Forensic audit: CDA to re-investigate housing society’s compensation claims
A commission had recommended the amount in light of an audit report.
When asked why CDA had not conducted a forensic audit earlier, Kazmi said it was the former CDA board’s decision to hire a local firm for the audit. PHOTO: FILE.
ISLAMABAD:
City managers have decided to opt for a forensic audit to determine the veracity of a cooperative housing society’s claim for a refund for developing 54 acres in the northern strip of Sector E-11.
The Supreme Court in April 2011 had directed the administration of the Multi-Professional Cooperative Housing Society (MPCHS) to ask for a refund of the amount spent on development in Sector E-11, after anulling a joint venture between the Capital Development Authority (CDA) and MPCHS.
MPCHS submitted a claim of Rs2.036 billion with the CDA in May 2011, following which the CDA board constituted an eight-member commission headed by former president of Islamabad Bar Association Haroonur Rasheed to ensure transparency in adjudication of MPCHS’s claim in light of the apex court’s judgment. The commission recommended Rs1.3 billion as compensation which the CDA board approved last February, subject to availability of funds.
“At that time, the claim for Rs2.036 billion was audited by a local firm and the commission was informed that the actual amount spent on the project by MPCHS was Rs1.3 billion,” said a senior CDA official. Last year, the CDA board headed by former chairman Farkhand Iqbal decided to compensate the cooperative housing society by giving them a commercial plot equivalent in value to their claim.
When CDA held an auction of commercial plots in May 2012, MPCHS submitted the highest bid amounting to Rs1.335 billion for plot No. 56-D, Blue Area which was accepted. MPCHS approached CDA to adjust the payment for the plot against their pending claim and asked for an allotment letter. The CDA board in August 2012 decided to seek its legal adviser’s opinion who was of the view that “Since CDA accepts its liability there appears to be no issue in settling MPCHS’s claim against the plot.”
In the latest development, a board member objected to the move and asked for a forensic audit of the claim. CDA Member Planning and Design Mustafain Kazmi said forensic audit involves the use of science or technology in the investigation of claims and consequent establishment of facts. “Forensic audit is conducted for investigating dubious economic transactions.”
When asked why CDA had not conducted a forensic audit earlier, Kazmi said it was the former CDA board’s decision to hire a local firm for the audit. “As MPCHS’s claim runs into billions, a forensic audit is needed to ascertain the actual expenditure,” Kazmi said. When asked about the timeframe for this exercise, he added that the idea of a forensic audit had just been floated to the CDA board and it was now up to them.
Published in The Express Tribune, May 3rd, 2013.
City managers have decided to opt for a forensic audit to determine the veracity of a cooperative housing society’s claim for a refund for developing 54 acres in the northern strip of Sector E-11.
The Supreme Court in April 2011 had directed the administration of the Multi-Professional Cooperative Housing Society (MPCHS) to ask for a refund of the amount spent on development in Sector E-11, after anulling a joint venture between the Capital Development Authority (CDA) and MPCHS.
MPCHS submitted a claim of Rs2.036 billion with the CDA in May 2011, following which the CDA board constituted an eight-member commission headed by former president of Islamabad Bar Association Haroonur Rasheed to ensure transparency in adjudication of MPCHS’s claim in light of the apex court’s judgment. The commission recommended Rs1.3 billion as compensation which the CDA board approved last February, subject to availability of funds.
“At that time, the claim for Rs2.036 billion was audited by a local firm and the commission was informed that the actual amount spent on the project by MPCHS was Rs1.3 billion,” said a senior CDA official. Last year, the CDA board headed by former chairman Farkhand Iqbal decided to compensate the cooperative housing society by giving them a commercial plot equivalent in value to their claim.
When CDA held an auction of commercial plots in May 2012, MPCHS submitted the highest bid amounting to Rs1.335 billion for plot No. 56-D, Blue Area which was accepted. MPCHS approached CDA to adjust the payment for the plot against their pending claim and asked for an allotment letter. The CDA board in August 2012 decided to seek its legal adviser’s opinion who was of the view that “Since CDA accepts its liability there appears to be no issue in settling MPCHS’s claim against the plot.”
In the latest development, a board member objected to the move and asked for a forensic audit of the claim. CDA Member Planning and Design Mustafain Kazmi said forensic audit involves the use of science or technology in the investigation of claims and consequent establishment of facts. “Forensic audit is conducted for investigating dubious economic transactions.”
When asked why CDA had not conducted a forensic audit earlier, Kazmi said it was the former CDA board’s decision to hire a local firm for the audit. “As MPCHS’s claim runs into billions, a forensic audit is needed to ascertain the actual expenditure,” Kazmi said. When asked about the timeframe for this exercise, he added that the idea of a forensic audit had just been floated to the CDA board and it was now up to them.
Published in The Express Tribune, May 3rd, 2013.