Audit Report on the Accounts of Secretary Local Government Department Karachi Metropolitan Corporation & Karachi Water &

AUDIT REPORT ON THE ACCOUNTS OF SECRETARY LOCAL GOVERNMENT DEPARTMENT KARACHI METROPOLITAN CORPORATION & KARACHI WATER & SEWERAGE BOARD AUDIT YEAR 2012-13

AUDITOR GENERAL OF PAKISTAN

TABLE OF CONTENTS

ABBREVIATIONS AND ACRONYMS ...... i Preface ...... iv EXECUTIVE SUMMARY ...... v SUMMARY TABLES & CHARTS ...... ix Table 1: Audit Work Statistics ...... ix Table 2: Audit observations Classified by Categories ...... ix Table 3: Outcome Statistics ...... x Table 4: Table of Irregularities pointed out ...... xi CHAPTER-1 ...... 1 1.1 Introduction/profile of the entities ...... 1 1.1.1 Secretary Local Government ...... 1 1.1.2 Karachi Metropolitan Corporation ...... 1 1.1.3 Karachi Water & Sewerage Board ...... 2 1.1.4 Comments on Budget and Accounts (Variance Analysis) ...... 2 1.2 AUDIT PARAS ...... 10 1.2.1 Misappropriation / Fraud ...... 10 1.2.2 Non-Production of Record ...... 12 1.2.3 Irregularity / Non-Compliance ...... 13 1.2.4 Internal Controls Weakness ...... 36 ANNEXURE ...... 41

ABBREVIATIONS AND ACRONYMS

ACL Audit Command Language AEE Assistant Executive Engineer ADOE Assistant Director Officer Education ADP Annual Development Programme AG Accountant General Admn Administration BOQ Bill of Quantity BPS Basic Pay Scale BT&D Bulk Transmission & Distribution CDGK City District Govt. Karachi CE Chief Engineer Cft Cubic feet CNG Compressed Natural Gas CPWA Code Central Public Works Accounts Code CPWD Code Central Public Works Department Code CRC/PBM Consumer Report Card / Performance Bench Mark CSR Composite Schedule of Rates DAC Departmental Accounts Committee DCO District Coordination Officer DDO Drawing & Disbursing Officer DG Director General DMD Deputy Managing Director D.O District Officer EDO Executive District Officer ECNEC Executive Committee for National Economic Council E&M Electrical Mechanical F.A Financial Advisor FAO Field Audit Office FBR Federal Board of Revenue FD Finance Division / Department F&P Finance and Planning FY Financial Year

GFR General Financial Rules GOS Govt. of Sindh GST General Sales Tax HBA House Building Advance H.R Hot rolled HRA House Rent Allowance HRM Human Resource Management HS&TO Hydrant Services & Tanker Operation I/C Including IPC’S Interim Payment Certificate KD Karachi Division KMC Karachi Municipal Corporation KW&SB Karachi Water & Sewerage Board LG Local Govt. MD Managing Director MEFDAC Memorandum for Departmental Accounts Committee MNA Member of National Assembly MOU Memorandum of Understanding MPA Member of Provincial Assembly MPAPP Member of Provincial Assembly Priority Programme MS Medical Services MT&RI Municipal Training & Research Institute NEK North East Karachi PAO Principal Accounting Officer PS Personal Secretary PC-I Planning Commission Proforma-I PD Project Director P&F Purification and Filter P/L Providing and Laying P/F Providing and Fixing POL Petroleum, Oil and Lubricants PPRA Public Procurement Regulatory Authority MT&RI Municipal Training & Research Institute PWD Public Works Department

PSDP Public Sector Development Program RA Running Account R.E Resident Engineer RHC Rural Health Centre Rft Running feet RO&DP Reverse Osmosis & Desalination Plant RRG Revenue Resources Generation R&T Road & Transport SE Superintendent Engineer S.S (HTP) Special Secretary for Housing & Town Planning SCS&LGTA Sindh Civil Services & Local Govt. Training Academy S/F Supplying & Fitting Sft Square Feet SLGB Sindh Local Govt. Board SMH Sobhraj Maternity Hospital SO Section Officer SOP Standard Operating Procedures SPPRA Sindh Public Procurement Regularity Authority SR Supplementary Rule SRC Standing Rates Committee TMA Town Municipal Administration T&C Transport & Communication TR Treasury Rules UA Union Administration UC Union Council VOL Volume WD Water Distribution XEN Executive Engineer

iii

Preface

Articles 169 & 170 (2) of the Constitution of the Islamic Republic of Pakistan, 1973, read with Sections 8 and 12 of the Auditor General (Functions, Powers and Terms and Conditions of Service) Ordinance, 2001, require the Auditor General of Pakistan to conduct audit of the receipts and expenditure of the Secretary Local Govt. Department, Karachi Metropolitan Corporation, Karachi Water & Sewerage Board, Taluka / Town Municipal Administrations and Union Councils.

This report is based on audit of the accounts of various offices of the Secretary Local Govt. Department, Karachi Metropolitan Corporation and Karachi Water & Sewerage Board for the financial year 2011-12. The Directorate General of Audit, Local Councils, Sindh, conducted audit during 2012-13 on test check basis with a view to reporting significant findings to the relevant stakeholders.

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.

Most of the observations included in this report have been finalized in the light of written response(s) and discussion(s) in the DAC meetings in case of paras related to audit year 2012-13. While in remaining cases Principal Accounting Officer failed to convene DAC meetings, despite pursuance by audit.

The Audit Report is submitted to the Governor of the Sindh in pursuance of Article 171 of the Constitution of the Islamic Republic of Pakistan, 1973 read with Section 116 of the Sindh Local Government Act 2013, for causing it to be laid before the Provincial Assembly of the Sindh.

Islamabad (Muhammad Akhtar Buland Rana) Dated: Auditor General of Pakistan

EXECUTIVE SUMMARY

The DG Audit, Local Councils, Sindh, Karachi is responsible to carry out the audit of 119 Taluka / Town municipal Administrations. This Directorate General has a human resource of 33 officers and staff, resulting in 2,937 man days and annual budget amounted to Rs 67.096 million for the financial year 2011-12. The office has a mandate to conduct regularity audit (compliance with authority audit) on test check basis with a view to report significant findings to the relevant stakeholders. This office also conducts performance audit of programmes / projects.

Secretary Local Govt. Department performs his duties under the Sindh Rules of Business 1986. According to financial provisions of the Constitution of Islamic Republic of Pakistan Provincial Consolidated Fund is based on Annual Budget Statement which is authorized by the Provincial Assembly. Further, Karachi Metropolitan Corporation and Karachi Water & Sewerage Board conduct their operations under Sindh Local Government Ordinance, 1979 (as amended). It comprises of one Principal Accounting Officer (PAO). Karachi Metropolitan Corporation covers fifteen groups of offices.

Karachi Water & Sewerage Board includes Managing Director, five Deputy Managing Directors and nine Chief Engineers. Financial provisions of the Ordinance of 1979 describe the budget as Local Fund and Public Account for which Annual Budget Statement is authorized by the Administrator/Karachi Water & Sewerage Board in the form of budgetary grants on the basis of the estimated revenue receipt duly approved by Local Government Department, GoS. a. Scope of Audit

The expenditure of the Secretary Local Government Department, Karachi Metropolitan Corporation and Karachi Water & Sewerage Board (KW&SB) for the financial year 2011-12, was Rs 1,8715.221 Million covering 01 PAO and 394 formations. Out of this, DGA, Local Councils, Sindh, audited an expenditure of Rs 7,486.088 Million, in terms of percentage, is 40% for the financial year 2011-12. Out of 394 formations, audit of 132 formations were conducted which, in terms of Percentage, is 100% achievement against the planned activities. Annexure-2 (Audit Impact Summary) provides additional information regarding the audit impact.

The selection of the audit formations i.e. DDO wise was made keeping in view the significance and risk assessment of entities, samples were selected after prioritizing risk areas by determining significance and risk associated with identified key controls. b. Recoveries at the at the instance of audit

Recoveries of Rs 1,344.568 Million were pointed out during the audit. However, recoveries of Rs 42.763 Million were affected till the finalization of this report. Out of the total recoveries, Rs 12.991 Million was not in the notice of the executive before audit. c. 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 in the field. The selection of audit formations was carried out on the basis of budget / significance, risk assessment, identification of weaknesses in internal controls and development of audit observations and recommendations relating to non-compliance of laws, rules, regulations and prescribed procedures and then reporting and follow up.

d. Audit Impact On pointation of audit, KW&SB has stopped the irregular sanctioning of POL to their employees for their private vehicles. Besides, authority has started deduction of house rent and electricity charges on fixed rates from the salaries of employees residing in official accommodation. Moreover, KW&SB has issued directives for preparation of Log books, History Sheets, and Petrol Consumption Accounts of each vehicle to justify the expenditure.

vi e. Comment on Internal Control and Internal Audit Department Several control deviations in the internal control system were noticed during the audit year 2012-13. Major internal control weaknesses have been reported in Chapter 3. Moreover, other internal control weaknesses have been incorporated in Annexure-1. Internal audit departments do exist in KMC and KW&SB but are not effectively functioning, whereas, the internal audit does not exist in the Department of Secretary, LG.

f. The key audit findings of the report

i. Misappropriation / Fraud were pointed out in 03 cases amounting to Rs 228.868 Million1.

ii. Non-Production of Record was pointed out in 01 case amounting to Rs 1,756.423 Million2.

iii. Irregularity / Non-Compliance of rules were pointed out in 30 cases 3 amounting to Rs 1,885.027 Million .

iv. Internal Control Weakness was pointed out in 05 cases amounting 4 to Rs 2,799.572 Million

Audit paras for the audit year 2011-12 & 2012-13 involving procedural violations including internal control weaknesses and irregularities not considered worth reporting to the PAC are included in MFDAC (Annexure-1).

1 Para 1.2.1.1,1.2.1.2, 1.2.1.3 2 Para 1.2.2.1 3 Para 2.2.2.1, 2.2.2.2, 2.2.2.3, 2.2.2.4, 2.2.2.5, 2.2.2.6, 2.2.2.7, 2.2.2.8, 2.2.2.9, 2.2.2.10, 2.2.2.11, 2.2.2.12, 2.2.2.13, 2.2.2.14, 2.2.2.15, 2.2.2.16, 2.2.2.17, 2.2.2.18, 2.2.2.19, 2.2.2.20, 2.2.2.21, 2.2.2.22, 2.2.2.23, 2.2.2.24, 2.2.2.25, 2.2.2.26, 2.2.2.27, 2.2.2.28, 2.2.2.29, 2.2.2.30 4 Para 2.2.3.1, 2.2.3.2, 2.2.3.3, 2.2.3.4, 2.2.3.5

vii g. Recommendations

i. The Secretary, Local Government Department, KW&SB and Karachi Metropolitan Corporation should comply to the SPPRA Rules 2010 for procurement of goods and services.

ii. Recovery pointed out by audit should be affected promptly and disciplinary action be taken against the officials involved in violation of rules and regulations.

iii. Inquiries should be held to fix responsibility for losses and wasteful expenditure.

iv. There is need to strengthen internal controls to ensure that types of lapses reported are not repeated and fair value for money is obtained from public spending.

viii

SUMMARY TABLES & CHARTS

Table 1: Audit Work Statistics (Rupees in Million) Sr. Description No. Budget 1. Total Entities (PAOs) in Audit Jurisdiction 01 50,246.300 2. Total formations in Audit Jurisdiction 394 50,246.300 *3. Total Entities (PAOs) Audited 01 7,486.088 *4. Total formations Audited 132 7,486.088 *5. Audit & Inspection Reports 132 7,486.088 6. Special Audit Reports - - 7. Performance Audit Reports - - 8. Other Reports (Relating to District Government) - - * The figures at serial No. 3, 4 & 5 represent expenditure

Table 2: Audit observations Classified by Categories

(Rupees in Million) Monetary Value of Sr. Description Audit Para Reference Observations 1. Unsound asset management 228.862 1.2.1.1,1.2.1.2, 1.2.1.3 2.2.2.1, 2.2.2.2, 2.2.2.3, 2.2.2.4, 2.2.2.5, 2.2.2.6, 2.2.2.7, 2.2.2.8, 2.2.2.9, 2.2.2.10, 2.2.2.11, 2.2.2.12, 2.2.2.13, 2.2.2.14, 2.2.2.15, 2.2.2.16, 2.2.2.17, 2. Weak financial management 1,885.027 2.2.2.18, 2.2.2.19, 2.2.2.20, 2.2.2.21, 2.2.2.22, 2.2.2.23, 2.2.2.24, 2.2.2.25, 2.2.2.26, 2.2.2.27, 2.2.2.28, 2.2.2.29, 2.2.2.30 Weak Internal control relating to financial 2. 2.3.1, 2.2.3.2, 2.2.3.3, 3. 2,799.572 Management 2. 2.3.4, 2.2.3.5 4. Others 1,756.423 1.2.2.1

Total 6,669.884

Table 3: Outcome Statistics

(Rupees in Million) Expenditure on Acquiring Receipts Total *Total Civil Sr. Description Physical (Revenue Others current Last Works Assets Targets) year Year (Procurement) Outlays 1. 136.181 3,547.704 19,013.313 3,802.203 **26,499.401 -N/A- Audited Amount Placed under Audit 2. 82.002 3,446.143 1,344.568 1,797.171 6,669.884 -N/A- Observation/ Irregularities of Audit Recoveries Pointed Out 3. at the 9.277 166.233 937.625 231.433 1,344.568 -N/A- instance of Audit Recoveries Accepted /Established 4. 0.093 1.662 9.376 2.314 13.466 -N/A- at the instance of Audit Recoveries Realized at 5. 0 0.245 10.201 2.545 12.991 -N/A- the instance of Audit

* This was first audit for the financial year 2011-12 since office was created on 05-09-2012.

** The amount mentioned against serial No. 1 column of “Total current Year” is the sum of Expenditure and Receipt whereas the total expenditure for the current year was Rs 7,486.088 million

Table 4: Table of Irregularities pointed out

(Rupees in Millions) Amount Placed under Sr. Description Audit Observation

1 Violation of Rules and regulations and violation of principle of propriety and probity in public operations. 769.321

2 Reported cases of fraud, embezzlement, thefts and misuse of public resources. 228.862 1 Accounting Errors (accounting policy departure from NAM , 3 misclassification, over or understatement of account balances) that are significant but are not material enough to result in the 0 qualification of audit opinions on the financial statements.

4 Quantification of weaknesses of internal control systems. 2,799.572

Recoveries and overpayments, representing 5 cases of establishment overpayment or misappropriations 1,115.706 of public money*.

6 Non-production of record. 1,756.423

7 Others, including cases of accidents, negligence etc. 0

Total 6,669.884

*Difference between items 4 of table 3 is due to some of the formations neither submitted replies nor DAC meeting was convened to discuss audit paras of KMC and KW&SB.

1 The Accounting Policies and Procedures prescribed by the Auditor General of Pakistan which are IPSAS (Cash) compliant.

CHAPTER-1 1.1 Introduction/profile of the entities 1.1.1 Secretary Local Government Secretary, Local Government Department, Sindh, being the Principal Accounting Officer is the overall administrative head of Karachi Metropolitan Corporation / Municipal Corporations, Karachi Water & Sewerage Board (KW&SB), defunct Taluka / Town Municipal Administrations and Union Administrations etc.

1.1.2 Karachi Metropolitan Corporation Activities of KMC are managed through offices of Administrator and Senior Directors under Sindh Local Government Ordinance, 1979. Each group of Office consists of a Senior Director. The Senior Director by means of a standing order distributes the work among the officers, branches, or sections of each office. Following is the list of departments which manage the activities of KMC. 1. Administrator 2. Senior Director (F&P) 3. Senior Director (Revenue) 4. Senior Director (IT) 5. Senior Director (Education) 6. Senior Director (Health) 7. Senior Director (CDD) 8. Senior Director (Agriculture) 9. Senior Director (E&IP) 10. Director General (KMTC) 11. Senior Director (MS) 12. Senior Director (T&C) 13. Senior Director (Literacy) 14. Senior Director (Law) 15. Director General (P&H)

1.1.3 Karachi Water & Sewerage Board The office of Managing Director, Water & Sewerage Board, Karachi, comprised of five departments headed by Deputy Managing Directors. Following is the list of departments which manage activities of KW&SB.

