Substantial expenditures were made on boarding and lodging of the BoG members, which suggests wastage of resources of the company. PHOTO: FILE
The service was initiated to bring credibility and transparency in various academic and professional assessments but it has apparently failed to bring transparency in its own affairs, says a report.
After finding irregularities in the annual audit of the premier testing organisation, the SECP ordered inspection of all the records, accounts books and papers and found NTS guilty on many charges.
Contrary to its mission statement saying that the body was promoting standards in educational and professional assessment, the SECP concluded that the body was accused of “capitalising its funds rather than using it for its objects, for which it has been established.”
Audit report
According to the SECP audit report for 2014-15, direct expenses of the organisation have increased by 91.30 percent which is inconsistent with the total revenue (47.75 percent) during the same period.
The report says that the income from the test fee is increasing which indicates that “the association is charging the fee on the higher side.”
It adds that significant increase, 190 percent, has been observed in the advances and receivables from Rs154 million in 2014 to Rs447 million in 2015.
The report says that huge reserves are being created from the funds of the organisation, which, prima facie, indicates that it is capitalising its funds rather than using it for the activities that can lead to the development of necessary entrepreneurial skills, acquiring suitable jobs and promotion of employment opportunities.
An additional membership subscription fee of Rs598 million is appearing in the funds which need to be probed, the report says, adding that the audited accounts for the year till June 30, 2015, has revealed prior year adjustment of Rs46 million, which needs to be probed.
Inspection team report
An inspection team of the SECP found that Rs78 million had been paid to various firms in the name of consultancy charges. “The actual purpose of which appears to be otherwise and requires deeper probe through investigation,” the team says in its findings.
“No costing mechanism has been employed by the company to determine the estimated cost attributed to each testing project,” the inspection report reveals.
A huge amount of interest-free loan has been extended to the Comsats Institute of Information Technology (CIIT) — the bigger stakeholder in NTS — out of its reserves.
The net assets of the NTS in 2013 included a plot measuring 4,259 square yards in Sector H-8/1 which was allotted by Capital Development Authority to the CIIT.
The testing system, however, has not produced any evidence of ownership of the plot as claimed by it, indicating that it is still CIIT’s property.
The team noted that the assertion of NTS that it is a separate and distinct entity from the CIIT is not tenable in view of various underlying facts which suggest that both the entities are under common management and therefore are an associated undertaking of each other.
Since the board of directors doesn’t have the appropriate mix of the people from diverse segments of the society, the report reads, the company lacks transparency in the management of its affairs.
Substantial expenditures were made on boarding and lodging of the BoG members, which suggests wastage of resources of the company.
“The findings are baseless. Members of the BoDs cannot withdraw a single penny from NTS’ accounts because of the strong system checks,” NTS acting CEO Air Commodore (retd) Dr Sherzada Khan said.
“I can’t take responsibility of an individual but NTS is clear at its end.”
Commenting on the issue of consultancy charges, Khan said that no one was handed over cash and all the payments were paid through cheques. He said that NTS keeps only 20 to 25 percent of the total money, its external yearly audits are clear and “not a single penny has been misappropriated.”
Published in The Express Tribune, August 15th, 2016.
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