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Auditor General of Pakistan AUDIT REPORT ON THE ACCOUNTS OF LOCAL GOVERNMENTS DISTRICT CHITRAL AUDIT YEAR 2018-19 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ............................................................... i Preface .................................................................................................................. ii EXECUTIVE SUMMARY .................................................................................. iii SUMMARY TABLES & CHARTS .................................................................... vii I: Audit Work Statistics ....................................................................................... vii II: Audit observations Classified by Categories ................................................... vii III: Outcome Statistics ....................................................................................... viii IV: Table of Irregularities pointed out .................................................................. ix V: Cost Benefit Ratio ........................................................................................... ix CHAPTER-1 ........................................................................................................ 1 1.1 Local Governments Chitral .................................................................... 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 ...... 6 1.2 AUDIT PARAS- District Government ................................................. 8 1.2.1 Irregularities and Non-Compliance ....................................................... 8 1.2.2 Internal Control Weaknesses .............................................................. 30 1.3 AUDIT PARAS- TMAS CHITRAL/ MASTUJ ................................ 57 1.3.1 Irregularities and non-compliance ....................................................... 57 1.3.2 Internal control weaknesses ................................................................ 62 1.4 AD LGE&RDD/VCs/NCs CHITRAL ................................................ 68 1.4.1 Irregularities and Non-Compliance ..................................................... 68 1.4.2 Internal Control Weaknesses .............................................................. 70 Annex-1 Detail of MFDAC ................................................................................ 71 Annex-2 Detail of Expenditure without TS ....................................................... 73 Annex-3 Detail of Expenditure before AA ........................................................ 76 Annex-4 Detail of Overpayment on account of Pay and allowances .................. 79 Annex-5 Detail of Recovery of Loans ............................................................... 80 Annex-6 Ddetail of medicines ............................................................................ 84 Annex-7 Detail of Repair of Machinery & equipments ....................................... 89 Annex-8 Detail of Pay and allowances paid during leave and absent period ...... 90 Annex-9 Detail of overpayment on account of Pay & Allownce ......................... 92 Annex-10 Detail of repair of vehicle and POL ................................................... 93 Annex-11 Detail of Doubtful Expenditure .......................................................... 94 Annex-12 Annexure of Pay & Allowances ......................................................... 96 Annex-13 Detail of penalty ................................................................................ 98 Annex-14 Detail of TS .................................................................................... 100 Annex-15 Loss to Government due to non adjustment of 7% I.T .................... 101 Annex-16 Detail of expenditure without T.S ................................................... 102 Annex-17 Detail of non imposition of penalty .................................................. 103 Annex-18 Detail of HDPE Pipe ....................................................................... 105 Annex-19 Loss to Government due to non adjustment of 7% I.T ..................... 106 Annex-20 Detail of Advance payment ............................................................. 108 Annex-21 Detail of expenditure without TS .................................................... 109 ABBREVIATIONS AND ACRONYMS AIR Audit and Inspection Report AA Administrative Approval AD Assistant Director AG Accountant General AP Advance Para APRs Actual Payee’s Receipt BHUs Basic Health Units CPWA Code Central Public Works Account Code DAC Departmental Accounts Committee DEO District Education Officer DHO District Health Officer DMO District Monitoring Officer DO District Officer DTL Drug Testing Laboratory GFR General Financial Rules KP Khyber Pakhtunkhwa KPPRA Khyber Pakhtunkhwa Public Procurement Regulatory Authority LGA Local Government Act LGE&RDD Local Government Elections & Rural Development Department MCC Medical Coordination Cell MFDAC Memorandum for Departmental Accounts Committee MPA Member Provincial Assembly M&R Maintenance and Repair NC Neighbourhood Council PAC Public Accounts Committee P&D Planning & Development Department PAO Principal Accounting Officer PCC Plain Concrete Cement PEC Pakistan Engineering Council PESCO Peshawar Electricity Supply Company SDO Sub Divisional Officer TMA Tehsil Municipal Administration TS Technical Sanction VC Village Council i 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 and Village Councils and Neighborhood Councils in District Chitral 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 some observations department did not submit 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. Dated: (Javaid Jehangir) Islamabad Auditor General of Pakistan ii EXECUTIVE SUMMARY The Director General Audit District Governments, Khyber Pakhtunkhwa carries out the audit of twenty six Local Governments of Khyber Pakhtunkhwa. Regional Directorate of Audit (RDA) Swat, on behalf of the DG Audit District Governments, Khyber Pakhtunkhwa carried out the audit of five District Governments namely Swat, Shangla, Dir Lower, Dir Upper and Chitral. The Regional Directorate has a human resource of six officers and staff with a total of 1,518 man-days. The annual budget amounting to Rs 12.005 million was allocated to the office during financial year 2018-19. The office is mandated to conduct regularity (financial attest audit and compliance with authority audit) and performance audits of programs/ projects. Local Governments of District Chitral consist of three tiers which perform their operations under Khyber Pakhtunkhwa Local Government Act 2013. Top tier- the District Government comprises one Principal Accounting Officer (PAO) i.e. Deputy Commissioner for the District Government, who is Officer in charge of nine departments devolved to local governments. Financial provisions of the Act, describe the Government fund as District Local Fund and District Public Account, for which Annual Budget Statement is authorized by the District Council in the form of budgetary grants. The second tier- Town/Tehsil Municipal Administrations have one PAO i.e. Tehsil Municipal officer for each administration. There are two tehsil administrations in district Chitral. The third tier- Village and Neighborhood Council have one principal accounting officer for development funds of these councils. There are 100 NC/VC’s in district Chitral. a. Scope of audit There are ten offices in District government Chitral, two Tehsil Municipal Administrations, one AD LGE&RDD
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