Huge irregularities spotted in federal spending

Discrepancies noted in FC and Balochistan Constabulary.

ISLAMABAD: An audit of federal ministries and divisions for 2009-10 has uncovered financial irregularities and instances of misuse of public money worth millions of rupees.

The auditor general's report on federal government (civil) accounts for 2009-2010 cites major financial discrepancies in purchases made (or not made) by the Frontier Corps and Balochistan Constabulary, release of subsidies to oil companies by the petroleum ministry, and in use of expensive bullet-proof cars imported by the Prime Minister's Secretariat.

According to the report, the Frontier Corps in Khyber Pakhtunkhwa withdrew Rs13,766,935 for the purchase of arms and ammunition in June 2008, but no purchase was made and the money was kept in a private bank account. In January 2010, the Departmental Accounts Committee ordered an inquiry and that the money be deposited in the government treasury. However, no progress had been made on these matters by the time the audit report was finalised on February 25 last year.

Auditors found a deduction of Rs59.28 million from the monthly salaries of FC soldiers under the Scout Savings Scheme, Medical Deductions and Half Mounting Deductions, in 2006-07 without authorisation from the government. The money was kept in an unknown account.
Another Rs53.942 million was deducted in a similar manner in 2008-09. The record of the deposit and disbursement was not shown to the auditors.

“The [FC] management stated that the Public Accounts Committee examined the issue on June 15, 2009, and the chairman supported the deduction. However, the audit did not find any documentary evidence to that effect .
Oil subsidies The auditor general uncovered irregularities in the payment of subsidies to oil and marketing companies. Some Rs29.798 million was released to several companies including Pakistan State Oil in 2008-09 on a provisional basis.

The audit report held that provisional payments without periodic reconciliations resulted in accumulation of government liabilities or overpayment against such liabilities. Officials said the payments were made on the recommendation of the Ministry of Petroleum and Natural Resources and a chartered accountancy firm was auditing these claims for the period May 1, 2004, to October 15, 2008. It said that the matter would be sorted out once the audit report was made public.

The Departmental Accounts Committee ordered adjustment of the provisional payments immediately, but this had not been done by February 25, 2010.
Cars for officials The government banned the purchase of “physical assets“ during financial 2008-09, but the deputy commissioner of Islamabad purchased two vehicles from the Directorate General of Intelligence and Investigation for Rs500,000.
The management told auditors that it would get the “irregular and unauthorised“ expenditure condoned by the Finance Division, but this had not been done by February 25, 2010.

The auditor report found that six of 33 bullet-proof vehicles imported by the Prime Minister's Secretariat had been in the use of non-government functionaries for more than two years. The report said that there were no rules to govern the use of such expensive cars, hence “the allotment and use of those vehicles was open to misuse“.

The audit report observed that the Prime Minister's Secretariat (Internal) had ordered Secretariat officials to return the cars to the Cabinet Division in May 2008, but this had not been done.

Published in The Express Tribune, March 22^nd, 2011.