Public Accounts Committee's (PAC) sub-committee observed on Tuesday that the way to purchase gifts for foreign dignitaries. While examining the audit report on the accounts of Ministry of Foreign Affairs and Pakistan missions abroad 1998-99, the committee observed that the ministry incurred an expenditure of Rs 8.7 million on the purchase of gifts for foreign dignitaries, to be presented by the Prime Minister or the President, during 1995-98. Purchases exceeding the limit of Rs 100,000 were made without calling tenders.
The officials of Ministry of Foreign Affairs in its arguments to the committee said that tendering in such case was not possible as directives of president and prime minister overruled all the other rules of purchasing. Officials of Auditor General of Pakistan (AGP) suggested that the Foreign Office should seek an exemption from the PPRA's board in purchase of gifts without tendering and fix the ceiling of amount according to the status of each foreign dignitary.
Chairman Committee Shafqat Mahmood said the whole process of gift purchase is non-transparent. He directed Ministry of Foreign Affairs and AGP to hold a special study on how to improve the procurement mechanism for gifts that are presented to foreign dignitaries. The committee further took the notice of purchase of books worth Rs 2.2 million in 1995-96 by the ministry. Tenders were not called to obtain competitive rates.
The committee showed its apprehensions that the copies of any particular book might be purchased in a bid to please someone and directed the ministry to come up with details in next meeting. It also called a retired libertarian whose pension was stopped in this connection.
An inquiry is also being initiated by the Foreign Office to find out how Rs 41.8 millions was paid as interest on availing the facility of an overdraft by three Pakistani missions abroad during 1994-98, on the directives of sub-committee. The committee showed its serious concern that billion of rupees were paid by foreign missions in the past on payment of interest due to delay in receiving remittances by Ministry of Finance. This practice is still in vogue, the AGP has observed.
The AGP officials stated that Pakistan missions are required to keep their expenditure within the budget grant and finance it only out of 'imprest account'. They are not authorised to borrow money from the banks of the country to which they are accredited. However, in violation of laid down rules, three missions were regularly borrowing from the banks to finance extra-budgetary expenditure. These missions paid Rs 41.8 million as interest on their overdrafts, which was a loss to the government.
In his ruling, Chairman Committee directed that extra-budgetary financing through bank borrowing be immediately stopped. All interest payment be regularised through Finance Division. The missions in Bonn, Geneva and Rome paid the interest which was charged by foreign banks on overdrafts, which was obtained by missions due to inadequacy of 'imprest', urgent payment of utility bills and rents, etc.
Shafqat Mahmood directed the AGP to calculate accumulated amount paid by Pakistani missions in interest on account of late release of fund by Ministry of Finance to meet their expenditure by May 26. He further directed Ministry of Foreign Affairs and AGP to jointly hold a study on this 'financial indiscipline' and to submit their recommendations to the committee. He said it was tip-off the iceberg as the AGP held audit of 10 percent of the total account of the Foreign Office.
Foreign Secretary Aizaz Ahmed Chaudhry asked the PAC for its assistance in relaxation of rules applied to travel by staff of Pakistani missions. He suggested the rules are problematic. He pointed out that all the foreign missions abroad are restricted to fly with foreign airliners except PIA. But there are various destinations where PIA is not operating. In addition, the schedule of flight does not match with the requisite time.