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Audit Report on the Accounts of District Government Sargodha Audit Year

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Audit Report on the Accounts of District Government Sargodha Audit Year AUDIT REPORT ON THE ACCOUNTS OF DISTRICT GOVERNMENT SARGODHA AUDIT YEAR 2016-17 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS & ACRONYMS ....................................................... i PREFACE .................................................................................................. ii EXECUTIVE SUMMARY ..................................................................... iii SUMMARY TABLES AND CHARTS ................................................. vii Table 1: Audit Work Statistics .................................................... vii Table 2: Audit observation regarding Financial Management .... vii Table 3: Outcome Statistics ........................................................ vii Table 4: Irregularities Pointed Out ............................................. viii Table 5: Cost-Benefit ................................................................. viii CHAPTER-1 .............................................................................................. 1 1.1 District Government, Sargodha ............................................... 1 1.1.1 Introduction of Departments ................................................... 1 1.1.2 Comments on Budget and Accounts (Variance Analysis) ...... 1 1.1.3 Brief Comments on the Status of MFDAC Audit Paras of Audit Report 2015-16.............................................................. 3 1.1.4 Brief Comments on the Status of Compliance with PAC Directives ................................................................................ 3 1.2 AUDIT PARAS ................................................................................ 5 1.2.1 Non Production of Record....................................................... 6 1.2.2 Irregularities / Non compliance ............................................... 8 1.2.3 Internal Control Weaknesses ................................................. 21 ANNEXES ............................................................................................... 31 Annex-A ............................................................................................ 32 Annex-B ............................................................................................ 42 Annex-C ............................................................................................ 43 Annex-D ............................................................................................ 44 Annex-E ............................................................................................. 45 Annex-F ............................................................................................. 49 Annex-G ............................................................................................ 51 Annex-H ............................................................................................ 52 Annex-I .............................................................................................. 53 Annex-J ............................................................................................. 54 Annex-K ............................................................................................ 55 Annex-L ............................................................................................. 56 Annex-M ........................................................................................... 58 Annex-N ............................................................................................ 60 Annex-O ............................................................................................ 61 Annex-P ............................................................................................. 62 Annex-Q ............................................................................................ 65 Annex-R ............................................................................................ 69 Annex-S ............................................................................................. 70 Annex-T ............................................................................................. 71 ABBREVIATIONS & ACRONYMS ACL Audit Command Language AIR Audit & Inspection Report B&R Code Buildings and Roads Code BHU Basic Health Unit CCB Citizen Community Board CD Community Development CPW Central Public Works DAC Departmental Accounts Committee DDO Drawing & Disbursing Officer DCO District Coordination Officer DO District Officer DHQ District Headquarter DNIT Demand Notice for Invitation of Tender DTL Drug Testing Laboratory DZC Defunct Zila Council EDO Executive District Officer FBR Federal Board of Revenue F&P Finance and Planning HSRP Health Sector Reforms Programme ICR First Completion Report FCR Final Completion Report MB Measurement Book MFDAC Memorandum for Departmental Accounts Committee MRS Market Rate Schedule MSD Medical Store Depot NAM New Accounting Model NSB Non Salary Budget OFWM On Farm Water Management PAC Public Accounts Committee PAO Principal Accounting Officer PFR Punjab Financial Rules PLGO Punjab Local Government Ordinance POL Petroleum Oil & Lubricants PPRA Punjab Procurement Regulatory Authority RHC Rural Health Centre SAP System Application Product SDO Sub Divisional Officer THQ Tehsil Headquarter i PREFACE Articles 169 and 170 of the Constitution of the Islamic Republic of Pakistan, 1973 read with Section 115 of the Punjab Local Government Ordinance, 2001 require the Auditor General of Pakistan to audit the accounts of the Provincial Governments and the accounts of any authority or body established by, or under the control of, the Provincial Government. Accordingly, the Audit of all Receipts and Expenditures of the District Government Fund and Public Account of District Government is the responsibility of the Auditor General of Pakistan. The Report is based on audit of the accounts of various offices of the District Government, Sargodha for the financial year 2015-16. The Directorate General of Audit District Governments, Punjab (North), Lahore, conducted audit during 2016-17 on test check basis with a view to reporting significant findings to the relevant stakeholders. The main body of the Audit Report includes only the systemic issues and audit findings carrying value of Rs.1.00 million or more. Relatively less significant issues are listed in the Annex-A of the Audit Report. The Audit observations listed in the Annex-A shall be pursued with the Principal Accounting Officer at the DAC level and in all cases where the PAO does not initiate appropriate action, the Audit observation will be brought to the notice of the Public Accounts Committee through the next year’s Audit Report. The audit results indicate the need for adherence to the regularity framework besides instituting and strengthening internal controls to prevent recurrence of such violations and irregularities. The observations included in this Report have been finalized after discussion of Audit paras with the management. However, no Departmental Accounts Committee meeting by PAO was convened despite repeated requests. The Audit Report is submitted to the Governor of the Punjab in pursuance of Article 171 of the Constitution of the Islamic Republic of Pakistan, 1973 to cause it to be laid before the Provincial Assembly of Punjab. Islamabad (Rana Assad Amin) Dated: Auditor General of Pakistan ii EXECUTIVE SUMMARY The Directorate General Audit (DGA), District Governments, Punjab (North), Lahore, is responsible to carry out the Audit of District Governments, Tehsil / Town Municipal Administrations and Union Administrations of three (03) City District Governments and sixteen (16) District Governments. Its Regional Directorate of Audit, Sargodha has audit jurisdiction of District Governments, TMAs and UAs of four District Governments i.e. Sargodha, Khushab, Mianwali and Bhakkar. The Regional Directorate has a human resource of 11 officers and staff, total 3,109 man days and the annual budget of Rs.14.220 million for the financial year 2016-17. It has mandate to conduct Financial Attest Audit, Regularity Audit and Compliance with Authority & Performance Audit of entire expenditure including programmes / projects & receipts. Accordingly, RDA Sargodha carried out Audit of accounts of District Government Sargodha for the financial year 2015-16. The District Government, Sargodha conducts its operations under Punjab Local Government Ordinance, 2001. It comprises one Principal Accounting Officer (PAO) i.e. the District Coordination Officer (DCO) covering six groups of offices i.e. Agriculture, Community Development, Education, Finance & Planning, Health and Works & Services. The financial provisions of the Punjab Local Government Ordinance, 2001 require the establishment of District Government Fund comprising Local Government Fund and Public Account for which Annual Budget Statement is authorized by the Nazim / Council / Administrator in the form of budgetary grants. Audit of District Government, Sargodha was carried out with a view to ascertaining whether the expenditure was incurred with proper authorization, in conformity with laws / rules / regulations for economical procurement of assets and hiring of services etc. Audit of receipts / revenues was also conducted to verify whether the assessment, collection, reconciliation and allocation of revenues were made in accordance with laws / rules, resulting in no leakage of revenue. iii a. Scope of Audit Out of total auditable expenditure of Rs.11,941.209 million of the District Government, Sargodha for the financial year 2015-16 covering one PAO and 341
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