Report of the
Public Account
Committee
[201011]
CHAIRS FOREWORD
The Report of Auditor General of Pakistan for the year
2010-11 was examined by the earlier Public Accounts
Committee (PAC) except the Audit Paras pertaining to
only two (02) Departments which were examined by the
present PAC. I have a high regard for the former PAC
which established role model example of the last functional
performance for the coming entire Committees. That PAC
has obtained the honor to complete examination of eight
(08) Audit Reports and also passed it from the House after a detailed professing
thinking. The PAC has admired the honor that it found the basic tradition of
examining the recent Audit Reports rather the previous ones.
The PAC always felt the need of effective internal audit control system in
Government Departments, pleasurably some achievement has come in this regard
but a lot of change for more is obviously required. I think if the Secretaries of the
Government Departments produce continuity in the economical discipline of the
Province by acting upon the decisions of PAC according to its spirit, handsome
amount of national wealth will become safe rather flowing in waste cave. I expect
the professional manner from all Principal Accounting Officers not to defend their
Departments out of way rather to deface the irregularities present in their
Department and to get effective and solid measures for their prohibition.
It cannot be avoided to honestly appreciate the efficient performance of the
Officers and staff of PAC Cell of Provincial Assembly Secretariat that showed
their best functional performance under the leadership of Secretary Assembly Mr.
Amanullah.
I hope that the present PAC will follow the tradition of examining recent
Audit Reports and shall strengthen the foundations laid down by the previous PAC
for effective accountability.
(ASAD QAISAR)
Speaker/Chairman
Public Accounts Committee
PREFACE
The Report of the Auditor General of Islamic
Republic of Pakistan on the accounts of
Government of Khyber Pakhtunkhwa Province for
the year 2010-11 received in the Assembly
Secretariat on 19-04-2012, was laid before the
House on 07-05-2012 in pursuance of Article 171
of the Constitution of the Islamic Republic of
Pakistan and under rule 198 of the Provincial
Assembly of Khyber Pakhtunkhwa Procedure and
Conduct of Business Rules, 1988 the Report
consisted of the Audit Report, Appropriation
Accounts, Financial Statements, Audit Report on
Revenue Receipts and Audit Report on Public
Sector Enterprises. The Assembly referred it to the Public Accounts Committee for
detailed examination on the same day.
The Public Accounts Committee (PAC) examined the Audit Report in
series of meetings spanning over Twenty Nine (29) sittings held in the Conference room
of Assembly Secretariat, Peshawar and Khyber Pakhtunkhwa House, Abbottabad.
In this Report the Audit Paras/observations pertaining to each Department
of the Government of Khyber Pakhtunkhwa are arranged separately. Tables showing
details of total Paras and recommendations of PAC thereon have also been added for
ready reference.
The drafting and preparation of this report has been made possible due to
the concerted efforts of the Hon’ble Speaker, Members of the Committee and
officers/staff of the Public Accounts Committee headed by Mr. Amjad Ali, Additional
Secretary and under the guidance of Mr. Inamullah Khan, Deputy Secretary. I deeply
acknowledge the active collaboration and contribution of the PAC Cell in arranging
frequent meetings, facilitating the PAC and timely compilation of this Report. Their
sincere and devoted endeavors deserve appreciation, acclaim and commendation. I am
confident that this exerse will be a pole star for future inputs of the like nature.
This report of PAC is presented to the Provincial Assembly of Khyber
Pakhtunkhwa under Rule 161 of the Provincial Assembly of Khyber Pakhtunkhwa
Procedure and Conduct of Business Rules, 1988.
(AMANULLAH)
Secretary,
Provincial Assembly of Khyber Pakhtunkhwa
TABLE OF CONTENTS
S.No.
Department
1.
Introduction
Date of meeting
Page No.
1-8
Audit Report
10/07/2012
9-64
3.
Agriculture, Livestock &
Cooperation
Irrigation
11/07/2012
65-87
4.
Local Govt:, Rural Development
12/07/2012
88-110
5.
Information
16/07/2012
111-119
6.
Higher Education, Archives &
Library Department
16/07/2012
24&25/09/2012
120-165
18/09/2012
166-169
18&19/07/2012
05/03/2013
2,3&8/10/2012
170-202
