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Audit Report on the Accounts of Tehsil Municipal Administrations Khanewal

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Audit Report on the Accounts of Tehsil Municipal Administrations Khanewal AUDIT REPORT ON THE ACCOUNTS OF TEHSIL MUNICIPAL ADMINISTRATIONS KHANEWAL AUDIT YEAR 2013-14 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ....................................................................... i PREFACE ................................................................................................................... ii EXECUTIVE SUMMARY ...........................................................................................iii SUMMARY TABLES AND CHARTS .....................................................................viii Table 1: Audit Work Statistics ......................................................................................viii Table 2: Audit Observations regarding Financial Management ...................................viii Table 3: Outcome Statistics ............................................................................................. ix Table 4: Table of Irregularities pointed out ..................................................................... x Table 5: Cost -Benefit ...................................................................................................... x CHAPTER-1 ................................................................................................................... 2 1. TEHSIL MUNICIPAL DMINISTRATIONS KHANEWAL ............................ 2 1.1 INTRODUCTION .............................................................................................. 2 1.1.1 Comments on Budget and Accounts (Variance Analysis) ................................. 2 1.1.2 Brief Comments on the Status of Paras of Audit Report of Remaining TMAs for the Audit Year 2012-13 ..................................................................... 4 1.1.3 Brief Comments on the Status of Compliance on Audit Paras of Annex-1 of Audit Report 2012-13 .................................................................................... 4 1.1.4 Brief Comments on Status of Compliance with PAC/ZAC Directives ............. 5 ii AUDIT PARAS 1.2 Tehsil Municipal Administration, Khanewal ..................................................... 6 1.3 Tehsil Municipal Administration, Kabirwala .................................................. 22 1.4 Tehsil Municipal Administration, Mianchannu ............................................... 23 1.5 Tehsil Municipal Administration, Jahanian ..................................................... 25 Paras of Audit Reports of Remaining TMAs for the Audit YEAR 2012-13 1.6 Tehsil Municipal Administration, Mian Chunnu ............................................... 35 Non Complaint Paras of Annexure-I of Audit Reports for the Audit Year 2012-13 1.7 Tehsil Municipal Administration,Khanewal .................................................... 46 1.8 Tehsil Minicipal Administration,Kabirwala .................................................... 54 1.9 Tehsil Municipal Administration, Jahanian ..................................................... 59 Annex .......................................................................................................................... 65 iii ABBREVIATIONS AND ACRONYMS ADP Annual Development Programme CCB Citizen Community Board DAC Departmental Accounts Committee FD Finance Department IPSAS International Public Sector Accounting Standards LG&CD Local Government& Community Development MFDAC Memorandum for Departmental Accounts Committee NAM New Accounting Model PAC Public Accounts Committee PDG Punjab District Government PLGO Punjab Local Government Ordinance PDSSP Punjab Devolved Social Sector Programme TAC Tehsil Accounts Committee TMA Tehsil Municipal Administration TMO Tehsil Municipal Officer TO (F) Tehsil Officer (Finance) TO (I&S) Tehsil Officer (Infrastructure & Services) TO (P&C) Tehsil Officer (Planning & Coordination) TO (R) Tehsil Officer (Regulations) i Preface Articles 169 and 170 of the Constitution of the Islamic Republic of Pakistan, 1973 read with Section 115 of the Punjab Local Government Ordinance, 2001 require the Auditor General of Pakistan to audit the accounts of the Provincial Governments and the accounts of any authority or body established by, or under the control of, the Provincial Government. Accordingly, the audit of all Receipts and Expenditures of the Local Fund and public account of Tehsil/Town Municipal Administrationsis the responsibility of the Auditor General of Pakistan. The Report is based on audit of Tehsil Municipal Administrations of District Khanewal for the Financial Year 2012-13. The Directorate General of Audit District Governments Punjab (South), Multan, conducted audit during 2013- 14 on test check basis with a view to reporting significant