Post Office audit points to Rs12.3b flaws

AGP recommends strengthening of internal controls to prevent fraud and embezzlement

ISLAMABAD:

The top auditor of the country has detected irregularities and cases of serious fraud worth Rs12.3 billion in the Pakistan Post Office Department (PPOD) in its first year under the Pakistan Tehreek-e-Insaf (PTI) government.

The Post Office is under the administrative control of the communications ministry, currently headed by Murad Saeed as Minister for Communications and Postal Services. The firebrand minister is famous for lashing out at the opposition in and outside parliament.

In its audit report for 2019-20 – submitted to the president under Article 171 of the Constitution for presenting it before parliament – the auditor general of Pakistan (AGP) has given observations about Rs12,331.127 million, which also includes recoveries of Rs681.6 million.

The classified summary of the audit observations has revealed that the reported cases of fraud, embezzlement and misappropriation amounted to Rs256.2 million, irregularities to roughly Rs392 million, value for money and service delivery issues to 14.7 million and the issue-based audit on special saving schemes to Rs1,904.9 million. In addition, the AGP report stated that flaws amounting to Rs394.6 million were pertaining to non-production of the record.

The AGP stated that a total of 64 cases of fraud, misappropriation, embezzlement, theft and dacoity of public were pointed out, six cases of employees-related irregularities were found and five cases of procurement-related irregularities in violation of PPRA were observed.

In addition, the AGP stated, 13 cases of overpayments and irregularities – valuing at Rs1,904.9 million – were pointed out, 10 cases of internal control weaknesses, nine cases of non-recovery and three cases of value for money and service delivery were detected.

The auditor has found that the value of physical assets of Rs183.2 million for the financial year 2018-19 were not capitalised in the balance sheet, which is tantamount to understating the fixed assets.

In addition, the auditor said that the forms, methods and principles of accounting and accounts maintenance for 46 agency functions did not have the approval of the AGP and it is a violation of the Article 170 of the Constitution and directives of the Public Accounts Committee.

Therefore, the report read, audit could not determine the authenticity and reliability of accounting or receipts and collection of Rs923 billion and payments of Rs881 billion.

The report has revealed that the remittances of Rs1,439.8 million were not acknowledged by the corresponding general post offices; resultantly remittance advices showed a negative balance in the financial statement. It added that Rs7,629.8 million was lying unadjusted due to difference of money orders and postal drafts in the balance sheet.

Also, it continued, negative balance to the tune of Rs146 million was appearing in Mahana Amdani Accounts, foreign remittances, incentive on the BISP money orders etc, while Rs15.4 million was paid on account of payment of incentives to staff.

The report stated that the DG Audit Postal & Telecommunication Services also conducted audit of non-budgeted payments amounting to Rs498.53 billion on account of agency functions performed by the PPOD on behalf of various government department. As a result of it, it added, a recovery of Rs1.46 billion was pointed out in the report.

The AGP has recommended that the PPOD should update and strengthen the internal controls to prevent fraud and embezzlement, while disciplinary cases regarding frauds and misappropriation needed to be finalised expeditiously to prevent recurrence.

Among other recommendations, the AGP said that the revenue recovery mechanism needed to be made effective and postal dues be recovered timely from various government departments.