Irregularities detected in Zakat fund distribution

Report blames weak internal controls; says disbursement procedures violated

ISLAMABAD: Huge irregularities worth millions of rupees have been detected in the balance sheet of the Central Zakat Fund, according to an audit report compiled by the Auditor-General of Pakistan for the year 2015-16.

The report has shown that Rs2.112 million was paid as stipend to non-mustahiq (non-deserving) students.

During the scrutiny of the record of the Islamabad-based Model Deeni Madrassah, it was observed that Rs2,112,900 had been claimed out of the Zakat Fund as expenditure for mustahiq (deserving) students whose Istehqaq (entitlement) was not conveyed by the chairmen of Local Zakat Committees (LZCs).

Documents also showed that signatures of the LZC chairmen were missing from entitlement certificates.

According to the report, the expenditure was unjustified and required recovery.

Blaming weak internal controls for the irregularity, the report maintained that it also violated Zakat Disbursement Procedures. The matter was reported to the management on September 13 this year but the Principal Accounting Officer (PAO)/ Department neither submitted any reply nor the Departmental Accounts Committee (DAC) convened a meeting till the finalisation of this report.



The audit report also observed another irregularity in which payment out of Zakat Fund was made to students whose fathers were government servants, resulting in a loss of Rs2.447 million to the government exchequer.

During scrutiny of the accounts of the same Madrassa, it was observed that Rs2,446,800 were paid out of the Zakat Fund to students whose fathers were government servants. Hence, the expenditure was unjustified and required recovery, the audit report recommended.

This matter, the report stated, was also reported to the management on September 13 this year without any concrete result.

The audit report also recommended recovery of the amount in question.

In another development, the audit report detected an irregularity of Rs7.891 million in the purchase of medicines without issuing an open tender. Under PPRA rules, any procurement over Rs100,000 and up to a limit of Rs2 million should at least be advertised on the purchasing authority’s website.

Meanwhile, another audit report observed that two hospitals purchased medicines worth Rs7,890,821 between 2010 and 2015 without issuing open tenders in violation of PPRA rules.

Nuclear Medicine Oncology and Radiotherapy Institute (NORI) Islamabad during the period 2010-14 purchased medicines worth Rs4,000,000 from NOORI Patient Welfare Society (NPWS) while the Society for the Advancement of Community, Health Education and Training (SACHET), Islamabad, purchased medicines worth Rs3,890,821 through quotations. The audit report stated that in the absence of open tender the principal of economy could be compromised.

The management of NORI replied that the hospital management had purchased medicines from NPWS as no other entity could compete with the rates offered by NPWS.

The audit report did not deem the reply tenable.

In the meantime, the management of SACHET replied that it followed a pre-approved Internal Control Manual/ Policy for all procurement and would in future follow PPRA rules.

Published in The Express Tribune, October 16^th, 2016.