected on Wood Working Centre at Batagram. It said that as per revised PC-1, the project was launched for to contribute the development of wood sector in the province and the training programme of the centre shall enhance the technical skills of the workers, which will result in improved quality of services and products, availability of skilled manpower to the existing as well as a new wood units and generation of employment.
During the audit of SIDB headquarters, it was observed that a project Wood Working Centre Batagram was administratively approved on 7.02.2014, which was completed at a cost of Rs.21.598 million. The SIDB management incurred further amount of Rs 856,210 on electrification. However, it has not been handed over to the Implementation Department of P&M till the finalization of this report. The Joint Director found defects in the building during his visit in 2016 which have not been rectified till date despite final payment tot eh contractor already made in June 2014.
In this connection, the Managing Director (MD) SIDB constituted a three-member committee to ascertain the facts and fixing responsibility upon the delinquent within fortnight. But, the committee could not complete its report within the stipulated timeframe.
Audit was of the view that PC-1 of the project was defective as no provision for Working Capital, salaries of employees and space for log band saw shed and welding shed was included in it due to which the project could not be functional and the machinery of the said project was transferred to other units on March 01, 2019.
Thus due to mismanagement, the project could not be operationalized till date resultantly, the objectives of PC-1 could not be achieved. The lapse occurred due to showing weak operational management in the organization. The irregularity was reported to the management through Audit Inspection Report (AIR) dated Novembedr 13, 2019. No reply was received till finalization of this report.
Furthermore, no Depart-mental Audit Committee (DAC) meeting was convened till finalization of the report despite efforts.
Audit has recommended investigation into the reasons due to which project was operational besides fixing responsibility thereof.
Another case, a non-recovery of a handsome amount of Rs.100.087 in head of cost of plots from the industrialists has also been noticed by the audit. According to a letter of SIDB (HO) dated 10.03.1997, the mode of payment of the plot was required to be recovered in the following heads i.e 25 percent cost would be deposited at the time of application, 25 percent at the time of allotment, 25 percent at the time of allotment and remaining 50 percent at the time of lease deed/ taking over possession of the land.
During the audit of SIDB for the year 2018-19, it was observed that 73 plots were allotted to industrialists against 25 percent down payment at Industrial Estate Charsadda and possession of land was also handed over during the period from January 2015 to January 2019.
Later on the allottees of the plots failed to deposit the remaining amount of Rs.100.087 million to SIDB. Audit was of the view that possession of plots were allowed to the industrialists in violation of laid down procedure due to which neither dues of Rs 100.087 million were recovered nor allotments of defaulters were cancelled. The lapse occurred due to weak internal controls in the organization. The irregularity was reported to the management through AIR dated November 13, 2019. But, no reply was received till finalization of this report.
DAC meeting was not convened till finalization of this report despite efforts.
So, the audit has recommended investigation into the matter of non-recovery from the defaulters, besides fixing responsibility thereof and recovery of the amount in question along with delayed payment surcharge.
In another case, a surplus fund of Rs 50 million has been invested without approval of the competent authority. According to financial rules, the process of selection of banks should be transparent. Therefore, prior to placing deposits with a bank under this new policy and in case of the local working balance exceed Rs 10 million, the selection of the banks as well as the terms of deposits will be approved by the concerned Board of Directors/ Governing body on the basis of competitive bids from at least three independent banks.
During audit of SIDB Pak-German Wood Working Centre Peshawar for the year 2018-19, it was noticed that surplus fund of Rs 50 million was invested in TDR @ 10.47 percent with Allied Bank Limited for one year w.e.f March 11, 2019. The investment was made without prior approval of Fund Management Committee as well as Board of Directors.
Audit was of the view that investment was made in violating laid down procedure and even no ex-post facto approval was obtained till date. The irregular investment occurred due to violation of government instructions. Thus investment of Rs 50 million made in violation of government standing instructions was held irregular.
The irregularity was reported to the management through AIR dated November 13, 2019. No reply was received till finalization of this report. Despite efforts the DAC meeting was not convened till the finalization of this report.
Audit has recommended investigation into the reasons of investment by non-observing of laid down procedure besides fixing responsibility thereof.
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