The Auditor General of Pakistan (AGP) has detected financial irregularities to the tune of Rs.236.85 million in Small Industries Development Board (SIDB), Khyber Pakhtunkhwa in various heads including non-recovery, wasteful expenditures, non-adjustment, irregular appointments and payments etc, said AGP Report on KP's Public Sector Enterprises (PSEs) for the Year 2016-17.
The report has already been presented in the provincial assembly that had referred it to the Public Accounts Committee (PAC) that is headed by the Speaker of the house and comprising of the representatives of all parliamentary parties. The AGP has recommended in all these cases.
In total of 12 audit objections, the highest was the wasteful expenditure of Rs.88.67 million was made on projects. The board established under SIDB Act 1972 is responsible for laying down policy for the promotion of small industries and introducing better means of production and new designs, including proto-types.
During the audit for the year 2014-15, it was noticed that the management closed projects namely Woolen Centre Batkhela, Ceramic Development Centre, Akora Khattak and Technical Training Centre (TTC) Urmer Payan upon its expiry and discontinued its further government grants.
The management incurred expenditure of Rs.4.27 million from July, 2009 to June, 2015 on account of salaries/allowances, leave encashment and board distribution to Contributory Provident Fund (CPF) etc against these closed projects. No measures were taken to run these projects on self sustainable basis. Certain assets having book value of Rs.21.61 million and un-allocated capital expenditure of Rs.62.79 million (total Rs.88.67 million) as on June 30, 2011 were also lying at the closed units and were getting deteriorated.
The audit was of the view that the management failed to run the projects on self sustainable basis resulting into incurrence of wasteful expenditure of Rs.88.67 million. The matter was reported to the management in May 2016. But, neither reply was received, nor Special Departmental Accounts Committee (SDAC) was convened despite repeated requests by the audit. So, the audit has recommended investigation into the matter to fix responsibility on persons at fault besides taking remedial measures to make closed projects operation.
In the second case, the audit has noticed the non-recovery of dues amounting to Rs.44.70 million from the allottees of the plots. During the audit it was noticed that a huge amount of Rs.44.70 million was lying outstanding as on December 31, 2013 against the industrialists at various small industries estates on account of rent, service charges etc. Moreover, neither aging of these outstanding dues was prepared nor any legal action was taken against defaulters.
Audit has attributed the matter to ineffective management that resulted into non-recovery of government dues to that extent. Though the matter was reported to the management in May 2016, but neither any reply received nor SDAC meeting was convened despite repeated requests.
Audit has recommended the fixing of responsibility for non-recovery of outstanding dues and taking of necessary steps under Land Revenue Act against the defaulters.
In third case, it was observed that 53 officials of different technical and non-technical cadres were appointed by SIDB Project, namely, 'Pak German Wood Working Centre (PGWWC)' on July 10, 2015 without any press advertisement in leading newspapers. Similarly, 57 officials were appointed during the previous year. An expenditure of Rs 20.57 million was incurred on their salaries from July 2014 to February 2016.
The audit has declared the recruitment without advertisement resulted into irregular appointments and payments of salaries amounting to Rs 20.57 million. The matter was reported to the management, but the reply was not acceptable. Despite, repeated requests by audit the SDAP meeting was not convened.
The audit has recommended investigation into the matter with view to fix responsibility thereof, get regularized the appointments and expenditure incurred thereon.
In fourth case relating to non-recovery of withholding tax that incurred a loss of Rs 16.65 million was observed in the leasing out of 149 plots of different categories by Small Industrial Estates (SIEs) at a total sale price of Rs.229.99 million to different industrialists during 2011-12 and 2014-15. The management did not collect withholding tax at the respective prescribed rates. Resultantly, government sustained a total loss of Rs.16.65 million.
The audit was of the view that management failed to collect tax from the lessees that resulted into loss sustained by the government exchequer to the extent of Rs 16.65 million.
The matter was reported to the management in May 2016 and in reply they stated that collection of tax was their responsibility. The reply was not acceptable as collection of tax was the responsibility of SIDB at the time of leasing out of the land and despite repeated requests of audit the SDAC meeting was not convened.
The audit has recommended investigation into the reasons for non-recovery of advance withholding tax from the lessees, fixation of responsibility to make good the loss by effecting recovery from the concerned.
The remaining eight cases were the wastage of Rs 15.28 million due to non-completion of projects, irregular payment of Rs 27.59 million on behalf of CP Fund, non-recovery of Rs.4.84 million from defaulter lessee and loss of Rs.3.69 million due to non-execution of decree.