NHA has over Rs31b in financial irregularities: Audit report
Unjust contracting, theft and non-deduction of income tax cited as some of several managerial blunders.
Heavy machinery busy in construction work on the highway. PHOTO: PPI/FILE
ISLAMABAD:
An audit of last year’s accounts for the National Highway Authority (NHA) has exposed a huge case of mismanagement and embezzlement, with financial irregularities and losses of up to Rs31.43 billion.
The audit authorities have raised a total of 61 audit objections on the NHA's accounts, 22 of which are concerned with irregularities and non-compliance alone, 37 relate to the internal control weaknesses with two paragraphs highlighting the non-receipt of deposits by the provincial governments and irregularities inside the organization itself.
The audit report categorized losses in several categories.
These included:
• Irregular awarding of contracts, costing up to Rs11.22 billion.
• Overpayments worth over Rs3.21 billion.
• Losses to the authority worth Rs3.16 billion.
• Unjustified payments to contractors valued at Rs22.4 billion.
• Mismanagement in different works costing Rs8.50 billion.
• Amount of Rs2.68 billion which was non-recoverable.
The Auditor General of Pakistan (AGP) report indicated that:
• Road contracts worth Rs11.2 billion had been awarded to 'blue-eyed contractors' without the adoption of proper tendering procedures and contrary to the rules of NHA.
• The negligence of NHA officials also resulted in an overpayment of Rs3.2 billion. The loss owed itself to higher rates, non-deduction of income tax and price escalation of materials.
• A loss of Rs.3.2 billion was to be attributed to to amicable settlements, the non-collection of revenue, theft of vehicles and the awarding of work without due consideration of risk and cost.
• NHA officials could not recover an amount of Rs2.7 billion. The amount includes payment for the repair of flood damages; rent of NHA land used by contractor; mobilization advance and interest from contractors; cost of maintenance works due to non-finalisation of construction of N-50; non-deduction costs of excavated stone; and the dues of promotional displays on roads falling under the Authority’s jurisdiction.
• NHA officials made unjustified payments worth Rs2.2 billion. These included resettlement allowances and one additional cost compensation; change in source of material through post-bid amendment and the engagement of consultants on maintenance works.
• The report identifies the mismanagement of Rs8.5 billion in NHA accounts due to non provision of performance security from AA rating insurance company, mis-procurement of services, non obtaining of insurance policies of works and irregular purchase of luxury vehicles and unauthorised appointments.
The AGP office made repeated attempts to organise a Departmental Accounts Committee meeting for a discussion on these findings, but the NHA officials showed no interest.
An audit of last year’s accounts for the National Highway Authority (NHA) has exposed a huge case of mismanagement and embezzlement, with financial irregularities and losses of up to Rs31.43 billion.
The audit authorities have raised a total of 61 audit objections on the NHA's accounts, 22 of which are concerned with irregularities and non-compliance alone, 37 relate to the internal control weaknesses with two paragraphs highlighting the non-receipt of deposits by the provincial governments and irregularities inside the organization itself.
The audit report categorized losses in several categories.
These included:
• Irregular awarding of contracts, costing up to Rs11.22 billion.
• Overpayments worth over Rs3.21 billion.
• Losses to the authority worth Rs3.16 billion.
• Unjustified payments to contractors valued at Rs22.4 billion.
• Mismanagement in different works costing Rs8.50 billion.
• Amount of Rs2.68 billion which was non-recoverable.
The Auditor General of Pakistan (AGP) report indicated that:
• Road contracts worth Rs11.2 billion had been awarded to 'blue-eyed contractors' without the adoption of proper tendering procedures and contrary to the rules of NHA.
• The negligence of NHA officials also resulted in an overpayment of Rs3.2 billion. The loss owed itself to higher rates, non-deduction of income tax and price escalation of materials.
• A loss of Rs.3.2 billion was to be attributed to to amicable settlements, the non-collection of revenue, theft of vehicles and the awarding of work without due consideration of risk and cost.
• NHA officials could not recover an amount of Rs2.7 billion. The amount includes payment for the repair of flood damages; rent of NHA land used by contractor; mobilization advance and interest from contractors; cost of maintenance works due to non-finalisation of construction of N-50; non-deduction costs of excavated stone; and the dues of promotional displays on roads falling under the Authority’s jurisdiction.
• NHA officials made unjustified payments worth Rs2.2 billion. These included resettlement allowances and one additional cost compensation; change in source of material through post-bid amendment and the engagement of consultants on maintenance works.
• The report identifies the mismanagement of Rs8.5 billion in NHA accounts due to non provision of performance security from AA rating insurance company, mis-procurement of services, non obtaining of insurance policies of works and irregular purchase of luxury vehicles and unauthorised appointments.
The AGP office made repeated attempts to organise a Departmental Accounts Committee meeting for a discussion on these findings, but the NHA officials showed no interest.