ISLAMABAD:
An internal review and audit report about the affairs of Indus Heritage Trust (IHT) revealed several legal and financial flaws. The trust is currently running the Art and Craft Village project of the Capital Development Authority (CDA) and concerns have surfaced after the deed between the two entities for the village, which spreads over 21 acres of land, was reviewed.
The audit was conducted by Anjum Asim Shahid Rahman, a trustee of IHT Board and a member of Grant Thornton International Limited, in September 2010 but the findings of the report were not shared with the civic agency to avoid “unfavourable consequences”. The CDA officials had recently termed the project as a successful example of public-private partnership.
“Indus Heritage Trust failed to fulfil the legal and regulatory compliances since its formation and thereon. No attention has been given towards other requirements and proper financial records have also not been maintained,” the Grant Thornton report says.
The agreement of the trust with CDA on January 1, 2005 specified establishment of the village at a place between Khayaban-e-Iqbal in F-6/2 and Saidpur Village. Its location was subsequently changed from Saidpur to Shakarparian but the agreement was not updated accordingly, the report stated.
Internal review report also conceded shortcomings in the trust deed. For instance, it did not specify the limit for minimum and maximum number of trustees. Provisions regarding accounts and audit were also not covered by the trust deed. Moreover, IHT did not establish its own office and no rules and regulations were formulated for running of its operations.
Financial statements of the IHT and the village were not prepared and no proper financial system was in place. Members joined and left without following the legal requirements. Even timely elections were not held for appointment of trustees. Co-opted trustees were serving even after completion of their tenure of one year, after which they are required to be reappointed, the report says.
The report added that financial transactions of Art and Craft Village were not recorded on a double entry system. Vouchers were prepared since December 2008 and the later transactions were not recorded on vouchers but instead were recorded on monthly sheets.
Moreover, bank reconciliations were also not prepared nor has depreciation been charged on any asset related to the project.
The report also criticised the management committee over running of the project. The committee comprises CDA chairperson and member planning of CDA. The report raised objections that the project is managed by management committee but there are no rules and regulations regarding their tenure, appointment and reappointment.
Official sources told The Express Tribune that the management committee of the project has been changed six times in the last three years. The CDA chairperson recently removed Mian Wahid, Member Environment, from the management committee for not cooperating with the IHT.
A top CDA official told The Express Tribune that IHT conducted a third party audit from its favoured organisation that was also in violation of the rules. Through this practice IHT allowed a private party to assess the government files which is a criminal offence, he said. “The secrets of the state cannot be revealed before a third party,” he added.
Siddiqa Malik, Chairperson of the trust, when contacted, said that the basic purpose of the report was internal assessment of the trust. Responding to the legal and financial flaws, Malik said, “These are legal issues and are not understandable for everyone, but the agreement of the deed was prepared by the legal department of the CDA.”
Published in The Express Tribune, June 9th, 2011.
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