1. Deputy Managing Director, Planning, 2. Deputy Managing Director, Technical Services 3. Deputy Managing Director, Finance 4. Deputy Managing Director, Revenue Resource Generation 5. Deputy Managing Director, Human Resource Development and Administration

1.1.4 Comments on Budget and Accounts (Variance Analysis)

i. Budget of Secretary Local Government (Rupees in Million) 2011-12 Budget Expenditure Excess (+) Saving (-) Salary 224.722 258.388 33.665 Non-salary 47.304 42.071 -5.233 Development 593.186 525.092 -68.094 Total 865.212 825.551 -39.661

Expenditure 2011-12

The original budget of Secretary, Local Government, during 2011-12 was Rs 865.212 Million, against which the total expenditure incurred was Rs 825.551 Million. There was overall saving of Rs 39.661 Million which was 5% of total budget.

Budget & Expenditure 2011-12

The comparative analysis of the budget and expenditure of current and previous financial year is depicted as under:

Comparison of Budget & Expenditure 2010-11 & 2011-12

There was 15% increase in the budget allocation and expenditure of financial year 2011- 12 viz a viz financial year 2010-11. However overall saving during the financial year 2011-12 remained Rs 39.661 million which was 15% more than the saving of financial year 2010-11.

Budget of Karachi Metropolitan Corporation

(Rupees in Million) 2011-12 Budget Expenditure Excess (+) Saving (-) Salary 6,419.101 6,241.597 -177.504 Non-salary 9,236.838 1,351.676 -7,885.162 Development 9,350.000 610.235 -8,739.765 Total 25,005.939 8,203.508 -16,802.431

Expenditure 2011-12

The original budget of Karachi Metropolitan Corporation during 2011-12 was Rs 25,005.939 Million the total expenditure incurred was Rs 8,203.508 Million. There was overall savings of Rs 16,802.431 Million which was 67% of total budget.

Budget & Expenditure 2011-12

The comparative analysis of the budget and expenditure of current and previous financial years is depicted as under:

Comparison of Budget & Expenditure 2010-11 & 2011-12

* Budget allocation indicates only KMC portion excluding Karachi Development Authority and Parks & Horticulture Department. Besides, transfer of offices of devolved departments Govt. of Sindh back to their original position due to repealment of Sindh Local Govt. Ordinance 2001.

There was 35% decrease in the budget allocation and expenditure of financial year 2011-12 viz a viz financial year 2010-11. However overall saving during the financial year 2011-12 remained Rs 16,802.430 million which was 58% more than the saving of financial year 2010-11. The overall budget estimates were unrealistic and based on previous practises.

Revenue Collection 2011-12

Budget of Karachi Water & Sewerage Board

(Rupees in Million) 2011-12 Budget Expenditure Excess (+) Saving (-) Salary 3,348.085 3,005.523 -342.562 Non-salary 4,101.153 1,696.706 -2,404.447 Development 16,925.909 4,983.933 -11,941.976 Total 24,375.147 9,686.162 -14,688.985

Expenditure 2011-12

The original budget of Karachi Water & Sewerage Board during 2011-12 was Rs 24,375.147 Million against final budget the total expenditure incurred was Rs 9,686.162 Million. However, there was overall saving of Rs 14,688.985 Million which was 60% of total budget.

Budget & Expenditure 2011-12

The comparative analysis of the budget and expenditure of current and previous financial years is depicted as under:

Comparison of Budget & Expenditure 2010-11 & 2011-12

There was 40% increase in the budget allocation and expenditure of financial year 2011- 12 viz a viz financial year 2010-11. However overall saving during the financial year 2011-12 remained Rs 14,688.985 million which was 60% more than the saving of financial year 2010-11.

Revenue Collection 2011-12

1.1.5 Brief comments on the status of compliance with PAC Directives The audit report pertaining to financial year 2011-12 has been submitted to Governor of Sindh. Detail of PAC meeting is given below:

Sr. Audit Year No. of Paras Status of PAC Meetings 1. 2011-12 44 Held on 23-01-2013

1.2 AUDIT PARAS 1.2.1 Misappropriation / Fraud 1.2.1.1 Misappropriation - Rs 225.455 Million

Para 23 of General Financial Rules Volume- I, states that, “Every Govt. officer should realize fully and clearly that he will be held personally responsible for any loss sustained by Govt. through fraud or negligence on his part and that he will also be held personally responsible for any loss arising from fraud or negligence on the part of any other Govt. officer to the extent to which it may be shown that he contributed to the loss by his own action or negligence”.

During audit it was observed that huge amount of public funds was withdrawn from the treasury in the following three formations but evidences of utilization of these funds were not found available to substantiate the bonafide of the expenditure. a. Financial Advisor, KMC, had drawn Rs 225.000 Million, during 2010-11 and irregularly handed over the same to P.S to DCO for further disbursement among affect-tees but same was not done. b. Secretary, Local Govt. Dept., paid Rs 0.183 Million, on account of purchase of petrol and diesel for the same vehicle but same was mis-appropriated since same vehicle could not have used petrol and diesel at the same time. c. Secretary, Local Govt. Board, had drawn Rs 0.272 Million, on account of compilation of data through contractor but failed to pay to the contractor till close of financial year and same was misappropriated. Detail provided in Annexure-A.

Audit was of the view that amount drawn was neither disbursed nor deposited back which transpires misappropriation of public funds.

The matter was reported during June & July, 2013. In cases of a & b Secretary, LG, vide its reply dated 20-08-2013 agreed to audit point of view. DAC in its meeting held on 20-08-2013 agreed to audit point of view and directed to concerned department to justify the expenditure. No further progress was reported in compliance of DAC directives till finalization of this report. Secretary LGB failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para of Secretary LGB despite pursuance by audit.

Audit recommends fixing responsibility on account of misappropriation of public funds and same may be recovered from concerned officials, under intimation to audit.

[AIR Para: 1/DP-1.2.1.1 (A.R 2011-12), 11, 5]

1.2.1.2 Misappropriation - Rs 2.000 Million Rule 668 of Treasury Rules, states that, “Advance granted under special order of the competent authority to Govt. officer for departmental or allied purpose may be drawn on the responsibility and receipt of the officers for whom they are sanctioned, subject to adjustment by submission of detailed accounts supported by vouchers or by refund, as may be necessary”. Financial Advisor, KMC, sanctioned an advance of Rs 2.000 Million, during 2010-11, paid to District Officer for clearance of imported fire-fighting equipment at Port, but management failed to account for advance in respect of paid vouchers / adjustments, in violation of the above rule. Audit was of the view that management failed to account for payment taken as advance resulted into misappropriation public money which constitutes weak financial management. The non-adjustment of advance payment constitutes weak internal control. The Matter was reported during July, 2013 but management failed to provide justification. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit. Audit recommends investigating the matter to fix responsibility on account of misappropriation of Rs 2.00 Million from public money and same may be recovered and deposited into govt. treasury, under intimation to audit. [AIR Para: 2]

1.2.1.3 Misappropriation Due to Non-Remittance of Training Fees Rs 1.407 Million Rule 77 of CTR Vol-I, states that, “All money received on behalf of Govt. should be without undue delay be credited into Government account”. According to section 41 (a) of Sindh Financial Rules Volume I, “The departmental controlling officers should see that all sums due to Govt. are regularly received and checked against demands and that they are paid into treasury. They should

11 accordingly arrange to receive from their subordinates accounts and returns claiming credit for so much paid into the treasury and compare with the figures in the statements supplied by the comptroller.” DG, (SCS&LGTA), Tando Jam and Principal (MT&RI), Karachi, during 2011-12, conducted different trainings and collected an amount of Rs 1.407 Million on account of fees from participants but failed to deposit into Govt. treasury, in violation of above rule. Detail provided in Annexure-B. Audit was of the view that due to non-deposit of collected fees into treasury Govt. sustained financial loss of Rs 1.407 Million due to misappropriation which constitutes weak financial management. The non-remittance of public receipt into the Govt. treasury constitutes weak internal control. The Matter was reported during April &June, 2013. DG, (SCS&LGTA) vide its reply dated 15-04-2013, stated that the amount was spent on lunch / dinner for participants and there was no precedent to deposit the receipt into govt. account. The reply was not tenable since govt. receipt is required to be deposited into treasury in accordance with rules. Principal (MT&RI) Karachi, failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit paras despite pursuance by audit. Audit recommends fixing responsibility for non-deposit of Govt. receipt and recovery of same from concerned officials may be affected and deposited into Govt. treasury under intimation to audit. [AIR Paras: 7, 1]

1.2.2 Non-Production of Record 1.2.2.1 Non-Production of Record - Rs 1,756.423 Million Article 170(2) of the Constitution of the Islamic Republic of Pakistan, inserted vide Constitutional (Eighteenth Amendment) Act, 2010 w.e.f. April 20, 2010, states that, “The audit of accounts of the Federal and of the Provincial Govt. and the accounts of any authority or body established by, or under the control of, the Federal or Provincial Govt. shall be conducted by the Auditor General, who shall determine the nature and extent of such audit”. Further, the Constitutional provisions were stressed upon by the Honourable

Supreme Court of Pakistan vide its judgment in CMA No.2376/2013 dated 07-05-2013, wherein it was observed that “the amount is charged on the Consolidated Fund or relates to the Public Accounts of the Federation or of the Provinces, the same may be audited by the Auditor- General without exception”. Different offices of Secretary Local Govt. Department, KMC & KW&SB incurred an expenditure of Rs 1,756.423 Million on various head of accounts during 2010-11& 2011-12, but failed to provide access to audit over the record to justify the expenditure, in violation of the above rule. Detail provided in Annexure-C. Audit was of the view that record was not provided to audit resulting into non-authenticity of expenditure from public funds which constitutes non-transparency in public spending. The Matter was reported to managements during January, 2012, May and June, 2013. DAC in its meeting held on 15-02-2012, 29-08-2013 and 04-09-2013, agreed to audit point of view and directed to Chairman, MD (KW&SB), S.D, HRM (KMC) and Chief, City Wardens, to produce record to audit. No further progress was reported in compliance of DAC directives till finalization of this report. While in regard of other offices the PAO failed to convene the DAC meeting to discuss audit paras despite pursuance by audit. Audit recommends fixing responsibility on account of non-provision of record. [AIR Paras: 70, 1, 12, 2, 4, 3, 1, 4, 1, 4, 6, 1, 1, 1]

1.2.3 Irregularity / Non-Compliance 1.2.3.1 Short Receipt from Allottees of Plots - Rs 866.702 Million As per Rule 28 of GFR Vol-I, “No amount due to Govt. should be left outstanding without sufficient reason and where any dues appear to be irrecoverable the orders of competent authority for their adjustment must be sought”. Senior Director, Land Management-II, KMC, auctioned 4,008 plots, during different periods, at a cost of Rs 1,120.873 Million, but recovered only partial amount of Rs 254.171 Million, leaving a balance of Rs 866.702 Million, as on 30-06-2013, in violation of the above rule. Detail is as under:

(Rupees in Million) Total Occupancy value Occupancy Amount less auctioned plots to be recovered value recovered occupancy value 44 15.993 12.138 3.855 3964 1104.88 242.033 862.847 Total 1,120.873 254.171 866.702 Audit was of the view that non-realization of outstanding govt. receipt resulted into loss to public ex-chequer which constitutes weak financial management. Non-realization of govt. receipt transpires weak internal control. The matter was reported during June 2013. The management vide its reply dated 29-08-2013 agreed to audit point of view. The PAO failed to convene the DAC meeting to discuss audit paras despite pursuance by audit. Audit recommends fixing responsibility for non-realization of outstanding Govt. dues and all out efforts may be made to realize the same, under intimation to audit. [AIR Paras: 3, 4]

1.2.3.2 Irregular Expenditure - Rs 522.727 Million Directives of Planning & Development Division vide letter No.21 (40) / PIA / PC/200 dated 26th May 2007, states that, “the executing agency should start preparing the revised scheme immediately when it is known that the cost of the scheme is going to rise beyond permissible limit of 15%”. The Project Director (RO&DP) Lyari, KW&SB, work scheme was originally approved, during 2011-12, for Rs 1,819.227 Million but management incurred expenditure of Rs 2,341.954 Million without revising the scheme resultantly of Rs 522.727 Million were incurred in excess i.e. 29% from original cost, in violation of above rule. Audit was of the view that execution of excess work beyond permissible limit without revising the original scheme constitutes weak financial management. The incurrence of expenditure in excess of approved scheme constitutes weak internal control. The matter was reported during May, 2013 but management failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit.

Audit recommends fixing responsibility on account of Irregular expenditure, under intimation to audit. [AIR Para: 8] 1.2.3.3 Non-Recovery of Income Tax - Rs 133.796 Million Section 153 (1) (b) of the Income Tax Ordinance 2001, states that, “Income tax is required to be deducted @ 6% from contractors.” Chief Engineers, RO&DP, KW&SB, awarded work for Procurement & Installation of Reverse Osmosis Plant to Rs 2,229.927 million, during 2011-12, but failed to deduct income tax @ 6% from contractors to the extent of Rs 133.796 million, in violation of the above rule. Detail provided in Annexure-D. Audit was of the view that non-deduction of income tax amounting to Rs 133.796 million from contractors resulted into loss to public exchequer and constitutes weak financial management. The non-realization of govt. revenue constitutes weak internal control. The Matter was reported to the management during January, 2012 and May, 2013 but no departmental point of view was provided. DAC in its meeting held on 15-02-2012, agreed to audit point of view. No further progress was reported in compliance of DAC directives till finalization of this report. However, PAO failed to convene the DAC meeting to discuss audit paras related to 2012-13 despite pursuance by audit. Audit recommends fixing responsibility for non-deduction of income tax and govt. revenue may be recovered, under intimation to audit. [AIR Paras: 8, 4]

1.2.3.4 Excess Payment - Rs 127.838 Million Clause 38 of Contract Agreement, states that, “Quantities shown in the tender are approximate and no claim shall be entertained for quantities of work executed being 30% more or less than those entered in the tender or estimate”. XEN (Sewerage), Jamshed Town and PD (RO&DP), Lyari & Kemari Town, KW&SB, executed development schemes and allowed excess payment to Rs 127.838 Million resulted into excess expenditure exceeding admissible limit, during 2010-11 & 2011-12, in violation of above rule. Detail provided in Annexure-E.

