Audit Report on the Accounts of City District Government Rawalpindi
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AUDIT REPORT ON THE ACCOUNTS OF CITY DISTRICT GOVERNMENT RAWALPINDI AUDIT YEAR 2013-14 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS & ACRONYMS ....................................................... I PREFACE ................................................................................................. II EXECUTIVE SUMMARY .................................................................... III SUMMARY TABLE & CHARTS ........................................................VII Table 1: Audit Work Statistics .............................................................. vii Table 2: Audit observations .................................................................. vii Table3: Outcome Statistics ................................................................. viii Table4: Irregularities Pointed Out ......................................................... ix CHAPTER 1 ...............................................................................................1 1.1 City District Government Rawalpindi ...................................... 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 with with ZAC / PAC Directrives ........................................................................ 3 1.2 AUDIT PARAS .............................................................................5 1.2.1 Non-production of Record ....................................................... 6 1.2.2 Irregularity and Non-compliance of Rules .............................. 9 ANNEXURES ...........................................................................................21 ABBREVIATIONS & ACRONYMS B&R Building & Road BHU Basic Health Unit C&W Communication and Works CCB Citizen Community Board CD Community Development DAC Departmental Accounts Committee DCO District Coordination officer DDO Drawing and Disbursing Officer DEO (EE-M) District Education Officer (Elementary Education- Male) DO District Officer DHQ District Headquarters EDO Executive District Officer FD Finance Department F&P Finance and Planning HRA House Rent Allowance LP Local Purchase MS Medical Superintendent OFWM On-Farm Water Management PAO Principal Accounting Officer PFR Punjab Financial Rules PLGO Punjab Local Government Ordinance POL Petroleum Oil and Lubricants PPPRA Punjab Public Procurement Rules Authority RHC Rural Health Center SMC School Management Council SMO Senior Medical Officer SWM Solid Waste Management THQ Tehsil Headquarters TS Technical Sanction W&S Works and Services WUA Water Users Association ZAC Zila Accounts Committee i PREFACE Articles 169 & 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 shall be conducted by the Auditor General of Pakistan. Accordingly, the audit of all receipts and expenditures of the District Government Fund and Public Account of City 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, Rawalpindi for the financial years 2011-12 and 2012-13. The Directorate General of Audit District Governments Punjab (North), Lahore conducted audit during 2013-14 on test check basis with a view to report 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 Annexure-A of the Audit Report. The Audit observations listed in the Annexure-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 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 (Muhammad Akhtar Buland Rana) 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 City District Governments and sixteen District Governments. Its Regional Directorate of Audit, Rawalpindi has audit jurisdiction of District Governments, Tehsil / Town Municipal Administration and Union Administrations of one City District Government i.e. Rawalpindi and three District Governments i.e. Jhelum, Chakwal and Attock. 2. The Regional Directorate has a human resource of 15 officers and staff, total 4,185 man-days and the annual budget of Rs17.400 million for the financial year 2012-2013. It has mandate to conduct Financial Attest, Regularity Audit and Compliance with Authority & Performance Audit of entire expenditure including programmes / projects & receipts. Accordingly, R.D.A Rawalpindi carried out audit of the accounts of various offices of the City District Government, Rawalpindi for the financial year 2011-2012 and 2012-13. 3. City District Government Rawalpindi conducts its operations under Punjab Local Government Ordinance, 2001. It comprises one Principal Accounting Officer (PAO) i.e. the District Coordination Officer (DCO) covering seven groups of offices i.e. Finance & Planning, Works & Services, Education, Health, Community Development, Municipal Services and Agriculture. 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. 4. Audit of City District Government Rawalpindi was carried out with the view to ascertain that the expenditure was incurred with proper authorization, in conformity with laws / rules / regulations, economical procurement of assets and hiring of services etc. 5. 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 in the Government Account / Local Fund. iii Audit Objectives Audit was conducted with the objective to ensure that: 1. Money shown as expenditure in the accounts was authorized for the purpose for which it was spent. 2. Expenditure incurred was in conformity with the laws, rules and regulations framed to regulate the procedure for expending public money. 3. Every item of expenditure was incurred with the approval of the competent authority in the Government for expending the public money. 4. Public money was not wasted. 5. The assessment, collection and accountal of revenue is made in accordance with prescribed laws, rules and regulations. a) Audit Methodology Audit was performed through understanding the business process with respect to functions, control structure, prioritization of risk areas by determining their significance and identification of key controls. This helped auditors in understanding the systems, procedures, environment, and the audited entity before starting field audit activity. Audit used desk audit techniques for analysis of compiled data and review of permanent files / record. Desk Audit greatly facilitated identification of high risk areas for substantive testing in the field. b) Audit of Expenditure and Receipt Total expenditure of the City District Government Rawalpindi for the financial year 2012-2013 was Rs9, 451.689 million covering 622 formations. Out of this RDA Rawalpindi audited expenditure of Rs571.619 million which in terms of percentage was 6.5% of total expenditure. Regional Director Audit planned and executed audit of 32 formations i.e. 100% achievement against the planned audit activities. Total receipts of the CDG Rawalpindi for the financial year 2012-2013, were Rs160.746 million. RDA Rawalpindi audited receipts of Rs40 million which was 25% of total receipts. iv c) Recoveries at the Instance of Audit Recoveries of Rs6.663 million were pointed out, which were not in the notice of the executive before audit. An amount of Rs0.267 million was recovered and verified during the year 2013-14, till the time of compilation of report. d) Key Audit Findings of the Report i. Non-production of Record of Rs13.642 million noted in one case2. ii. Non-compliance of Rules of Rs52.034 million noted in six cases3. iii. Recoveries of Rs6.633 million noted in four cases4. iv. Analysis of budget and expenditure of City District Government Rawalpindi for the financial year 2012-13 revealed that the original budget was Rs9,182.226million; supplementary grant was Rs661.519 million whereas Rs162.261