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Audit Report on the Accounts of Earthquake Reconstruction & Rehabilitation Authority Audit Year 2015-16

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AUDIT REPORT ON THE ACCOUNTS OF EARTHQUAKE RECONSTRUCTION & REHABILITATION AUTHORITY AUDIT YEAR 2015-16 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS & ACRONYMS ........................................................................... i PREFACE .............................................................................................................. vi EXECUTIVE SUMMARY ........................................................................................ vii SUMMARY TABLES & CHARTS ..............................................................................1 I Audit Work Statistics ..............................................................................1 II Audit observations regarding Financial Management ...........1 III Outcome Statistics ............................................................................2 IV Table of Irregularities pointed out ..............................................3 V Cost-Benefit ........................................................................................3 CHAPTER-1 Public Financial Management Issues (Earthquake Reconstruction & Rehabilitation Authority 1.1 Audit Paras .............................................................................................4 CHAPTER-2 Earthquake Reconstruction & Rehabilitation Authority (ERRA) 2.1 Introduction of Authority .....................................................................18 2.2 Comments on Budget & Accounts (Variance Analysis) .....................18 2.3 Brief comments on the status of compliance with PAC directives ......18 2.4 AUDIT PARAS ...................................................................................20 Irregularity & Non Compliance ..................................................................... 20 Performance .................................................................................................... 42 Internal Control Weaknesses ......................................................................... 43 CHAPTER-3 Provincial Earthquake Reconstruction and Rehabilitation Agency (PERRA), Khyber Pakhtunkhwa 3.1 Introduction of the Agency ..................................................................47 3.2 AUDIT PARAS ...................................................................................47 Fraud / Misappropriations ............................................................................. 47 Irregularities & Non Compliance................................................................... 49 Performance .................................................................................................. 116 CHAPTER-4 State Earthquake Reconstruction and Rehabilitation Agency (SERRA), Azad Jammu and Kashmir 4.1 Introduction of the Agency ................................................................118 4.2 AUDIT PARAS .................................................................................118 Irregularities/ Non Compliance.................................................................... 118 Internal Control Weaknesses ....................................................................... 164 Annexures ......................................................................................................166 ABBREVIATIONS & ACRONYMS A&P Administration & Procurement AFS Annual Financial Statement AGP Auditor General of Pakistan AGPR Accountant General Pakistan Revenues AIR Audit Inspection Report AJK/AJ&K Azad Jammu and Kashmir APNS All Pakistan Newspaper Society ASTM American Society for Testing and Materials BCDP Bagh City Development Project BHU Basic Health Unit BOQ Bill of Quantity CB Contingent Bill CBO Community Based Organization CDWP Central Development Working Party CE Chief Engineer Cft. Cubic Feet CGA Controller General of Accounts Co. Company CPC Closing Payment Certificate CPWA Central Public Works Accounts CPWD Central Public Works Department CSR Composite Schedule of Rates Cu.m Cubic meter CWE China International Water & Electric Company CXB China Xinjiang Beixin Construction & Engineering (Group) Co. Ltd. DAC Departmental Accounts Committee DAM Development Authority Muzaffarabad DC Deputy Commissioner DDO Drawing & Disbursing Officer DDR Deputy Director Reconstruction DG Director General Div. Division DLP Defect Liability Period DOR&E District Officer Revenue & Estate DHQ District Headquarter DRAC District Reconstruction Advisory Committee DIG Deputy Inspector General i Dia Dia meter DRU District Reconstruction Unit EA M/s Engineering Associates EAD Economic Affairs Division ECIL Engineering Consultants International Pvt. Ltd. ECNEC Executive Committee of the