Audit was of the view that excess payment beyond permissible limit without revising the original estimates resulted into Irregular expenditure and constitutes weak financial management. The work exceeding permissible limits constitutes weak internal control. The matter was reported during August 2012 & May 2013, but managements failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit paras despite pursuance by audit. Audit recommends fixing responsibility for allowing excess payment exceeding permissible limits, under intimation to audit. [AIR Paras: 34, 12, 8] 1.2.3.5 Short realization of Water Charges - Rs 51.000 Million Clause 6 of additional terms and condition of (KW&SB), states that, “Water Supply will be allowed by the department to the contractor from Authority’s water mains passing through areas where the work is required to be carried out and he shall pay the cost of water to the department at ½ % of the total cost of work for drinking purposes and 1% of the total cost of the work involving use of water (i.e for constructional purposes). The contractor will bear all charges for laying his water line from the mains to the site of this underground tank which he may require and construct for storage purposes at his own cost.” Further, Clause 13 of KMC condition of contract for works, states that, “Water supply will be allowed by the department to the contractor from Municipal Water Mains passing through areas where the work is required to be carried out and he shall be pay cost of water to KMC at 1 ½ % of total cost of work for drinking purpose and 1% of total cost of work for constructional purposes”. S.D (T&C) KMC, PD, (RO&DP) Lyari & Kemari, and XEN, (WD) Kemari Town, KW&SB, awarded various works to contractors, during 2011-12, but failed to deduct water charges or less deducted an amount of Rs 51.000 Million, in violation of above rules. Detail provided in Annexure-F. Audit was of the view that non-recovery of water charges resulted into loss to departments which constitutes weak financial management. Non-realization of revenue constitutes weak internal control. The Matter was reported during April & May 2013. S.D (T&C) vide its

16 reply dated 21-08-2013 agreed to audit point of view while other departments failed to provide departmental point of view. DAC in its meeting held on 29-08-2013 agreed to audit point of view for para related to S.D (T&C) and directed to department for affecting recovery. No further progress was reported in compliance of DAC directives till finalization of this report. The PAO failed to convene the DAC meeting to discuss remaining audit paras despite pursuance by audit. Audit recommends fixing responsibility on account of non-deduction / less deduction of water charges from contractors and same may be recovered, under intimation to audit. [AIR Paras: 10, 6, 4, 6]

1.2.3.6 Irregular Award of Contract - Rs 28.928 Million Rule 7 of SPPRA 2010, states that, “The procuring agency shall, with approval of its Head of the Department, Constitute as many procuring committees, as it deems fit, each comprising odd number of persons and headed by the gazette officer not below the rank of BPS-18, or if not available, the officer of the highest grade, and shall ensure that at least one third of the members of a procurement committee are from the agencies or departments other than the procuring agency”. S.D (T&C) KMC and R.E (NEK K-II) KW&SB, awarded different works, during 2011-12, amounting to Rs 28.928 Million but failed to include 1/3rd members from other departments in procurement committee, in violation of above rule. Detail provided in Annexure-G. Audit was of the view that non-compliance of the prescribed procedure resulted into non-transparency in public spending and constitutes weak financial management. Non-observance of prescribed procedure constitutes weak internal control. The Matter was reported during April & May, 2013. S.D (T&C) vide its reply dated 21-08-2013, agreed to audit point of view, while R.E vide its reply dated 19-08-2013, stated that rules will be followed in future. DAC in its meeting held on 29-08-2013 agreed to audit point of view for para related to S.D (T&C) and stressed upon the observance of laid down procedure provided in SPPRA. No further progress was reported in compliance of DAC directives till finalization of this report. The PAO failed to convene the DAC meeting to discuss remaining audit para despite pursuance by audit.

Audit recommends fixing responsibility for non-constitution of committee in accordance with laid down procedure. [AIR Paras: 12, 2]

1.2.3.7 Irregular Advance Payment - Rs 25.297 Million Para 228 of CPWA Code, states that, “Advances to contractor are prohibited and every endeavor should be made to maintain a system under which no payment except for work actually done.” Chief Engineer, BT&D (KW&SB), awarded a work “Supply of Liquid Chlorine to M/s Ittehad Chemical Ltd. of Rs 25.297 Million, during 2010-11, and paid same amount in advance, in violation of above rule. Audit was of the view that by paying amount in advance, department extended undue favour to contractor resulted into non-transparency in public spending and constitutes weak financial management. Non-observance of prescribed procedure constitutes weak internal control. The Matter was reported during December 2011. The management vide its reply dated 19-08-2013 stated that under clause 18 of agreement signed with contractor the said payment was made. The reply was not tenable since payment was made in violation rule. DAC in its meeting held on 13th to 15th February 2012, agreed to audit point of view. No further progress was reported in compliance of DAC directives till finalization of this report. Audit recommends investigating the matter to fix responsibility on account of irregular advance payment. [AIR Para: 5]

1.2.3.8 Irregular Award of Work - Rs 20.429 Million Section 3(b) of Sindh Local Govt. Contract Rules 2001, read with KW&SB Act 1996 Appendix “A” and Appendix “B” states that, “M.D and Chairman of the Board may enter into contract of work not exceeding 2.5 Million and 5 Million respectively”. XEN, (WD) Saddar Town, KW&SB awarded work of Rs 20.429 million, during 2011-12, in excess of delegated powers, in violation of above rule. Detail is as under:

(Rupees in Million) Name of work Amount P/L 12” Dia, 10” Dia, 8” Dia& 6” Dia Polyethylene Pipe of 315mm, 250mm, 200mm Pipe line for the Improvement of Water Supply in 20.429 Block-2, Clifton FL side UC-II, Saddar

Audit was of the view that authority exercised powers beyond its delegated limits resulted into Irregular expenditure which constitutes weak financial management. The exercise of powers beyond delegation constitutes weak internal control. The matter was reported during April, 2013 but management failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit. Audit recommends fixing responsibility for execution of work beyond delegated powers of authority and same may be regularized. [AIR Para: 4]

1.2.3.9 Non-Recovery of Outstanding Dues - Rs 18.031 Million Paragraph 7 of SOP vide No.KW&SB/D.M.D/HRD&A/109/71dated 25-08-2009, states that, “Permission is granted to supply the tanker trips as VIP gratis trips on the payment basis”. Further, GFR 28, states that, “No amount due to Government should be left outstanding without sufficient reason, and where any dues appear to be irrecoverable the orders of competent authority for their adjustment must be sought”. The C.E, Hydrant Services & Tanker Operation, KW&SB, and Senior Director, Local Taxes, KMC, failed to recover Rs 14.715 Million from consumers of water and Rs 3.316 Million from hoarders, respectively, during 2011-2012, in violation of the above rules. Detail provided in Annexure-H. Audit was of the view that departments failed to realize receipts resulted into loss of revenue which constitutes weak financial management. Non-realization of govt. revenue constitutes weak internal control. The matter was reported during June, 2013. The C.E, Hydrants vide its reply dated 16-08-2013, agreed to audit point of view, while S.D, Local Taxes vide its reply dated 28-08-2013, stated that part recovery has been made, but failed to produce evidence. The PAO failed to convene the DAC meeting to discuss audit paras despite

19 pursuance by audit. Audit recommends fixing responsibility on non-realization of outstanding dues and same may be recovered, under intimation to audit. [AIR Paras: 1, 2, 4, 3, 4, 5, 6, 7]

1.2.3.10 Irregular Consumption of POL - Rs16.127 Million Finance Department, Govt. of Sindh, O.M No.FD-B1(15)/99-2000 (POL) dated12-01-2000, states that, “The petrol ceiling for head of subordinates office have been fixed at 180 liters per month”. Further, Para 23 of General Financial Rules Volume-I, states that, “Every Govt. officer should realize fully and clearly that he will be held personally responsible for any loss sustained by Govt. through fraud or negligence on his part and that he will also be held personally responsible for any loss arising from fraud or negligence on the part of any other Govt. officer to the extent to which it may be shown that he contributed to the loss by his own action or negligence”. Secretary, Local Govt. Board, Chairman and MD (KW&SB), incurred Rs 16.127 Million, during 2010-11 & 2011-12, on account of POL consumed by the personnel who were not on the strength of departments and without entitlements, in violation of above rule. Detail is as under: (further detail provided in Annexure-I). (Amount in Rupees) Sr. Name of Office Year AIR Amount 1 Secretary Local 2011-12 17 490,876 2 Govt. Board 2011-12 21 2,019,700 3 2010-11 10 13,168,477 MD (KW&SB) 4 2011-12 10 215,443 5 Chairman (KW&SB) 2011-12 3 232,425 Total 16,126,921 Audit was of the view that Irregular expenditure made by management on account of POL to staff working outside the departments and to employees without entitlement for staff cars resulted into loss to public exchequer which constitutes weak financial management. The expenditure incurred on purchase of POL on account of mis-utilization of public funds constitutes weak internal control. The Matter was reported during August, 2012 and June, 2013 but managements failed to provide justification on Irregular consumption of POL. DAC in its meeting held

20 on 04-09-2013, agreed to audit point of view and took serious note of allotment of vehicles to persons who were not entitled and directed to KW&SB to recover the amount in 12 equal installments and withdraw facility. No further progress was reported in compliance of DAC directives till finalization of this report. The PAO failed to convene the DAC meeting to discuss remaining audit paras despite pursuance by audit. Audit recommends investigating the matter to fix responsibility on account of Irregular expenditure and same may be recovered, under intimation to audit. [AIR Paras: 17, 21, 10, 10, 3]

1.2.3.11 Irregular payment on Leave Encashment - Rs 11.208 Million Rule 18-A of Revised Leave Rules 1980, states that, “A civil servant may fifteen month before the date of superannuation or thirty years qualifying service on or after the 1st July, 1983, at his option, be allowed to encash his leave preparatory to retirement if he undertakes to in writing to perform duty in lieu of the whole period of three hundred and sixty five days or lesser period which is due and admissible”. Offices of KMC & KW&SB, paid Rs 11.208 million, during 2010-11 and 2011- 12, to officials on account of leave encashment who were not fulfilling the criteria, in violation of above rule. Detail provided in Annexure-J. Audit was of the view that undue benefit was extended to employees on account of leave encashment not due, resultantly payment of Rs 11.208 million stands irregular which constitutes weak financial management. Non-observance of prescribed procedure constitutes weak internal control. The matter was reported during December, 2011, July, August, 2012 and April, May, June 2013. C.E (B,T&D), DMS, R.E Dhabeji & Gharo, SD (T&C), R.E NEK (P&F) K-II, R.E NEK (P&F) Old and XEN (WTM-I) vide their replies dated, 09-02-2012, 30-12-2011, 08-10-2011, 07-02-2012, 23-08-2013, 26-08-2013, 19-08-2013 and 19-08-2013 agreed to audit point of view. DMS failed to provide departmental point of view for the year 2011-12. DAC in its meetings held on 13 & 15 February 2012 and 29-08-2013 agreed to audit point of view and constituted committees headed by Special Secretary, LGD and Financial Advisor for KW&SB and KMC respectively with the mandate to examine as to why leave encashment was allowed every year, in violation of rules. Committees were directed to submit report within three weeks. No further progress was reported in compliance of DAC directives till finalization of this report.

Audit recommends fixing responsibility on account of irregular payment and same may be stopped henceforth, under intimation to audit. [AIR Paras: 8, 3, 5, 3, 4, 6, 5, 2, 16]

1.2.3.12 Non-Transparency in Govt. Spending - Rs 9.780 Million Rule 15 of the Staff Car Rules 1980, as amended in 2001, states that, “The log book, History Sheet, and Petrol Account Register shall be maintained for each official vehicle”. Following Offices incurred Rs 9.780 Million, on purchase of POL, during 2011-12, for official vehicles, but failed to justify expenditure through maintaining of log books, history sheets and petrol consumption account, in violation of above rule. Detail is as under: (Amount in Million) Sr. Name of offices Amount 1 Secretary Local Govt. Department 1.980 2 Secretary Local Govt. Board 4.978 3 MD (KW&SB) (Non-Development) 1.222 4 M.S (Sobraj Maternity Hospital) 1.150 5 Principal (MT&RI) Karachi 0.450 Total 9.780 Audit was of the view that expenditure incurred on POL without preparation of log books, history sheets and petrol consumption account to justify the expenditure which transpires non-transparency in public spending and constitutes weak financial management. The expenditure on POL without justifying the expenditure through log books, history sheets and petrol consumption account constitutes weak internal control. The matter was reported during May & June, 2013. The Secretary, LGD vide its reply dated 20-08-2013, stated that department is not required to justify the expenditure since fix quota on POL has been provided to officers, while MS, Sobhraj Maternity Hospital vide its reply dated 22-08-2013, stated that log book has been prepared but documentary evidence was not provided. Managements of other offices failed to provide their departmental point of view. DAC, in its meetings held on 20-08-2013 and 04-09-2013, agreed to audit point of view and stressed upon importance of preparation of log books to justify the expenditure. No further progress was reported in compliance of DAC directives till finalization of this report.

Audit recommends fixing responsibility for incurring expenditure without justification. [AIR Paras: 10, 25, 22, 21, 3, 8]

1.2.3.13 Irregular Expenditure - Rs 7.472 Million Rule 532 of PWD Manual Vol-I, states that, “A revised estimate must be submitted duly approved by the competent authority when a sanctioned estimate is likely to exceed by more than 5% either due to rate being found insufficient or for any other reason”. XEN (KD Civil-I), RE, Dhabeji & Gharo and XEN (HTM), (KW&SB), awarded various works to different contractors in excess of 5% of the original approved estimate, during 2010-11, by exceeding original cost of the estimate to Rs 7.472 Million, in deviation of rule 532 of PWD. Detail is as under: (further detail provided in Annexure-K). (Rupees in Million) Original Excess Sr. Name of Office Expenditure Excess Estimate Amount 1 XEN, KDCivil-I 0.800 3.259 207.52% 2.459 2 RE, Dhabeji & Gharo (P&F), E&M 7.039 8.381 16.66% 1.341 3 XEN (HTM) 51.908 55.580 7% 3.672 Total 59.747 67.22 - 7.472 Audit was of the view that excess expenditure of the approved estimate resulted into Irregular expenditure which constitutes weak financial management. The expenditure incurred in excess of approved estimates constitutes weak internal control. The matter was reported during August, 2012 but managements failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit paras despite pursuance by audit. Audit recommends fixing responsibility and Irregular expenditure may be regularized. [AIR Paras: 65, 57, 15]

1.2.3.14 Non-Recovery of Wastage - Rs 7.277 Million Para 503 of CPWA Code, states that, “It is permissible to take reduction of the expenditure in progress, certain recoveries of expenditure sale proceed of surplus material

23 and plant acquired specially for work or of material received from dismantle structure irrespective of whether the estimate for the works make allowance for such or not”. Further, letter No.CE (P)/KW&SB/2010/1709 dated 16-08-2010 issued by Chief Engineer (Project), KW&SB, states that, “Competent Authority has approved rate recovery against wastage of H.R. Coil supplied by the KW&SB add 6% wastage of H.R Coil @ Rs 31,000 per ton”. C.E, Projects, KW&SB, issued 3912.47 metric tons H.R Coil to contractor but failed to recover proceeds of scrap to the extent to Rs 7.277 Million, during 2010-11, in violation of above rules. Detail provided in Annexure-L. Audit was of the view that department failed to recover dues on account of sale proceeds resulted into loss to departments revenue which constitutes weak financial management. The non-realization of sale proceeds constitutes weak internal control. The matter was reported during August, 2012 but management failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit. Audit recommends fixing responsibility for non-recovery of scrap value and same may be recovered, under intimation to audit. [AIR Para: 11] 1.2.3.15 Irregular Expenditure - Rs 6.782 Million Rule 17(1) of SPPRA Rules 2010, states that, “Procurements over one hundred thousand rupees and up to one Million rupees shall be advertised by timely notifications on the Authority’s website and may in print media in the manner and format prescribed in these rules”. Further, SPPRA letter No.Dir(CB)/SPPRA/1-3(GEN)/08-09/011 dated 1st July 2010, states that, “All procurement opportunities over one Million rupees should be advertised on authority’s website as well as in print media / newspapers having wide circulation”. Senior Director, (T&C) KMC, R.E, Hub and XEN, Purification Plant, KW&SB, awarded different works to contractors of Rs 6.782 Million, during 2010-11 & 2011-12, without inviting open tenders and advertising on authority’s website and print media, in violation of the above rules. Detail provided in Annexure-M.

