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Audit Report on the Accounts of District Government Charsadda Audit Year 2017-18 Auditor General of Pakistan

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Audit Report on the Accounts of District Government Charsadda Audit Year 2017-18 Auditor General of Pakistan AUDIT REPORT ON THE ACCOUNTS OF DISTRICT GOVERNMENT CHARSADDA AUDIT YEAR 2017-18 AUDITOR GENERAL OF PAKISTAN TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ...............................................................i Preface ………………………………………………………………………….iii EXECUTIVE SUMMARY ...................................................................................iv SUMMARY TABLES & CHARTS ................................................................... vii I: Audit Work Statistics ....................................................................................... vii II: Audit Observations classified by Categories .................................................. vii III: Outcome Statistics ........................................................................................ viii IV: Irregularities pointed out .................................................................................ix V : Cost benefit .....................................................................................................ix CHAPTER-1 .......................................................................................................... 1 1.1 District Government Charsadda ......................................................... 1 1.1.1 Introduction ....................................................................................... 1 1.1.2 Comments on Budget and Expenditure/Reciept (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 Misappropriation & Fraud ................................................................... 3 1.2.2 Irregularities/non compliance ............................................................ 16 1.2.3 Internal control weaknesses .............................................................. 62 ANNEXURES ................................................................................................ …..97 Annex-1 Detail of MFDAC Paras ........................................................................ 97 Annex-2 Fraudulent payment to contractor ......................................................... 99 Annex-3 Construction & Blacktopping of road ................................................. 101 Annex-4 Detail of Penalty .................................................................................. 102 Annex -5 Irregular Purchase of Medicine .......................................................... 103 Annex- 6 Non-imposition of penalty on late supply of medicines MHSDP ...... 105 Annex-7 Expenditure without TS ...................................................................... 106 Annex – 8 Non imposition of penalty ................................................................ 109 Annex -9 Details of Cash Payment of Salaries to DC staff ............................... 111 Annex 10 Irregular retention of fund and improper maintenance of Cash Book112 Annex -11 Non disbursement & non maintenance of Cash Book ..................... 113 Annex-12 Irregular and unauthentic expenditure ............................................... 114 Annex-13 Illegal and unauthorized release on account of Transformers ........... 115 Annex -14 Expenditure on PTC funded schools ................................................ 116 Annex-15 Doubtful withdrawal of Provincial ADPs fund ................................. 117 Annex-16 Detail OF 2nd Deposit ........................................................................ 118 Annex-17 Irregular award of lighting system .................................................... 122 Annex -18 Doubtful withdrawal of pay and allowances .................................... 123 Annex-19 Doubtful appointment of overage class-IV staff ............................... 127 Annex-20 Irregular appointment of class-IV staff ............................................. 129 ABBREVIATIONS AND ACRONYMS AIR Audit and Inspection Report AOM&R Annual Ordinary Maintenance and Repair APRs Actual Payee Receipts BHU Basic Health Unit BOQ Bill of Quantity B&R Building & Road CA Conveyance Allowance CDR Call Deposit Receipt CPWA Code Central Public Works Account Code CPWD Code Central Public Works Department Code CTR Central Treasury Rules C&W Communication and Works DAC Departmental Accounts Committee DAC District Accounts Committee DC Deputy Commissioner DD Dairy Development DDC District Development Committee DHO District Health Officer DO District Officer DSM District Support Manager GFR General Financial Rules HPA Health Professional Allowance HRA House Rent Allowance IPC Interim Payment Certificate IPSAS International Public Sector Accounting Standards KM Kilometer KPPRA Khyber Pakhtunkhwa Public Procurement Regulatory Authority LGA Local Government Act MB Measurement Book MCC Medicine Coordination Council MFDAC Memorandum for Departmental Accounts Committee MRS Market Rate System i NIT Notice Inviting Tender PAC Public Accounts Committee PAO Principal Accounting Officer PATA Provincially Administered Tribal Areas PC-I Planning Commission One PC-IV Planning Commission Four PCC Plain Cement Concrete PHE Public Health Engineering RCC Reinforced Concrete Cement RDA Regional Directorate of Audit RHC Rural Health Center TS Technical Sanction WSS Water Supply Scheme XEN Executive Engineer ZAC Zilla Accounts Committee ii 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, Charsadda for the financial year 2016-17. The Director General of Audit, District Governments, Khyber Pakhtunkhwa conducted audit during 2017 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 Annexure-1 of the Audit Report. The audit observations listed in the Annexure-1 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 observation 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 convened only on the audit paras for the financial year 2015-16 of education department. 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 appropriate legislative forum. Dated: (Javaid Jehangir) Islamabad Auditor General of Pakistan iii EXECUTIVE SUMMARY The Director General Audit District Governments, Khyber Pakhtunkhwa carried out the audit of twenty-five District Governments. Regional Directorate of Audit (RDA) Peshawar, on behalf of the DG Audit District Governments, Khyber Pakhtunkhwa carried out the audit of one City District Government of Peshawar and two District Governments of Nowshera and Charsadda. The Regional Directorate has a human resource of ten officers and staff, with 2500 mandays. The annual budget amounting to Rs 17.508 million was allocated to the office during financial year 2017-18. The office is mandated to conduct regularity (financial attest audit and compliance with authority audit) and performance audit of programs/ projects. District Government, Charsadda conducts its operations under Khyber Pakhtunkhwa Local Government Act 2013. 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. Adminintratively, District Charsadda is sub divided into three Tehsils namely Charsadda, Shabqadar and tangi.Distrcit Admininstration comprises Distrcit Nazim and Deputy Commissionor. a. Scope of audit There are eighteen devoled departments in District Charsadda out of which the accounts of six departments were examined in detail. These departments were selected for detailed audit keeping in view the available man days. The total expenditure of District Government Charsadda for the Financial Year 2016-17, was Rs 6248.144 million. Out of this, RDA Peshawar audited an expenditure of Rs 2424.003 million which, in terms of percentage, was 39% of auditable expenditure. iv The receipts of District Government Charsadda for the financial year 2016-17, were Rs 11.232 million. Out of this, RDA Peshawar audited receipts of Rs 5.841 million which, in terms of percentage, was 52 % of auditable receipts. The total of expenditure and
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