Federal auditors to probe 0.6m ‘ghost pensioners’

National Bank management try to deflect blame onto media

ISLAMABAD:

The office of Auditor General of Pakistan has ordered a special audit of military and civilian pensions after the state-owned National Bank of Pakistan, through which the government disburses the pensions, claimed that it identified 600,000 ‘ghost’ pensioners who were receiving billions of rupees annually.

Auditor General Rana Assad Amin told the National Assembly Public Accounts Committee on Wednesday that the special audit of military and civilian pensioners will be completed within a month and a report will be presented to the parliamentary watchdog.

When confronted with the possibility of a special audit into his bank, NBP President Ashraf Iqbal tried to deflect blame onto the media, an attempt to which the PAC did not take kindly.

Iqbal claimed that the state-owned bank, the second largest in the country, identified 600,000 ghost pensioners during the process of automating bank accounts. The disclosure created a stir in the government and the NBP came under fire for allowing the ‘ghost pensioner’ phenomenon to persist, causing NBP management to try to deflect blame onto the media, claiming that the facts were misreported. However, the initial claim is now part of the parliamentary record, kept at the Senate Secretariat.



“These 600,000 pensioners are not receiving pensions from NBP anymore. They could have gone to other banks, might have died or might not be able to fulfill NBP’s requirements for opening the bank accounts,” said Ashraf.

“These are your perceptions,” said PAC Chairman Khursheed Shah, dismissing the NBP President’s statement.

The Auditor General told the committee that in violation of the constitution, the NBP was not allowing the auditors to conduct its regular audit. “Had the NBP allowed a statutory audit, this scandal would not have surfaced,” claimed Amin, while seeking the PAC’s help to initiate the NBP’s audit.

Shah said his party, the Pakistan Peoples Party, would introduce a bill in the National Assembly to mandate audits for all government departments. The National Bank of Pakistan is not a government department. It is a commercial bank in which the government of Pakistan is a majority shareholder.

Nonetheless, the NBP has been in the limelight for the last couple of years for the wrong reasons. A Rs18.5 billion fraud surfaced in NBP’s Bangladesh operations earlier this year, and senior management were accused of trying to protect those responsible.

The PAC also directed the NBP to present a list of loans that it has written off during the past few years. It also ordered a review of the bank’s board of directors’ powers to write off loans. The boards of all banks in Pakistan have the power to write off loans considered to be in default.

Settling accounts

The PAC settled Rs665 billion worth excesses or savings against the allocated budget to the Finance Ministry during fiscal year 2010, the highest amount that the PAC ever settled of any ministry.

There was no financial irregularity but the excesses and savings against the allocated budget showed that the Finance Ministry could not ensure financial discipline. Out of Rs665 billion, Rs460 billion savings were on account of repayment of domestic debt. The Ministry obtained the approval of the Parliament to repay or roll over Rs3.92 trillion debt in fiscal year 2009-10 but the actual payments stood at Rs3.5 trillion.

The Finance Ministry also violated its own circular, which seeks surrender of surplus budget before May 15 of every fiscal year, which PAC members criticised. “If the mother department’s financial affairs are going haywire, what one can expect from the other ministries?” said Junaid Anwar.

AGP Rana Amin, who until recently served in the ministry, said ministry officials take the May 15 deadline lightly.

Published in The Express Tribune, August 27^th, 2015.