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Audit Report on the Accounts of City District Government Lahore

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AUDIT REPORT
ON
THE ACCOUNTS OF
CITY DISTRICT GOVERNMENT
LAHORE

AUDIT YEAR 2015-16

AUDITOR GENERAL OF PAKISTAN

TABLE OF CONTENT

ABBREVIATIONS & ACRONYMS................................................... i PREFACE............................................................................................iii EXECUTIVE SUMMARY................................................................. iv

Table 1: Table 2: Table 3: Table 4: Table 5:
Audit Work Statistics.................................................... vii Audit Observations regarding Financial Management . vii Outcome Statistics ........................................................ vii Irregularities Pointed Out.............................................viii Cost-Benefit.................................................................viii

CHAPTER-1 ......................................................................................... 1

1.1 City District Government, Lahore........................................... 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 Compliance on MFDAC
Audit Paras of Audit Report 2014-15 ..................................... 3

1.1.4 Brief Comments on the Status of Compliance with PAC
Directives ................................................................................ 3

Fraud / Misappropriation.................................................... 5 Non-production of Record................................................... 9 Irregularity / Non-compliance .......................................... 12 Performance........................................................................ 61
1.2.1 1.2.2 1.2.3 1.2.4 ANNEXES........................................................................................... 64 Annex-A............................................................................................... 65 Annex-B............................................................................................... 88 Annex-C............................................................................................... 89 Annex-D............................................................................................... 96 Annex-E............................................................................................... 97 Annex-F............................................................................................. 101 Annex-G ............................................................................................ 104 Annex-H ............................................................................................ 105 Annex-I.............................................................................................. 106 Annex-J.............................................................................................. 107 Annex-K ............................................................................................ 108 Annex-L............................................................................................. 112 Annex-M............................................................................................ 115

ABBREVIATIONS & ACRONYMS

ACL AIR AIT
Audit Command Language Audit & Inspection Report Allama Iqbal Town
B&R B&C BHU C&W CCB CD CDC CMW CPRO DAC DCO DDC DDO DDOH DGA DHO DO
Buildings & Roads Bedding & Clothing Basic Health Unit Communication and Works Citizen Community Board Community Development Centre for Disease Control Community Mid Wife Chief Public Relation Officer Departmental Accounts Committee District Coordination officer District Development Committee Drawing and Disbursing Officer Deputy District Officer Health Director General Audit District Health Officer District Officer
DHQ E&M E&T EDO FD
District Headquarters Electrical & Mechanical Excise and Taxation Executive District Officer Finance Department
F&P HR
Finance and Planning Human Resource
HRA LC
House Rent Allowance Letter of Credit

  • LP
  • Local Purchase

  • MB
  • Measurement Book

M&E MLC MNCH
Machinery & Equipment Medico-legal Certificate Mother and Neo-natal Child Health

i

  • MS
  • Medical Superintendent

MSD MRS NAM OFWM PAC PAO PDFPR P&D
Medical Store Depot Market Rate Schedule New Accounting Model On-Farm Water Management Public Accounts Committee Principal Accounting Officer Punjab Delegation of Financial Powers Rules Planning and Development Passenger & Freight Transport Terminal Punjab Financial Rules
P&FTT PFR PDG & TMA Punjab District Governments & Tehsil Municipal
Administration
PLGO PMMD POL PPRA PW
Punjab Local Government Ordinance Punjab Machinery and Maintenance Department Petroleum Oil and Lubricants Punjab Procurement Regulatory Authority Public Works
RCC RHC SAP
Re-inforced Cement Concrete Rural Health Center System Application Product Skill Development Council Services and General Administration Department School Management Council Senior Medical Officer
SDC S&GAD SMC SMO SWM TA
Solid Waste Management Travelling Allowance
THQ TMA TS
Tehsil Headquarter Tehsil Municipal Administration Technical Sanction
W&S WUA
Works and Services Water Users Association

ii

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 City District Government, Lahore for the financial year 2014-15. The Directorate General of Audit District Governments Punjab (North), Lahore conducted audit during 2015-16 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 Rs1.00 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 in the light of written responses and discussion in DAC meetings.

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, shall cause it to be laid before the Provincial Assembly of Punjab.

Islamabad Dated:
(Rana Assad Amin)
Auditor General of Pakistan

iii

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, Lahore has Audit jurisdiction of District Governments, TMAs and UAs of one (01) City District Government i.e. Lahore and four (04) District Governments i.e. Kasur, Sheikhupura, Okara and Nankana Sahib.

The Regional Directorate of Audit Lahore has a human resource of
20 officers and staff having 5,706 man days and annual budget of Rs25.020 million for the financial year 2015-16. It has mandate to conduct Financial Attest, Regularity & Compliance with Authority Audit and Performance Audit of programmes / projects/ activity. Accordingly, RDA Lahore carried out Audit of accounts of City District Government, Lahore for the Financial Year 2014-15.