9&10/10/2012
24&26/02/2014
270-310
16,17&22/10/2012
311-363
2.
7.
Finance
8.
Health
9.
Food
10.
Home & Tribal Affairs
11.
Communication & Works
12.
Environment
12&13/11/2012
364-395
13.
Administration
28&29/01/2013
396-434
14.
25/02/2014
435-441
15.
Elementary & Secondary
Education
Energy & Power
-------
442
16.
Inquiry Reports
-------
443-444
17.
Reports of Sub Committees
-------
445-526
18.
Reports of Inter Departmental
Committees (IDCs)
25/02/2014
527-531
25/02/2014
532
19.
Leftover Business Of The Earlier
Sub-Committees
203-269
INTRODUCTION
In pursuance of Article 171 of the Constitution of Islamic Republic of
Pakistan, the annual report of the Auditor General of Pakistan on the Accounts of
Government of Khyber Pakhtunkhwa for the year 2010-11, received in the Assembly
Secretariat on 19-04-2012, was laid before the House on 07-05-2012 under rule 198 of
the Provincial Assembly of Khyber Pakhtunkhwa Procedure and Conduct of Business
Rules, 1988. The House referred it to the Public Accounts Committee (PAC) on the
same day for detailed examination.
2.
The PAC examined the Audit Report for the year 2010-11 being the latest
one pending for examination. It conducted a series of meetings spanning over twenty
five (25) sittings which commenced from 6th to16th of July 2012, at the Khyber
Pakhtunkhwa House, Abbottabad and 18th to 25th of September, 2012, 2nd to 23rd of
October, 2012, 1st to13th of November, 2012, 28th to 29th of January, 2013 and 5th of
March, 2013 in the Conference room of Assembly Secretariat, Peshawar.
AUDIT REPORT
3.
The Committee examined the Audit Report for the year 2010-11 consisting
of two hundred and ninety one (291) Draft Paras. The Audit covered an expenditure of
Rs. 23120.011 million out of total budget of Rs. 249710.723 million, which in terms of
percentage is 18.23 of auditable expenditure. The following irregularities were noticed:1.
Three (03) cases of embezzlement of public money amounting to Rs. 8.137
(M).
2.
Fifteen cases of mis-appropriation of public money amounting to Rs. 287.195
(M)
3.
Forty (40) cases of non-recovery of government dues amounting to Rs.
8942.292 (M).
4.
Fifty two (52) cases of un-authorized expenditure amounting to Rs. 3802.83
(M).
5.
Sixty two (62) cases of loss amounting to Rs. 2643.422 (M).
6.
Eleven (11) cases of doubtful payment amounting to Rs. 173.827 (M).
7.
One (01) case of non-obtaining of security amounting to Rs. 1.8 (M).
8.
Two (02) cases of un-due financial aid amounting to Rs. 3369.494 (M).
9.
Six (06) cases of un-verified expenditure amounting to Rs. 7867.899 (M).
10. Six (06) cases of un-authentic expenditure amounting to Rs. 1547.988 (M).
11. Twenty (20) cases of over-payment amounting to Rs.1341.399 (M).
12. Eleven (11) cases of wasteful expenditure amounting to Rs. 142.217 (M).
13. Five (05) cases of uneconomical expenditure amounting to Rs. 5321.058 (M).
14. One (01) case of un-justified expenditure amounting to Rs. 5.199 (M).
15. Twenty five (25) cases of irregular expenditure amounting to Rs.4570.182 (M).
16. Three (03) cases of non-accountal of store amounting to Rs.2399.016 (M).
17. Seven (07) cases of excess expenditure amounting to Rs.66.61 (M).
18. One (01) case of non-auction of store amounting to Rs 28.128 (M).
19. Six (06) cases of un-necessary obtaining of loan amounting to Rs.6701.59 (M).
20. One (01) case of double drawl amounting to Rs. 0.737 (M).
21. Two (02) cases of sub-standard work/supply amounting to Rs. 150.975 (M).
22. Two (02) cases of non-supply of store amounting to Rs. 280.077 (M).
23. Two (02) cases of blockage of public money amounting to Rs. 31.841 (M).
24. One (01) case of non-conducting of police training amounting to Rs. 54.333
(M).
25. Two (02) cases of non-submission of adjustment account amounting to Rs.
175.848 (M).
26. Three (03) cases of non-deduction of income tax amounting to Rs. 47.581 (M).
27. One (01) case of improper maintenance of record amounting to Rs. 159.594
(M).
28. One (01) case of extra expenditure on rent of building amounting to Rs. 1.078
(M).
4.
The said violations/irregularities indicated that the Principal Accounting
Officers did not have the adequate institutional capacity required to address financial
management and control issues and the Principal Accounting Officers need to take
necessary steps to institute, evaluate and strengthen the management, budgeting and
accounting controls to achieve the following objectives that;

