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Auditor General of Pakistan AUDIT REPORT ON THE ACCOUNTS OF LOCAL GOVERNMENTS DISTRICT DIR LOWER AUDIT YEAR 2018-19 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ............................................................... i Preface ................................................................................................................. iii EXECUTIVE SUMMARY .................................................................................. iv SUMMARY TABLES & CHARTS ................................................................... viii I: Audit Work Statistics ...................................................................................... viii II: Audit observations Classified by Categories .................................................. viii III: Outcome Statistics ......................................................................................... ix IV: Table of Irregularities pointed out ................................................................... x V: Cost Benefit Ratio ............................................................................................ x CHAPTER-1 ........................................................................................................ 1 1.1 Local Governments Dir Lower .................................................................. 1 1.1.1 Introduction ............................................................................................... 1 1.1.2 Comments on Budget and Accounts (Variance Analysis) ........................... 5 1.1.3 Comments on the status of compliance with DAC / TAC Directives .......... 7 1.2 DISTRICT GOVERNMENT ..................................................................... 8 1.2.1 Misappropriation and Fraud ....................................................................... 9 1.2.2 Irregularity/Non-compliance .................................................................... 11 1.2.3 Internal Control Weaknesses .................................................................... 70 1.3 TMAs Timergara, Chakdara, Balambat, Samarbagh, Khall, Munda, Lalqila ...... 98 1.3.1 Irregularity/Non-Compliance ................................................................... 98 1.3.2 Internal Control Weaknesses .................................................................. 118 1.4 AD LG E&RDD/VCs/NCs DIR LOWER .............................................. 129 1.4.1 Irregularity/Non-Compliance ................................................................. 129 1.4.2 Internal Control Weaknesses .................................................................. 134 ANNEXURES .................................................................................................. 136 Annex-1 Detail of MFDAC ............................................................................... 136 Annex-2 Detail of fake issue of medicines to sub units ...................................... 138 Annex-3 Detail of funds withdrawn and transferred to PTCs ............................ 143 Annex-4 Detail of doubtful purchase and non issue of medicines ...................... 145 Annex-5 Detail of lease land and outstanding amount of lease money ............... 144 Annex-6 Detail of expenditure from polio fund and conveyance charges .......... 147 Annex-7 Detail of medicines bill of previous years ........................................... 148 Annex-8 Detail of non supply of science equipment .......................................... 149 Annex-9 Detail of non-deposit of deducted taxes .............................................. 150 Annex-10 Details of non supply of furniture and non imposition of penalty ...... 160 Annex-11 Detail of inadmissible expenditure on POL and repair vehicles ......... 161 Annex-12 Detail of purchaseof furniture from unapproved contractors ............. 162 Annex-13 Detail of POL of ambulances of THQs, Cat- D hospitals and RHCs . 163 Annex-14 Detail of overpayments of HPA and Conveyance Allowance ............ 165 Annex-15 Detail of loss due to purchase of equipment at higher rates ............... 167 Annex-16 Detail of loss due to placement of funds in current accounts ............. 170 Annex-17 Detail of excess withdrawal of POL and repair of ambulances .......... 172 Annex-18 Detail of non-deposit of health receipts ............................................. 174 Annex-19 Detail of schemes executed without technical ................................... 177 Annex-20 Detail of schemes executed without technical sanctions ................... 178 Annex-21 Detail of expenditure without Technical Sanction ............................. 179 Annex-22 Detail of non -imposition of penalty for late deposit of installments .. 180 Annex-23 Detail of non -deduction of stamp duty and professional tax ............. 