The Auditor General of Pakistan (AGP) has detected losses to the tune of Rs 1.448 billion in the Agriculture Department of Khyber Pakhtunkhwa during financial year 2015-16, said audit report on the accounts of KP Department.
The report of the audit conducted during financial year 2016-17 has been presented to the provincial assembly that had referred it to the Public Accounts Committee (PAC) of the house. The KP Assembly PAC comprising representatives of all parliamentary parties is headed by the Speaker of the house.
A total of ten cases of losses have been noticed by the AGP and the highest loss to the tune of Rs.1320.527 million was detected during the financial year 2014-15 in various offices of Agriculture Department.
On Farm Water Management, it was noticed that construction of water courses worth Rs 1,320,527,132 was executed on the higher rates rather than assessing the water course construction material rates, without fixing ceiling on six month/annual basis in accordance with the specifications prescribed in the On Farm Water Management (OFWM) Field Manuals.
The rates analysis was not approved by the competent forum, but the bills were entertained at higher rates. The public exchequer sustained loss due to weak internal controls and financial indiscipline.
In the Departmental Accounts Committee (DAC) meeting held in December 2016, the department replied that cost estimates of all OFWM schemes are based on local market rates, assessed by the designated committee, wherein there is a representative of farmers.
According to PC-1 of the project, rates assessment committee carries out the exercise twice a year subject to a significant change in the material rates. As there was not considerable change in the material rates, hence, the rates were kept same during the whole year.
This reply of the department was not satisfactory, as no rate analysis, duly signed and approved by District Rate Committee Assessment (DRAC), was carried out either annually or biannually. DAC directed that rates analysis committee be constituted, so that comparison of the market rates and those applied by the department in the purchase of materials be properly ascertained. However, no progress was intimated till finalization of the report.
Audit has recommended that the rates applied be analyzed and the DAC directives be implemented in letter and spirit.
In second case a loss of Rs.32.254 million has been noticed during the financial year 2014-15, in the offices of Agriculture Department, OFWM that Rs.189,731,489 was paid to suppliers/manufacturers for construction of various schemes of water courses, its lining and improvement, however, sales tax of Rs.32,254,353 @ 17 percent was not deducted from their bills and the amount was overpaid that inflicted loss to the public exchequer.
In the DAC meeting, the department replied that 1/5th of 17 percent sales tax was deducted from all the payments to Water User Associations (WUAs) , and the record is available, which can be verified any time. However, no evidence regarding deduction of sales tax, either 17 percent or 1/5th was produced. The DAC directed for production of record for verification, but no record was produced for verification.
The audit beside recovery of the loss has also recommended inquiry and fixing responsibility against those responsible.
In third case, a loss of Rs.29.493 million was noticed in Agriculture Department, OFWM due to non-deduction of income tax. During financial year 2014-15 it was noticed that an amount of Rs.444,251,483 was paid to the Chairman of Water User Association. The amount was spent by the representative Chairmen on the purchase of various items, however, income tax of Rs.29,493,000 @ 4.5 percent was not deducted from the bills of suppliers.
In DAC meeting, the department replied that income tax was deducted from the bills according to rules. But, the reply was not based on facts, as income tax @ 4.5 percent was not deducted from the suppliers' bill at the time of payment by the chairmen. The DAC directed for production of original challans for verification, however, no record was produced for verification of recovery of income tax.
The audit has recommended the recovery of the income tax.
In fourth case, a loss to the tune of Rs.15.334 million was detected on the construction /installation of substandard high roof in the province.
In the office of the Director General (DG) Agriculture (Extension) it was noticed that 68 high roof tunnels were approved at a total cost of Rs.15,334,000 in the PC-1 of the Project 'Sustainable Agriculture Development for Food Security through Integrated Approach in Khyber Pakhtunkhwa'.
The work was awarded to M/s Spinkai Builders, Mardan. The supplier was required to complete the work upto 25th June 2016 and severe irregularities were noticed in the implementation of the project.
The contractor was to pay a penalty, @ 10 percent of the contract value, for failure to supply the implements/equipments to the requisite quantity, quality and specifications within the specified time, and to provide warranty certificate for the structure as 10 years, authorization certificate from the manufacturer/importer and indemnity bond. But, no penalty was imposed and no security was obtained. The audit has recommended conducting of fact finding inquiry, fix responsibility and the loss be made good.
Copyright Business Recorder, 2019