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Department of the Auditor General of Pakistan AUDIT REPORT ON THE ACCOUNTS OF CDA, CAA, NHA, PAK PWD, ESTATE OFFICE, FEDERAL GOVERNMENT EMPLOYEES HOUSING FOUNDATION, NATIONAL CONSTRUCTION LTD., PAKISTAN HOUSING AUTHORITY FOUNDATION, EVACUEE TRUST PROPERTY BOARD, FRONTIER CORPS, PAK RANGERS, HIGHER EDUCATION COMMISSION, WORKERS WELFARE FUND/BOARDS AND MINISTRY OF PLANNING, DEVELOPMENT & REFORMS (SPECIAL PROJECT CELL) GOVERNMENT OF PAKISTAN AUDIT YEAR 2013-14 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ...................................................................................... i PREFACE ..................................................................................................................................... v EXECUTIVE SUMMARY ........................................................................................................ vii SUMMARY TABLES & CHARTS ....................................................................................... xxiii I Audit Work Statistics ....................................................................................... xxiii II Audit Observations classified by Categories .................................................... xxiii III Outcome Statistics ............................................................................................. xxiv III Irregularities pointed out .................................................................................... xxv IV Cost-Benefit ...................................................................................................... xxvi CHAPTER 1 .................................................................................................................................. 1 PUBLIC FINANCIAL MANAGEMENT ISSUES (PAKISTAN PUBLIC WORKS DEPARTMENT) ................................................................................................................. 1 1.1 AUDIT PARAS ...................................................................................................... 1 1.1.1 Irregular payments without work done and booking as expenditure - Rs 5,975.92 million ..................................................................................................... 1 1.1.2 Non-production of record - Rs 243.58 million ....................................................... 3 CHAPTER 2 .................................................................................................................................. 5 CAPITAL DEVELOPMENT AUTHORITY ..................................................................... 5 2.1 Introduction ............................................................................................................ 5 2.2 Comments on Budget and Accounts (Variance Analysis) ..................................... 6 2.3 Brief comments on the status of compliance with PAC‟s directives ................... 11 2.4 AUDIT PARAS .................................................................................................... 13 Fraud/Misappropriations ................................................................................................. 13 2.4.1 Increase in amount of land compensation by unauthorized cutting/changes in Acquittance Roll - Rs 25.38 million ................................................................. 13 Irregularity and Non-Compliance ................................................................................... 14 2.4.2 Loss due to charging cost of plot at lesser rates on change of Floor Area Ratio after allotment - Rs 524.36 million ............................................................. 14 2.4.3 Loss due to non-recovery of commercialization charges of plot allotted for Institute and transfer to private parties - Rs 462.22 million ................................. 15 2.4.4 Irregular enhancement in scope of work - Rs 167.09 million .............................. 16 2.4.5 Conversion of land obtained for official residences into a Housing Society in violation of Lease Agreement - Rs 108.04 million .......................................... 17 2.4.6 Undue payment on account of extra items of leftover work of previous contractor - Rs 53.88 million ................................................................................ 18 2.4.7 Loss due to non-recovery on account of unauthorized occupation of excess land - Rs 29.00 million ......................................................................................... 19 2.4.8 Non-acceptance of lowest bid due to mis-management - Rs 15.96 million ......... 20 2.4.9 Irregular award of additional work - Rs 13.59 million ......................................... 21 2.4.10 Irregular/Unauthorized award of work to a non-specialized firm - Rs 8.92 million .................................................................................................................. 22 2.4.11 Non-submission of Budget to the Federal Government for approval .................. 23 Performance ..................................................................................................................... 25 2.4.12 Non-disposal of industrial and residential plots in Sector I-9 - Rs 4,456.00 million .................................................................................................................. 25 2.4.13 Inefficient/ineffective utilization of public development funds without achievement of prescribed objectives - Rs 842.63 million ................................... 26 2.4.14 Inefficient property management caused 122 kanal land grabbing ...................... 28 Internal Controls Weaknesses ......................................................................................... 29 2.4.15 Non-taking over possession of CDA land encroached by a housing scheme - Rs 2,313.82 million ............................................................................................ 29 2.4.16 Non-retrieval of CDA land from Housing Societies in Sector E-11 - Rs 2,290.00 million ................................................................................................... 31 2.4.17 Non-imposition & recovery of commercialization charges for operating commercial activity on plots allotted for establishment of manufacturing industries - Rs 2,285.33 million ........................................................................... 32 2.4.18 Non-recovery of cost of plot, delayed payment charges, capital value tax (CVT) and advance income tax - Rs 944.99 million ............................................ 33 2.4.19 Unauthorized/Illegal replacement of machinery of efficient tube wells without execution of contract agreement, approval of Government of Pakistan and disposal thereof without proper survey and cost analysis - Rs 819.45 million ...................................................................................................... 36 2.4.20 Non-obtaining of insurance policies to cover work, contractor‟s equipment and third party insurance - Rs 739.18 million ...................................................... 38 2.4.21 Loss to CDA due to enhancement of storeys of commercial plot in violation of bye-laws and encroachment on CDA land - Rs 550.51 million ........ 39 2.4.22 Non-taking over possession of cancelled industrial plots - Rs 500.00 million .................................................................................................................. 41 2.4.23 Non-recovery of commercialization charges - Rs 450.80 million........................ 42 2.4.24 Non-taking over possession of plots on cancellation of allotment - Rs 322.66 million ...................................................................................................... 43 2.4.25 Undue financial aid to the contractor due to unauthorized conversion of item from composite to labour rate - Rs 258.91 million ...................................... 44 2.4.26 Non-imposition/recovery of commercialization charges due to unauthorized change of trade of industrial plot - Rs 206.67 million .................... 47 2.4.27 Unauthentic consumption of POL valuing Rs 204.34 million ............................. 48 2.4.28 Irregular acceptance of insurance bond as performance guarantee instead of bank guarantee - Rs 64.28 million and non-obtaining of additional performance guarantee - Rs 121.49 million ......................................................... 49 2.4.29 Loss due to non-conviction for non-conforming use - Rs 153.90 million ........... 52 2.4.30 Non-imposition and recovery of penalty - Rs 82.43 million ................................ 53 2.4.31 Non-recovery of extension charges due to delay in completion of development works and non-imposition of penalty for changes in layout plan without approval - Rs 43.40 million ............................................................. 54 2.4.32 Less-recovery of additional storey charges - Rs 31.48 million ............................ 55 2.4.33 Loss due to removal of the secured material - Rs 29.09 million .......................... 58 2.4.34 Non-calculation and recovery of charges for allowing additional storeys - Rs 23.80 million ................................................................................................... 59 2.4.35 Non-recovery of building plan approval charges/delayed payment charges - Rs 13.65 million ................................................................................................... 61 2.4.36 Non-recovery of extension charges - Rs 13.62 million ........................................ 62 2.4.37 Issuance of completion certificate of building without clearance of violations,
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