ISLAMABAD: President Dr Arif Alvi on Monday ordered the Ministry of Federal Education and Professional Training to conduct an inquiry against officials concerned who failed to utilise a German donation of Rs13.70 million lying with the government since 1993-94.

The president said the amount was given for purchase of paper for printing of cheap textbooks.

Dr Alvi directed the Ministry of Federal Education and Professional Training to conduct an inquiry and take action against the officials responsible for the lapse, says a press release issued by the Presidency.

It said the president warned the education ministry not to shift the burden of such inquiries on retired and expired officials and submit a compliance report to Federal Tax Ombudsman (FTO) within 45 days.

President Alvi orders ministry to hold inquiry into non-utilisation of over Rs13 million grant

He observed this in his decision announced on Monday on an appeal referred to him by the Central Directorate of National Savings (CDNS) against a ruling of the FTO.

He said the money remained in non-profit bearing account for six years and nobody cared about it.

Dr Alvi said the loss incurred due to keeping the money idle accumulated to Rs17,490,730 which even exceeded the principal sum of Rs13.707 million.

Moreover, even this loss could have been greater had it not been pointed out by the audit.

The president said the forgotten money was deposited in the special savings certificate on July 23, 1999, to July 23, 2014.

During this time, the government policy on special savings certificate was for automatic rollover every three years that did not require investor’s prompting.

He observed that after March 23, 2014, when automatic rollover of investment stopped, there was not a single individual in the Ministry of Education who cared about this money and the ministry let the entire amount remained idle without earning any profit.

The president termed the act of the Ministry of Education for non-utilisation of amount and profit thereof which had increased to Rs54,265,500 as shameful.

When in 2020, the government ordered that all funds of ministries lying in different banks be deposited in the national treasury the audit revealed this gross negligence of keeping the German grant in non-profit account.

However, when the ministry withdrew the money in response to an audit objection, the matter of deduction of Zakat and withholding tax came to surface.

The president observed that the ministry also failed to obtain the income tax and Zakat deduction exemption

certificates to claim exemption from deduction of withholding tax and Zakat which as per policy was admissible to the ministry.

As a result, CDNS deducted both withholding tax and Zakat on account of non-furnishing of exemption certificate which again reflected poorly on the education ministry’s ability to handle government investment prudently and efficiently.

The president exonerated the CDNS on account of acting in good faith and on deduction of both withholding tax and Zakat for want of exemption certificates.

He directed the ministry of federal education to approach the FBR and Zakat Department for getting exemption certificates with retrospective effect and also consider issuance of exemption certificates on “one time basis” in accordance with the rules.

Published in Dawn,June 7th, 2022