Government auditors have recommended recovery of Rs481.9 million from the officials responsible for irregular payments made on purchases and other purposes between 2009 and 2011 for the Punjab Forensic Science Agency (PFSA) project, The Express Tribune has learnt.
The Audit and Inspection Report (AIR), conducted by a team from the office of the Director General of Audit, Punjab – a federal office – and led by Deputy Director Muhammad Younas, also recommended disciplinary action against the officials. A copy of their 250-page report is available with The Express Tribune.
The auditors found that several payments made to contractors and suppliers were irregular, for various reasons. Many were not sanctioned by the competent authority. Some of the new equipment had not even been installed after most of their warranty period had expired. Officials failed to recover liquidated damages from suppliers who failed to meet agreements. Most of the irregularities were blamed on the PFSA project director, an office held by Nayyar Mahmood from 2009 to 2011
The auditors branded several purchases by the PFSA as irregular. The agency bought vans for Rs2.5 million without inviting bids in an open tender. It purchased three Toyota Hiace vans in 2010 for Rs8.94 million without floating a tender, and made the entire payment in advance without deducting 20 per cent in general sales tax. Another six cars – four Suzuki Swifts, a Toyota Corolla GLI and a Toyota Corolla XLI – were bought for Rs3.22 million without the approval of the competent authority and again without deducting general sales tax.
The project director purchased 28 kanals and 16 marlas for Rs72.86 million without the approval of the competent authority.
The auditors said that a lot of the lab equipment that had been purchased by the agency had almost gone past its warranty period and had yet to be installed. For example, the agency bought chromatography equipment from HA Shah & Sons, Islamabad, for $812,500 (Rs76.375 million) without carrying out a prequalification of the firms in violation of Punjab Procurement Rules (PPR) 2009.
The office neither installed the equipment nor commissioned it to check it.
The agency bought an autoclave for Rs378,450 in July 2010 but it had not even been installed nor staff trained to use it. Almost two years later, the 27-month warranty period for the equipment has almost expired. A UPS purchased in June 2010 for Rs1,306,013 had yet to be installed.
Other laboratory equipment including ovens, refrigerators, baths and stirrers purchased irregularly for Rs6.48 million had yet to be installed though most of its warranty period had passed.
The auditors said several items had been purchased at high rates. For example, they said, the agency had overpaid to the tune of $449,000 (Rs42.25 million) in purchasing a forensic laboratory information management system for $1.1 million (Rs103.51 million).
Easy on contractors
The PFSA project director was accused of giving undue benefit to Al-Imam Enterprises, the contractor who built the agency’s headquarters near Thokar Niaz Beg. For example, the auditors said, the original contract of Rs887.548 million was revised to Rs957.548 million. The agency did not deduct income tax of Rs5.3 million from payments made to Al-Imam Enterprises and HA Construction for the supply of various items.
The agency failed to recover Rs88.75 million Al-Imam should have paid for delays in the completion of its work. The audit report stated that Al-Imam was paid Rs107 per kg for providing, and placing steel reinforcing bars when it should have been paid Rs85 per kg, resulting in overpayment of Rs20.46 million.
The agency also failed to recover damages, known as liquidated damages, from suppliers who failed to provide equipment on time as stipulated in the purchase agreement. For example, 18 microscopes were purchased for $395,227 (Rs37.2 million) but these were not supplied on time.
The agency did not recover liquidated damages of $11,730 (Rs1.1 million). Liquidated damages of $10,352 (Rs974,123) had not been recovered from the supplier of histology equipment, and of $17,925 (Rs1.69 million) from the supplier of radiology equipment.
The audit report said that networking and IT equipment had been bought irregularly for $1.69 million (Rs159.03 million). It said that a loss of $215,050 (Rs20.24 million) had been caused due to the expiry of the maintenance support period for the equipment, while liquidated damages of $29,285 (Rs2.76 million) had not been recovered.
The auditors noted that the project director had spent Rs1 million on the purchase of stationery, shields, bags and handmade carpets and printed brochures and banners for seminars and workshops, when he was authorised only to sanction spending of up to Rs100,000 in this regard. The AIR also noted an irregular purchase of library books for Rs1,866,199, which the agency’s management had admitted was a mistake. The agency recorded expenditure of Rs431,755 on vehicle repairs when there was no proof that any vehicle had been sent to the workshop.
Published in The Express Tribune, July 11th, 2012.