National Economic Council EDO Executive District Officer EEAP Earthquake Emergency Assistance Project EOT Extension of time ERRA Earthquake Reconstruction and Rehabilitation Authority FBR Federal Board of Revenues FIDIC Fédération Internationale Des Ingénieurs-Conseils(French) International Federation of Consulting Engineers(English) FMIS Financial Management Information System FTO Federal Treasury Officer FTR Federal Treasury Rules FWO Frontier Works Organization GCC General Conditions of Contract GFR General Financial Rules GGMS Government Girls Middle School GMS Government Middle School GGPS Government Girls Primary School GHS Government High School GI Galvanized Iron GOP Government of Pakistan GPS Government Primary School GST General Sales Tax HP Horse Power HQs Headquarters HSD High Speed Diesel IB Instructions to Bidders IDB Islamic Development Bank IESCO Islamabad Electric Supply Company IPC Interim Payment Certificate IPSAS International Public Sector Accounting Standards JV Joint Venture KDR Kohala Dhirkot Road KFW Kreditanstalt Für Wiederaufbau (German Development Bank) KFAED Kuwait Fund for Arab Economic Development ii KICT Karachi International Container Terminal KKH Karakoram Highway Km Kilometer KP Khyber Pakhtunkhwa KPT Karachi Port Trust LD Liquidated Damages LGRDD Local Government and Rural Development Department LGSS Light Gauge Steel Structure Ltd. Limited LS Lump Sum MB Measurement Book MCC Mumtaz Construction Company (Pvt.) Ltd. MCDP Muzaffarabad City Development Project MDF Medium Density Fiberboard M&E Monitoring and Evaluation M/s Messer mm Millimeter MTDF Medium Term Development Framework Mzd Muzaffarabad NBCDP New Balakot City Development Project NDMA National Disaster Management Authority NESPAK National Engineering Services Pakistan (Pvt.) Ltd. NHA National Highway Authority NIDA National Income Daily Account No. Number NOC No Objection Certificate NSI Non-Scheduled Items NWFP North West Frontier Province O.M. Office Memorandum PAC Public Accounts Committee PAO Principal Accounting Officer PC-I Planning Commission form One PC-IV Planning Commission form Four PCC Particular Condition of the Contract PD Project Director P&D Planning & Development PDP Proposed Draft Para PE Polyethylene PEC Pakistan Engineering Council iii PERRA Provincial Earthquake Reconstruction and Rehabilitation Agency PHE Public Health Engineering PHED Public Health Engineering Department PICT Pakistan International Container Terminal PLD Personal Ledger Deposit Account P.M. Prime Minister PM Program Manager PMU Project Management Unit PMIU Project Management Implementation Unit PMT Project Monitoring Team POL Petrol Oil and Lubricant PPRA Public Procurement Regulatory Authority PSC Provincial Steering Committee PSDP Public Sector Development Program PST Project Supervision Team Pvt. Private PWD Public Works Department QAC Quality Assurance Committee Qty. Quantity QS Quantity Surveyor RCC Reinforced Cement Concrete RCDP Rawalakot City Development Project RD Road Distance Rft. Running feet Rm Running meter RHC Rural Health Centre ROW Right of Way Rs Rupees RWH Rain Water Harvesting RWHP Rain Water Harvesting Project SDO Sub-Division Officer SERRA State Earthquake Reconstruction and Rehabilitation Agency SPAPEV Saudi Public Assistance for Pakistan Earthquake Victims Sft. Square feet SFD Saudi Fund for Development SFD/IDB Saudi Fund for Development/Islamic Development Bank SFD&KF Saudi Fund for Development and Kuwait Fund Sft. Square feet SPC Special Project Cell iv Sq.m Square meter SRO Statutory Regulatory Order SSC State Steering Committee TOC Taking Over Certificate TQT Tajweed ul Quran Tax TS Technical Sanction US United States VO Variation Order Vol Volume Vs. Verses WAPDA Water and Power Development Authority WBBP West Bank Bypass WBM Water Bound Macadam WeBOC Web Based One Customs XEN Executive Engineer v PREFACE Articles 169 & 170 (2) of the Constitution of the Islamic Republic of Pakistan 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 receipts and expenditure of the Federation and the Provinces or the accounts of any authority or body established by the Federation or a Province. The report is based on audit of the accounts of Earthquake Reconstruction and Rehabilitation Authority (ERRA), Provincial Earthquake Reconstruction and Rehabilitation Agency (PERRA) in Khyber Pakhtunkhwa and State Earthquake Reconstruction and Rehabilitation Agency (SERRA) in AJ&K for the financial year 2014-15. Observations pertaining to the financial year 2013-14 processed during 2nd phase of Audit Plan 2014-15 are also included in this report. The Directorate General Audit (Disaster Management) conducted audit during 2015-16 on test check basis with a view of reporting significant findings to the relevant stakeholders. The main body
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