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Audit Report on the Accounts of Local Governments District Hangu

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Audit Report on the Accounts of Local Governments District Hangu AUDIT REPORT ON THE ACCOUNTS OF LOCAL GOVERNMENTS DISTRICT HANGU AUDIT YEAR 2018-19 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ...................................................................... i Preface ................................................................................................................... iii EXECUTIVE SUMMARY .......................................................................................... iv SUMMARY TABLES & CHARTS .......................................................................... viii I: Audit Work Statistics .............................................................................................. viii II: Audit observations Classified by Categories ......................................................... viii III: Outcome Statistics .................................................................................................. ix IV: Table of Irregularities pointed out ........................................................................... x CHAPTER-1 ........................................................................................................................... 1 1.1 Local Government Hangu ........................................................................... 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 PAC, DAC/TAC Directives .. 7 1.2 Audit Paras-District Government ................................................. 8 1.2.1 Irregularities & Non compliance ................................................................ 8 1.2.2 Internal Control Weaknesses .................................................................... 32 1.3 Audit Paras-TMAs Hangu/Thall .................................................... 37 1.3.1 Mis-appropriation ...................................................................................... 37 1.3.2 Irregularity/ Non compliance ..................................................................... 39 1.4.1 Irregularity/ Non compliance ..................................................................... 47 ANNEXURES.............................................................................................................. 50 Annex-1 ................................................................................................................... 50 Annex -2 Detail of unverified expenditure ................................................................ 53 Annex -3 Detail of unauthorized cash withdrawal .................................................... 54 Annex -4 Detail of blockade of government fund ..................................................... 55 Annex -5 A. Detail of irregular and unauthorized disbursement ................................. 57 Annex-6 Detail of irregular expenditure on account of other store .......................... 58 Annex -7 Detail of overpayment of HPA allowance ................................................. 59 Annex-8 Detail of non utilization of machinery ....................................................... 60 Annex-9 Detail of blockade of public money ........................................................... 61 Annex-10 Detail of non deduction of HRA & Conveyance ....................................... 62 Annex-11 Detail of loss due to less realization of revenue ........................................ 64 Annex-12 Detail of non realization of revenue .......................................................... 65 Annex-13 Detail of non imposition of penalty ........................................................... 66 Annex-14 Detail of non realization of revenue .......................................................... 69 Annex-15 Detail of non deduction of HRA &CA ...................................................... 70 ABBREVIATIONS AND ACRONYMS AAC Additional Assistant Commissioner ADC Additional Deputy Commissioner ADP Annual Development Programme AIR Audit & Inspection Report BHU Basic Health Unit BOQ Bill Of Quantity CD Call Deposit CMD Chief Minister Directives CNG Compressed Natural Gas CPWA Code Central Public Works Account Code CPWD Code Central Public Works Department Code C&W Communication and Works DAC District Accounts Committee DC Deputy Commissioner DDO Drawing and Disbursing Officer DGHS Director General Health Services DHO District Health Officer E&SE Elementary and Secondary Education GFR General Financial Rules HRA House Rent Allowance IT Information Technology KP Khyber Pakhtunkhwa KPPRA Khyber Pakhtunkhwa Public Procurement Regulatory Authority LGO Local Government Ordinance MFDAC Memorandum for Departmental Accounts Committee MFSC Model Farm Services Centre NCs Neighbourhood Councils NIT Notice for Inviting Tender NOC No Object Certificate i PAC Public Accounts Committee PAO Principal Accounting Officer PEC Pakistan Engineering Council PCC Plain Cement Concrete PHE Public Health Engineering RDA Regional Directorate of Audit RHC Rural Health Centre SMO Senior Medical Officer SNE Schedule for New Expenditure TMA Tehsil Municipal Administration TMO Tehsil Municipal Officer UCs Union Councils VCs Village Councils ii Preface Articles 169 & 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 District Fund and Public Account of District Governments. 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 Hangu 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 Officer at DAC level. In all cases where the PAO does 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, except in few cases mentioned in report. However, in a few cases certain departments did not submit written replies. Except Developmental Authorities 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. Islamabad (Javaid Jehangir) Dated: Auditor General of Pakistan iii EXECUTIVE SUMMARY The Director General Audit District Governments, Khyber Pakhtunkhwa carries out the audit of Local Governments of Khyber Pakhtunkhwa. Regional Directorate of Audit (RDA) Kohat, on behalf of the DG Audit District Governments, Khyber Pakhtunkhwa carried out the audit of Local Governments of three districts namely Kohat, Karak and Hangu. The Regional Directorate has a human resource of seven officers and staff with a total of 1,960 man-days. The annual budget amounting to Rs 13.646 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 Hangu consist of three tiers which perform their functions under Khyber Pakhtunkhwa Local Government Act 2013. Tier-1, the District Government comprises one Principal Accounting Officer (PAO) i.e. Deputy Commissioner for the District Government, who is Officer in charge of the offices 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 Hanug. The third tier- Village and Neighborhood Councils have one PAO i.e. The Assistant Director Local Government, Elections and Rural Development for development funds of these councils. There are 61 NC/VC’s in district Hangu. a. Scope of audit There are nine offices in District government Hangu, two Tehsil Municipal Administrations, one AD LGE&RDD, 61 VC/NC’s out of which the accounts of 08 offices of district government, two TMA’s, one AD LGE &RDD and 06 VC/NC’s were examined in detail. These entities were selected for
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