April 14, 2008	Monday	Rabi-us-Sani 7, 1429

ISLAMABAD, April 13: Accounts of the Earthquake Reconstruction and Rehabilitation Authority’s (Erra) show financial irregularities of more than Rs655 million, according to an audit report.

Contrary to claims of high levels of transparency in the utilisation of funds, the Auditor General of Pakistan’s report showed that during 2006-2007, Erra paid housing cash grant of Rs94.125 million to ineligible people and also made payment of Rs410.77 million under the same head which required confirmation.

A review of 4,267 assessment forms showed that the authority had paid Rs94.125 million at Rs75,000 per head to 1,255 individuals whose forms had been marked ‘no house’ or ‘rejected’ by the army’s inspection teams.

These payments were made without adhering to prescribed checks and internal controls at the assessment, processing and payment stages.

During audit and field visits, it was observed that the basic manual record provided by assistance and inspection teams lacked information critical to the process of assessment and filing of forms.

It was noted that net disbursement of Rs410.77 million required confirmation.

The audit also found that beneficiaries were overpayed Rs1.35 million. In six cases, Rs400,000 was paid twice on rent forms bearing the same identity cards while Rs275,000 was paid to four beneficiaries without MoU.

In nine cases, damage assessment forms were accompanied by computerised national identity cards (CNIC) which differed from the ones on MoUs, but the authority paid Rs75,000 to each of the claimants.

In 13 of the cases, signatures of the patwari and representatives of the Army Engineering Corps and the government did not tally with their signatures on other forms from the same area.

Erra also paid advances amounting to Rs50.7 million to the Army Engineering DTE of the GHQ for inspection of rural housing and Coordinator Livelihood Cash Grant for training and workshops. Only Rs12.5 million was subsequently verified.

During scrutiny of complaints received by the disbursing agencies, it was observed that at the initial stage, army’s inspection teams had entered incorrect or incomplete data, rendering individuals ineligible under the criteria set by the authority and the same was processed by Nadra, thus delaying or denying payment to beneficiaries.

The audit noted that the financial management capacity at the authority’s headquarters and its representative units in Azad Kashmir and the NWFP needed to be strengthened. It was observed that Erra did not put in place effective Management Information System (MIS) with banks for tracking of funds, because of which Erra, Provincial Earthquake Reconstruction and Rehabilitation Authority (Perra) and State Earthquake Reconstruction and Rehabilitation Authority (Serra) were unable to confirm the status of payments to beneficiaries.

The financial review also revealed that Rs3,311 million of the total housing reconstruction cash grant had not been confirmed by banks till November 2006 for funds released to beneficiaries till June 30, 2006.