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Auditor General of Pakistan AUDIT REPORT ON THE ACCOUNTS OF LOCAL GOVERNMENTS DISTRICT MARDAN AUDIT YEAR 2018-19 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ................................................................................ i Preface .................................................................................................................................. iii EXECUTIVE SUMMARY ................................................................................................... iv SUMMARY TABLES & CHARTS................................................................................... viii I: Audit Work Statistics ...................................................................................................... viii II: Audit observations Classified by Categories ................................................................. viii III: Outcome Statistics ........................................................................................................... ix IV: Table of Irregularities pointed out .................................................................................... x V: Cost Benefit Ratio ............................................................................................................. x CHAPTER-1........................................................................................................................... 1 1.1 LOCAL GOVERNMENTS .............................................................................................. 1 1.1.1 Introduction ................................................................................................................... 1 1.1.2 Comments on Budget and Accounts (Variance Analysis)............................................ 5 1.1.3 Comments on the status of compliance with DAC / TAC Directives ........................... 8 1.2. DISTRICT GOVERNMENT .......................................................................................... 9 1.2.1 Irregularity/non-compliance ....................................................................................... 10 1.2.2 Internal Control Weaknesses ...................................................................................... 27 1.3 TMAs MARDAN/TAKHT BHAI/KATLANG ........................................................... 52 1.3.1 Irregularity/Non-compliance ...................................................................................... 53 1.3.2 Internal Control Weaknesses ...................................................................................... 60 1.4 AD LGE&RDD AND VCs/NCs Mardan ....................................................................... 80 1.4.1 Internal Control Weaknesses ...................................................................................... 81 1.5 DEVELOPMENT AUTHORITIES ............................................................................... 86 1.5.1 Internal Control Weaknesses ...................................................................................... 87 Annex-1 MFDAC ................................................................................................................. 92 Annex-2 Non reconciliation of expenditure made on account of land acquisition ............ 102 Annex-3 Unauthorized drawl from treasury ....................................................................... 103 Annex-4 Irregular drawl and disbursement of pay and allowances .................................... 105 Annex-5 Unauthorized purchase from un-registered firms ................................................ 106 Annex-6 Non deduction/deposit of Income Tax from contractors ..................................... 107 Annex-7 Non deposit of Capital Value Tax ....................................................................... 120 Annex-8 Non transfer of 2% Property Tax........................................................................ 122 Annex-9 loss due to allowing Compulsory Land Acquisition Charges ............................. 124 Annex-10 Non recovery of penalty on late deposit of installments ................................... 125 Annex-11 House Rent Allowance and 5% maintenance charges ....................................... 126 Annex-12 Non recovery of Health Professional Allowance .............................................. 129 Annex-13 Non imposition of penalty on late supply of equipments .................................. 132 Annex-14 Loss due non auction of old material of damaged schools ................................ 134 Annex-15 Loss to Government due to irregular appointments .......................................... 135 Annex-16 Non collection/Non-deposit of Stamp Duty ...................................................... 136 Annex-17 Non deduction of Conveyance and Mess/Uniform Allowance ......................... 149 Annex-18 Non deduction/non deposit of Sales Tax and Income Tax ................................ 152 Annex-19 Less deposit of 1% tax on registry amount ........................................................ 153 Annex-20 Loss due to less realization of receipts .............................................................. 154 Annex-21 Detail of non-imposition of penalty ................................................................... 155 Annex-22 Loss due to less realization of receipts .............................................................. 156 Annex-23 Non recovery of Income Tax from shopkeepers ............................................... 157 Annex-24 Detail of non-deduction of income tax .............................................................. 159 Annex-25 Non deposit of Sales Tax and non deposit of Income Tax ................................ 160 Annex-26 Detail of petrol/ CNG pumps under the jurisdiction of TMA ........................... 161 Annex-27 Detail of non-imposition of penalty ................................................................... 164 Annex-28 Non recovery of rent of shops ........................................................................... 165 Annex-29 Detail of petrol/ CNG pumps during the jurisdiction of TMA ......................... 167 Annex-30 Detail of non-imposition of penalty ................................................................... 170 Annex-31 Non-deduction of income tax ............................................................................ 171 Annex-32 Detail of non deduction of conveyance Allowance ........................................... 172 Annex-33 Irregular award of contracts ............................................................................... 173 Annex-34 Non deposit of income tax, stamp duty and DPR fund ..................................... 174 Annex-35 Non deduction of income tax, sales tax and stamp duty .................................... 176 Annex-36 Non deposit of Bank profit into Government Treasury ..................................... 177 Annex-37 Overpayment due to non deduction of Vibrator charges ................................... 178 Annex-38 Non recovery of water, conservancy and sewerage charges ............................. 180 Annex-39 Detail of loss due to investment of surplus funds on lower rate ........................ 181 ABBREVIATIONS AND ACRONYMS AIR Audit and Inspection Report APPM Accounting Policies and Procedures Manual ASTM American Society for Testing and Materials AG Accountant General BHUs Basic Health Units CMD Chief Minister Directive CPWA Code Central Public Works Accounts Code CVT Capital Value Tax DAC Departmental Accounts Committee DAC District Accounts Committee DG Director General DEO District Education Officer DHO District Health Officer DO District Officer DPR Disabled Person Rehabilitation DRAP Drug Regularity Authority of Pakistan GHSS Government Higher Secondary School GFR General Financial Rules E& SE Elementary & Secondary Education FTR Federal Treasury Rules KPPPRA Khyber Pakhtunkhwa Public Procurement Rules Authority LCB Local Council Board LED Light Emitting Diode LGE & RDD Local Government, Election & Rural Development Department LGA Local Government Act MCC Medicine Coordination Cell MDA Mardan Development Authority MFDAC Memorandum for Departmental Accounts Committee MRS Market Rate System PD Project Director PAC Public Accounts Committee PAO Principal Accounting Officer i PCC Plain Concrete Cement PLS Profit & Loss Sharing PTC Parents Teachers Council SIDB Small Industrial Development Board TMA Tehsil Municipal Administration TMO Tehsil Municipal Officer TAC Tehsil Accounts Committee TDR Term Deposit Receipt TS Technical Sanction ii Preface Articles 169 and 170 of the Constitution of the Islamic Republic of Pakistan, 1973 read with Sections-8 and 12 of the Auditor General’s (Functions, Powers and Terms and Conditions of Service) Ordinance, 2001 and Section-37 of Khyber Pakhtunkhwa Local Government Act 2013 require the Auditor General of Pakistan to conduct audit of the receipts and expenditure of Local Governments of each District of the Khyber Pakhtunkhwa. The report is based on audit of the accounts of various offices of Local Governments i.e District Governments, Tehsil Municipal Administrations, Assistant Director Local Government Elections and Rural Development Department,VCs/NCs and Mardan Development Authority Mardan for the financial year 2017-18. The Director General of Audit, District Governments, Khyber Pakhtunkhwa conducted audit during 2018-19 on test check basis with a view to report significant findings to the relevant stakeholders. The main body of the audit report includes the systemic
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