AGP points to Rs12b embezzlement by CDA


May 17, 2010

ISLAMABAD: The Auditor General of Pakistan (AGP) identified embezzlement amounting to Rs12 billion by CDA on Monday.

The audit report on the financial records of Capital Development Authoriy for year 2008-09, made 14 observations in five categories, including mismanagement in different projects worth Rs7.7 billion, loss to authority worth Rs3.1 billion, irregularities in contract management worth Rs643 million, non recovery of Rs281 million and overpayment due to officials' negligence amounting to Rs 206 million.

However, when contacted, spokesman of CDA Ramzan Chaudhry rejected the audit report and said that unless established by a Public Accounts Committee (PAC), he could not term it as embezzlement under specific rules and regulations.

The total budget of CDA for the fiscal year 2008-09 was Rs25.89 billion and the AGP exposed massive irregularities and mismanagement in the above stated amount.

The report identifies the mismanagement of Rs 7,769 million in CDA accounts due to the defective approval of building plan for Grand Hayyat, a five star hotel, without getting No Objection Certificate(NoC) from Civil Aviation Authority, unauthorized extension of commercial area, on cancellation and possession of Agro farms due to non-devolvement and non-confirming use.

The report observed that CDA suffered a loss of Rs 3.149 billion, due to acquisition of land at higher rate and due to negligence on the part of CDA officials.

The report identifies the embezzlements in contract management amounting to Rs 643 million, including award of work without competition, without approval of PC -1 and without open tendering to their selected parties.

According to the report, CDA faced overpayments due to wrong calculation of escalation, irregular measurement of select material in rock cut and non-utilization of available material.

The audit also observed that the authority also violated its own rules of penalty recovery in cases of illegal constructions and encroachments. The AGP office made repeated attempts to hold a Departmental Accounts Committee meeting for settling the observations, but the CDA did not bother.

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