Audit Report on the Accounts of Town Municipal Administrations District Lahore
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AUDIT REPORT ON THE ACCOUNTS OF TOWN MUNICIPAL ADMINISTRATIONS DISTRICT LAHORE AUDIT YEAR 2016-17 AUDITOR GENERAL OF PAKISTAN 1 TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ................................................ i PREFACE .............................................................................................. ii EXECUTIVE SUMMARY ................................................................... iii Table 1: Audit Work Statistics ...........................................................................vi Table 2: Audit observation regarding Financial Management .............................vi Table 3: Outcome Statistics ..............................................................................vii Table 4: Irregularities pointed out ................................................................... viii Table 5: Cost-Benefit ..................................................................................... viii CHAPTER 1 ........................................................................................... 1 1.1 Town Municipal Administrations of District Lahore ............................ 1 1.1.1 INTRODUCTION .............................................................................. 1 1.1.2 Comments on Budget and Accounts (Variance Analysis)..................... 2 1.1.3 Brief Comments on the Status of Compliance on MFDAC Audit Paras of Audit Report 2015-16 ..................................................................... 3 1.1.4 Brief Comments on the Status of Compliance with PAC Directives ..... 3 1. AUDIT PARAS ........................................................................ 4 1.2 TMA Allama Iqbal Town ........................................................ 5 1.2.1 Non-production of record .................................................................... 6 1.2.2 Irregularities and Non-compliance ....................................................... 7 1.2.3 Performance ...................................................................................... 22 1.3 TMA Aziz Bhatti Town .......................................................... 23 1.3.1 Non-production of Record ................................................................. 24 1.3.2 Irregularities and Non-compliance ..................................................... 25 1.3.3 Performance ...................................................................................... 47 1.4 TMA Data Gunj Bakhsh Town ............................................. 49 1.4.1 Non-production of Record ................................................................. 50 1.4.2 Irregularities and Non-compliance ..................................................... 51 1.4.3 Performance ...................................................................................... 59 1.5 TMA Gulberg Town .............................................................. 60 1.5.1 Irregularities and Non-compliance ..................................................... 61 1.5.2 Performance ...................................................................................... 76 2 1.6 TMA Nishtar Town ................................................................ 78 1.6.1 Irregularities and Non-Compliance .................................................... 79 1.6.2 Performance ...................................................................................... 94 1.7 TMA Ravi Town .................................................................... 95 1.7.1 Irregularities and Non-compliance ..................................................... 96 1.8 TMA Samanabad Town ....................................................... 106 1.8.1 Irregularities and Non-compliance ................................................... 107 1.8.2 Performance .................................................................................... 118 1.9 TMA Shalamar Town .......................................................... 119 1.9.1 Irregularities and Non-compliance ................................................... 120 1.10 TMA Wahga Town .............................................................. 136 1.10.1 Non-production of record ................................................................ 137 1.10.2 Irregularities and Non-compliance ................................................... 138 1.10.3 Performance .................................................................................... 147 ANNEXURE ....................................................................................... 149 3 ABBREVIATIONS AND ACRONYMS ADP Annual Development Programme APPM Accounting Policies and Procedure Manual BDD Budget Demand - Development CCB Citizen Community Board CFT Cubic Feet CO Chief Officer DAC Departmental Accounts Committee DDC District Development Committee DGBT Data Gunj Bakhsh Town DNIT Detailed Notice Inviting Tenders I&S Infrastructure and Services IPSAS International Public Sector Accounting Standards MB Measurement Book MRS Market Rate System NAM New Accounting Model NSL Natural Surface Level P&C Planning & Co-ordination PAO Principal Accounting Officer PCC Plain Cement Concrete PDG & TMA Punjab District Governments & Tehsil Municipal Administration PFR Punjab Financial Rules PLA Personal Ledger Account PLGB Punjab Local Government Board PLGO Punjab Local Government Ordinance RCC Re-inforced Cement Concrete RDA Regional Director Audit SAP System Application Product SFT Square Feet TMA Town/Tehsil Municipal Administration TO Town Officer TS Technical Sanction UA Union Administration UIP Urban Immoveable Property 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 Accounts of Tehsil / Town Municipal Administrations of the Districts is the responsibility of the Auditor General of Pakistan. The Report is based on audit of accounts of various offices of Town Municipal Administrations of District Lahore for the Financial Year 2015-16. The Directorate General of Audit District Governments Punjab (North) Lahore, conducted audit during Audit Year 2016-17 on test check basis with a view to reporting significant findings to the relevant stakeholders. The main body of the Audit Report includes only the systemic issues and audit findings carrying value of Rs 1.00 million or more. Relatively less significant issues are listed in the Annex-A of the Audit Report. The Audit observations listed in the Annex-A shall be pursued with the Principal Accounting Officer at the DAC level and in all cases where 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. The 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 intimated responses without DAC meetings which the respondent entities did not convene despite repeated reminders. 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 (Javaid Jehangir) Dated: Auditor General of Pakistan ii EXECUTIVE SUMMARY The Directorate General Audit (DGA), District Governments, Punjab (North), Lahore is responsible to carry out the Audit of District Governments, Town / Tehsil Municipal Administrations and Union Administrations of nineteen districts. Its Regional Directorate of Audit, Lahore has Audit jurisdiction of District Governments, TMAs and UAs of five districts i.e. Lahore, Kasur, Sheikhupura, Okara and Nankana Sahib. The Regional Directorate of Audit Lahore had a human resource of 23 officers and staff with a total of 5,727 man days and annual budget of Rs 28.982 million for the Financial Year 2016-17. It had mandate to conduct Financial Attest, Regularity Audit, Compliance with Authority and Performance Audit of programmes & projects. Accordingly, Directorate General Audit, District Governments Punjab (North), Lahore carried out audit of various offices of nine TMAs of District Lahore for the Financial Year 2015-16. Each Town Municipal Administration in District Lahore conducts its operations under Punjab Local Government Ordinance, 2001. It comprises one Principal Accounting Officer (PAO) i.e. Town Municipal Officer and acts as coordinating and administrative officer, responsible to control land use, its division, development and to enforce all laws including Municipal Laws, Rules and Bye-laws. The Punjab Local Government Ordinance, 2001 requires the establishment of Tehsil/Town Local Fund and Public Account for which Annual Budget Statement is authorized by the Tehsil / Town Nazim, Tehsil / Town Council, Administrator in the form of budgetary grants. Audit of TMAs of District Lahore was carried out with a view to ascertaining that the expenditure was incurred with proper authorization and in conformity with laws / rules / regulations, yielding economical procurement of assets and hiring of services etc. Audit of receipts was also