The City District Government, Lahore conducts its operations under Punjab Local Government Ordinance, 2001. It comprises of one Principal Accounting Officer (PAO) i.e. the District Coordination Officer (DCO) covering seven groups of offices i.e. Agriculture, Community Development, Education, Finance & Planning, Health, Municipal Services 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 City District Government Lahore was carried out with a view to ascertaining that the expenditure was incurred with proper authorization and in conformity with laws / rules / regulations, 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 and rules, there was no leakage of revenue and nothing kept outside Government Account/Local Fund.

  • a)
  • Scope of Audit

Total expenditure of the City District Government Lahore for the Financial Year 2014-15, was Rs20,761.10 million covering one PAO and 538 formations. Out of this, an expenditure of Rs6,228.329 million

iv was audited, which in terms of percentage, was 30 % of the total expenditure. Regional Director Audit planned and executed Audit of 40 formations i.e. 100% achievement against the planned Audit activities.

Total receipts from own sources of City District Government Lahore for the financial year 2014-15, were Rs1075.277 million. Directorate General Audit Punjab (North), audited receipts of Rs451.298 million which was 42% of total receipts.

b) c)
Recoveries at the instance of Audit

Recovery of Rs289.585 million was brought into the notice of the executive. An amount of Rs2.708 million was recovered and verified during the year 2015-16, till the time of compilation of report.

Audit Methodology

The audit year 2015-16 witnessed intensive application of Desk Audit techniques in this directorate. This was facilitated by access to live SAP/R3 data, internet facility, and availability of permanent files. Desk review helped auditors in understanding the systems, procedures, and environment of the audited entity before starting field activity. This greatly facilitated in the identification of high risk areas for substantive testing in the field.

  • d)
  • Audit Impact

A number of improvements, as suggested by audit, in maintenance of record and procedures, have been initiated by the concerned departments. However, audit impact in shape of change in rules has not been significant due to non-convening of regular PAC meetings. Had PAC meetings been regularly held, audit impact would have been manifold.

  • e)
  • Comments on Internal Controls and Internal Audit Department

Internal control mechanism of City District Government Lahore was not found satisfactory during audit. Many instances of weak Internal Controls have been highlighted during the course of audit which includes some serious lapses like withdrawal of public funds against the entitlement of employees. Negligence on the part of District Government authorities may be captioned as one of important reasons for weak Internal Controls.

v
Section 115-A (1) of PLGO, 2001 empowers Nazim of each District Government to appoint an Internal Auditor but the same was not appointed in City District Government Lahore.

  • f)
  • The key Audit findings of the report

i. Fraud/Misappropriation of Rs3.550 million was noted in different formations.1 ii. Non-production of record of Rs1518.315 million in different formations was noted.2 iii. Irregularity and non-compliance of Rs2092.407 million was noted in different formations.3 iv. Recovery of Rs286.035 million was pointed out in different formations.4

  • g)
  • Recommendations

  • i.
  • Inquiries need to be held to fix responsibility for fraud,

misappropriation, losses, theft and wasteful expenditure.

  • ii.
  • The PAO needs to take appropriate action for non-production

of record.

  • iii.
  • Departments need to comply with the Public Procurement

Rules for economical and rational purchases of goods and services.

iv.

v.
Inquiries need to be held to fix responsibility for unauthorized / irregular payments.

The PAO needs to make efforts for expediting the realization of various Government receipts.

  • vi.
  • Head of the District Government needs to conduct physical

stock taking of fixed and current assets.

1Para 1.1.1.1, 1.1.1.2 2Para 1.1.2.1 3Para 1.2.3.1-2, 1.2.3.4-5, 1.2.3.7-8, 1.2.3.11-14, 1.2.3.17-18, 1.2.3.20-25, 1.2.3.27-28, 1.2.3.30-32, 1.2.3.34-36, 1.2.3.39, 1.2.3.41, 1.2.3.43, 1.2.3.45 & 1.2.4.1 4Para 1.2.3.3, 1.2.3.6, 1.2.3.9-10, 1.2.3.15-16, 1.2.3.19, 1.2.3.26, 1.2.3.29, 1.2.3.33, 1.2.3.37-38, 1.2.3.40, 1.2.3.42, 1.2.3.44, 1.2.3.46 & 1.2.4.2

vi

SUMMARY TABLES & CHARTS

  • Table 1:
  • Audit Work Statistics

Rs in Million

Sr. No.

