KARACHI: Auditors have detected financial irregularities of up to Rs62,878 million out of the total expenditures of Rs444.78 billion, 90 per cent of all auditable expenditure, committed by 36 departments of the Sindh government during 2011-12, says the audit report for 2012-13.

The report was presented during the last session of the Sindh Assembly and was referred to its public accounts committee for scrutiny.

The committee would report its findings to the assembly within a year on whether the expenditure conformed to the competent authority and all re-appropriations had been made in accordance with such rules as might be prescribed by the government or not.

The report identifies Rs3,046 million as doubtful and fraudulent payments or misappropriation and finds Rs3,476 million expenditures record has not been maintained as it was not produced.

The instances were traced of Rs590 million wasteful expenditures while in the expenditures of Rs39,558 million propriety principle was violated and Rs11,964 million of government dues were not recovered.

The report recorded misclassification of Rs18 million expenditure and unauthorised encroachment of government properties or land in government schemes worth Rs296 million.

It said that besides unauthorised retention of Rs2,544 million government money, Rs1,386 million outstanding liabilities were not cleared.

The nature, frequency and the extent of violations and irregularities suggest that most of the principal accounting officers (PAOs) lack adequate institutional capacity required to keep financial management and control.

The report recommended that PAOs should take necessary steps to initiate, evaluate and strengthen internal controls and financial management practices in order to ensure compliance with canons of financial propriety, rules and regulations, especially in autonomous institutions, through training, monitoring and accountability of departmental functionaries and effective placement of internal controls to avoid recurrence of irregularities of similar nature.

It called for the establishment of an independent internal audit mechanism and urged the POAs to take steps to investigate cases of losses, embezzlements, unauthorised payments and non-accounting of cash and stores and take appropriate corrective action.

Some of the glaring irregularities as pointed out in the report in different departments are as under:

Agriculture: Rs 36.10 million unauthorised retention of funds in DDO account, Rs 7.84 million unjustified expenditure under the cost of other stores, Rs1.94 million disposal of crops and wheat seeds without open auction.

Board of Revenue: Rs31.81 procurement without inviting tenders, Rs154.02 million non-recovery of dues, Rs55.60 million cash withdrawal from bank through open cheque, Rs28.47 million irregular expenditure under rescue & relief fund, Rs 48.78 non-adjustment of advances, Rs59.17 million non-imposition of penalty on contractors, Rs34.67 million excess expenditure without revising the estimate, and Rs18.38 million excess consumption of bitumen.

Chief minister’s secretariat: Rs220.85 million non-recovery of advances, Rs514.71 million undue favour to the contractors, Rs77.91 million payment without tender process, Rs129.78 million irregular payment on utility charges, Rs510.66 million non-recovery of allowances and taxes, Rs301.76 million award of work on unapproved PC-1, Rs60.47 million excess payment of pension due to higher rate, Rs23.18 million payment of salary to unauthorised appointed retired employees, Rs48 million working strength in excess of sanctioned strength, Rs134.50 million unauthorised transfer of funds as temporary loan, Rs120.38 million unauthorised retention of funds in DDO account.

Coal energy: Rs1369.59 million non-realisation of electricity duty.

Education: Rs26.72 million paid in excess as stipend to trainees, Rs46.76 million difference in cash book and bank statement, Rs39.91 million working strength above sanctioned strength, Rs98.99 million irregular expenditure without open tenders, Rs43.55 million irregular expenditure without approval of finance department, Rs17.58 million irregular appointment of employees, Rs56.21 million non-recovery of government dues.

Excise and taxation: Rs179.11 million non-realisation of property tax, Rs120.65 million non-realisation of motor vehicle tax, Rs34.95 million non-realisation of infrastructure cess, Rs667.80 million less recovery of provincial excise duty, and Rs1036.48 million bank guarantees cleared without cash realisation.

Finance: Rs276.56 million unjustified expenditure on shifting of utilities, Rs56.15 million unjustified favour to concessioner, Rs755.86 million agreement of mark-up security guarantee after tendering, Rs23.21 million irregular payments of consultancy charges, Rs93.36 million irregular award of work without inviting tenders and Rs16.99 million non-deduction of sales tax/income tax.

Food: Rs21.77 million non-recovery of outstanding bardana, Rs17.20 million procurement without inviting open tenders, Rs149.09 million loss due to non-issuance of old crop, Rs53.94 million non-fixing responsibility for not lifting old

Published in Dawn, December 22th, 2014