Audit was of the view that management’s failure to observe SPPRA rules resulted into non-transparency in awarding of contract and non-achievement of competitive rates which constitutes weak financial management. Non-observance of SPPRA rules constitutes weak internal control. The Matter was reported during December 2012 and June, 2013. S.D (T&C) and XEN Purification Plant vide their replies dated 21-08-2013 and dated 30-11-2011 respectively, agreed to audit point of view, while R.E, Hub Division failed to provide his departmental point of view. DAC in its meetings held on 13-02-2012 and 29-08-2013, agreed to audit point of view and directed to departments for compliance. No further progress was reported to audit in compliance of DAC directives till finalization of this report. The PAO failed to convene the DAC meeting to discuss audit paras of other departments, despite pursuance by audit. Audit recommends fixing responsibility on concerned official(s) on account of non-transparency in awarding of contracts and failure in obtaining competitive rates. [AIR Paras: 5, 6, 5, 1]

1.2.3.16 Undue Favour to Contractor - Rs 6.112 Million Para 23 of General Financial Rules Vol-I, states that, “Every Govt. officer should realize fully and clearly that he will be held personally responsible for any loss sustained by Govt. through fraud or negligence on his part and that he will also be held personally responsible for any loss arising from fraud or negligence on the part of any other Govt. officer to the extent to which it may be shown that he contributed to the loss by his own action or negligence”. Further, Contract agreement between the CDGK and M/s New M.A Enterprises, states that, “Contractor was to pay 08 quarterly installments of Rs 1.313 Million each to be paid at the start of quarter and has to pay additional 10% of payment of the defaulted amount”. The S.D (T&C) KMC, awarded a contract on account of Operations and Maintenance of intercity bus terminal signed on 30-09-2009 applicable from 05-09-2009 for a period of two years between CDGK and M/s New M.A Enterprises. The contractor defaulted for an amount of Rs 6.112 Million, but management failed to take action to recover the said amount, instead renewed the contract for further one year w.e.f 05-10-2011 to 04-10-2012. Audit was of the view that non-compliance of the contractor from his obligations

25 on account of non-deposit of agreed amount resulted into loss to public revenue and non- action by the management constitutes weak financial management. Non-observance of prescribed terms & conditions by management & contractor constitutes weak internal control. The Matter was reported during April 2013. The management vide its reply dated 21-08-2013, agreed to audit point of view. DAC in its meeting held on 29-08-2013 agreed to audit point of view and directed to hold departmental inquiry to fix the responsibility on undue favour to contractor. No further progress was reported in compliance of DAC directives till finalization of this report. Audit recommends investigating the matter to fix responsibility and recover defaulted amount from contractor, under intimation to audit. [AIR Para: 8]

1.2.3.17 Overpayment - Rs 4.951 Million Composite Schedule of Rates, 2004, vides Para IV & VIII, states that, “all estimate of the work should invariable based on the schedule of the rates prescribed by standing rates committee”. XEN (Water) Saddar, KW&SB, allowed excess payment of Rs 4.951 Million, during 2010-11,on account of allowing higher rates to contractor for various items, in violation of above rule. Detail provided in Annexure-N. Audit was of the view that due to higher rates allowed resulted into overpayment and loss to public funds which constitutes weak financial management. Excess payments to contractor constitute weak internal control. The matter was reported during August, 2012 but management failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit. Audit recommends that matter may be investigated for fixing responsibility and excess amount paid to contractor may be recovered, under intimation to audit. [AIR Para: 27]

1.2.3.18 Irregular Purchase of Vehicles - Rs 3.788 Million Finance Division (Expenditure wing), Govt. of Pakistan, O.M No. F7(1) Exp.IV/2011, 18th march 2011, states that, “Total ban on purchase of physical assets including all vehicles”. Secretary, Local Govt. Department & Secretary, Local Govt. Board, purchased vehicles of Rs 3.788 Million, during 2011-12, in violation of above rule. Detail provided in Annexure-O. Audit was of the point of view that vehicles were purchased during ban period and without seeking exemption from competent authority which constitutes weak financial management. The expenditure incurred in contravention of ban constitutes weak internal control. The matter was reported during June, 2013. The Secretary, LGD vide its reply dated 20-08-2013, stated that there was no ban imposed by GoS while Secretary, LGB failed to provide its departmental point of view. DAC, in its meeting held on 20-08-2013, directed to concerned department to furnish comprehensive reply to justify the purchase of vehicles during ban period. No further progress was reported to audit in compliance of DAC directives till finalization of this report. The PAO failed to convene the DAC meeting to discuss audit para related to Secretary, LGB, despite pursuance by audit. Audit recommends investigation to fix the responsibility on irregular purchase of vehicles. [AIR Paras: 2, 30]

1.2.3.19 Overpaid House Rent Allowance - Rs 2.782 Million Para 07of Finance Division Office O.M. No.F.1/7/IMP.II/87 dated 01-07-1987, states that, “All employees not provided with Govt. accommodation shall continue to be entitled to house rent allowance @ 45% of the minimum of the relevant Basic Pay Scale”. The Senior Director (T&C), R.E (NEK K-II),R.E Dhabeji & Gharo (P&F) and DMD (RRG) (KW&SB), paid Rs 2.782 million @ 65% House Rent Allowance instead of @ 45% of the initial basic pay to their employees, during 2011-12, in violation of above rule. The irregularity pointed out is only illustrative and not exhaustive. Detail provided in Annexure-P.

Audit was of the view that payment made in excess of prescribed limit on account of house rent allowance to employees resulted into loss to public ex-chequer which constitute weak financial management. Deviation from prescribed procedure constitutes weak internal control. The Matter was reported during April, May and June, 2013. The managements of Senior Director (T&C), R.E NEK-II, R.E Dhabeji & Gharo& DMD (RRG) vide their replies dated 21-08-2013, 19-08-2013, 16-08-2013 and 29-08-2013 agreed to audit point of view. DAC in its meetings held on 04-09-2013 & 29-08-2013 agreed to audit point of view and directed to DMD (RRG), KW&SB, to ascertain the factual position and furnish comprehensive reply to audit for discussion in next DAC meeting. DAC, in case of S.D (T&C), KMC, directed to constitute a committee headed by Financial Advisor, KMC, with the mandate to examine as to why house rent allowance was allowed over and above against the government provided ceilings of basic pay scales. Committee will provide the report within 30 days to Secretary, LG and audit. No further progress was reported in compliance of DAC directives till finalization of this report. Audit recommends fixing responsibility on person(s) and overpayment of Rs 2.781 Million be recovered. Besides, recovery on account of overpayments related to all employees of KMC & KW&SB may be calculated and recovered, under intimation to audit. [AIR Paras: 2, 6, 2, 4]

1.2.3.20 Non-Accountal of stores - Rs 2.311 Million Para 155 of GFR Vo-I read with Para 113 of SFR Vol-I, states that, “A reliable list, inventory or account of all stores in the custody of Govt. officers should be maintained in a form prescribed by competent Authority, to enable a ready verification of stores and check of accounts at any time and transactions must be recorded in it as they occur”. Secretary, LGD and ADOE Bin Qasim, KMC, incurred an expenditure of Rs 2.311 Million, during 2010-11 and 2011-12, on purchase of different items but the items purchased were not entered or accounted for in the relevant stock registers, in violation of above rule. Detail provided in Annexure-Q. Audit was of the view that without following the prescribed procedure the possibility of shortage / theft of assets cannot be ruled out which constitutes weak financial management.

Non-observance of rule constitutes weak internal control. The matter was reported during June, 2013. The Secretary, LGD, vide its reply dated 20-08-2013, stated that now stock register has been prepared but failed to produce documentary evidence, while ADOE Bin Qasim failed to provide departmental point of view. DAC in its meeting dated 20-08-2013, directed to concerned office for production of stock register to audit for its verification. No further progress was reported to audit till finalization of this report. The PAO failed to convene the DAC meeting to discuss audit para related to ADOE Bin Qasim despite pursuance by audit. Audit recommends fixing of responsibility on official(s) for non-preparation of stock register and same may be prepared, under intimation to audit. [AIR Paras: 8, 27, 5]

1.2.3.21 Non-Deduction of Security Deposit - Rs 1.983 Million Rule 89 (c) of CPWA Code, states that, “Security for the due fulfillment of the contract should invariably be taken. This security may take the form of a cash deposit a deposit of interest bearing securities, a deduction of 10% from the payments to be made on account of work done, or a personal bond of two persons of known probity and wealth”. XEN, (W/D) Saddar Town, (KW&SB), awarded contract but failed to deduct 10% security deposit valuing Rs 1.983 Million, during 2011-12, from the bills of contractor, in violation of above rule. Detail is as under:

(Amount in Rupees) Amount of 10% SD to Name of Contract Running Bill Bill be deducted P/L 12” Dia, 10” Dia, 8” Dia& 6” Polyethylene pipe 1st Running Bill 10,042,724 1,004,272 of 315, 250, 200 mm pipeline for the improvement of water supply in block-2, Clifton FL side UC-11, 2nd Running Bill 9,790,000 979,000 Saddar Total 1,983,272 Audit was of the view that failure of the department to deduct security deposit resulted into undue favour to contractor which constitutes weak financial management. Non-observance of rules constitutes weak internal control. The Matter was reported during April, 2013 but management failed to provide its departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit.

Audit recommends fixing responsibility on account of non-deduction of security deposit from contractor. [AIR Para: 3]

1.2.3.22 Non-recovery of House Rent Allowance and Maintenance Charges Rs 1.429 Million Para 07 of Finance Division Office O.M.No.F.1/7/IMP.II/87 dated 01-07-1987, states that, “All employees not provided with Govt. accommodation shall continue to be entitled to house rent allowance”. Further, Para 11 of F.D, Govt. of Sindh‟s O. M. No.FD (SR-IV)-I (12)/77 dated 13-05-1977, states that, “The H.R.A. is not admissible to whom accommodation is provided by Govt. and house rent maintenance charges shall be recovered @ 5% of the basic pay of an employee”. MD (KW&SB), his subordinate official(s) and Additional Secretary, LGD were provided residential accommodation and paid Rs 1.429 million on account of house rent, during 2010-2011 & 2011-12, and also failed to deduct maintenance charges @ 5%, from the official(s), in violation of above rules. The irregularity pointed out is only illustrative and not exhaustive, in case of KW&SB. Detail provided in Annexure-R. Audit was of the view that payment of house rent allowance to employees despite provision of official accommodation and non-deduction of 5% maintenance charges from allot-tees resulted into loss to public exchequer which constitutes weak financial management. Irregular payment of house rent and non-deduction of maintenance charges from allot-tees constitutes weak internal control. The matter was reported during August 2012, May and June, 2013. The Secretary, LGD and R.E NEK (P&F) Old vide their replies dated 20-08-2013 & 16-08-2013 agreed to audit point of view. DAC in its meetings held on 20-08-2013 and 04-09-2013, agreed to audit point of view and took serious notice for payment of house rent to the officials availing facility of official accommodation and non-deduction of maintenance charges from the salaries of employees residing in official accommodation. No further progress was reported in compliance of DAC directives till finalization of this report. Audit recommends fixing responsibility on managements on account of deviation from prescribed procedure and recovery of overpayment from official(s) may be affected. Besides, recovery on account of overpayments related to all employees of

KW&SB may be calculated and recovered, under intimation to audit. [AIR Paras: 17, 6, 7, 8, 3, 1]

1.2.3.23 Purchase of Medicines Availing Less Discount - Rs 1.249 Million S&GAD, Govt. of Sindh, Notification No.SO (C-IV) SG&CD/ 6-25/97 dated 04-10-2001, states that, “Medicines can be purchased from the medical stores by inviting quotation on special discount rates subject to the condition that the price shall be at least 10% less in the case of local manufacturers and at least 5% less in the case of multinational companies than the trade price”. DMS (KW&SB) incurred an expenditure of Rs 24.974 Million, on purchase of medicines, during 2010-11, from local market availing less discount @ 5% instead of 10% which resulted into loss of Rs 1.249 Million, in violation of above rule. Detail is as under: (Amount in Rupees) Total Purchase Discount to be Discount availed Less discount of Medicines availed @10% @ 5% Availed 24,973,941 2,497,394 1,248,697 1,248,697

Audit was of the view that due to less discount availed by the management from the supplier on medicines resulted into loss to public ex-chequer which constitutes weak financial management. Less-realization of discount from suppliers constitutes weak internal control. The Matter was reported during August, 2011.The Management vide its reply stated that, discount @ 5% was obtained as per agreement between suppliers and KW&SB. In DAC meeting held in February, 2012, agreed to audit point of veiw and directed for providing compliance. No further progress was reported in compliance of DAC directives till finalization of this report. Audit recommends fixing of responsibility for less availing of discount from suppliers resulting into loss to the govt. [AIR Para: 2]

1.2.3.24 Irregular expenditure on POL - Rs 1.868 Million Para 10 of GFR Vol-I, states that, “Every Govt. officer is expected to exercise the same vigilance in respect of expenditure incurred from public money as a person of

31 ordinary prudence would exercise in respect of expenditure of his own money and public money should not utilized for the benefits of a particular person or community”. Secretary, LGB, incurred Rs1.868 Million, during 2011-12, on account of POL consumed by the Minister Local Govt. Dept. on two vehicles, in violation of above rule. Detail is as under: (further detail is provided in Annexure-S). (Amount in Rupees) Total Year Vehicle No. Product No. of Litres Consumed Avg. Rate Per Ltr Amount GS-6498 Petrol 7875 95.13 749,143 2011-12 GS-7595 Diesel 10993 101.76 1,118,627 Total 1,867,770 Audit was of the view that payment made on account of POL consumed by Minister, LGD despite the fact that authority has separate budgetary allocations, resulted into Irregular expenditure which constitutes weak financial management. The payment made on account of POL to Minister, LGD from the budget earmarked for local Govt. board constitutes weak internal control. The Matter was reported during June, 2013 but management failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit. Audit recommends fixing of responsibility, besides, recovery of Rs1.868 Million, may be affected, under intimation to audit. [AIR Para: 20]

1.2.3.25 Non-recovery of Govt. dues - Rs 1.767 Million Para 23 of GFR Vol-I, states that, “every Govt. officer should realize fully and clearly that he will be held personally responsible for any loss sustained by Govt. through fraud or negligence on his part and that he will also be held personally responsible for any loss arising from fraud or negligence on the part of any other Govt. officer to the extent to which it may be shown that he contributed to the loss by his own action or negligence”. Secretary, LGB, sanctioned Rs 3.947 Million, during 1987 to 2005, on account of House Building Advance to 46 employees but failed to recover outstanding amount of Rs 1.767 Million upto 30-06-2012 from employees, in violation of the above rule. Detail provided in Annexure-T.

