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Department of the Auditor General of Pakistan AUDIT REPORT ON THE ACCOUNTS OF DISASTER MANAGEMENT ORGANIZATIONS (FEDERAL) AUDIT YEAR 2018-19 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS & ACRONYMS ........................................................................... i PREFACE .............................................................................................................. iv EXECUTIVE SUMMARY ...........................................................................................v SUMMARY TABLES & CHARTS .......................................................................... viii I Audit Work Statistics .......................................................................... viii II Audit observations regarding Financial Management ....... viii III Outcome Statistics .......................................................................... ix IV Table of Irregularities pointed out ..............................................x V Cost-Benefit ........................................................................................x CHAPTER-1 Public Financial Management Issues ..............................................................1 Earthquake Reconstruction & Rehabilitation Authority (ERRA) ..................1 1.1 Audit Paras .............................................................................................1 CHAPTER-2 Earthquake Reconstruction & Rehabilitation Authority (ERRA) ..................7 2.1 Introduction of Authority .......................................................................7 2.2 Comments on Budget & Accounts (Variance Analysis) .......................7 2.3 Brief comments on the status of compliance with PAC directives ........7 2.4 AUDIT PARAS .....................................................................................9 CHAPTER-3 National Disaster Management Authority (NDMA) .....................................56 3.1 Introduction of Authority .....................................................................56 3.2 Budget and Expenditure .......................................................................57 3.3 AUDIT PARAS ...................................................................................58 CHAPTER-4 ..............................................................................................................73 FATA Disaster Management Authority (FDMA)..........................................73 4.1 Introduction of Authority .....................................................................73 4.2 Budget and Expenditure .......................................................................74 4.3 AUDIT PARAS ...................................................................................75 Annexures ..............................................................................................................90 ABBREVIATIONS & ACRONYMS AFS Annual Financial Statements AGPR Accountant General Pakistan Revenues AJK/AJ&K Azad Jammu and Kashmir BCDP Bagh City Development Project BHU Basic Health Unit BOQ Bill of Quantity Cft. Cubic Feet CLCP Citizen Losses Compensation Program Co. Company 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 DDMA District Disaster Management Authority DDO Drawing & Disbursing Officer DDR Deputy Director Reconstruction DG Director General DRU District Reconstruction Unit DSR Daily Situation Report ECNEC Executive Committee of the National Economic Council EOT Extension of time ERRA Earthquake Reconstruction and Rehabilitation Authority FBR Federal Board of Revenues FDMA Fata Disaster Management Authority GCC General Conditions of Contract GFR General Financial Rules GGPS Government Girls Primary School GHS Government High School GOP Government of Pakistan GPS Government Primary School GSM Grams per Square Meter GST General Sales Tax HSD High Speed Diesel IPC Interim Payment Certificate IPSAS International Public Sector Accounting Standards JV Joint Venture Km Kilometer KP Khyber Pakhtunkhwa i LD Liquidated Damages Ltd. Limited MCDP Muzaffarabad City Development Project M/s Messer Mm Millimeter NDMA National Disaster Management Authority NDMF National Disaster Management Fund 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 O.M. Office Memorandum PAC Public Accounts Committee PAO Principal Accounting Officer PC-I Planning Commission form One PCC Particular Condition of the Contract PCSIR Pakistan Council of Scientific and Industrial Research PDMA Provincial Disaster Management Authority PDP Proposed Draft Para PEC Pakistan Engineering Council PERRA Provincial Earthquake Reconstruction and Rehabilitation Agency P.M Prime Minister PM Program Manager/Per month PMU Project Management Unit POL Petrol Oil and Lubricant PPRA Public Procurement Regulatory Authority PPS Project Pay Scales PSC Provincial Steering Committee / Program Steering Committee PSDP Public Sector Development Program Pvt. Private PWD Public Works Department Qty Quantity RCC Reinforced Cement Concrete RCDP Rawalakot City Development Project RD Road Distance Rft Running feet RRU Reconstruction & Rehabilitation Unit Rs. Rupees SAC Statement At Completion ii SERRA State Earthquake Reconstruction and Rehabilitation Agency SFD Saudi Fund for Development Sft. Square feet SPC Special Project Cell Sq.m Square meter SRO Statutory Regulatory Order TOC Taking Over Certificate TS Technical Sanction VO Variation Order Vol Volume iii 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 Disaster Management Organizations of Federal Government for the financial year 2017-18 and accounts of some formations for previous years. The Directorate General Audit (Disaster Management) conducted audit during the year 2018-19 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 as a general principle, attempt has been made to include audit findings having value of rupees one million or more. Relatively less significant issues are listed in the Annexure-I of the Audit Report. The audit observations listed in the Annexure-I shall be pursued with the Principal Accounting Officers at the DAC level and in all cases where the PAOs do 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 findings indicate the need for adherence to the regularity framework besides instituting and strengthening of 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 discussions in the DAC meetings. The Audit Report is submitted to the President in pursuance of the Article 171 of the Constitution of the Islamic Republic of Pakistan 1973, for causing it to be laid before both houses of Majlis-e-Shoora (Parliament). Dated: February 2019 [Javaid Jehangir] Auditor-General of Pakistan iv EXECUTIVE SUMMARY The Director General Audit (Disaster Management) is mandated to conduct the audit of receipts and utilization of funds spent by Disaster Management Organizations of the Federal, Provincial as well as District Governments. The office conducts regularity audit, financial attest audit, compliance with authority audit, audit of sanctions and propriety and performance audit of ERRA, NDMA, DG Civil Defence, PDMAs, FDMA, DDMAs and Rescue-1122. The office is presently located at Islamabad. The Director General Audit (Disaster Management) has a human resource of 44 personnel with 7,440 man-days available. The annual budget of the Directorate General Audit Disaster Management for the financial year 2018-19 is Rs. 59.028 million. There are 04 Federal PAOs and 43 auditable formations. As per Audit Plan, both expenditure and receipts of these formations were audited on test check basis by selecting 09 out of 43 formations during Audit Year 2018-19. a. Scope of audit Out of a total expenditure of Rs. 10,866.392 million (ERRA Rs. 7,300.883 million, NDMA Rs. 270.170 million, FDMA Rs. 3,295.339 million) of Federal Disaster Management Organizations, the DG Audit, Disaster Management audited an expenditure of Rs. 4,330.273 million (ERRA Rs. 3,277.223 million, NDMA Rs. 122.550 million, FDMA Rs. 930.500 million), which in terms of percentage is 39.85% of auditable expenditure. The audit covered issues of propriety, efficiency and economy in public spending. b. Recoveries at the instance of audit Recoveries of Rs. 718.260 million were pointed out by audit out of which recovery of Rs. 10.705 million was admitted during DAC. However, the recovery is not yet verified till the time of compilation of this report. All these recoveries were not in the notice of the executive before audit. v c. Audit Methodology The Audit Year 2018-19 witnessed intensive application of desk audit techniques which included examining permanent files,
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