Financial irregularities: PTA breaches rules by investing idle funds
Audit report says that Rs18.4 billion had to be transferred to the Federal Consolidated Fund.
An audit report has revealed that the Pakistan Telecommunication Authority violated rules by investing Rs18.428 billion, instead of transferring the amount to the Federal Consolidated Fund (FCF). PHOTO: FILE
ISLAMABAD:
An audit report has revealed that the Pakistan Telecommunication Authority violated rules by investing Rs18.428 billion, instead of transferring the amount to the Federal Consolidated Fund (FCF).
According to the report, prepared by the office of the Auditor General of Pakistan (AGP), on accounts of the telecommunication sector for 2012-13, the justification given by the PTA in this regard has been deemed ‘not acceptable’.
The report has already been submitted to the president and presented before both houses of the parliament in pursuance of Article 171 of the Constitution.
Meanwhile, the report has also pointed out recovery worth more than Rs14 billion, out of which Rs444.832 million was effected during 2011-12 fiscal year, till the compilation of the report.
PTA, a corporate body established in 1996 under the Pakistan Telecommunication (Re-Organisation) Act 1996, works under the administrative control of the cabinet division.
The audit report mentions that according to Section 12 (3) and 13 (3) of Pakistan Telecommunication (Re-Organisation) Act 1996, any surplus of receipts over the actual expenditure in a year shall be remitted to Federal Consolidated Fund and any deficit from the actual expenditure shall be made up by the federal government.
“Contrary to this, the PTA transferred funds of Rs18.428 billion from different National Income Daily Accounts (NIDA) and made investments in Treasury Bills (TB) and Term Deposit Receipts (TDR) with National Bank of Pakistan (NBP),” the report added.
The PTA invested funds that had to be transferred to the FCF. Moreover, it was observed that the investments were made in a non-competitive manner.
It was replied in January 2013 that the PTA maintains National Income Daily Accounts, and that surplus funds in the collection accounts were ultimately surrendered to the FCF at the end of each financial year.
Therefore, in the same spirit, the PTA utilised its short term idle funds for placement with the National Bank of Pakistan, with a yield higher than NIDA. Further, these placements were made after approval from competent authority.
“The reply was not acceptable as funds were invested in banks instead of being transferred to FCF. Further, the interest on these investments does not fall under the category sources of PTA, as elaborated above,” the auditors observed in the report.
The report further stated that the “matter may be investigated to fix responsibility for violation of rule and funds be transferred to FCF,” however, “no progress has been initiated till finalisation of this report.”
Various government departments, mostly semi-government organisations do not deposit their earnings in the federal treasury, as some of their high officials have been found operating separate accounts to make money.
Many officials in the past have been accused of taking commissions, in return for providing deposits to commercial banks, at comparatively concessionary rates. These commercial banks lend the same money to the desperate federal government at comparatively higher rates. The Public Accounts Committee has fixed responsibility in the past regarding similar cases.
Published in The Express Tribune, August 26th, 2013.
An audit report has revealed that the Pakistan Telecommunication Authority violated rules by investing Rs18.428 billion, instead of transferring the amount to the Federal Consolidated Fund (FCF).
According to the report, prepared by the office of the Auditor General of Pakistan (AGP), on accounts of the telecommunication sector for 2012-13, the justification given by the PTA in this regard has been deemed ‘not acceptable’.
The report has already been submitted to the president and presented before both houses of the parliament in pursuance of Article 171 of the Constitution.
Meanwhile, the report has also pointed out recovery worth more than Rs14 billion, out of which Rs444.832 million was effected during 2011-12 fiscal year, till the compilation of the report.
PTA, a corporate body established in 1996 under the Pakistan Telecommunication (Re-Organisation) Act 1996, works under the administrative control of the cabinet division.
The audit report mentions that according to Section 12 (3) and 13 (3) of Pakistan Telecommunication (Re-Organisation) Act 1996, any surplus of receipts over the actual expenditure in a year shall be remitted to Federal Consolidated Fund and any deficit from the actual expenditure shall be made up by the federal government.
“Contrary to this, the PTA transferred funds of Rs18.428 billion from different National Income Daily Accounts (NIDA) and made investments in Treasury Bills (TB) and Term Deposit Receipts (TDR) with National Bank of Pakistan (NBP),” the report added.
The PTA invested funds that had to be transferred to the FCF. Moreover, it was observed that the investments were made in a non-competitive manner.
It was replied in January 2013 that the PTA maintains National Income Daily Accounts, and that surplus funds in the collection accounts were ultimately surrendered to the FCF at the end of each financial year.
Therefore, in the same spirit, the PTA utilised its short term idle funds for placement with the National Bank of Pakistan, with a yield higher than NIDA. Further, these placements were made after approval from competent authority.
“The reply was not acceptable as funds were invested in banks instead of being transferred to FCF. Further, the interest on these investments does not fall under the category sources of PTA, as elaborated above,” the auditors observed in the report.
The report further stated that the “matter may be investigated to fix responsibility for violation of rule and funds be transferred to FCF,” however, “no progress has been initiated till finalisation of this report.”
Various government departments, mostly semi-government organisations do not deposit their earnings in the federal treasury, as some of their high officials have been found operating separate accounts to make money.
Many officials in the past have been accused of taking commissions, in return for providing deposits to commercial banks, at comparatively concessionary rates. These commercial banks lend the same money to the desperate federal government at comparatively higher rates. The Public Accounts Committee has fixed responsibility in the past regarding similar cases.
Published in The Express Tribune, August 26th, 2013.