KARACHI: The Karachi Water and Sewerage Board and the Karachi Metropolitan Corporation have illegally paid a total of over Rs61 million between 2011 and 2013 relating to overpaid house rent and house rent to those who were already living in official residences, electricity charges and leave encashment to its various employees, including past and present incumbent KWSB managing directors, a report has said.

The report prepared by the auditor general of Pakistan (AGP) has recommended that managements are held responsible on account of deviation from prescribed financial rules and that the overpayment related to all employees of the KWSB is calculated and recovered from them.

The report prepared by the director general of audit (local governments), subordinate office of the AGP, duly approved by AGP, says that Para 07 of the Finance Division Office OM No:F.1/7/IMP.II/87 dated July 1, 1987 states that “all employees not provided with government accommodation shall continue to be entitled to house rent allowance (HRA).”

Further, Para 11 of FD, government of Sindh OM No: FD (SR-IV)-I (12)/77 dated May 13, 1977 states that, “the HRA is not admissible to whom accommodation is provide by the government and house rent maintenance charges shall be recovered at 5 per cent of the basic pay of an employee.”

The report says that the additional secretary of the local government, KWSB MD and his many subordinate officials were not only provided residential accommodation, but they were also paid house rent between 2010 and 2013. The department also failed to deduct the maintenance charges at five per cent from them in violation of the above-mentioned rules. The amount overpaid totals over Rs6 million.

The officials who not only lived in official residences, but also received illegal payments included incumbent KWSB managing director Qutabuddin Shaikh and former MDs Misbah Uddine Fareed, Sajjad Hussain, Fazal-ur-Rehman, Ghulam Arif Khan, Mohammad Sulaman. Some other senior officials were S. Baqar Raza Zaidi, Mohammad Kamal, S. Rahbar Ali, Dr Mah Taj, Dr Aziz-ur-Rehman, Yar Mohammad, Afroz Sultana, Mukesh Kumar, Pervaz Gul and Ishwar Lal. Additional secretary of local government Shah Mohammad has also received the illegal payment.

The report says that the irregularity pointed out was only an illustrative and not exhaustive. The matter was reported to the secretary of local government in August 2012, May and June 2013, and the secretary in his communications as well as departmental accounts committee (DAC) meetings held in 2013 agreed to the audit’s point of view and took serious note of payment of house rent to the officials availing the facility of official residences and non-deduction of maintenance charges from them. However, no further progress was reported to the audit.

Excess payment

The KWSB and KMC paid over Rs6 million as house rent to various employees at a higher rate than the one prescribed by the government and the audit has called for recovery.

The report says that Para 07 of the finance division office OM No: F.1/7/IMP.II/87 dated July 1, 1987 states that, “all employees not provided with government accommodation shall continue to be entitled to house rent at allowance (HRA) at 45 per cent of the minimum of the relevant basic pay scale.”

The report says that in violation of the above law various the KWSB and KMC officials were paid over Rs3.54 million as HRA at 65 per cent instead of 45 per cent during 2012-13. The audit reported the matter in 2013 and senior director (charged parking) in his Dec 3, 2013 reply said that the increase was allowed as per approval of the City Nazim, but the audit was not satisfied as the Nazim had no powers to amend provincial government rules. The departmental accounts committee meeting was not held despite pursuance of the audit which recommended fixing of the responsibility for deviation from the prescribed procedure and recovery of over payments.

The KWSB also paid over Rs2.7 million as HRA at 65 per cent during 2011-12 to its various employees in Dhabeji and Gharo, etc to which the audit objected. During a DAC meeting a committee was constituted in August 2013 to examine why overpayment had been made and report in 30 days, but no progress was reported to the audit, which recommended for fixing the responsibility and recovery of the overpaid funds from the freeloaders.

Leave encashment

The KWSB and KMC made illegal payments of leave encashment of over Rs48.8 million between 2010 and 2013 and the audit recommended fixing the responsibility and recovery of the illegal payments made to the employees.

The report says that the Rule 18A of Revised Leave Rules 1980 state that, “a civil servant may 15 months before the date of superannuation or 30 years qualifying service on or after the July 1, 1983, at his option, be allowed to encash his leave preparatory to retirement if he undertakes to in writing to perform duty in lieu of the whole period of 365 days or lesser period which is due and admissible.”

The report says that the KMC and KWSB paid over Rs 11.2 million from 2010 to 2012 to its officials on account of leave encashment who were not fulfilling the criteria, in violation of above rule. The DAC in Feb 2012 and Aug 2013 agreed to the audit’s point of view and constituted a committee to examine why the leave encashment was allowed every year, in violation of rules, and report in three weeks. However, no progress was reported to audit.

Similarly, the KWSB also paid over Rs37.6 million to its various employees in leave encashment in violation of the above rule in 2012-13. The issue was reported from August 2013 to December 2013 but the management failed to provide the departmental views and the DAC was also not held. The audit has recommended the fixing of the responsibility and recovery of the illegal payments.

Responding to Dawn queries, the director general of the audit (local government) Sindh, Mohammad Ali S. Bokhari, who has drafted the reports, confirmed that not only these irregularities had been pointed out, but so many other serious issues had also been highlighted in the said reports and that hard work was put in and detailed reports were sent to the Public Accounts Committee, the highest body to regulate and monitor the public fund spending and where these reports are to be discussed, but the PAC has not discussed the reports relating the civic agencies for past many years — from 2001 to 2014.

He further said that no DAC was convened by principal accounts officer (PAO) ie the secretary, local government, since January 2004 despite pursuance of audit with PAO and a meeting was also held with the chief secretary that was also attended by the deputy auditor general, but authorities expressed their inability to convene the DAC meeting, resultantly, major irregularities of same nature recurred every year. He said that delay in DAC and PAC meetings encourages local council functionaries to escape accountability process.

He said that the reports for 2012 were discussed on Jan 23, 2013 but the PAC could not arrive at decision and minutes were not issued.

Although the Sindh assembly was sworn in last year, the PAC was formed only a couple of months ago, but so far the PAC had not taken up these reports related to local councils, Mr Bokhari added.

Published in Dawn, August 4th, 2014