Audit was of the view that non-recovery of House Building Advance granted to employees who have been mostly retired / transferred to other departments resulted into loss of public funds and constitutes weak financial management. The non-recovery of dues constitutes week internal control. The matter was reported during June, 2013 but management failed to provide their departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit. Audit recommends investigation and fixing responsibility on account of loss to Govt. and same may be recovered from concerned employees, under intimation to audit. [AIR Para: 6]

1.2.3.26 Irregular expenditure - Rs 1.765 Million Rule 10 of GFR, states that, “Every Officer authorized to incur expenditure from the public fund should observe high standards of financial propriety”. DMS, KW&SB, allotted ambulances meant for transferring patients to doctors for use as staff cars against fixed entitlements of POL of Rs 1.765 million during 2011-12, in violation of above rule. Detail provided in Annexure-U. Audit was of the view that ambulances are meant for providing facility for transfer of patients, but vehicles were handed over to doctors for use as staff cars with fixed entitlements which constitutes weak financial management. The utilization of ambulances as staff cars constitutes weak internal control. The Matter was reported during April 2013 but management failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit. Audit recommends fixing responsibility on account of Irregular use of ambulances and recovery of POL may be affected. Besides, remedial measures may be taken to avoid misuse of ambulance. [AIR Para: 8]

1.2.3.27 Irregular Award of works - Rs 1.143 Million Rule 12 (1) of SPPRA 2010, states that, “Save as otherwise provided and subject to the regulations made by the Authority a procuring agency shall prepare in accordance

33 with Rule 11 above all proposed procurements for each financial year and shall proceed accordingly without any splitting or regrouping of the procurements already grouped allocated and scheduled in the Procurement Plan”. Director (CRC/PBM) Cell, R.E, NEK K-II, XEN (E&M) Jamshed Town, R.E Mechanical Pumping Hub Division and XEN (E&M) Korangi Town (KW&SB), incurred Rs 1.143 Million by awarding various works by splitting-up sanction orders to avoid the sanction of competent authority, during 2010-2011 and 2011-12, in violation of the above rule. Detail provided in Annexure-V. Audit was of the view that non-compliance of the prescribed procedure provided by SPPRA resulted into non-obtaining of competitive rates and non-transparency in public spending which constitutes weak financial management. The non-observance of rules as per delegated financial powers constitutes weak internal control. Matter was reported during August, 2010 & May 2013. The XEN (E&M), Korangi Town, XEN (E&M), Jamshed Townand, R.E, Mechanical Pumping Hub Division vide their replies dated 04-07-2013, 21-08-2013 and 21-08-2013, agreed to audit point of view. Management of other departments failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit paras despite pursuance by audit. Audit recommends fixing responsibility on account of Irregular expenditure. [AIR Paras: 66, 4, 1, 2, 1]

1.2.3.28 Non-Recovery of Sales Tax - Rs 0.485 Million Sales Tax General Order dated 26-06-2008 of FBR, Govt. of Pakistan, states that, “The applicable rate of sales tax on items in Third Schedule of Sales Tax Act, 1990, increased to 16% with effect from 1st July 2010, after amendment of Sales Tax Rule, 2006”. Secretary (LGD), Secretary (LGB) and R.E, Hub Division Mechanical (Pumping) KW&SB, incurred Rs 3.033 Million, on purchase of items from contractors / suppliers, but failed to deduct sales tax @ 16% amounting to Rs 0.485 Million, during 2011-12, in violation of above rule. Detail provided in Annexure-W. Audit was of the view that non-recovery of govt. revenue from the contractors / suppliers resulted into loss to public ex-chequer which constitutes weak financial

34 management. The non-implementation of sales tax rules constitutes weak internal control. The Matter was reported during June, 2013. The Secretary, LG, vide its reply dated 20-08-2013, stated that GST has been already paid by contractor on purchase of items, while managements of other offices failed to provide departmental point of view. DAC in its meeting held on 20-08-2103 agreed to audit point of view and directed to department to produce evidence showing the GST has been deducted. No further progress was reported in compliance of DAC directives till finalization of this report. The PAO failed to convene the DAC meeting to discuss audit paras related to KW&SB despite pursuance by audit. Audit recommends fixing responsibility on account of non-deduction of sales tax and recovery may be affected, under intimation to audit. [AIR Paras: 9, 5, 24, 3]

1.2.3.29 Non-Appointment of Independent Project Director for New Projects ECNEC Decision conveyed through D.O No.2(263)/PW/PD/2003 dated 3rd November 2006, states that, “Directed all the Executing agencies to appoint independent Projects Directors for all the on-going projects costing Rs 100 Million and above. It was also decided that no approval will be given to new projects costing Rs 100 Million and above unless an independent Project Director is included in the PC-I cost estimate”. S.D (T&C), KMC and C.E, Malir District, KW&SB, were appointed as Project Directors of Car Parking Plaza, Saddar and RO&DP, Lyari & RO&DP, Kemari Towns, in violation of above rule. Detail provided in Annexure-X. Audit was of the view that non-compliance of ECNEC decision resulted into non-transparency in public spending and constitutes weak financial management. Non-observance of ECNEC rules constitutes weak internal control. The Matter was reported during April & May, 2013.Senior Director (T&C) vide its reply dated 21-08-2013, agreed to audit point of view, while management of RO&DP, Kemari and Lyari Town failed to provide departmental point of view. DAC, in its meeting held on 29-08-2013, agreed to audit point of view and directed to comply with instructions provided in ECNEC decision. No further progress was reported in compliance of DAC directives till finalization of this report. The PAO failed to convene the DAC meeting to discuss audit paras despite pursuance by audit.

Audit recommends fixing responsibility on account of failure to observe ECNEC directives rules and to get regularize from competent authority. [AIR Paras: 1, 9, 12] 1.2.3.30 Short Realization of Revenue Rule 26 of GFR Vol-I, states that, “Subject to any special arrangement that may be authorized competent authority with respect to any particular class of receipts, It is the duty of the Departmental Controlling Officers to see that all sums due to Govt. are regularly and promptly assessed, realized and duly credited in the Public Account”. S.D, LM-II, KMC and DMD (RRG) KW&SB, failed to collect revenue as per targets set in the budget, during 2011-12, in violation of above rule. Detail is a under: (Rupees in Million) Short Realization Name of offices Revenue Target Revenue Realized of Revenue Sr. Director, LM-II 903.000 139.714 763.286 DMD (RRG), KW&SB 16,860.441 1,423.618 15,436.823 Total 16,200.109 Audit was of the view that short realization of govt. revenue resulted into deficit which constitutes weak financial management. Non-realization of govt. revenue as per targets constitutes weak internal control. The matter was reported during June, 2013. DMD (RRG) vide its reply dated 29-08-2013, agreed to audit point of view, while management of S.D (LM-II) failed to provide departmental point of view. DAC in its meeting held on 04-09-2013 agreed to audit point of view and directed to DMD (RRG), KW&SB, to take all out efforts for realization of revenue. No further progress was reported in compliance of DAC directives till finalization of this report. The PAO failed to convene the DAC meeting to discuss audit para relating to SD (LM-II), KMC, despite pursuance by audit. Audit recommends fixing responsibility on account of short realization of revenue, under intimation to audit. [AIR Paras: 1, 1]

1.2.4 Internal Controls Weakness 1.2.4.1 Irregular payment - Rs 2,069.838 Million Rule 89 of SPPRA 2010, states that, “Procurements exceeding the Rs 10 Million for goods works, and Rs. 2.5 million for services shall be subject to an integrity pact, as

36 specified by regulations, between the procuring agency and the suppliers or contractors or consultants” XEN (Water), Gadap Town and P.D (RO&DP) Lyari, (KW&SB) awarded works of Rs 2,069.838 million, during 2010-11 & 2011-12 to contractors without executing integrity Pact, in violation of above rule. Detail provided in Annexure-Y. Audit was of the view that department failed to execute integrity pact with contractors and failed to safeguard departmental interests which constitutes weak financial management. Non-securing of Integrity Pact constitutes weak internal control. The Matter was reported during August, 2012& May 2013 but managements failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit paras despite pursuance by audit. Audit recommends fixing responsibility for not safeguarding the departmental interests, under intimation to audit. [AIR Paras: 41, 11]

1.2.4.2 Non-Adjustment of Grant-In-Aid Advances - Rs 492.606 Million 1.2.4.3 Rule 668 of Treasury Rules, states that, “Advances granted under special order of the competent authority to Govt. officers for departmental or allied purpose may be drawn on the responsibility and receipt of the officers for whom they are sanctioned, subject to adjustment by submission of detailed accounts supported by vouchers or by refund, as may be necessary”. Secretary, LGD, paid advances of Rs 492.606 Million to Sehwan and Larkana Development Authorities, during 2011-12, but failed to obtain bills/vouchers to account for and justify the expenditure, in violation of above rule. Detail is as under:

(Rupees in Million) Sr. Name of Office Cheque No. Date Amount 1 Sehwan Development Authority Nil/19-01-2012 150.000 2 -do- Nil/18-02-2012 150.000 3 -do- Nil/16-05-2012 150.000 4 Larkana Development Authority Nil/28-05-2012 42.606 Total 492.606

Audit was of the view that department failed to account for likely expenditure incurred which constitutes non-transparency in public expenditure. The expenditure without availability of supporting vouchers to justify the actual expenditure constitutes weak internal control. The matter was reported during June, 2013. The Secretary, LGD, vide its reply dated 20-08-2103, stated that its responsibilities of authorities to adjust the expenditure. DAC in its meeting held on 20-08-2013, directed to department to furnish the adjustment of advances. No further progress was reported to audit in compliance of DAC directives till finalization of this report. Audit recommends fixing responsibility for non-adjustment of advances. [AIR Para: 7]

1.2.4.4 Undue Favour to Contractor - Rs 133.942 Million Clause 33.14 of particular condition of Contract of Bidding documents (Vol-I) signed between PD (RO&DP), Lyari and Contractor, states that, “An interest free mobilization advance upto 15% of the contract price shall be paid by the employer, 1st Part within 14 days after signing of the contract agreement or date of receipt of engineers notice to commence, whichever is earlier and 2nd Part within 42 days from the date of payment of the first part subject to the satisfaction of the engineer as the state of mobilization of the contract”. PD, RO&DP, Lyari, awarded the work of “Procurement and installation of 5 Nos. Reverse Osmosis and Desalination Plants, Lyari Town” and signed an agreement with contractor dated 25-06-2011 but second part of mobilization advance of Rs 133.942 Million was paid to contractor after three days of signing of agreement i.e. on 28-06-2011 without certificate of satisfaction given by concerned authority as the state of mobilization of the contract, in violation of above rule. Audit was of the view that payment of mobilization advance of second part was allowed without certificate of satisfaction given by concerned authority resulted into undue favour to contractor which constitutes weak financial management. Extension of undue financial assistance to contractor constitutes weak internal control.

The matter was reported during May, 2013 but management failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit. Audit recommends fixing responsibility on account of undue favour to contractor. [AIR Para: 2]

1.2.4.5 Execution of Work without Revalidation of Performance Security Bond Rs 81.812 Million Clause-10.2 of Condition of Contract, states that, “The performance guarantee shall be valid until the contractor has executed and completed the work and remedied any defect there in accordance with contract”. XEN, (WD) Saddar Town, C.E (Projects) and XEN (Water) Jamshed Town, KW&SB, awarded different works to contractors on submission of guarantee of Rs 81.812 Million, during 2010-11 & 2011-12, for specific period up to completion date, whereas, period of completion was further extended but no fresh performance security bonds were obtained, in violation of the above rule. Detail provided in Annexure-Z. Audit was of the view that extension of work without obtaining of fresh security bonds, the prescribed procedure was not followed. Non-obtaining of performance security bonds constitutes weak internal control. The Matter was reported during April 2012 and August 2013 but managements failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit paras despite pursuance by audit. Audit recommends that responsibility be fixed upon person(s) responsible for non-obtaining of fresh performance security bonds from the contractors. [AIR Paras: 1, 9, 2, 8, 32]

1.2.4.6 Non-deposit of Receipts - Rs 21.374 Million Rule 05 of GFR Vol-I, states that, “Money received as dues of Govt. or for deposit in the custody of Govt. should be credited into the public account in accordance with the treasury rules”. Chief Engineer, Projects (KW&SB), awarded work, during 2010-11, and deducted Rs 21.374 Million, on account of water charges from contractor but no record showing deposit of recovered amount into the Govt. treasury was found

39 available with Dept., in violation of above rule. Detail provided in Annexure-ZA. Audit was of the view that management recovered Rs 21.374 Million from contractor, but failed to deposit into the Govt. treasury which constitutes weak financial management. The non-remittance of recovered amount into Govt. treasury constitutes weak internal control. The Matter was reported during August, 2012 but management failed to provide departmental point of view. The PAO failed to convene the DAC meeting to discuss audit para despite pursuance by audit. Audit recommends investigating the matter to fix responsibility on account of non-deposition of Rs 21.374 Million and same may be deposited into Govt. treasury, under intimation to audit. [AIR Para: 6]

ANNEXURE ANNEXURE-1

Memorandum for departmental accounts Committee (MFDAC) Paras

(Amount in Rupees) Unit Sr. Para Caption Amount SLGD Secretary Local Govt. Department (2011-12) 1 15 Unjustified exp on account of TA/DA. 382,580 Unjustified exp on account of pay & allowance to Mr. Abdul Aleem 2 16 193,648 Palijo. 1 3 19 Non receipt of govt. vehicles GL-0067 valuing approximately. 400,000

4 30 Limitation of audit scope/non production of auditable record. -

Secretary Local Govt. Board (2011-12) 5 10 Payment through open cheques. 439,608

Irregular expenditure claimed by Mr. Ghulam Arif Khan (BS-20, retired 6 14 223,774 secretary, RDD) on account of medical reimbursement. 2 Unjustified expenditure Mr. Muhammad Hussain (Driver) on account of 7 33 90,595 pay & allowances.

8 12,13&15 Un-Authorised Medical Re-Imbursements 801,000

Director General, Sindh Civil service & Local Government Training Academy, Tando Jam (2011-12) 9 6 Poor performance of training Academy 0 10 10 Internal audit and inspection not conducted by the controlling officer 0 3 11 11 Non receipt of Government Vehicle 400,000 12 12 Payment of salaries without pay fixation in service books 0 13 13 Annual physical verification of stock and store not conducted 0 Principal Municipal Training Institute Karachi (2011-12) 4 14 9 Expenditure incurred from irrelevant head of account. 18,450 KMC DG (Technical Services), Karachi 1 15 1 Non-Production of record. 0 Medical Superintendent, Sobraj Maternity Hospital, KMC, Karachi (2011-12) 2 16 6 Loss to KMC due to short collection of fee charges from the patient. 555,000

(Amount in Rupees) Unit Sr. Para Caption Amount MS Spencer Eye Hospital Karachi 17 1 Non Accountal of various articles worth. 99,660 3 18 2 Exp without procuring committees. 99,800 Director (Council Secretariat), Karachi 19 4 Non-functional council secretariat during period under audit. - 4 20 5 Annual physical verification of stock and stores not conducted. - Assistant Director Education (Gulburg), Karachi 21 1 Non production of accounts record. - 5 22 2 Non accountal of store articles. 57,360 Assistant Director Education (Liaqutabad), Karachi 23 1 Non production of accounts record. 0 6 24 2 Non recovery of conveyance allowance. 35,000 Assistant Director Educating Shah Faisal Zone, Karachi, 25 1 Non production of accounts record. - 7 26 2 Non recovery of conveyance allowance. 17,500 Assistant Director Education Korangi Zone, Karachi, 27 1 Non production of accounts record. - 8 28 2 Non recovery of conveyance allowance. 312,396 Assistant Director Education Sadar Town, Karachi, 29 1 Non production of accounts record. - 9 30 2 Non accountal of store articles. 157,404 Assistant Director Education Kemari Zone, Karachi, 31 1 Non production of accounts record. - 10 32 2 Non recovery of conveyance allowance. 15,000 Assistant Director Education North Nazimabad, Karachi, 33 1 Non production of accounts record. - 11 34 2 Non recovery of conveyance allowance. 21,000 Assistant Director Education Landhi, Karachi, 35 1 Non production of accounts record. - 12 36 2 Non recovery of conveyance allowance. 18,400 Assistant Director Education Baldia Town Karachi, 37 1 Non production of accounts record. - 13 38 2 Non recovery of conveyance allowance. 19,820 Assistant Director Education Site Town Karachi, 14 39 1 Non production of accounts record. -

(Amount in Rupees) Unit Sr. Para Caption Amount 40 2 Non recovery of conveyance allowance. 18,400 41 3 Non accountal of store articles. 55,500 Assistant Director Education North Zone Karachi, 42 1 Non production of accounts record. - 15 43 2 Non recovery of conveyance allowance. 20,000 Assistant Director Education Malir Town Karachi, 44 1 Non production of accounts record. - 16 45 2 Non recovery of conveyance allowance. 17,500 MS Landhi Medical Complex, Karachi, 46 1 Late deposit of govt. fee. 639,110 17 47 5 Wasteful exp: on a/c of salary of contractual employee on detailment. 637,932 48 6 Non production of record. - Senior Director Health KMC, Karachi, 18 49 1 Non production of record. - Director Medical Services KMC, Karachi (2011-12) Irregularuse of ambulance No.GI-161-418 which is property of primary 50 4 - 19 health care centre lyari since 2007. 51 9 Non production of record. - Medical Superintendent Homeopathic Hospital, KMC Nazimabad, Karachi, Irregular payment to the suppliers on supply of medicines & diet items 52 1 678,493 20 without quality assurance certificate. 53 6 Non production of record. - Medical Superintendent Gadarabad Maternity & General Hospital, Karachi, Irregular payment to the suppliers on supply of medicines & diet items 54 1 30,705 without quality assurance certificate. 55 6 Non production of record. - Medical Superintendent Sarfaraz Rafiqui Shaheed Hospital, Karachi, Irregular payment to the suppliers on supply of medicines without quality 56 2 491,970 assurance certificate. Administrator, Karachi Metropolitan Corporation, Karachi, 57 1 Recovery of conveyance allowance. 127,920 KW&SB Director (Medical Services) KW&SB , Karachi (2011-12) 1 58 3 Recovery on account of miscellaneous pay drawn by various officers. 72,000 Executive Engineer ADP/PSDP, Karachi, 2 59 5 Irregular inclusion of cartage/carriage in the estimate of work. 65,972

