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Audit Report on the Accounts of City District Government Lahore Audit

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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 ................................................... 6 1.2.2 Non-production of Record ............................................... 13 1.2.3 Irregularity / Non-compliance ......................................... 15 1.2.4 Performance ..................................................................... 87 ANNEXES ........................................................................................ 90 ABBREVIATIONS & ACRONYMS AA Administrative Approval ACL Audit Command Language AIT Allama Iqbal Town B&R Buildings & Roads BHU Basic Health Unit CA Conveyance Allowance C/E Chief Engineer C&W Communication and Works CMW Community Mid Wife CPRO Chief Public Relation Officer CR Chlorinated Rubber DAC Departmental Accounts Committee DCO District Coordination officer DDC District Development Committee DDO Drawing and Disbursing Officer DDO(H) Deputy District Officer (Health) DGA Director General Audit DGBT Data Gunj Bukhash Town DGPR Director General Public Relation DHQ District Headquarters DO District Officer DOH District Officer Health DNIT Draft Notice Inviting Tender E&M Electrical & Mechanical EDO Executive District Officer FBR Federal Board of Revenue FD Finance Department F&P Finance and Planning HR Human Resource HRA House Rent Allowance IDH Infectious Disease Hospital JMF Job Mix Formula LC Letter of Credit LP Local Purchase i LPC Lahore Parking Company MB Measurement Book MS Medical Superintendent MSD Medical Store Depot MRS Market Rate Schedule NAM New Accounting Model OFWM On-farm Water Management OPD Out door Patient Department PAC Public Accounts Committee PAO Principal Accounting Officer PDFPR Punjab Delegation of Financial Powers Rules P&D Planning and Development PFR Punjab Financial Rules PDG & TMA Punjab District Governments & Tehsil Municipal Administration PLGO Punjab Local Government Ordinance 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 S&GAD Services and General Administration Department SDO Sub-divisional Officer SE Superintending Engineer SMC School Management Council SMO Senior Medical Officer SSB Social Security Benefit TA Travelling Allowance THQ Tehsil Headquarter TMA Tehsil Municipal Administration TP Thermo Plastic TS Technical Sanction W&S Works and Services WUA Water Users Association XEN Executive Engineer 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 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 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, who 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 21 officers and staff having 5,271 man-days and annual budget of Rs 28.982 million for the financial year 2016-17. 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 2015-16. 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 2015-16, was Rs 26,550.397 million covering one PAO and 538 formations. Out of this, an expenditure of Rs 7,965.119 million iv was audited, which in terms of percentage, was 30 % of the total expenditure. Regional Director Audit planned and executed Audit of 39 formations i.e. 100% achievement against the planned Audit activities, whereas printed draft paras in relation to LWMC are separately being compiled as distinct Audit Report. Total receipts from own sources of City District Government Lahore for the Financial Year 2015-16, were Rs 1,184.423 million. Directorate General Audit Punjab (North), audited receipts of Rs 592.211 million which was 50 % of total receipts. b) Recoveries at the instance of Audit Recovery of Rs 1,303.967 million was pointed out whereas recovery of Rs 19.740 million was affected during the Audit Year 2016-17. c) Audit Methodology The audit year 2016-17 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
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