Caught: Federal auditors unearth irregularities in CDNS

Seek disciplinary action for ‘irregular’ appointment of its head.

ISLAMABAD:

Federal auditors have unearthed serious irregularities in the financial and administrative affairs of the Central Directorate of National Savings (CDNS), seeking disciplinary action against responsible officials for ‘irregular’ appointment of the head of the body and non-production of record for audit purposes.

The office of Auditor General of Pakistan (AGP) has framed six audit objections against the CDNS – an attached department that works under the administrative control of the ministry of finance – while performing audit for fiscal year 2013-14, according to the audit report.

The auditors have questioned expenditures of Rs453.6 million with a serious charge of ‘irregular and in violation of rules of appointment’ of Zafar Sheikh as the director general (DG) of CDNS, reveals the report, which the government is yet to table in the parliament.

Sheikh was appointed as the DG in 2007 by former prime minister Shaukat Aziz for a two-year term before being given extensions during the Pakistan Peoples Party government by the establishment division on the recommendation of the finance ministry, the report disclosed.

If the parliament endorses the recommendations of the AGP, some federal secretaries who have served in the ministry and the establishment division may face disciplinary action.

The federal government appointed Sheikh in the Management Position-I (MP) scale against a promotion post of the CDNS. From 2007 to end 2013, the government paid Sheikh an amount of Rs25.1 million, according to the report. He received Rs16.8 million in salaries, Rs7.4 million in house rent and Rs841,200 in utility charges.

According to the auditors, the DG’s position was a grade-20 post and there was no room for appointing a person on the MP-I scale. He was appointed without advertising the post in the press.

Sheikh was appointed despite a dissenting note by the establishment division, which observed that the procedural requirements for appointment against the MP scale were not fulfilled and the status of the officer was on deputation from the State Bank of Pakistan. The auditors said that no selection committee was constituted for Sheikh’s selection.

“The appointment and subsequent extensions were irregular, unauthorised and in violation of rules and responsibility may be fixed for the irregularity,” according to the audit report.

The auditors brought the issue of irregular appointment in the knowledge of the finance secretary on November 26, 2013 but he did not call a meeting of the Departmental Accounts Committee (DAC) to discuss the irregularity.

When contacted by The Express Tribune, the ministry of finance did not comment on Sheikh’s appointment. It said the issue will be discussed in the DAC meeting.

According to another audit objection, the government paid Rs2.1 million in gratuity to Sheikh, despite such a facility not being available to contractual employees. The auditors have recommended that responsibility may be fixed for the irregularity and excess amount of gratuity may be recovered.

In yet another irregularity, the government paid Rs6.3 million irregular house rent allowance to the former DG, which the auditors have asked to recover from him.

Non-production of record

In the violation of Auditor General’s Ordinance of 2001, the management of CDNS refused to provide the records for the Automation project of CDNS that cost the kitty Rs397.3 million, according to the report. It added that the violation, which is tantamount to creating hindrance in the functioning of the AGP, is liable to disciplinary action under the efficiency and disciplinary rules of the government.

The project was completed by February 2013, however, documents for the audit report have not been submitted, it added. The issue was brought to secretary finance’s knowledge, who is also the Principal Accounting Officer of the CDNS but no action has been taken yet, stated the report.

The finance ministry said the CDNS management was directed to provide all relevant records to the AGP.

But, according to the report, auditors were not given procurement files for generators, computer hardware, vehicles, office equipment, site preparations, furniture, office buildings, advertisement and publicity. The bank statement of the assignment account, books of accounts, expenditure controls, movement registers of vehicles, details of POL, repair/maintenance and payroll of the project were also not provided to the auditors.

Published in The Express Tribune, August 31^st, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.