(Amount in Rupees) Unit Sr. Para Caption Amount Executive Engineer (Water Distribution) Korangi Town, Karachi, 3 60 1 Non-posting of bid evaluation report on authorities’ website. 834,664 Executive Engineer (E&M) Jamshed Town, Karachi (2010-11) 4 61 2 Non utilization of funds. 785,733 Executive Engineer (Water Distribution) Jamshed Town, Karachi 62 1 Irregulartechnical sanction by transgression of financial power. 990,326 5 63 2 Irregular NIT published without mentioning category of the contractor. 990,326 Executive Engineer, (STP-II) 6 64 1 Non accountal of stationary. 9,995 Executive Engineer (Sewerage) New Karachi 7 65 1 Non surrender of saving amount. 453,099 Executive Engineer (Water Distribution) New Karachi 8 66 1 Irregular payment of on account of purchase of uniform & liveries. 89,700 Executive Engineer, (E&M) Gadap Town. 9 67 1 Non surrender of saving amount. 513,901 Executive Engineer, Water Distribution Gadap Town, 10 68 3 Non utilization of funds. 688,741 Executive Engineer, (E&M) Bin Qasim Town, Karachi 69 1 Irregular payment of the bills of the contractor without his signature. 294,254 11 70 2 Non remittance of KW&SB revenue to bulk recovery head of account. 3,811 Executive Engineer, (Water Distribution) Bin Qasim Town, Karachi 71 1 Irregular payment of the bills of the contractor without his signature. 298,904 12 72 2 Non remittance of KW&SB revenue to bulk recovery head of account. 23,903 Executive Engineer, (Sewerage) Bin Qasim Town, Karachi 13 73 1 Irregular payment of the bills of the contractor without his signature. 298,779 Executive Engineer, Sewerage Gulberg Town, Recovery of undue payment off permanent travelling allowance to 14 74 2 77,472 employees. Executive Engineer, (E&M) Liaquatabad Town 75 1 Non utilization of funds. 350,430 15 Irregular exp replacement of worn out parts during repair of electronic 76 2 145,715 motor. Executive Engineer, (E&M) Site Town, 15 77 3 Expenditure incurred in excess of budget grant. 115,000 Executive Engineer, (Sewerage) Site Town, 16 78 1 Recovery of undue payment of permanent travelling allowance to 66,300

(Amount in Rupees) Unit Sr. Para Caption Amount employees. Executive Engineer, (Water Distribution) Site Town 79 2 Non utilization of funds. 464,835 17 80 3 Expenditure incurred in excess of budget grant. 500,000 Executive Engineer, (Water Distribution) Orangi Town 18 81 1 Non utilization of funds. 176,509 Executive Engineer, (E&M) Saddar Town 82 1 Irregular payment of the bills of the contractor without his signature 393,762 19 83 2 Non-remittance of KW&SB revenue bulk recovery head of account. 11,220 Executive Engineer, (Sewerage) Malir Town 20 84 3 Non remittance of KW&SB revenue bulk recovery head of account. 44,684 Executive Engineer, (E&M) Malir Town 21 85 2 Non remittance of KW&SB revenue bulk recovery head of account. 11,939 Executive Engineer, (WD) Malir Town 22 86 1 Irregular exp without mentioning the place of work to be executed. 397,496 Executive Engineer, (Sewerage) Gulshan-e-Iqbal Town 87 1 Deliberate keeping exp within quotation limit. 498,925 23 88 2 Non remittance of KW&SB revenue bulk recovery head of account. 45,337 Executive Engineer, (WD) Gulshan-e-Iqbal Town 24 89 2 Non recovery of professional tax. 4,500 DMD (HRD&A) , Karachi 25 90 7 Limitation of audit scope/non-production of auditable record. 180,511 DMD (Finance) , Karachi 26 91 2 Recovery on a/c of payment of over time allowance. 342,605 Chief Engineer Malir, Karachi 27 92 2 Recovery on a/c of payment of over time allowance. 20,365 Chief Engineer (Zone II), Karachi 28 93 5 Non accountal of purchase stationary in stationery items register. 30,000 Chief Engineer (E&M) New Karachi Town 30 95 4 Irregular payment on a/c of purchase of uniform & Liveries. 116,793 Managing Director, KW&SB (2011-12) Recovery from Ms/Misbah-ud-din fareed on account of excess TA/DA 96 4 7,563 31 claim. 97 5 Recovery from Mashkoor-ul-Hasnain on a/c of excess TA/DA claim. 7,563 Chief Engineer (E&M) Gulshan-e-Iqbal Town

(Amount in Rupees) Unit Sr. Para Caption Amount 32 98 2 Non remittance of revenue bulk recovery head of account. 9,008 DMD (Planning &Development) 99 6 Recovery on a/c of payment of over time allowance. 76,737 33 100 7 Payment of previous liability from grants of current year. 51,573 101 8 Doubtful payments without sanction from higher authority. 12,678 DMD (Revenue Resources Generation) KW&SB Karachi (2011-12) 34 102 9 Non-recovery of stamp duty on contract agreement. 95,918 Executive Engineer (Sewerage) Gulshan-e-Iqbal Town 35 103 3 Non-remittance of revenue bulk recovery head of account. 101,242 Executive Engineer (Sewerage) Sadar Town Irregular payment of the contractor bills of the contractor without his 104 2 998,871 36 signature. 105 3 Non accountal of store articles. 94,150 Executive Engineer (Water Distribution) Saddar Town (2011-12) 37 106 3 Irregular exp: without mentioning place of work to be executed. 298,033 Executive Engineer (Water distribution) Gulshan-e-Iqbal Town 38 107 3 Non-remittance of revenue bulk recovery head of account. 101,242

Annexure-2 Audit Impact Summary

1. Suspected Misappropriation - Rs 250.236Million

Secretary Local Govt. Dept. incurred Rs 0.183 Million on purchase of Petrol and Diesel for same vehicle, Secretary Local Govt. Board drawn Rs 0.272 Million on account of data entry of application forms instead of payment to the contractor, during 2011-12. Besides, F.A KMC drawn Rs 225 Million, during 2010-11 and paid to P.S to DCO.

Similarly, MD (KW&SB), awarded the work during 2010-11 and deducted Rs21.374 Million from contractor on account of water charges but no record showing deposit of recovered amount into the Govt. treasury was found available with Dept.

Besides, F.A KMC sanctioned an advance of Rs. 2.00 Million during 2010-11 paid to DO for the purpose of clearance of fire-fighting equipment but there was no proof of disbursement of money, hence, officer failed to account for Govt. money which transpires advance was not adjusted till date.

Moreover, DG, (SCS&LGTA), Tando Jam and Principal (MT&RI) Karachi, during 2011-12, conducted different trainings and collected an amount of Rs 1.407 Million from participants but failed to deposit the recovered amount into Govt. Treasury.

2. Irregular Consumption of POL – Rs 16.127 Million

Secretary Local Govt. Board, Chairman & MD (KW&SB), paid Rs 16.434 Million, during 2010-11 & 2011-12, on account of POL consumed by the personnel who were not entitled and on the strength of departments.

3. Undue Favour to Contractor - Rs 6.112 Million

The Senior Director (T&C) KMC, awarded a contract on account of Operations and Maintenance of intercity bus terminal signed on 30-09-2009 applicable from 05-09-2009 for a period of two years between CDGK and M/s New M.A Enterprises, however, contractor violated terms & conditions and defaulted for an amount of Rs 6.112Million but management failed to

47 take action to recover the said amount instead renewed the contract for further one year w.e.f05- 10-2011 to 04-10-2012.

4. Non-recovery of Govt. dues - Rs 1.767 Million

Secretary Local Govt. Board, sanctioned Rs 3.947 Million, during 1987 to 2005, on account of House Building Advance to 46 employees but failed to recover outstanding amount to Rs 1.699 Million upto 2011-12 from employees, in violation of the above rule.

5. Irregular expenditure – Rs 1.765 Million

The Director Medical Services KW&SB allotted ambulances, meant for patients, to doctors for use as staff cars against fixed ceilings of POL.

6. Irregular Expenditure – Rs 6.782 Million.

Senior Director, (T&C) KMC, R.E, Hub and XEN, Purification Plant, KW&SB, awarded different works to contractors amounting to Rs 6.782 Million, during 2010-11 &2011-12, without inviting open tender and advertising on authority’s website and print media, in violation of SPPRA rule

Annexure-A Suspected Misappropriation (Rupees in Million) F.A KMC [AIR Para-1] 2010-11 Cheque Amount to be Date Paid to AMOUNT No Paid Affected parties whose land was acquired for the 7352717 15-11-2010 (PS to DCO) 225.000 construction of Hino Pak flyover

(Amount in Rupees) Secretary Local Govt. Dept. [AIR Para-5] 2011-12 CV Sr. Paid to PARTICULARS AMOUNT DATE 339 Al-Noor Petroleum GS-4855 [email protected] & HSD 1 12,869

5-3-12 Service [email protected] 376 GS-4855 P [email protected] & HSD 2 -do- 13,024 5-4-12 102 @ 103.70 375 GS-7126 P [email protected] & 3 -do- 34,967

5-4-12 HSD [email protected] GS-7126 P [email protected] & 4 Nil -do- 33,244

HSD [email protected] GS-4855 P [email protected] HSD 5 Nil -do- 13,527

[email protected] GS-4855 P [email protected],HSD 6 Nil -do- 18,353 [email protected] GS-7126 P [email protected] & 7 Nil -do- 33,244

HSD [email protected] GS-4855 P [email protected] HSD 8 Nil -do- 13,527

[email protected] GS-4855 P [email protected] HSD 9 Nil -do- 10,310

50@106 Sub-total 183,065

(Amount in Rupees) Secretary Local Govt. Board [AIR Para-11] 2011-12 CV No. & Amount to be Paid to Designation Particulars AMOUNT Date Transfer Data entry of application 50 Abdul Haq Secretary Local M/s Manager forms for the 271,849 26-04-2012 Abro Govt. Board Techworkflow recruitment of BS-16/17 of SCUGS

Annexure-B

Misappropriation Due to Non-Remittance of Training Fees

(Amount in Rupees) Un- No. of Fee per Paid Sr. Name of Course Paid Participant Participant Amount Amount DG, (SCS&LGTA), Tando Jam [AIR Para-7] 1 Standards for Internal Control in Local Govt. 8 7,500 7,500 52,500 3 Budgetary Process 4 7,500 - 30,000 Departmental Tainting and Examination 4 37 15,000 - 555,000 Administrative Branch 03-Days Training Course of Office 5 7 7,500 7,500 45,000 Procedures and Management Departmental Training and Examination 6 35 15,000 30,000 495,000 Administrative Branch 7 Examination Fees 14 3,000 - 42,000 Sub-total to be deposited in Govt. Treasury 37,500 1,219,500 Principal (MT&RI) Karachi [AIR Para-1] 8 M.S Excel 9 1,000 - 9,000 9 Basic of Computer 6 1,000 - 6,000 10 Local Govt. Management 12 1,000 - 12,000 11 Disaster Management 10 1,000 - 10,000 12 Project Identification 7 1,000 - 7,000 13 Formulation and Appraisal 8 1,000 - 8,000 14 Word PPT. 9 1,000 - 9,000 15 Health Sanitation 12 1,000 - 12,000 16 M.S Excel Office Management 19 2,000 - 38,000 17 M.S Word 1 2,000 - 2,000 18 Financial Management 11 2,000 - 22,000 19 Fundamental of Municipal Administration 1 2,000 - 2,000 20 Office Management 16 2,000 - 32,000 21 Human Resource Management 9 2,000 - 18,000 Sub-total - 187,000 Total to be deposited in Govt. Treasury 37,500 1,406,500

Annexure-C

Non-Production of Record

(Amount in Rupees) AIR Audit Sr. Name of Office Head of A/c Amount Para# Period M.D (KW&SB) 1 Development Works 70 2010-11 877,366,995 (Development Portion) Daily Charges Conveyance 1,000,000 Allowance Budget

Provident Fund/Pension Budget 998,496 MD (KW&SB) 2 Welfare Fund Budget 1 2011-2012 11,445 (Non-Development Portion) Court Order Payment Budget 100,000,000 Contingencies Expenditure 789,182 Leave Encashment Expenditure 369,660 2 P.D K-III Consultancy 12 2010-11 5,000,000 Pay & Allowances 2010-11 3 Senior Director (HRM) (KMC) 2 40,831,000 (appointments & Promotions) Appointment of Chief Security 4 Officer Chief Security Officer 2010-11 4,800,456 4 Payment to the Armed Security 3 Guards

Capital Income (arrears) 1 54,561,027 5 Secretary Local Govt. Board 2011-12 Pension & Commutation 4 154,036,070

6 Provincial Local Govt. Commission Pay & Allowances 1 2011-12 6,000,000 M.S (Sobraj Maternity Hospital) Diet 4 2011-12 1,544,172 Printed Stationary, Machinery & 7 Senior Director LM-II, KMC 6 2011-12 498,430 Equipment and etc. 8 Karachi Zoo (Development) ADP Schemes 1 2011-12 58,806,932 Pay & allowance, contingencies 9 City Wardens 1 2011-12 275,418,205 and Repair & Maintenance Provident Fund/Pension Budget 360,878

Welfare Fund Budget 2,825 Contingencies Expenditure 1,932,963

Casual Incidents Budget 12,000,000 10 Govt. Additional add for salary Chairman (KW&SB) 1 2011-12 40,000,000 budget Expenditure Against CBA 120,000,000 agreement Budget Leave Encashment Expenditure 94,360 Total 1,756,423,096

Annexure-D

Non-Recovery of Income Tax

(Amount in Rupees) Chief Engineer Reverse Osmosis & water desalination plant Lyari & Kemari AIR Para-8] (2010-11) Rate Name of Sr. Name of Work Date Payment of Amount Contractor I.T Procurement & Installation M/s Pak Oasis 2011/206/L 1. of Reverse Osmosis Water Industries 324,150,000 23-06-2011 19,449,000 Desalination Plants (PVT) Ltd Chief Engineer Reverse Osmosis & water desalination plant Lyari AIR Para-4] (2011-12) 6% Procurement & Installation 2 of Reverse Osmosis Water -do- -do- 1,905,776,820 114,346,609 Desalination Plants Total 2,229,926,820 133,795,609

Annexure-E Detail of Excess Payment

Excess Excess % Sanctioned Admissible Executed over Amount Name of Items over Unit Rate quantity 30% quantity 30% (4x6) 30% (3-1-2) (4/1x100) 0 1 2 3 4 5 6 7 XEN (Sewerage) Jamshed Town [AIR Para-34] excavation in hand rock lift 8" - 9000 2700 14320 2620 29.11% Cft% 3275 85,805 11" full hire charges of the pumping 48 14.4 145 82.6 172.08 Days 1270 104,902 set Manufacturing & Supplying Rcc manhole covers 600 180 1200 420 70 Nos. 610 256,200 casting 1:2:4 convert ratio 21" dia Cartage of sand, bajri, lime, 33991 10197.3 102766 58577.7 172.33 Cft% 1050 615,066 rubbish Sub-total 1,061,973 P.D (R.O & D.P) Lyari Town [AIR Para-12] (2011-12) Supply of Duplex stainless steel submersible pump 150m or 126 greater lead 25 7.5 64 31.5 Each 4,000,000 126,000,000 % coupled with motor of required capacity as per design P.D (R.O & D.P) Kemari Town [AIR Para-8] (2011-12) P/L consolidating and mechanical compacting stone soiling under base 29.16 811 243.3 1290.779 236.479 Cu.m 1250 295,599 slab including % filling of voids as per instructions of Engineer

Excess Excess % Sanctioned Admissible Executed over Amount Name of Items over Unit Rate quantity 30% quantity 30% (4x6) 30% (3-1-2) (4/1x100) 0 1 2 3 4 5 6 7 P/L Plain cement concrete grade C10/20 using ordinary Portland cement in foundation and plinth or where required, including form 21.41 work, mixing, 400 120 605.633 85.633 Cu.m 5613 480,658 % pouring, levelling, compacting, vibrating and curing complete as per drawings, specifications and as directed by the engineer Sub-total 776,257 Grand-total 127,838,230

