|
|
|
| 10 April 2005 | Sunday | 30 Safar 1426 |
‘No irregularities detected’: SAF Games
The 9th SAF Games were originally scheduled to be held in Pakistan in October 2001 but due to geo-political reasons, were postponed three times and finally held in March 2004. In 2003 the SAF secretariat of the 9th SAF Games Organizing Committee requested the Auditor-General of Pakistan (AGP) to carry out an audit of the organization’s accounts from 2000 to 2003. The AGP’s first report for the period 2001 to 2003 was submitted to the committee on April 13, 2004, with certain observations and recommendations.
The committee responded to these observations on April 19, 2004. However the AGP’s office published the report without taking into account the actions taken by the committee. The news report contained extracts from the AGP report without verifying that the committee had duly responded to the observations in the audit report and that the AGP’s second report for the period 2003-2004 issued in January 2005 had cleared these observations.
In fact the AGP report does not describe any of their observations as ‘financial irregularities’ or that some ‘undue benefit’ had been granted to any party.
Five intra-governmental issues (then current, having a financial impact of Rs185 million out of the Rs2001 million mentioned in the report) have been wrongly described as ‘financial irregularities’ in the earlier report. The largest of these related to the grant of Rs150 million provided by the GOP.
In December 2000 the committee was formed through Chief Executive directive and in January 2001 a directive was issued by the Chief Executive’s Secretariat that the Ministry of Sports and Culture make available Rs150 million to the committee and that this amount would be refunded to the Ministry of Sports by the Ministry of Finance.
Instead of releasing the funds as a grant, the ministry of sports released these funds as a loan. The committee challenged the ministry of sports’s characterization of the funds and stood by its position that the ministry should recover the same from the ministry of finance. This is an intra-ministerial dispute and not a financial irregularity.
Another intra-ministerial issue related to the committee’s agreement with the Pakistan Post Office (PPO) for the sale of SAF postcards. At the time of the AGP audit, an amount of Rs1.02 million was due to be paid by the PPO. After the audit this amount was received by the committee from the PPO on February 12, 2004 and the AGP observation stood settled. The same was the case with the Directorate of Haj, Ministry of Religious Affairs. At the time of the AGP audit, an amount of Rs0.758 million was outstanding as advance given by the committee to the directorate of Haj. After the games, this amount was adjusted from the total amount due from the committee to the directorate of Haj.
As for the Hero Card, the committee’s share of income was to be paid to it under each disbursement for the preparation of the games and upon completion of the games, any balance was to be transferred to a trust endowment to be set up for the future sports promotion. The Pakistan Sports Trust is the trust so established. The AGP’s view was that the whole amount received from Hero Cards was to be transferred to the trust endowment to be established. The committee disagreed with this view.
There was no issue that the Rs16.84 million was not used for the holding of the SAF Games. The only issue was whether the committee was entitled to do so. In any event, this became a moot point. The committee transferred an amount of Rs42 million upon the completion of the games to the Pakistan Sports Trust.
Another observation relating to the Hero Cards project was that the committee had received less than what was agreed in the contract. The initial contract signed for the Hero Card project estimated 30 per cent of revenues to be available to the committee was based on the understanding that the committee, as a non-profit sports entity, would have tax exemption. However, the CBR refused to recognize the committee’s tax exemption status.
Accordingly the committee decided to pay the taxes due on the cards imported, withholding taxes on distributor’s commission and withholding taxes on prize money related to smaller prizes. This tax incidence consequently led to a reduction in the net revenue for the committee. The committee has paid to date approximately Rs20 million to the GOP treasury as taxes.
As regards the agreement with ARY, substantial revenue was received by the committee and a balance of Rs9.45 million was payable by ARY at the time the AGP audit was concluded. The amount outstanding was collected from ARY by June 2, 2004 and the same had been reported to AGP and the ministry of sports.
Under another agreement, a cell phone company was to pay Rs12 million of which Rs5 million had been paid at the time of the AGP audit and Rs7 million was due to be paid a week prior to the holding of the SAF games. When the games were eventually held in 2004, the company enhanced the sponsorship under the package and paid the committee Rs11 million instead of Rs7 million as indicated in the AGP audit.
There was no undue benefit to anyone or undue loss to any party nor were any financial irregularities detected.
Dawn published the report in good faith, but as some of the facts have come to light subsequently, the newspaper regrets the misperceptions the report may have caused as well as any aspersions it may have cast on persons mentioned in the report.
|
|
|
|