Taxpayer’s money: Govt watchdog finally gets a look at Karachi’s books

For 10 years nazims refused to allow audits of their local governments.

KARACHI:

For the first time in over a decade, the auditor general in Pakistan has been allowed access to the financial records of local governments in Sindh.

The highlight of the Karachi report is that it detected 56 cases of financial mismanagement that totalled Rs1.4 billion out of a total city budget of Rs28.6 billion for 2010-11.

This money was supposed to go to water and sanitation schemes, pedestrian bridges, roads, medicine and equipment for district government hospitals and dispensaries.

The auditor general presented the audit to the Sindh Assembly so that it can be taken apart by the financial watchdog, the Public Accounts Committee. “Billion of rupees have been mismanaged during the nazim system that started from 2001,” said MPA Ghulam Mujadid Isran, who is also a member of the financial watchdog. No audits were held even though it was legally required every year.

The watchdog went after the district governments as soon as they were formed but was completely stonewalled. Nazims refused to allow their accounts to be examined. It is thus being considered a breakthrough that an audit of 2010-11 was carried out. “For the first time the audit team has ... recovered around Rs280 million, which I think is good achievement,” said Isran.

For the chairman of the public accounts committee, Jam Tamachi Unar, the reason nazims did not allow their accounts to be examined for ten years is simple: corruption.

Examples

The audit has uncovered instances when local government officials violated the rules, committed fraud, embezzled public funds, misused public resources and made overpayments.

In just one example, an additional district officer for works and services posted at Surjani Town spent Rs19 million on sanitation work in 2010-11, even though it was not his responsibility but that of the Town Municipal Authority of the area. “The allocated amount for sanitation was [used] by [an] irrelevant person and development work could not start in the area,” the report said.

It is suspected that Rs367 million was embezzled from the accounts of the City District Government, Karachi. The money was withdrawn on the pretext of dealing with a natural calamity but there are no records on how the money was spent and there is no evidence of a disaster or calamity in Karachi.

In another example, the audit team found that officials of the Karachi district government used to incur expenses for the city information centre at Jinnah International Airport, which was closed in 2010.  Besides this, millions of rupees were paid in excessive amounts to contractors in violation of the rules.

There was no justification as to why Rs71 million was spent on petrol by officials of the Karachi Water and Sewerage Board and city district government. “Despite repeated efforts, the management of the water board and district government have failed to provide a departmental point of view on it,” the report said.

Why the delay

From 2001 to 2010, local governments were controlled by the federal government and not the Sindh government. This is why the Sindh government was unable to get them to cooperate on the audits. But now, Sindh Audit DG Nazir Ahmed Seehar said that they have completed the audits of the district governments for these ten years. The reports have been submitted to the governor. They have not yet been sent to the Sindh Assembly and the public accounts committee. “It will create a mess in government institutions, if the due process of an audit is not initiated,” he said.

Published in The Express Tribune, August 11^th, 2012.