Annexure-F

Short realization of Water Charges

(Amount in Rupees) Water Water Charges Charges to be Less Sr. Name of Work deducted @ deducted recovered 1 % @ 1.5%

PD (R.O & D.P) Lyari [AIR Para-10] Procurement & Installation of 5 Nos. x 1 1 9,340,598 0 9,340,598 MGD R.O Plants at Lyari Sub-total 9,340,598 PD (R.O & D.P) Kemari[AIR Para-6] Procurement & Installation of 6 Nos. x 1 2 28,586,652 0 28,586,652 MGD R.O Plants at Kemari Sub-total 28,586,652 Senior Director (T&C) KMC [AIR Para-4] 3 Imp/Reh of Malir Cantonment intersection 125,277 0 125,277 Const. of bus terminal of CNG buses at 4 741,166 0 741,166 Orangi Town Const. of approach road and parking 5 spaces for CNG bus terminal at orange 636,780 0 636,780 town sector Imp/Reh including allied traffic works at 6 186,198 0 186,198 korangi Const of car parking/ commercial plaza at 7 shahbuddin market adjacent to empress 10,718,355 0 10,718,355 market Sub-total 12,407,776 Executive Engineer, (WD) Kemari Town [AIR Para-6] P/L Dia Water Supply to Gulshan-e- 8 1,994,758 1,329,839 664,919 Sikanderabad UC-1&2, Kemari Town Sub-total 664,919 Grand- total 50,999,945

Annexure-G

Irregular Award of Contract Due to Constitution of Invalid Procurement Committee (Amount in Rupees) Name of Amount of Sr. Name of Work Contractor Contract Senior Director (T&C) KMC [AIR Para-12] M/s Noman 1. Improvement of Malir Cantt inter-section (Tank Chowk) 12,257,736 Builders Improvement including allied traffic engineering works at Korangi 2 -do- 12,413,158 Crossing Sub-total 24,670,894 Resident Engineer (NEK K-II) KW&SB [AIR Para-02] M/s R/M of No. Weir pump set “E” 6660m3 / h (45MGD) installed at 3 Mukhtiar 4,257,313 low lift pump house NEK (P&F) K-II Enterprises Sub-total 4,257,313 Grand-total 28,928,207

Annexure-H Non-Recovery of Outstanding Dues

Summary (Amount in Rupees) Sr. Name of Office Amount 1 Chief Engineer, Hydrant Services & Tanker Operation, KW&SB 14,714,990 2 Senior Director Local Taxes KMC 3,316,350 Total 18,031,340

Outstanding of Water Charges Outstanding of Hoarding Charges

(Amount in Rupees) (Amount in Rupees) Amount Amount Sr. Name of Entity Sr. Name of Contractor Outstanding Outstanding 1 Sachal Ranger 50 Wing 1,453,550 1 M/s Faizer Links 488,850 2 (Sakkhi Hassan Hyd) 786,450 2 M/s Perfect Vision 240,000 3 Karachi 1,173,550 3 M/s Liberty Advertising 360,000 4 The Commander, Sachal 653,450 4 M/s Outdoor One 1,687,500 Rangers 60 Wing (Baldia Smart Outdoor 5 397,950 Hydrant), Karachi 5 Advertising 540,000 The Commander, H.Q Total 3,316,350

6 Sachal Rangers Sindh 3,264,864 (NEK Hydrant), Karachi Sub-total 7,729,814 Taluka Municipal 7 2,051,808 Administration, Lyari Taluka Municipal 8 512,952 Administration, Saddar Police Head Quarter, 9 2,051,808 Garden 10 CDGK 2,051,808 Sub-total 6,668,376 202,800 11 Secretary Flats 114,000 Sub-total 316,800 Grand-total 14,714,990

Annexure-I

Irregular Consumption of POL (Outside the Departments)

2011-12 Sr. Designation Vehicle No. Qty in Amount (Litres) Secretary, Local Govt. Board [AIR Para- 21] 1 Special Secretary (LG) GS-8000 3,667.70 358,629 2 PS to Chairman, SLGB GS-6781 2,540.00 258,181 3 Dy. Secretary (Admn) GS-9375 2,020.00 192,310 4 Special Secretary (HTP) GS-5428 2,600.00 245,704 Total 10,827 1,054,824

2011-12 Sr. Designation Vehicle No. Qty in Amount (Litres) MD, KW&SB [AIR Para-10] Special Secretary Local AAA-343 Detail 5 0 Govt. (BPS-19) awaited Special Sec Local Govt. AGA-728 6 6000 604,260 (BPS-19) ABJ-873 Detail 7 Ex-Legal Advisor 0 Awaited 8 S.O BC-5078 3600 360,616 Total 9,600 964,876

Irregular Consumption of POL (Without Entitlements)

(Amount in Rupees) Qty in Sr. Designation Vehicle No. Amount (Litres) Secretary, Local Govt. Board [AIR Para-17] 1 Naib Qasid KCS-968 520 54,861 2 Driver KCV-2659 560 59,120 3 -do- KAN-3564 520 54,861 4 -do- KCC-3704 520 54,861 5 -do- KDK-0578 480 50,858 6 -do- LHS-0056 672 74,200 7 -do- KCV-4043 360 39,308 8 -do- KFM-1728 240 24,528 9 -do- KBE-4058 480 50,764 10 -do- NHA-8015 240 27,515

Sub-total 4592 490,876 MD, KW&SB [AIR Para-10] EE (wd) Site / 11 161-033 2400 217,212 17 EE E&M/ 12 161-023 3600 325,818 17 Accounts Officer/ 13 161-042 2100 190,060 17 Sub Engineer/ 14 161-156 2400 217,212 14 EE Purification Plant Div / 15 161-157 3600 325,818 17 EE (sewerage) lyari / 16 161-161 2400 217,212 17 EE (sewerage) lyari / 17 AA-2586 3600 325,818 17 18 Senior Stenographer AAB-741 3000 271,515 EE (wd) Lyari / 19 AAC-486 4200 380,121 17 EE (wd) Lyari / 20 AAD-496 3000 271,515 17 21 EE AAE-0462 3600 325,818 22 P.S AAS-932 4800 434,424 23 ADT AB-4387 3000 271,515 24 EE (Karachi Division Civil-I) BC-4594 4800 434,424 25 Assistant Director BC-4594 3000 271,515 26 EE (WTM) BC-5120 4200 380,121 27 EE (NEK) BC-5143 3600 325,818 BC-5144 8400 760,242 AFR-1 7200 651,636 28 P.S to Chairman AFR-11 7200 651,636 BD-1143 36000 3,258,180 29 EE(wd) Ghulshan BD-0236 3600 325,818 30 Accounts Officer CD-3936 3600 325,818 31 Assistant Director CF-0971 3600 325,818 32 Assistant Director CN-2937 2400 217,212 33 Assistant Director CN-2953 3600 325,818 34 EE CN-3594 3600 325,818 35 EE EX-3628 3000 271,515 36 Assistant XEN GA-2101 2400 217,212 37 EE GL-0074 3600 325,818 Sub-total 145,500 13,168,477 38 Asstt. Director (Planning) GL-5380 - 215,443 Sub-total - 215,443 Chairman, KW&SB [AIR Para-3] 39 Stenographer AAB-741 2400 232,425 Grand-total 157441.6 16,126,921

Annexure-J

Details of Payment on Leave Encashment

(Rupees in Million) Year S.No. Name of Offices AIR Para # Amount

1 R.E Dhabeji & Gharo 2010-11 8 2.204

2 C.E Bulk Transmission & Distribution 2010-11 3 0.427

3 XEN Purification Plant Division 2010-11 5 1.258

4 Senior Director (T&C) 2011-12 3 0.538

2010-11 6 0.281 5 Director Medical Services 2011-12 4 0.484

6 R.E NEK (P&F) K-II 2011-12 5 1.457

7 R.E NEK (P&F) Old 2011-12 2 1.212

8 XEN (WTM-I) 2011-12 16 3.347

Total 11.208

Annexure-K

Irregular Expenditure

(Rupees in Million) Name of Original Excess Excess Sr. Name of work Locations Expenditure Office Estimate % Amount Re-Routing of existing 15” dia RCC pipe with 12” dia M.S pipe of 5.6 M/s Khalid & Co. mm thick 33” dia PRCC XEN M/s Zafar Masood 1 pipe with 36” dia M.S 51.908 55.580 7% 3.672 (HTM) & Co. Joint pipe of 7.75 mm thick Venture pipe from banaras chowk to Abdullah college round about (HTM) Repair Supply & Manufacturing of 35 MGD wire pump set ‘A’ RE, uniglide type by Dhabeji & replacement of worn out M/s Usman 16.66 2 Gharo parts and rebuilding / 7.039 8.381 1.341 Enterprises % (P&F), protective coating of E&M casing including R/M of 1000 mm dia no-returned wall at k-2 pump house dhabeji” XEN, Breaking of wall from KDA 207.52 3 upstream transition of M/s Syed Eng. 0.800 3.259 2.459 (Civil I) % Syphon No.19 BT&D Total 59.747 67.22 7.472

Annexure-L

Detail of Recovery

(Rupees in Million) H.R. Coil issued Minimum Name of Wastage Name of Work to scrap Amount Office 6% contractor rate (Quantity) 1811 108.7 P/L/J of 36” Dia M.S Pipeline form Pipri 3.370 Chief Filter Plant to saudabad pumping station metric tons metric tons Engineer in malir town via dumlotee, Part-B Projects Inspection bungalow of KW&SB to 2101.47 126.08 31,000 3.908 saudabad pumping station metric tons metric tons

3912.47 234.75 Total 7.277 metric tons metric tons

Annexure-M

Irregular Expenditure

(Amount in Rupees) Name of Bill #& Sr. Name of Work Contractor/ Amount date Supplier Senior Director (T&C) KMC [AIR Para-5 & 6] (2011-12) M/s Mehran 1785 1 Rent a Car 135,000 Rent-A-Car 22-10-11 1617 2 -do- -do- 173,000 11-11-11 1618 3 -do- -do- 135,000 11-11-11 1614 4 -do- -do- 214,500 11-11-11 1618 5 -do- -do- 135,000 11-11-11 1617 6 -do- -do- 173,000 11-11-11 7 -do- Misc. Bills Misc. Bills 531,940 Sub-total 1,497,440 M/s Frontier 6869 8 Repair of CNG Buses 465,784 Motors 30-01-12 6868 9 -do- -do- 486,327 30-01-12 6866 10 -do- -do- 480,323 30-01-12 6867 11 -do- -do- 470,284 30-01-12 Sub-total 1,902,718 R.E, HUB Division Mechanical (Pumping) KW&SB (2011-12) [AIR Para-05] M/s Malir 112 12 R/M of 630 KVA J&P Transformer HUB Pumping Station 100,000 Construction 15-06-12 R/M Reconditioning of MV Insulator of H.T Panel at HUB 114 13 -do- 100,000 Pumping Station 15-06-12 Sub-total 200,000 XEN Purification Plant KW&SB (2010-11) [AIR Para-01] Replacement and maintenance of raw water inlet M.S pipe 33” M/s Z.A 442 14 3,182,199 dia and 54” dia repair M.S pipe complete job Enterprises 02-04-11 Sub-total 3,182,199 Grand-total 6,782,357

Annexure-N Overpayment to the Contractor

(Amount in Rupees) Schedule Amount Name of Name of Qty Rate Name of work d Diff. overpaid contractor Item allowed Rate [Colum 4x7] 1 2 3 4 5 6 7 8 Dismantling 26250 bitumen 565 312.16 252.84 66,371 %Cft carpeting Dismantling 26250 of stone 2,375 1,629.87 745.13 195,596 %Cft metalling Excavation 52500 625 468.24 156.76 82,299 in all kinds %Cft Excavation 73000 810 549.18 260.82 190,399 in wet silt %cft P/L & 1,485.24 1,064 421.24 3,452,200 8200 Rft jointing of ployth pipe Replacement of 6” a) 250mm dia damage AC pipe 2300 Rft 455 208.04 246.96 568,008 b) 110 mm to 10” dia polyethylene line P/L & Jointing of from federation M/s Ali 2 Jobs 9200 7,575.24 1,624.76 3,250 house block-4 & 4” Ali’s & pipe fitting dia old damaged AC Co. 250 mm pipe to 4” dia P.E P/F M.S 15,000 13,516 pipe at Bilawal 2 each 8,242 6,758 spilt quality chowrangi to Bilawal a) 12” dia House Clifton b) 10” dia 3 each 6,000 3,510 2,490 7,470

Full Hire 100 / day 1,550 1,100 450 45,000 Charge

Filling & 12550 535 274.84 260.16 326,500 Disposal %Cft

Total 4,950,607

Annexure-O

Irregular Purchase of Vehicles

(Amount in Rupees) Sanction order Bill No & Sr. Name of Office Name of Supplier # & Amount Date Date 834 M/s Indus Motor Company Nil 1 1,424,000 13-10-2011 Secretary Local Govt. Ltd Karachi (Corolla XLI) 02-11-2011 01 Department M/s Pak Suzuki Motor (Cultus Nil 2 990,000 25-1-2012 VXR) 17-03-2011 Sub-total 2,414,000 Secretary Local Govt. M/S Indus Motor Company 3 Nil Nil 1,374,000 Board Limited (details not Provided) Grand-total 3,788,000

Annexure-P

Detail of Overpaid House Rent Allowance

(Amount in Rupees) House Rent House Rent Excess Amount to Allowance Allowance Audit Paid be Sr. Name of Office Drawn To be Drawn Year Per recovered @65% @45% Month Per Year Per Month Per Month

1. Seniors Director (T&C) 2011-12 236,480 163,717 72,763 873,156

Resident Engineer, NEK 2 2011-12 73,153 50,643 22,509 270,103 K-II Resident Engineer 3 2011-12 249,143 172,460 766,83 920,196 Dhabeji & Gharo (P&F)

4 DMD (RRG) 2011-12 194,482 134,641 59,841 718,087

Total 753,258 521,461 155,962 2,781,542

Annexure-Q

Non-Accountal of stores

(Amount in Rupees) Sr. A/c Head Amount SLGD[AIR Para-8]2011-12 1 Stationery 466,840 2 Printing & Publication 877,350 Sub-total 1,344,190 SLGD [AIR Para-27] 3 Purchase of Furniture 200,000 4 Purchase of Hardware 118,000 5 Purchase of Stationary 225,303 6 Printing and Publication 123,575 7 Cost of Other Stores 262,740 Sub-total 929,618 ADE Bin Qasim [AIR Para-5] 2010-11 8 Purchase of Machinery Equipment 37,400 Grand-total 2,311,208

Annexure-R

Details of Non-recovery of House Rent Allowance and Maintenance Charges

(Amount in Rupees)

Maintenance House rent charges to be allowance Over- No. of Name of employee deducted @ paid @ Payment Sr. Months 5% per 45% per month month

Secretary Local Govt. Department (2011-12) [AIR Para-17] 1 Mr. Shah Mohammad 0 8,856 12 106,272 MD (KW&SB) (2010-11) [AIR Para-6] 2 Mr.Misbah Uddine Fareed 970 8,731 14 135,814 3 Mr. Sajjad Hussain 970 8,856 10 98,260 4 Mr.Qutabuddin Shaikh 1,175 10,505 11 128,480 5 Mr. Fazal Ur Rehman 1,175 10,505 04 46,720 6 Mr. Ghulam Arif Khan 1,280 11,521 04 46,720 7 Mr. Mohammad Sulaman 1,280 11,521 04 51,204 8 Mr. Ghulam Arif Khan 973 8,755 10 97,280 Sub-total 604,478 MD (KW&SB) (2011-12) [AIR Para-7 & 8] 9 Mr.Misbah-u-Dine Fareed 2,750 12,667 12 185,004 Resident Engineer, NEK (P&F) Old, KW&SB (2011-12) [AIR Para-3] 10 Mr. S.Baqar Raza Zaidi 1,280 6,277 12 90,684 11 Mr. Mohammad Kamal 1,300 3,814 12 61,368 12 Mr. S.Rahbar Ali 888 3,073 12 47,532 Sub-total 199,584 Director Medical Services, KW&SB (2011-12) [AIR Para-1] 13 Mr. Dr.MahTalat 2,420 6,277 12 104,364 14 Dr. Aziz-ur-Rehman 1,040 6,277 12 87,804 15 Yar Mohammad - 2,104 12 32,958 16 Mrs.Afrooz Sultana - 1,981 12 27,168 17 Mr. Mukesh - 1,916 12 26,502 18 Miss PervazGul - 1,848 12 28,074 19 Mr. IshwarLal - 1,805 12 26,790 Sub-total 333,660 Grand-total 1,428,998