1234567

  • Description
  • No.
  • Budget

Total Entities (PAOs) under Audit Jurisdiction Total formations under Audit Jurisdiction Total Entities (PAOs) Audited Total formations Audited Audit & Inspection Reports Special Audit Reports
01
538
01 40 40
-
20,746.404 20,746.404
6,930.548 6,930.548 6,930.548
---
Performance Audit Reports Other Reports
-

  • -
  • 8

  • Table 2:
  • Audit Observations regarding Financial Management

Rs in Million

Sr. No.
Amount Placed under Audit Observation
Description

1234
Asset management Financial management Internal controls Others
62.834
289.585
2029.573
1,518.315

  • 3,900.307
  • TOTAL

  • Table 3:
  • Outcome Statistics

Rs in Million

Expenditure on Acquiring of Physical Assets
Total current year
Total Last year
Sr. No.
Civil Works

  • Description
  • Receipts
  • Others

(Procurement)

Outlays audited
1

  • 109.797 2,580.884
  • 451.298 3,537.648 6,679.627* 7,142.034

Amount placed

  • under
  • audit

2

34observation Irregularities of audit Recoveries pointed out at the instance of audit Recoveries accepted / established at the instance of audit

  • /
  • 62.834
  • 896.514 1,226.259
  • 1714.700

59.260
3,900.307 1,254.375
--
167.642 167.642
62.683 62.683
289.585 289.585
228.879

  • 228.879
  • 59.260

vii

Expenditure on Acquiring of Physical Assets
Total current year
Total Last year
Sr. No.
Civil Works

  • Description
  • Receipts
  • Others

(Procurement)

Recoveries realized at the instance of audit

  • 5
  • -

  • 2.573
  • 0.119
  • 0.016
  • 2.708
  • 3.627

  • *
  • The amount mentioned against serial No.1 in column of Total Current Year is the sum of

Expenditure and Receipts whereas the total expenditure for the current year was Rs 6,228.329 million.

  • Table 4:
  • Irregularities Pointed Out

Rs in Million

Amount Placed under Audit Observation
Sr. No.
Description

Violation of Rules and regulations, principle of propriety and probity in public operations Reported cases of fraud, embezzlement, theft and misuse of public resources
12
2,090.470
3.550
Accounting Errors (accounting policy departure

  • from
  • NAM1,
  • misclassification,
  • over
  • or

understatement of account balances) that are significant but are not material enough to result in the qualification of Audit opinions on the financial statements Quantification of weaknesses of internal controls systems Recoveries and overpayments, representing cases of established overpayment or misappropriation of public money
3
1.937

0
45
286.035
6

7
Non-production of record Others, including cases of accidents, negligence etc.
1,518.315
0

  • TOTAL
  • 3,900.307

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    Page 1 of 7 TEHSIL CODE LIST FOR THE HAJJ -2016 (FOR MEHRAM CODE LIST, PLEASE SEE LAST PAGE ) DIV DISTT TEHSIL CODE DISTT TEHSIL CODE 001 ISLAMABAD 001 PUNJAB 01 RAWALPINDI DIVISION 002 DISTRICT RAWALPINDI 003 DISTRICT ATTOCK RAWALPINDI 002 ATTOCK 009 KAHUTA 003 JAND 010 MURREE 004 FATEH JANG 011 TAXILA 005 PINDI GHEB 012 GUJAR KHAN 006 HASSAN ABDAL 013 KOTLI SATTIAN 007 HAZRO 014 KALLAR SAYYEDAN 008 004 DISTRICT CHAKWAL 005 DISTRICT JHELUM CHAKWAL 015 JHELUM 020 TALA GANG 016 PIND DADAN KHAN 021 CHOA SAIDAN SHAH 017 SOHAWA 022 KALLAR KAHAR 018 DINA 023 LAWA 019 02 SARGODHA DIVISION 006 DISTRICT SARGODHA 007 DISTRICT BHAKKAR SARGODHA 024 BHAKKAR 031 BHALWAL 025 MANKERA 032 SHAH PUR 026 KALUR KOT 033 SILAN WALI 027 DARYA KHAN 034 SAHIEWAL 028 009 DISTRICT MIANWALI KOT MOMIN 029 MIANWALI 038 BHERA 030 ESSA KHEL 039 008 DISTRICT KHUSHAB PIPLAN 040 KHUSHAB 035 NOOR PUR 036 QUAIDABAD 037 03 FAISALABAD DIVISION 010 DISTRICT FAISALABAD 011 DISTRICT TOBA TEK SING FAISALABAD CITY 041 TOBA TEK SING 047 FAISALABAD SADDAR 042 KAMALIA 048 JARANWALA 043 GOJRA 049 SAMUNDARI 044 PIR MAHAL 050 CHAK JHUMRA 045 012 DISTRICT JHANG TANDLIANWALA 046 JHANG 051 013 DISTRICT CHINIOT SHORE KOT 052 CHINIOT 055 AHMEDPUR SIAL 053 LALIAN 056 18-HAZARI 054 BHAWANA 057 04 GUJRANWALA DIVISION 014 DISTRICT GUJRANWALA 015 DISTRICT SIALKOT GUJRANWALA CITY 058 SIALKOT 063 GUJRANWALA SADDAR 059 DASKA 064 WAZIRABAD 060 PASROOR 065 NOSHEHRA VIRKAN 061 SAMBRIAL 066 KAMOKE 062 016 DISTRICT NAROWAL 017 DISTRICT HAFIZABAD NAROWAL 067 HAFIZABAD 070 SHAKAR GARH 068 PINDI BHATTIAN
  • Punjab Development Statistics 2017 Preface