181 Annex-24 Detail of expenditure without pre-audit ............................................. 182 Annex-25 Detail of non-imposition of penalty .................................................. 184 Annex-26 Detail of non-imposition of penalty .................................................. 186 Annex-27 Detail of loss due to non-acceptance of lowest rates .......................... 187 Annex-28 Detail of non-imposition of penalty .................................................. 189 ABBREVIATIONS AND ACRONYMS AA Administrative Approval AC Assistant Commissioner AAC Additional Assistant Commissioner ADC Assistant Deputy Commissioner ADP Annual Development Program AIR Audit and Inspection Report ASDEO Assistant Sub Divisional Education Officer BHU Basic Health Unit B&R Building & Roads C&W Communication & Works CD Civil Dispensary CPWA Central Public Works Accounts CPWD Central Public Works Department CRC Class Rooms Consumables DAC Departmental Accounts Committee DAO District Accounts Officer DD District Director DC Deputy Commissioner DEO District Education Officer DDO Drawing & Disbursing Officer DDEO Deputy District Education Officer DO District Officer DG Director General DHO District Health Officer DP Draft Para DPO District Police Officer DPR Disabled Persons Rehabilitation EDO Executive District Officer FC Frontier Constabulary FD Finance department FTR Federal Treasury Rules i FY Financial Year GFR General Financial Rules HPA Health Professional Allowance IPSAS International Public Sector Accounting Standards KPPPRA Khyber Pakhtunkhwa Public Procurement Regulatory Authority LGE&RDD Local Government Elections and Rural Development Department MCC Medicines Co-Ordination Cell NBP National Bank of Pakistan PAC Public Accounts Committee PAO Principal Accounting Officer P&D Planning & Development PESCO Peshawar Electric Supply Company PLA Personal Ledger Accounts PTC Parent teacher Council POL Petrol Oil Lubricant RHC Rural Health Center SIDB Small Industries Development Board S&GAD Services and General Administration SDEO Sub Divisional Education Officer SHC Sub Health Center TAC Tehsil Accounts Committee THQ Tehsil Head Quarter TMA Tehsil Municipal Administration TMO Tehsil Municipal Officer NC Neighborhood Council VC Village Council ii Preface Articles 169 and 170 of the Constitution of the Islamic Republic of Pakistan, 1973 read with Sections-8 and 12 of the Auditor General’s (Functions, Powers and Terms and Conditions of Service) Ordinance, 2001 and Section-37 of Khyber Pakhtunkhwa Local Government Act 2013 require the Auditor General of Pakistan to conduct audit of the receipts and expenditure of Local Governments of each District of the Khyber Pakhtunkhwa. The report is based on audit of the accounts of various Local Governments i.e.offices of District Government, Tehsil Municipal Administrations, Assistant Director Local Government Elections and Rural Development, Village Councils and Neighborhood Councils and Development Authorities in district Dir Lower for the financial year 2017-18. The Director General of Audit, District Governments, Khyber Pakhtunkhwa conducted audit during 2018-19 on test check basis with a view to report significant findings to the relevant stakeholders. The main body of the audit report includes the systemic issues and significant audit findings. Relatively less significant issues are listed in the Annex-1 of the Audit Report. The audit observations listed in the Annex-1 shall be pursued with the Principal Accounting Officers at the DAC level. In all cases where PAO’s do not initiate appropriate action, the audit observations will be brought to the notice of appropriate forum through the next year’s Audit Report. Audit findings indicate the need for adherence to the regularity framework besides instituting and strengthening internal controls to avoid recurrence of similar violations and irregularities. The observations included in this Report have been finalized in the light of written replies of the departments. However, in a few cases certain departments did not furnish written replies. DAC meetings were not convened despite repeated requests. The Audit Report is submitted to the Governor, Khyber Pakhtunkhwa in pursuance of Article 171 of the Constitution of the Islamic Republic of Pakistan, 1973 read with Section 37 of Khyber Pakhtunkhwa Local Government Act, 2013, for laying before the appropriate legislative forum. (Javaid Jehangir) Islamabad Auditor General of Pakistan Dated: iii EXECUTIVE SUMMARY The Director General Audit District Governments, Khyber Pakhtunkhwa carries out the audit of Local Governments of Khyber Pakhtunkhwa. Regional Directorate of Audit (RDA) Swat, on behalf of the DG Audit District Governments, Khyber Pakhtunkhwa carried out the
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