findings to the relevant stakeholders. The main body of Audit Report includes only the systemic issues and audit findings carrying value of Rs 1 million or more and also the non-compliant observations which were included in Annex-I of Audit Report for the Audit Year 2012-13. Relatively less significant issues are listed in the Annex-I of the Audit Report. The Audit observations listed in the Annex-I shall be pursued with the Principal Accounting Officer at the DAC level and in case the PAO does not initiate appropriate action, the Audit observations will be brought to the notice of the Public Accounts Committee through the next year‟s Audit Report. Audit results indicate the need for adherence to the regularity framework besides instituting and strengthening internal controls to prevent recurrence of such violations and irregularities. The observations included in this Report have been finalized in the light of written responses and discussion in DAC meetings. The Audit Report is submitted to the Governor of the Punjab in pursuance of Article 171 of the Constitution of the Islamic Republic of Pakistan, 1973, to cause it to be laid before the Provincial Assembly of Punjab. Islamabad (Muhammad Akhtar Buland Rana) Dated: Auditor General of Pakistan ii EXECUTIVE SUMMARY The Directorate General Audit, District Governments, Punjab (South), Multan, a Field Audit Office of the Auditor General of Pakistan is responsible to carry out the audit of all District Governments in Punjab (South) including Tehsil and Town Municipal Administrations. Its Regional Directorate of Audit Multan has audit jurisdiction of District Governments, TMAs and UAs of six Districts i.e. Multan, Lodhran, Vehari, Sahiwal, Pakpattan and Khanewal. The Regional Directorate has a human resource of 30 including 20 officers and other staff. Total mandays available were 6,275 and the budget amounted to Rs13.800 million in Audit Year 2013-14. It has the mandate to conduct financial attest audit, regularity audit, audit of sanctions, audit of compliance with authority and audit of receipts as well as the Performance Audit of entities, projects and programs. Accordingly, R.D.A Multan carried out audit of the accounts of four TMAs of District Khanewal for the Financial Year2012- 13 and the findings are included in the Audit Report. Each Tehsil Municipal Administration in District Khanewal is headed by a Tehsil Nazim / Administrator. He/she carries out operations as per Punjab Local Government Ordinance, 2001. Tehsil Municipal Officer is the Principal Accounting Officer (PAO) and acts as coordinating and administrative officer, responsible to control land use, its division and development and to enforce all laws including Municipal Laws, Rules and By-laws. The PLGO, 2001, requires the establishment of Tehsil / Town Local Fund and Public Account for which Annual Budget Statement is authorized by the Tehsil Nazim / Tehsil Council / Administrator in the form of Budgetary Grants. The total Development Budget of four above mentioned TMAs in District Khanewal for the Financial Year 2012-13, was Rs671.961 million and expenditure incurred was of Rs418.019 million, showing savings of Rs253.941 million. The total Non Development Budget for Financial Year2012-13 was Rs670.107 million and expenditure was of Rs497.985 million, showing savings iii of Rs 172.122 million. The reasons for savings in Development and Non development Budgets are required to be provided by TMO and PAO concerned. Audit of TMAs of District Khanewal was carried out with a view to ascertaining that the expenditure was incurred with proper authorization, in conformity with laws/rules/regulations, economical procurement of assets and hiring of services etc. Audit of receipts/ revenues was also conducted to verify whether the assessment, collection, reconciliation and allocation of revenues were made in accordance with laws and rules and that there was no leakage of revenue. a. Scope of Audit (Audit of Expenditure and Receipts) Audit of development expenditure of Rs 154.667 million was carried out, out of the total expenditure of Rs418.019million and Audit of non-development expenditure Rs129.476 million out of total expenditure of Rs497.985million for the Financial Year2012-13 was conducted, which are 37%& 26% of development and non-development expenditures, respectively. Total overall expenditure of TMAs of District Khanewal for the Financials Year 2012-13 was Rs916.004 million, out of which overall expenditure of Rs284.143million was audited, which is 31% of total expenditure. Therefore, there was 100% achievement against the planned audit activities. Total overall receipt of TMAs of District Khanewal for the financial year 2012-13 was Rs190.105 million, out of which overall receipt of Rs.47.526 million was audited which, is 25% of total receipt. b. Recoveries at The Instance of Audit
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