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Sindh failed to spend Rs167bn in 2011-12

Updated August 15, 2013
Chief Minister Sindh Syed Qaim Ali Shah. — File photo
Chief Minister Sindh Syed Qaim Ali Shah. — File photo

KARACHI, Aug 14: Highlighting flaws in the Sindh government’s response to financial management, a report of the Auditor General of Pakistan about the financial year 2011-12 revealed that the provincial government did not utilise the approved budget of Rs167 billion for the intended purposes, it emerged on Wednesday.

“On scrutiny of Appropriation Accounts, we observed that a sum amounting to Rs167,294 million was allocated in the annual budget and placed at the disposal of departmental authorities but the funds were not fully utilised for the intended purposes,” according to a 65-page report about performance of the Sindh government’s departments during the said financial year.The report prepared by the Director General of Audit Sindh observed that implications of such state of affairs were obvious. It is a violation of the general financial rules. As per financial rules, the government has to surrender savings immediately without waiting by the end of the financial year so that the same may be utilised for other productive purposes.

“We recommend that the government resources should be efficiently and effectively utilised for the intended purposes. Further we recommend that the funds in excess of the needs of the departments should be surrendered as soon as possible so that the government resources can be used for some other purposes,” said the report reviewed by Dawn.

However, in other accounts, the audit report pointed out that over Rs7.9 billion expenditure was incurred in excess to budget allocation.

The report noted with concern that there were general control weaknesses in the Sindh government about fiscal affairs.

It said pension was an important part of the budgeting process. A sum of Rs5 billion was transferred in the pension fund this year (financial year 2011-12). It was observed that Rs23.3 billion was transferred in all previous years since year 2002-03 in creating pension fund for future pension payments. But since the inception of the fund, no reporting had been made in that regard. This year only current transfer of Rs5 billion was reported as investments in financial statements, but there was no indication of previous transfers in the financial statements.

“Such representation shows that fund is only created in the current year while it is not the fact and this treatment is a gross negligence on the part of the finance department and AG Sindh,” observed the audit team.

About other purported deviations from the financial rules by the provincial government, the team said there was a tendency to split the purchase orders to avoid obtaining the approval of the higher authority. This was done in case of the education and agriculture department.

Similarly, as per the financial rules concerned, the tender notice should be advertised on the authority’s website and through the media, but this rule was not followed during the course of audit for fiscal 2011-12 in some sections.

In other cases, payments were made without obtaining supporting documents. In some other instances, the required procedure was not followed. For instance, a government servant has to get treatment from public hospital barring certain emergency cases, but it was not followed.

Furthermore, it has been observed that the departments tended not to maintain record, making it difficult for the audit team to ascertain their veracity of claims about expenditure, thus putting a question mark over it.

It has also been noted that unauthorised expenditure was made during the said financial year. For example, as per the Sindh government’s financial rule, honorarium would be given to section officers or their equivalent officer, but in violation of this rule, over Rs1.1 million was paid to certain employees, which the audit termed as unauthorised expenditure.

The report warned that such deviations entailed legal and other implications for the officers concerned.