Islamabad Club being run as a money-making machine, finds audit report

Club violating rules and lacks transparent criteria for membership; its lease agreement not renewed for 35 years

Arsalan Altaf September 17, 2017
Islamabad Club. PHOTO: File

ISLAMABAD: The Islamabad Club, which was established as a social club for federal government officers and diplomats in the late 60s, has been turned into a commercial entity, making money and lacking transparent criteria for membership.

A recent audit of the club by the auditor general of Pakistan (AGP) found that it was violating several rules.

In 1970, over 244 acres of land was leased out to the club by the Capital Development Authority (CDA) at a concessional rate of Re1 per acre for the first 10 years only. The rent was to be revised a decade after the agreement but it was not, the audit revealed.

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The AGP has maintained that as the club was undertaking commercial activities, the land for commercial use can only be leased through an open auction and charged accordingly, which was not the case for the Islamabad Club.

The club has also reportedly blocked efforts by the audit team to evaluate the criteria for granting membership.

“Despite repeated verbal and written requests, the management of Islamabad Club did not provide the requisite record … Due to non provision of required documents, an independent evaluation of the criteria for granting membership cannot be made by audit,” the audit report read.

As per the Islamabad Club Ordinance, it was meant for use by federal government officers and diplomats stationed in Islamabad. However, the club management later divided the criteria for granting membership in seven categories. It granted membership to private individuals as well as companies. The audit declared this practice unauthorised.

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Other matters for which the auditors wanted documents, but were not provided with, included the appointment and employment of the club’s administrator, managing committee and executive officers; the policy and procedure for provision of subsidised food and beverages to members; and the policy regarding the sale of birds and eggs by the Islamabad Golf Club, which is part of the Islamabad Club.

The audit also found that the Rising Club House Building was constructed at a cost of Rs53.3 million without the approval of the CDA as required under the lease agreement.

Lack of accountability and oversight

The club was incorporated as a limited company in 1968 but due to persistent losses the company was dissolved and its ownership taken over by the government through a presidential order in 1978. Though it is placed under the Capital Administration and Development Division (CADD), the latter’s role is limited to correspondence and coordination between the club and the government. All of the club’s administrative and financial powers vest in the club’s administrator, which per rules is the Cabinet Division secretary.

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As a result, the audit found, the club is neither an incorporated body nor a government department and hence is not subject to various oversight and accountability mechanisms.

“The Islamabad Club is not subject to either SECP rules, regulations or public disclosure requirements, nor it is accountable to members of the Club. Accountability and oversight mechanisms that apply to regular government departments, such as oversight by the Public Accounts Committee and Principal Accounting Officer, are non-existent and have not been implemented,” the report read and recommended that a proper oversight mechanism be devised for the club.



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