The Auditor General of Pakistan (AGP) has detected massive irregularities of Rs7.441bn in accounts of public sector enterprises (PSEs) of Khyber Pakhtunkhwa.
These included 42 cases of the provision of funds, wasteful expenditure on a rest house, and delay in claim insurance, 13 cases of less/non-recovery, irregular retention of development funds, irregular award of contract, non-depositing of interest, non-deduction of tax, and 11 cases of irregularities of miscellaneous nature during the financial year 2015-16, said Audit Report of 2016-17.
The highest para of the audit report has been made in case of the provision of funds to Pakhtunkhwa Energy Development Organization (PEDO) without requirement and in violation of KP Energy and Power Development Fund Ordinance 2016.
The ordinance says that the amount contributed to the funds shall be utilized for the purpose under the ordinance and for any other purpose as the government with the approval of the Board of Directors may determine and shall be operated upon in accordance with the provision of the ordinance and rules made there under.
During the audit of Energy and Power Development Fund, Peshawar, for the year 2015-16, it was observed that the management released an amount of Rs 6977.13 million during the years, 2012-13 to 2014-15 to Pakhtunkhwa Energy Development Organization (PEDO) for execution of 7 projects. The PEDO could utilize only an amount of Rs 490.49 million during 2012-13 and 2014-15 on the said projects.
Financial requirements of these projects were not properly assessed before release. Moreover, the consumption of funds was also not monitored periodically by the Energy and Power Development Fund management and as a result an amount of Rs.6486.64 million remained unutilized.
Audit was of the view that release of funds amounting to Rs 6,486.64 million by Energy and Power Development Fund was without assessment of requirement and resulted into loss of interest income amounting to Rs421.62 million. The order loss to Energy and Power Development Fund and general public was in the shape of non-achievement of objectives of seven projects.
The matter was reported to the management in Dec 2016, but no reply was received till finalization of the report. Special Departmental Accounts Committee (SDAC) was also not convened by the Principal Accounting Officer (PAO) despite repeated requests by audit. The audit has recommended that release of Energy and Power Development funds without requirement may be investigated to fix responsibility.
The second detected in the PEDO was the irregular expenditure of Rs.14.88 million incurred on appointment of Chartered Accountants. The auditors are required to be appointed in consultation with office of the Auditor General of Pakistan (AGP).
During the audit of the Energy and Power Development Fund, Peshawar for the year 2015-16, it was observed that the board of the Fund during a meeting held in Jan 2016 approved the appointment of M/s M Yousaf Adil Saleem and Co Deloitte Chartered Accountants at a fee of Rs 14.88 million to conduct audit of GPI, Pension, Contributory Provident Fund and Energy and Power Development Fund.
The government was considered irregular on the grounds that consultation with the office of the Auditor General of Pakistan was not made while making this appointment.
The audit was of the view that appointment of Chartered Accountant firm made without consultation with office of the Auditor General of Pakistan (AGP) and payment of Rs14.88 million was irregular.
The matter was reported to the management in Dec 2016, but no reply was received till finalization of the audit report. Similarly SDAC meeting was also not convened by the PAO despite repeated requests.
The audit has recommended that the award of work needs regularization by referring the case to the competent authorities. The audit has also detected a case of non-recovery of loss amounting to Rs32.69 million from the contractor of the Forest Development Corporation (FDC).
According to the agreement between FDC and the harvesting contractor, the contractor was responsible for making good any loss sustained by the corporation during the currency of his contract period.
During the audit of Forest Development Corporation (FDC) for the period 2014-15, it was observed that on December 08, 2014 a huge volume of 16,589.61cft timber valuing Rs.32.69 million was set on fire by unknown offenders. FDC had entered into an agreement with M/s Ahmad Hussain on April 18, 2012 for forest operation up to April 30, 2015. As per agreement, the contractor was responsible for making good the loss. However, no action was taken against the contractor.
The corporation sustained a loss of Rs32.69 million due to fire as assessed by the Deputy Forest Manager Swat.
The audit was of the view that ineffective management resulted into loss due to non-recovery of Rs.32.69 million from contractor. The matter was reported to the management in June 2016 and in reply the management stated that the Conservator of Forest Malakand Circle (East) constituted a committee to report the actual burnt timber, but the report was awaited. Reply was not convincing as no responsibility had been fixed. SDAC meeting was also not convened by PAO despite repeated requests.
So, the audit recommends that the loss may be recovered from the contractor. The audit has also made a para regarding non-recovery of outstanding dues to tone of Rs.66.70 million from allottees of industrial plots by Sarthad Development Authority (SDA).
During the audit of the authority for the year 2015-16, it was observed that the management has failed to recover the recurring charges on account of maintenance, water and extension from the allottees of plots at Industrial Estates, Peshawar, Gadoon, Hattar and Nowshera.
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