June 26, 2007	Tuesday	Jamadi-us-Sani 10, 1428

ISLAMABAD, June 25: An embezzlement of more than Rs842.277 million has been unearthed in the accounts of Export Development Fund (EDF) and Export Market Development Fund (EMDF) for the audit year 2005-06.

It has also been observed that besides financial irregularities, financial rules and accounting procedures were neither notified, nor incorporated in the amendments proposed by the finance division and the auditor-general of Pakistan.

According to the special audit report of EDF and EMDF, prepared by the Auditor-General of Pakistan for the year 2005-06, it was observed that the EDF board did not make regulations as required under the Act, thus business of the board was conducted and its meetings were held without approved regulations which are inconsistent with the Act.

The audit department identified unauthorised accounts in the NBP Karachi, including the National Income Daily-Product Account.

An account (NIDA No 20003-08) was being maintained in the NBP FTC Branch, Karachi, having a balance of Rs361.815 million as on June 30, 2005.

The Export Promotion Bureau, vide its letter (EPB-20(2)/2001-EDF) issued on Jan 28, 2002, revealed that a balance of Rs102.787 million was lying in a term deposit account with the NBP Karachi. The audit requested for the updated financial record of this term deposit account, which was not provided.

The department’s contention to continue with both the provisions of resolution of 1992, as well as Act of 1999, is not justified.

It was revealed in the report that the department did not disclose details of the expenditure of Rs10.427 million, and there was a non-reporting of Rs10.524 million in the annual report 2004-05.

Moreover, audited statements and performance reports relating to endowment funds of Rs65 million were not obtained.

The audit department also unearthed unauthorised release of an amount of Rs502,000 to M/s Hassan and Hassan Advocates; and that an irregular expenditure amounting to Rs4.640 million was made as audit fee.

Another unjustified expenditure of Rs45.283 million was made on Foreign Trade Institute of Pakistan and that details of expenditure of Rs93.040 million on city development activities were not available.

The department did not produce record of Rs92.705 million.

The report also unearthed non-functioning of projects worth Rs520.156 million and non-production of record relating to different projects financed through the Export Development Fund.

The auditor-general of Pakistan report recommended that the EDF should notify the financial rules and accounting procedures in the light of the Act of 1999 after incorporating the amendments.

The EDF needs to pursue the projects funded by it and to evaluate their performance on a regular basis so that their contribution to the export of Pakistan is effectively gauged.