whether the moneys shown as expenditure in the accounts were authorized for
the purpose for which they were spent.

to see that the expenditure incurred was in conformity with the laws, rules and
regulations framed to regulate the procedure for expending public money.

to see that every item of expenditure was done with the approval of the
competent authority in the Government for expending the public money.

to see whether the expenditure was incurred according to wisdom and economy
and to bring to light cases of improper expenditure or waste of public money.

to review, analyze and make recommendations on various policies relating to
different sectors.
5.
In order to overcome the said objectives and for future guidelines, the
following recommendations were made:-
6.

The compliance with directives of Public Accounts Committee by Principal
Accounting Officers was poor and inspite of reminding them time and again, no
improvement was made/shown in this regard. All Principal Accounting Officers
should give special attention to this issue and develop mechanism to monitor
compliance of directives of PAC in their departments.

Departments need to strictly follow the provisions of GFR while handling public
money whether they receive or spend it. They should deposit/retain the public
money received by them in the Provincial Consolidated Fund and Public Account
instead of depositing into unauthorized accounts in commercial banks.

Meetings of Departmental Accounts Committee be held regularly.

Instances of making payments by the department or their autonomous
bodies/authorities to employees in contravention of rules and in disregard of the
employees entitlement need to be checked by effecting recoveries where due
and taking disciplinary action against the official involved in overpayments.

Departments need to comply with the provisions of Public Procurement Rules
2004 for procurement of goods and services.

Departments need to strengthen internal controls to ensure that lapses of the
kind reported in this report are pre-empted and fair value for money is obtained
from public spending

Reconciliation of expenditure needs to be carried out regularly.

Unspent balances need to be deposited into government treasury.

