ISLAMABAD: The Sui Northern Gas Pipelines Limited (SNGPL) Audit Report for the financial year 2021-22 observed that the Oil and Gas Regulatory Authority (Ogra) under the determination of final revenue requirement for the fiscal year 2020-21 allowed Rs 37 million under the head of board meeting and directors’ expenses.
However, the SNGPL incurred expenditure of Rs 51 million on account of board fee/ directors’ expenses over and above Rs 37 million allowed by the Ogra.
The increasing trend in board meeting and directors’ expenses was mainly due to the reason that the board’s meeting was frequently being held outstation other than the company’s registered head office in Lahore. The audit was of the view that weak financial/board management resulted in an irrational expenditure of Rs 14 million.
Further, this aspect was also discussed in the board finance and procurement committee in its 314th meeting, wherein, the CFO clearly stated that the company had been bearing 5.4 times higher average cost of outstation meetings as compared to the average cost of meetings held at Lahore Head Office.
Further, the chairperson BoD and company secretary were required to oversee that due to frequent outstation meetings exorbitant expenditure on board fee/directors’ expenses were being incurred. This resulted in an exorbitant expenditure of board fee/directors’ expense of Rs 14 million.
The matter was reported to the management in November 2022. The management in its reply on January 12, 2023, stated that outstation board meetings were mostly held in SNGPL’s Islamabad office and the expenses incurred on such meetings were normally on the lower side due to the fact that out of total 12 directors, seven directors were from Islamabad, one from Peshawar, one from Karachi, and only three from Lahore. Accordingly, by holding board meetings in Islamabad, boarding/lodging and travelling costs were saved.
Audit contended that as the company head office was located at Lahore, therefore, staff had to move to Islamabad to brief the board on the agenda being discussed and this cost also needed to be considered in case meetings were held at Islamabad.
Further, the itemized breakup of board expenses be provided. Audit recommends rationalising the expense on board fee/directors’ expenses.
Copyright Business Recorder, 2023