President orders action against education ministry

Rs13.707m fund given 30 years ago for production of cheap textbooks remained unutilised until today, says statement

ISLAMABAD:

President Dr Arif Alvi held the Ministry of Education responsible for criminal waste, inefficiency and irresponsibility for the non-utilisation of Germany’s donation of Rs13.707 million since 1993-94.

He said that the donation which was given 30 years ago for the purchase of paper to enable the printing of cheap textbooks remained unutilised until today, while the government is asking for grants and loans internationally to meet its immediate needs.

The president directed the hitherto defunct Ministry of Education and now the Ministry of Federal Education and Professional Training to conduct an inquiry, hold specific people responsible, and take action against them according to law.

He cautioned the Ministry of Education not to shift the burden of such inquiries on the retired people and directed it to submit the compliance report to the FTO within 45 days.
President Alvi observed this in his decision announced today on the appeal preferred by the Central

Directorate of National Saving (CDNS) against the decision of the Federal Tax Ombudsman.

He highlighted that the said fund remained in the non-profit bearing account for 6 years, and nobody cared about it. Had it been an officer’s personal money, he would have not allowed even one day to lapse and would have deposited it in a profit scheme, he added.

He pointed out that the loss incurred due to keeping the money idle accumulated to Rs17,490,730 which even exceeded the principle sum of Rs13.707 million.

Moreover, even this loss could have been greater had it not been pointed out by the audit.
The president said that the forgotten money was deposited in Special Savings Certificate from 23-07-1999 to 23-07-2014. During this time the government policy for SSC was for automatic roll over every three years that did not require investors’ prompting. He further observed that after 23-03-2014 when the automatic rollover of investment stopped, there was not a single individual in the Ministry of

Education who cared about this money and the ministry let the entire amount remain idle without earning any profit.
He termed the act of the Ministry of Education for non-utilisation of principle amount and profit thereof which had increased to Rs54,265,500 as shameful as the money that was supposed to be used for the purchase of papers to make cheaper school textbooks was parked in an investment scheme without any utilisation it was intended to.

Later when in 2020, the government ordered that all funds of ministries lying in different banks be deposited in the national treasury, the audit revealed this gross negligence of keeping the German grant in the non-profit account.

However, when the ministry withdrew the money in response to audit objection, the matter of deduction of Zakat and withholding tax came to the surface.

President Alvi concluded while deploring and condemning the ministry of education on mainly two accounts. One that the said ministry did not bother, did not care, and totally forgot about a foreign grant given for paper for cheaper textbooks 30 years ago and secondly, due to this criminal negligence, the people of Pakistan were deprived of Rs36,357,051 as profit that could have been earned if the money was properly invested.

He observed that the Ministry of Education also failed to obtain the Income Tax and Zakat deduction exemption certificates to claim exemption from deduction of withholding tax and Zakat which as per policy in vogue was admissible to the ministry.

As a result, the CDNS deducted both withholding tax and Zakat on account of the non-furnishing of the exemption certificate which again reflects poorly on the Ministry of Education’s ability to handle government investment prudently and efficiently.

The president exonerated the CDNS on account of acting in good faith and on deduction of both withholding tax and Zakat due to want of exemption certificates.

The president directed the Ministry of Federal Education and Professional Training to approach the FBR and Zakat Department for getting exemption certificates with retrospective effect and also directed the FBR and Zakat Department to consider issuance of Exemption Certificates on a “One Time Basis” in accordance with the Rules and Regulations.