Inquiries need to be held to fix responsibility for losses, fudged payments and
wasteful expenditure.
The Committee examined the Audit Report in its twenty five (25) sittings
and dropped unconditionally seventy five (75) Draft Paras, where the explanation of the
Department was found plausible or relevant record was produced and duly verified by
the Audit, while in thirty two (32) Draft Paras, where the Government funds were
proved to have been mis-appropriated or have been embezzled, it recommended for
affecting recovery after fixing responsibility on the culprits in pursuance of the relevant
laws on the subject. Forty two (42) Draft Paras, where record needed to be verified,
were dropped conditionally subject to verification of record. Fifty seven (57) Draft Paras
were referred for departmental action, fifteen (15) Draft Paras were referred to Inter
Departmental Committees (IDCs) and sixty two (62) Draft Paras pertaining to various
Departments were kept pending.
7.
Sub-Committees were also constituted to probe into the issues mentioned
in eight (08) Draft Paras which needed detailed deliberation.
8.
The following table shows the detail of total draft paras pertaining to all
Administrative Departments and recommendations of PAC thereon:Departmen Total Dropped VOR/Ph.
Recover Depttl:
t
DPs
Verificatio
y
Action
n
Agriculture
33
09
07
03
14
SubIDC Pending
Committe
e
----
Irrigation
14
11
01
--
02
--
--
--
Local Govt:
20
--
04
07
06
--
02
01
Information
04
--
02
--
02
--
--
--
Higher
Education
Finance
Health
Food
Home &
Tribal
Affairs
C&W
29
08
07
03
03
02
--
06
02
19
40
39
02
03
07
11
-04
09
--
-03
06
01
-06
11
01
-02
03
08
-01
02
--
--02
18
38
17
06
02
05
01
--
7
Environmen
t
22
11
--
02
07
--
--
02
Establishment 25
&
Administration
Elementary
04
&
Secondary
07
02
06
--
--
10
--
02
01
01
--
--
--
--
Edu:
Energy &
Power
02
--
--
--
--
--
--
02
Total
291
88
43
34
57
16
15
38
GENERAL OBSERVATIONS
9.
During examination of Audit Report for the year 2010-2011, in addition to
the observations on each para incorporated in this report, the PAC also made the
following General Observations:CLUBBING OF AUDIT PARAS PERTAINING TO DIFFERENT ORGANIZATIONS.
10.
The Committee observed that contrary to its clear cut instructions to avoid
clubbing the Audit Paras pertaining to different organizations into a Draft Para. The
advance paras pertaining to different Institutions were clubbed which created confusion
and wasted the time of the Committee. The Audit should have made separate audit
paras in respect of each transaction to make examination of the accounts simple and to
facilitate the job of the members of the Committee. The Members were feeling great
trouble while examining different audit objection clubbed in one Para. This practice was
strongly objected to by the Members. The Committee showed its displeasure over such
non-responsive attitude of the Audit Department. It therefore, directed the Audit
Department to stop forthwith such practice and to frame Draft Paras involving single
issue pertaining to an organization.
APPRECIATION TO SECRETARY AGRICULTURE.
11.
The Public Accounts Committee (PAC) while examining the Audit Paras
for the year 2010-11 pertaining to Agriculture Department commended the laudable
services of Mr. Muhammad Afsar Khan, Secretary, Agriculture Department, Khyber
Pakhtunkhwa who made bold decisions in the Pre-PAC meeting against those involved
in the mis-management and mis-appropriation. Despite facing hurdles from his
subordinates he managed to decide the issues on merit. During the series of meetings
he did not defended the mis-deeds committed by his subordinates and brought the
factual position before the PAC resultantly the PAC was facilitated in discharge of its
function.
WIDE PUBLICITY WHILE FLOATING NIT.
12.
The PAC noted that most of the Departments while inviting NIT did not
mention the specifications of the items and prepare tender documents in a way to
extend benefit to certain blue eyed people, resultantly the practice of fair competition
was badly suffered. The Committee therefore, directed the Departments to follow the
prevailing Procurement and General Financial Rules in its true spirit while making
procurements.
POOR WORKING PAPER.
13.
The working papers supplied by few Departments were found very poor as
it was not on proper format neither properly binded in a book form nor accompanied by
supporting documents resultantly most of the time of the PAC was wasted to search out
the relevant documents. Most of the documents asked for by the Committee during the
meeting were not found available which created embarrassing situation. The
Department was therefore, directed to avoid such laxity in future while furnishing
working paper to the PAC being the highest forum dealing with the financial oversight of
the Government.
POOR FINANCIAL MANAGEMENT AND INTERNAL CONTROL SYSTEM.
14.
While examining the accounts of Agriculture Department, PAC observed
poor financial management and negligible internal control system in the Agriculture
