The Auditor General of Pakistan (AGP) has detected seven cases of the unauthorized expenditures on procurement of machinery and equipment, festival, publicity and promotion to the tune of Rs 53.47 million in the public sector enterprises (PSEs) of Khyber Pakhtunkhwa.
The Director General (DG) Commercial Audit and Evaluation (DG CA&E), Lahore carried out the audit of the accounts of PSEs. Government of Khyber Pakhtunkhwa conducts its operation under the Rules of Business 1973 that envisage Provincial Government as comprising four Principal Accounting Officers for different departments and authorities under its jurisdiction.
Financial provisions of the Constitution describe the government as Provincial Consolidated Fund and Public Account for which Annual Budget Statement is authorized by the Provincial Assembly in the form of budgetary grants. For this purpose, DG CA&E, Lahore, Lahore deployed a human resource of fourteen officers with staff utilizing 1,884 man days. Annual budget amounted to Rs 4.44 million. The office is mandated to conduct regularity (financial audit & compliance with authority audit) and performance audit for autonomous/semi autonomous bodies and projects run by these departments.
In first case the audit has detected unauthorized procurement of machinery and equipment to the tune of Rs 34 million in Sarhad Development Authority (SDA) in violation of the Rule-7 (i) of the Khyber Pakhtunkhwa Procurement of Goods, Works and Services Rules, 2003. According to Rules, the procuring entity may follow pre or post qualification procedure for contracts other than for development works with estimated cost exceeding Rs 5 million in accordance with criteria specified in tender documents.
During the audit of SDA Peshawar, it was found that the management procured machinery and equipment worth Rs 34 million from M/s Miraj Limited vide agreement dated June 03. 2010, without observing conditions of prequalification of suppliers. The matter was reported to management in May 2012 and to the department in January 2013. The management replied in September 2012 stated that the purchase was made under SDA rules. Reply was not convincing as the authority has either to follow the KP Procurement Rules 2003 or to obtain relaxation from the Finance Department, Government of Khyber Pakhtunkhwa. Further, progress was, however, not reported till finalization of audit report. Departmental Account Committee (DAC) was not convened by the department despite reminders till finalization of the report. The auditor has directed investigation at the level of Administrative Department for fixing of responsibility.
In the second case, an unauthorized expenditure to the tune of Rs 6.69 million was pinpointed in Shandur Polo Festival-2011 over and above the approved cost for the event. According to Rule-10 (1) of General Finance Rules (GFR) every Public Officer is expected to exercise same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money.
During audit of Tourism Corporation Khyber Pakhtunkhwa (TCKP), Peshawar, it was found that as per PC-1 an amount of Rs 10 million was approved and released to the District Coordination Officer (FCO) Chitral for the arrangement of Shandur Polo Festival 2011. Rs 16.69 million was incurred on the said festival resulting in excess expenditure of Rs 6.69 million.