Audit finds Rs55m irregularities

OGRA denies auditors’ findings, cites 2022 Ordinance

ISLAMABAD:

The Auditor General of Pakistan (AGP) has unearthed irregularities of around Rs55 million in the Oil and Gas Regulatory Authority (Ogra) over unauthorised purchase and use of vehicles, and an exemption from making interest payments on car-loans given to employees.

The AGP highlighted the irregularities in its audit report for the financial year 2021-22.

Auditors noted that the members and executives of Ogra were not only receiving a monetisation allowance but they were also using official vehicles, to which they were not entitled.

Irregularities of Rs38.4 million, due to the unauthorised exemption from interest payments on car-loans provided to the employees, were also pointed out.

The audit also found irregularities of Rs16.4 million in the use of official vehicles and of over Rs1 million in the purchase of a vehicle while a ban was in place.

According to Rule 9 of the Ogra Financial Regulations 2005, the auditors pointed out, every officer of the authority, authorised to incur expenditure from the Ogra fund, will ensure that the authority’s money is not expended for the benefit of a particular employee or class of employees.

As per the Finance Division (Regulation Wing-II), a letter dated June 29, 1999, the revision of salaries, allowances and perquisites of the supervisory and executive staff of public sector corporations, autonomous/ semi-autonomous bodies may be carried out by the respective board of directors besides clearance from the Finance Division.

During the audit for financial year 2020-21, the auditors observed that the Ogra management allowed interest-free car loans of Rs139.77 million to executive cadre employees without getting prior clearance from the Finance Division as it had a direct bearing on the federal consolidated fund.

Furthermore, these employees got interest on their contributory provident fund balances.

The auditors were of the view that poor management practices resulted in exemption from payment of interest of Rs38.43 million on car-loans taken by the employees.

The matter was reported to the regulatory authority in January 2022. Responding to that, Ogra emphasised that it was exclusively empowered to determine matters in its jurisdiction.

The Departmental Accounts Committee (DAC), in its meeting held on February 4, 2022, referred the case to the Finance Division for vetting.

No further progress was reported till the filing of this report. The auditors have recommended the recovery of interest cost from the employees.

The auditors also observed that the members and executives of Ogra were drawing monetisation allowances in lieu of the official vehicle facility.

In log books, however, they found that the vehicles were being used for personal use by the members and executives. This resulted in an unjustified expenditure of Rs16.42 million.

The auditors blamed poor management practices for the use of official vehicles despite the receipt of monetisation allowances.

The matter was reported to Ogra in January 2022, which argued that neither any member of the authority (including the chairman) nor any executive was entitled to use a dedicated vehicle.

The auditors did not accept the departmental stance, saying that it was evident from the log books that the vehicles were allocated to the members and executives. They sought reasons for the misuse of official vehicles and the recovery of expenses from the said officers.

In another finding, the auditors noted the purchase of a vehicle despite a ban, which led to the unauthorised expense of Rs1.04 million.

According to Para (1) of the Austerity Measures for Financial Year 2021-22, there was a ban on the purchase of all types of vehicles, both for current as well as development expenditure, except for the operational vehicles used by law enforcing agencies, for which an NOC from the Finance Division was required.

During the audit, it was observed that Ogra purchased a vehicle without obtaining an NOC from the Finance Division. The audit pointed to weak internal control resulting in the purchase of the vehicle costing Rs1.04 million.

The matter was reported to Ogra in November 2021, which stated that in light of the provisions of Section 3(2), 4(1), 17 and 18 of the Ogra Ordinance 2002, the authority “is competent and fully authorised to incur expenditure in accordance with the budget approved by its budget committee”.

The auditors, however, argued that the reply was not tenable as Ogra had already been directed by the Public Accounts Committee (PAC), in its meeting held on September 23, 2019, to get expenditures regularised from the Finance Division.

When pressed for a comment, Ogra stressed that “these all are already settled matters. Ogra is working according to the ordinance of 2002 and the rules and regulations made thereunder. All the matters are within the powers of the authority and there is no irregularity”.

Published in The Express Tribune, November 4^th, 2022.

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