Research Wing, resultantly number of cases of embezzlement, misappropriation, fraud,
etc; were reported in the Auditor General’s Report, which involved loss of millions of
rupees to public ex-chequer. Main reason for such irregularities was the defective and
non transparent procedure adopted by the Department contrary to the procurement
rules. In most of the cases, the ex-Director General has reportedly shown as the
principal accused, who has already been retired from service.
NO RESEARCH IN ANIMALS BREEDING etc.
15.
The Committee while examining the Audit Report pertaining to Directorate
of Livestock & Dairy Development of Agriculture Department was astonished to know
that no new bread of animals have been introduced by the Directorate since its creation.
Neither the local breads of animals have been improved nor was it properly handled the
imported breads despite utilization of funds in millions being allocated in every year’s
budget. The Committee was of the considered opinion that such laxity of the Directorate
towards its job assignment is not tolerable. The Department was therefore, directed to
focus on its assigned job so that better results and value for public money could be
achieved.
NON-SUBMISSION OF WORKING PAPER IN TIME.
16.
Non submission of working paper by the Higher Education Department to
the Committee in time was noted with grave concern. The Department was directed to
conduct enquiry and initiate action within one month against all those officers who failed
to prepare and submit the working to the PAC in time i.e. 10 days before the meeting as
instructed by the PAC from time to time and asked for by the PAC Cell of the Provincial
Assembly since the Auditor General”s Report is laid before the House.
UN-AUTHENTIC WORKING PAPER
17.
The PAC noted with grave concern that despite clear-cut instructions from
time to time the Health Department failed to submit working paper in time and on proper
format. The working paper was neither signed by the Administrative Secretary nor Chief
Executive concerned. The text of Draft Para exhibited in the working paper was not in
conformity with the Audit Report rather the text of Advance Para instead of Draft Para
was reflected in the working paper. The working paper was therefore, termed as faulty.
The Members strongly objected to such casual attitude of the Department. The
Department was directed to avoid such attitude and to provide working paper on proper
format in time to the Assembly Secretariat in future otherwise strict disciplinary action
will be recommended against the responsible.
RENTING OUT GOVERNMENT ACCOMMODATIONS.
18.
While examining the accounts of Administration Department, the
Committee noted that Government accommodations meant to facilitate the Government
servants in discharge of their duties were allotted to un-authorized persons on market
rates. It therefore, directed the Department to stop forthwith such practice of renting out
the Government accommodation to un-authorized person (s) on market rates as the
Government was not in the business of real estate.
STEREOTYPE COMMENTS OF FINANCE DEPARTMENT
19.
The Committee observed with grave concern that the comments of
Finance Department on the working paper were inadequate and could not facilitate the
job of PAC. Most of the time was wasted to find out the financial issue involved in the
Para. Had the Finance Department gone through all the relevant record and offered
realistic comments on the issue(s) involved in each Para, the job of PAC would have
been facilitated; therefore, the Finance Department was directed to properly go through
all the relevant documents and record realistic comments on the working paper in future
and avoid stereotype remarks.
WEAK INTERNAL CONTROL
20.
Total (38) Draft Paras were framed against the Home & Tribal Affairs
Department out of which 34 Draft Paras were against the Police Department. In all
these Paras, two issues that is construction of buildings and purchase of equipments for
Police were involved and in all cases it was noticed that the Department had not
adopted proper procedure, rules/regulations and failed to fulfill the codal formalities, the
Department was found un-aware of mis-deeds till it was pointed out by the Audit
Department which clearly indicates the non existence Internal Control System/Weak
Financial Management System in the Department.
21.
The Department was, therefore, directed to establish Internal Control
System with in the Department and to abide by the Financial Rules while spending
Government money in future.
POOR WORKING PAPER
22.
The working paper furnished by the Home Department was found
incomplete as no supporting documents were found attached with it nor it could be
produced during the meetings resultantly most of the time of Committee was wasted on
non-issues. The Department should inquire into the matter as to whether it was
intentional or otherwise and to take appropriate action against the concerned. The
Department was further directed to furnish working paper complete in all respect duly
supported by documentary proof in future.