Annexure-S

Irregular expenditure on POL

(Amount in Rupees) Vehicle No. GS-6498 of SLGB GS-7595 of SLGB Petrol Diesel 2011-12 Qty in Qty in Amount Amount (Litres) (Litres) Jun-11 300 26,914 500 48,745 Jul-11 1,110 96,152 1,550 147,916 Aug-11 570 50,015 800 76,789 Sep-11 550 48,260 800 76,789 Oct-11 625 59,282 830 80,950 Nov-11 600 55,875 800 78,025 Dec-11 525 47,737 845 88,894 Jan-12 570 53,107 800 81,873 Feb-12 540 54,621 800 85,696 Mar-12 670 67,630 800 85,696 Apr-12 620 64,857 800 88,580 May-12 655 73,191 868 96,109 Jun-12 540 51,502 800 82,565 Total 7,875 749,143 10,993 1,118,627 Total 1,867,770

Annexure-T Non-recovery of Govt. dues (Amount in Rupees) Name of Officer/ Sanction Year of Recovered Sr. Designation Outstanding Officials Amount Sanction amount 1 M. Ghaziullah Assistant 157,680 2004 125,488 32,192 2 M. Ali Soomro Driver 145,512 2004 104,200 41,312 3 Mehmood Ex-Naib Qasid 56,160 1996 49,732 6,428 8 Zulfiqar Ali Ex- Sr. Clerk 71,784 1998 68,400 3,384 9 M. Ali Hakro Former Admn. Officer 264,960 2001 52,992 211,968 10 Mohiuddin Accountant, SLGB 120,564 2004 116,005 4,559 11 M. Saleem Naib Qasid 70,920 2004 67,225 3,695 12 Nawaz Gujar Former Accountant 206,000 2003 63,060 142,940 13 M. Asif Ansari Sr. Clerk 100,800 2003 98,406 2,394 Sulaeh Ahmed 14 Former Secretary, SLGB 461,340 2003 61,520 399,820 Farooqui 15 S.M. Raza Rizvi Former Assistant SLGB 162,540 2003 43,150 119,390 Former Admn. Officer 16 Ghulam Rasool Memon 243,180 2004 174,720 68,460 SLGB Former Admn. Officer 17 Rahila Razi 273,780 2004 128,635 145,145 SLGB 18 Haroon Larik Assistant, SLGB 175,050 2004 147,329 27,721 19 Athar Qureshi Accountant 162,540 2004 143,119 19,421 20 Rashidul Hassan Anwar Former Assistant 120,600 79,445 41,155 2004 21 S.M. Rashid Former Clerk, SLGB 136,080 79,730 56,350 22 Ashraf Masih. Sweeper 104,280 2004 96,045 8,235 23 Laljee Sweeper 61,600 2004 57,613 3,987 24 Syed Imtiaz Ali Former Admn. Officer 200,000 2004 93,278 106,722 25 Abid Ali Clerk SLGB 139,350 2005 109,600 29,750 26 Atiq Ahmed Memon Clerk SLGB 202,860 2005 146,900 55,960 Former Accountant, 27 Liaquat Ali Soomro 46,968 1996 36,912 10,056 SLGB 28 GhulamHasnain Ex clerk, SLGB 41,352 1997 6,721 34,631 29 M. Fayyaz Awan -do- 67860 1997 10,490 57,370 Former Naib Qasid, 30 Sikandar Ali Almani 60,000 1996 26,250 33,750 SLGB 31 Hassan Abbas Former Naib Qasid, 49,860 2001 21,877 27,983

(Amount in Rupees) Name of Officer/ Sanction Year of Recovered Sr. Designation Outstanding Officials Amount Sanction amount SLGB Former Naib Qasid, 32 Ali Akbar Channa 21,420 1991 11,000 10,420 SLGB Ghulam Bashir Former Admn. Officer, 33 90,180 1987 28,568 61,612 Chandio SLGB Total 3,947,360 2,248,410 1,766,810

Annexure-U

Irregular Expenditure

(Amount in Rupees) VEHIC POL P/M RATE ANNUALLY Sr. NAME OF OFFICER LE & Exp: POL P/Litre (P/M*12) NO. P/M 1 Dr. Aziz-ur-Rehman (MO BS-17) GL-6334 480 85 40,800 489,600 2 Dr.Birmanand Jessrani (MO BS-17) GS-8677 250 85 21,250 255,000 3 Dr.MahTalat (MO BS-17) GL-5340 250 85 21,250 255,000 4 Dr.Issa Raza Soomro (MO BS-17) GL-5413 250 85 21,250 255,000 5 Dr.Tanveer Fatima (MO BS-17) GL-0141 250 85 21,250 255,000 6 Dr. Muhammad Ali (MO BS-17) EA-0035 250 85 21,250 255,000 Total 1,730 - 147,050 1,764,600

Annexure-V

Irregular Award of works

(Amount in Rupees) Name of Sr. Name of Work W.O No. and date Amount Suppliers Director (CRC/PBM) Cell, KW&SB [AIR Para-66] M/s Computer Purchase of Laptop HP KW&SB/CE(IRP)/2010/03 1 and office 76,560 Probook 4510 S Dated:01-04-2010 products KW&SB/DIR(CRC/PBM)/CELL 2 -do- -do- 2010/03 76,560 Dated:01-04-2010 Purchase of Computer M/s Computer KW&SB/DIR(CRC/PBM)/CELL 3 & Printer HP laser Jet P 79,900 Ways 2010 Dated:21-06-2010 1005 Purchase of HP Laser M/s Naim KW&SB/CE(IRP)/2010/04 4 23,780 Jet P 105 Trading Dated:21-06-2010 KW&SB/DIR(CRC/PBM)/CELL Purchase of Ricoh 5 M/s GEMCO 2010/06 98,600 Aficio Copier MP-1500 Dated:25-06-2010 Purchase of Brother KW&SB/DIR(CRC/PBM)/CELL 6 -do- 10,440 FAZ Machine-8275 2010/07 Dated:25-06-2010 Sub-total 365,840 Resident Engineer, NEK K-II [AIR Para -4] R/M Engineering Servicing of (FCP) Control Panels No. M/s Techno RE/NEK (P&F)/K-II/11-12/17 7 95,491 (L&H) & R/ of Services 21-11-2011 Transformers power supply R/M Engineering Servicing Electricity RE/NEK (P&F)/K-II/11-12/18 8 -do- 82,837 Operated Penstock 21-11-2011 Valves of Filter Beds Sub-total 178,328 Executive Engineer (E&M) Jamshed Town [AIR Para -1] R&M work at 42-S Razi EE/JT/E&M-W/Zone-II 9 Road Pumping Station M/s Risal & Co. A/W&S/KW&SB/2011/23 99,900 of Jamshed Town 11-10-2011 P/L 35MM Cable at PD EE/JT/E&M-W/Zone-II 10 Office Pumping Station -do- A/W&S/KW&SB/2011/23 99,968 of Jamshed Town 11-10-2011 Sub-total 199,868

Resident Engineer Mechanical Pumping Hub Division [AIR Para -2] R/M of MV Switch M/s Manoj RE/Hub/(P)/O&N/WO/11-12/90 11 Gear HT Panel at HUB 99,909 Kumar 25-5-2012 Pumping R/M Sewerage System RE/Hub/(P)/O&N/WO/11-12/113 12 of OLD Office Block of -do- 99,999 15-06-2012 HUB Pumping Station Sub-total 199,908 Executive Engineer (E&M) Korangi Town [AIR Para -1] Rewinding of electric EE/E&M/Korangi/Division/KW&SB)15, 13 Motor, repair of ball M/s Nabiha 99,655 dated:25-5-2012 bearing, foot valve Servicing elect motor and overhauling of EE/E&M/Korangi/Division/KW&SB)15, 14 DWT pump 60HP-b 12 -do- 99,743 dated:25-5-2012 setno:01 at p/s korangi no:5/1/2 Sub-total 199,398 Grand-total 1,143,357

Annexure-W

Detail of Non-Recovery of Sales Tax

(Amount in Rupees) Name of Amount Sr. Name of Items Contractor / Expenditure of GST Supplier @16% M/S Service 1 Various items (A-4 papers) 22,851 3,656 Stationery Mart 2 Stationery items -do- 14,345 2,295 3 Stationery items -do- 13,960 2,234 Accounts officer 4 File covers 8,400 1,344 SLGB M/S Service 5 File covers 15,496 2,479 Stationery Mart 6 stationery items -do- 9,905 1,585 7 stationery items -do- 15,806 2,529 8 file covers -do- 13,960 2,234 Payable to PA to 9 stationery items 2,230 357 Secretary 10 Written test material M/S Zahid Printers 502,500 80,400 M/S Service 11 File covers 13,960 2,234 Stationery Mart M/S S.A 12 Written test Material 362,500 58,000 Enterprises M/S Accounts 13 File Cover & File Board 9,312 1,490 Officer, SLGB M/S Service 14 File Cover & File Board 13,960 2,234 Stationary Mart 15 stationary items -do- 19,169 3,067 16 File Cover & File Board -do- 13,960 2,234 Paid to PS to 17 stationary items 14,257 2,281 SS(LG) M/S Service 18 stationary items 18,365 2,938 Stationary Mart M/S 19 File Cover & File Board 13,960 2,234 MasoodurRehman M/A Al-Mustafa 20 stationary items 12,049 1,928 Autos M/S Grace 21 File Cover & File Board 13,960 2,234 Enterprises M/S Service 22 File Cover & File Board 27,920 4,467 Stationary Mart 23 Stationary items M/S Masood-ur- 15,159 2,425

Rehman Paid to PS to 24 Stationary items 12,033 1,925 SS(LG) M/S Service 25 File Cover & File Board 14,920 2,387 Stationary Mart 26 Stationary items -do- 17,326 2,772 27 File Cover & File Board -do- 85,296 13,647 M/S Grace 28 Stationary items 17,331 2,773 Enterprises Sub-total 1,314,890 210,383 29 Nil M/s Alfah Traders 23,400 3,744 30 Nil -do- 50,700 8,112 31 Nil -do- 46,800 ,7488 32 Nil -do- 43,200 6,912 33 Nil -do- 35,100 5,616 Sub-Total 199,200 31,872 Secretary Local Govt. Department [AIR Para-24] 34 Iron Cup Board M/s A.K.M Traders 42,600 6,816 35 Leather Sofa set -do- 46,500 7,440 36 Wooden Chair net -do- 16,400 2,624 37 Office Tables -do- 49,500 7,920 38 Wooden cabinet -do- 45,000 7,200 M/s Ukashah 39 UPS 15,000 2,400 Enterprises 40 HP Laser Jet -do- 29,500 4,720 41 Complete computer system M/s A.K.M Traders 73,500 11,760 42 Paper Ream -do- 10,649 1,704 43 -do- -do- 42,595 6,815 M/s Ukashah 44 -do- 24,500 3,920 Enterprises 45 Various Items -do- 28,082 4,493 46 -do- -do- 14,318 2,291 47 -do- -do- 14,559 2,329 48 File covers -do- 27,000 4,320 49 File Board -do- 26,250 4,200 50 File Covers M/s Alfalah Traders 19,350 3,096 51 File Board M/s A.K.M Traders 10,500 1,680 M/s Ukashah 52 Various Items 7,500 1,200 Enterprises 53 Regzine File Board M/s A.K.M Traders 25,000 4,000 54 File covers -do- 13,500 2,160 M/s Ukashah 55 File Boards 25,000 4,000 Enterprises 56 File covers -do- 27,675 4,428 57 -do- -do- 15,750 2,520 58 -do- M/s A.K.M Traders 16,650 2,664 59 Shalwar Kameez M/s Ukashah 27,000 4,320

Enterprises Sub-total 693,878 111,020 Resident Engineer Hub Division Mechanical Pumping

(KW&SB) [AIR Para -3] Air Release valve for 35-17-5 M/s Hunnain 60 MGD Kubota Pump set at Hub 316,581 50,653 Builders Pumping Station 10” Dia Non-Return valve and 61 sluice valve for 2.5 MGD,LCP -do- 508,170 81,307 Pump Set at Hub Pumping Station Sub-total 824,751 131,960 Grand-total 3,032,719 485,235

Annexure-X

Detail of Non-appointment of Independent Project Director

(Rupees in Million) Name of Estimated Name of Work Work Order # & Date Contractor Cost Seniors Director (T&C) [AIR Para-1] Construction of Car Parking / Commercial Plaza at Shahbud M/s Abdul Majeed DO/TC&CO/CDGK/2010/95 din Market Adjacent to 714.557 & Co. dated 10-02-2010 Empress Market, Saddar Karachi Project Director (R.O & DP)Lyari [AIR Para-9] Procurement and Installation of Reverse Osmosis water M/s Pak Osis MD/KW&SB/2011/206/L 1,819.266 Desalination Plants in Lyari Industry 23-06-2011 Town Project Director (R.O & DP) Kemari [AIR Para-9] Procurement and Installation of Reverse Osmosis water M/s Pak Osis MD/KW&SB/2011/206/L 2,858.069 Desalination Plants in Kemari Industries 23-06-2011 Town Total 5,392.089

Annexure-Y

Irregular payment

(Amount in Rupees) Sr. Name of Remarks Name of Work Expenditure Contractor XEN (Water), Gadap Town[AIR Para-41] (2010-11) P/L 315 mm dia P.E water pipeline from surjani M.s Khyber 1 pumping station to khuda Without Integrity Pact 32.958 Builders ki basti UC No. 03 & 06 gadap town PD (RO&DP) Lyari [AIR Para-11] (2011-12) Procurement and Installation of Reverse M/s Pak Osis 2 Osmosis Water Without Integrity Pact 2,036.880 Industries Desalination Plants in Lyari Town Total 2,069.838

Annexure-Z

Execution of Work without Revalidation of Performance Security Bond

(Rupees in Million) Date of Sr. Name of work Date of expiry Amount issuance Executive Engineer (WD) Saddar Town (ADP,PSDP) [AIR- 1, 9]

Construction of water pumping station of 65000 gallons storage capacity in block-I, electrical & 1 23-07-2010 23-07-2011 2.244 Mechanical works and P/L of 12” dia pipe rising main from pumping station to Hindu Para”.

Sub-total 2.244

Chief Eng: Projects (36” Dia M.S Pipeline from PIPRI to Saudabad) [AIR-2, 8]

P/L/J of 36” Dia M.S Pipeline form Pipri Filter Plant to saudabad pumping station in malir town 2 27-03-2009 18-03-2011 44.079 via dumlotee, Part-A Pipri Filter Plant to Dumlottee Inspection bungalow of KW&SB

P/L/J of 36” Dia M.S Pipeline form Pipri Filter Plant to saudabad pumping station in malir town 3 11/3/2009 10/3/2011 35.489 via dumlotee, Part-B Inspection bungalow of KW&SB to saudabad pumping station

Sub-total 79.568 Grand -total 81.812

Annexure-ZA

Non-deposit of Receipts

Name of Name of Work Year Amount Office P/L/J of 36” Dia M.S pipeline from Pipri Filter Plant to Saudabad pumping station in Malir town MD 2010-11 21.374 via Dumlotee, Part-A Pipri Filter Plant to (KW&SB) Dumlottee Inspection Banglow of KW&SB