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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 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: Audit Work Statistics .................................................... vii Table 2: Audit Observations 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 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 1.2 AUDIT PARAS ...................................................................... 4 1.2.1 Fraud / Misappropriation .................................................... 5 1.2.2 Non-production of Record ................................................... 9 1.2.3 Irregularity / Non-compliance .......................................... 12 1.2.4 Performance ........................................................................ 61 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 Audit Command Language AIR Audit & Inspection Report AIT Allama Iqbal Town B&R Buildings & Roads B&C Bedding & Clothing BHU Basic Health Unit C&W Communication and Works CCB Citizen Community Board CD Community Development CDC Centre for Disease Control CMW Community Mid Wife CPRO Chief Public Relation Officer DAC Departmental Accounts Committee DCO District Coordination officer DDC District Development Committee DDO Drawing and Disbursing Officer DDOH Deputy District Officer Health DGA Director General Audit DHO District Health Officer DO District Officer DHQ District Headquarters E&M Electrical & Mechanical E&T Excise and Taxation EDO Executive District Officer FD Finance Department F&P Finance and Planning HR Human Resource HRA House Rent Allowance LC Letter of Credit LP Local Purchase MB Measurement Book M&E Machinery & Equipment MLC Medico-legal Certificate MNCH Mother and Neo-natal Child Health i MS Medical Superintendent MSD Medical Store Depot MRS Market Rate Schedule NAM New Accounting Model OFWM On-Farm Water Management PAC Public Accounts Committee PAO Principal Accounting Officer PDFPR Punjab Delegation of Financial Powers Rules P&D Planning and Development P&FTT Passenger & Freight Transport Terminal PFR Punjab Financial Rules PDG & TMA Punjab District Governments & Tehsil Municipal Administration PLGO Punjab Local Government Ordinance PMMD Punjab Machinery and Maintenance Department POL Petroleum Oil and Lubricants PPRA Punjab Procurement Regulatory Authority PW Public Works RCC Re-inforced Cement Concrete RHC Rural Health Center SAP System Application Product SDC Skill Development Council S&GAD Services and General Administration Department SMC School Management Council SMO Senior Medical Officer SWM Solid Waste Management TA Travelling Allowance THQ Tehsil Headquarter TMA Tehsil Municipal Administration TS Technical Sanction W&S Works and Services WUA 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 (Rana Assad Amin) Dated: 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
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