    Punjab Development Statistics 2017 Preface

    Punjab Development Statistics 2017 Preface Bureau of Statistics has been issuing this publication since 1972. The present edition is the 43rd in the series. It provides important statistics in respect of social, economic and financial sectors of the economy at aggregate as well as sectoral levels. This publication contains data on almost all sectors of the Provincial economy with their break-up by Tehsil, District & Division as far as possible. Eight tables on Monthly Electricity and Gas Consumption, Number of Zoo, Number of Bulldozers, Small and Mini Dams, Recognized Slaughter Houses and two provisional tables on population census 2017 are also added in this issue. It includes some national data on important subjects like Major Crops, Foreign Trade, Labour Force & Employment, National Accounts, Population, Price and Transport etc. It contains a 'Statistical Abstract' which gives a comparative picture of information on almost all Socio- Economic sectors of Pakistan and the Punjab. Key findings of Multiple Indicator Cluster Servey (MICS): 2014 of some of the Socio-Economic Indicators are also included in this edition viz-a-viz Education, Health, Housing and Socio-Economic Development by district. Every effort has been made to include the latest available data in this publication. It is hoped that this publication will be useful to the policy makers, planners, researchers, govt. departments and other users of Socio-Economic data in public as well as private sector. I am thankful to various Provincial Departments / Agencies / Federal Ministries / Divisional/District offices for supplying the required data. Without their co-operation, it would have not been possible to release this publication in time.
  • Pre-Flood Plan for Moon Soon Season

    Pre-Flood Plan for Moon Soon Season

    FOREWORD Lahore is prone to flooding during monsoon season. Incessant rains always pose two pronged challenge i.e. from low degree to high degree flood depending upon the intensity of rains in catchment areas of River Ravi and accumulation of rain water in low lying areas of District Lahore. A befitting state of preparedness and with minimum reaction time in case of emergency requires a comprehensive planning. Through “Flood Plan 2020”, Lahore District aims at saving life and property, protecting vital installation and organizing timely information, evacuation, rescue, relief and rehabilitation operations. Lahore District is protected by Shahdara and Sharakpur bunds on the right side and by Mehmood Booti on the left. To save the population from the havocs of flood, a survey of the protection bunds has been got completed by the authorities of Irrigation Department in Coordination with Revenue Department. Necessary repair / maintenance work will be completed by 10th June, 2020 positively. All departments including LESCO, PTCL, SWM, Rescue 1122, WASA, Livestock, Health, PHA and Civil Defence have prepared comprehensive Contingency Plans which will help counter the havoc played by the floods. Once more the officers of CDGL under the aegis of Deputy Commissioner, Lahore are on the vanguard to combat any emergency. 1 | P a g e Figure 1: Lahore Map 2 | P a g e INDEX FOREWORD ........................................................................................... 1 INDEX ....................................................................................................
  • Audit Report on the Accounts of City District Government Lahore Audit

    Audit Report on the Accounts of City District Government Lahore Audit

    AUDIT REPORT ON THE ACCOUNTS OF CITY DISTRICT GOVERNMENT LAHORE AUDIT YEAR 2016-17 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENT ABBREVIATIONS & ACRONYMS ................................................. i PREFACE ......................................................................................... iii EXECUTIVE SUMMARY ............................................................... iv Table 1: Audit Work Statistics ................................................. viii Table 2: Audit Observations regarding Financial Management. viii Table 3: Outcome Statistics ........................................................ ix Table 4: Irregularities Pointed Out .............................................. x Table 5: Cost-Benefit .................................................................. x CHAPTER-1 ...................................................................................... 1 1.1 City District Government, Lahore ......................................... 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 Compliance on MFDAC Audit Paras of Audit Report 2015-16 .................................... 4 1.1.4 Brief Comments on the Status of Compliance with PAC/ZAC Directives .............................................................................. 4 1.2 AUDIT PARAS .................................................................. 5 1.2.1 Fraud/ Misappropriation ..................................................