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Audit Report on the Accounts of District Government Nowshera

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Audit Report on the Accounts of District Government Nowshera AUDIT REPORT ON THE ACCOUNTS OF DISTRICT GOVERNMENT NOWSHERA AUDIT YEAR 2016-17 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ................................................................. ii Preface ....................................................................................................................... v EXECUTIVE SUMMARY ...................................................................................... vi SUMMARY TABLES & CHARTS ........................................................................ ix Table 1: Audit Work Statistics ......................................................................... ix Table 2: Audit observations classified by categories........................................ ix Table 3: Outcome statistics ................................................................................ x Table 4: Table of irregularities pointed out ...................................................... xi Table 5: Cost Benefit Ratio .............................................................................. xi CHAPTER-1 ............................................................................................................. 1 1.1 District Government Nowshera ........................................................................ 1 1.1.1 Introduction ............................................................................................... 1 1.1.2 Comments on Budget and Expenditure (Variance analysis) .................... 1 1.1.3 Comments on the status of compliance with ZAC / PAC directives ........ 2 1.2 Audit Paras ....................................................................................................... 3 1.2.1 Non-Production of Record ....................................................................... 3 1.2.2 Irregularities & Non-Compliance ............................................................ 5 1.2.3 Internal Control Weaknesses .................................................................. 53 ANNEXURES ......................................................................................................... 75 i ABBREVIATIONS AND ACRONYMS AA Administrative Approval AOM&R Annual Ordinary Maintenance and Repair AP Advance Para ADP Annual Development Programme APR Actual Payee’s Receipt BHUs Basic Health Units BOQ Bill of Quantity BPS Basic Pay Scale C&W Communication and Works CM Chief Minister CPWA Code Central Public Works Account Code CPWD Code Central Public Works Department Code CSR Composite Schedule of Rates CTRs Central Treasury Rules DAC Departmental Accounts Committee DAO District Accounts Officer DC Deputy Commissioner DCO District Coordination Officer DDAC District Development Advisory Committee DDC District Development Committee DHO District Health Officer DHP District Health Plan DHQ District Headquarter DGHS Director General Health Services DMS Deputy Medical Superintendent DOR District Officer Revenue DSM District Support Manager DTL Drug Testing Laboratory FBR Federal Board of Revenue FWO Frontier Works Organization GDC Government Degree College GFRs General Financial Rules ii HTV Heavy Transport Vehicle KPPRA Khyber Pakhtunkhwa Public Procurement Authority LG&RDD Local Government & Rural Development Department LGA Local Government Act LTV Light Transport Vehicle M2 Square Meter M3 Cubic Meter MB Measurement Book MCC Medicine Coordination Cell MPA Member of Provincial Assembly MOU Memorandum of Understanding MRS Market Rate System MS Medical Superintendent NGO Non-Government Organization NIT Notice Inviting Notice OT Operation Theater PAO Principal Accounting Officer PAC Public Accounts Committee PC-I Planning Commission Proforma-I PC-II Planning Commission Proforma-II PC-IV Planning Commission Proforma-IV PDMA Provincial Disaster Management Authority PDWP Provincial Development Working Plan PEC Pakistan Engineering Council PESCO Peshawar Electric Supply Company PHE Public Health Engineering PPHI People Primary Healthcare Initiative RCC Reinforced Concrete Cement RDA Regional Director Audit RHCs Rural Health Centers RAHBAR Research & Awarenesss for Human development Benefits And Rights iii SDO Sub-Divisional Officer S.E. Superintendent Engineer SNGPL Sui Northern Gas Pipeline TOR Term of Reference TS Technical Sanction TMA Town Municipal Administrator WAPDA Water and Power Development Authority XEN Executive Engineer ZAC Zilla Accounts Committee iv Preface Articles 169 & 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 District Fund and Public Account of District Governments. The report is based on audit of the accounts of various offices of District Government, Nowshera for the financial year 2015-16. The Director General of Audit, District Governments, Khyber Pakhtunkhwa conducted audit during 2016- 17 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 issues and significant audit findings. Relatively less significant issues are listed in the Annex-1 of the Audit Report. The audit observations listed in the Annex-1 shall be pursued with the Principal Accounting Officer at the DAC level. In all cases where the PAO does not initiate appropriate action, the audit observations will be brought to the notice of District Accounts Committee through the next year’s Audit Report. Audit findings indicate the need for adherence to the regularity framework besides instituting and strengthening internal controls to avoid recurrence of similar violations and irregularities. The observations included in this Report have been finalized in the light of written replies of the departments, however in some observations department did not submit written replies. DAC meetings were not convened despite repeated requests. The Audit Report is submitted to the Governor, Khyber Pakhtunkhwa in pursuance of Article 171 of the Constitution of the Islamic Republic of Pakistan, 1973 read with Section 37 of Khyber Pakhtunkhwa Local Government Act, 2013, for laying before the appropriate legislative forum. Islamabad (Rana Assad Amin) Dated: Auditor General of Pakistan v EXECUTIVE SUMMARY The Director General District Governments Audit, Khyber Pakhtunkhwa carries out the audit of 25 District Governments. Regional Directorate of Audit (RDA) Peshawar, on behalf of the DG District Governments Audit, Khyber Pakhtunkhwa carries out the audit of one City District Government and two District Governments namely Peshawar, Charsadda and Nowshera, respectively. This Directorate has a human resource of 12 officers and staff with a total of 3000 mandays. The annual budget amounting to Rs 15.415 million was allocated to this office during Financial Year 2016-17. The office is mandated to conduct regularity (financial attest audit and compliance with authority audit) and performance audit of programmes and projects. District Government, Peshawar conducts its operations under Khyber Pakhtunkhwa Local Government Act, 2013 (as amended). It comprises one Principal Accounting Officer (PAO) covering eighteen groups of offices as mentioned in Chapter–1 of this report. Financial provisions of the Act describe the Government fund as District Local Fund and District Public Account for which Annual Budget Statement is authorized by the District Council in the form of budgetary grants. Administratively, District Nowshera is subdivided into three Tehsils namely, Nowshera, Pabbi and Jehangira. District Administration comprises District Nazim and Deputy Commissioner. a. Scope of Audit There are 136 formations in District Nowshera out of which the accounts of four formations were examined in detail. These formations were selected for detailed audit by excluding the last year audited entities keeping in view the available mandays. The total expenditure of District Government, Nowshera for the Financial Year 2015-16 was Rs 7,109.144 million. Out of this, RDA Peshawar audited an expenditure of Rs 5,875.553 million which, in terms of percentage, was 82.648% of auditable expenditure. vi The receipts of District Government, Nowshera for the Financial Year 2015-16 was 1.255 million. Out of this, RDA Peshawar audited recipt of Rs 0.653 million which, in terms of percentage, was 52.01% of auditable expenditure. The total expenditure and receipts of District Governemnt, Noswshera for the fiancial year 2015-16 were 7,110.399 million. Out of this RDA Peshawar audited transactions of Rs 5,876.206 million which, interms of percentage, was 82.64 % of auditable amount b. Recoveries at the instance of audit Recovery of Rs 257.865 million was pointed out during the audit. However, no recovery was effected till finalization of this report. Out of the total recoveries, Rs 257.865 million was not in the notice of the executive before audit. c. Audit Methodology Audit was conducted after understanding the business processes of District Government, Nowshera with respect to their functions, control structure and key controls. This helped auditors in understanding the systems, procedures, environment, and the audited entity before starting the audit. Audit used desk audit techniques for analysis of compiled data and review of actual vouchers called for scrutiny and substantive testing. d. Audit Impact
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