AUDIT REPORT ON THE ACCOUNTS OF LOCAL GOVERNMENTS DISTRICT SWABI AUDIT YEAR 2018-19 AUDITOR GENERAL OF PAKISTAN Table of Contents ABBREVIATIONS AND ACRONYMS ........................................................................... I PREFACE.......................................................................................................................... II SUMMARY TABLES & CHARTS............................................................................... VII I: AUDIT WORK STATISTICS .......................................................................................... VII II: AUDIT OBSERVATIONS CLASSIFIED BY CATEGORIES ............................................... VII III: OUTCOME STATISTICS ........................................................................................... VIII IV: TABLE OF IRREGULARITIES POINTED OUT ............................................................... IX V: COST BENEFIT RATIO ................................................................................................ IX CHAPTER-1.......................................................................................................................1 1.1 LOCAL GOVERNMENTS ......................................................................................1 1.1.1 INTRODUCTION ..................................................................................................1 1.1.2 COMMENTS ON BUDGET AND ACCOUNTS (VARIANCE ANALYSIS) ..................6 1.1.3 COMMENTS ON THE STATUS OF COMPLIANCE WITH DAC / TAC DIRECTIVES .8 1.2 DISTRICT GOVERNMENT ....................................................................................9 1.2.1 IRREGULARITIES AND NON-COMPLIANCE ........................................................9 1.2.2 WEAK INTERNAL CONTROLS ..........................................................................31 1.3. TEHSIL MUNICIPAL ADMINISTRATION SWABI/RAZZAR/LAHOR/TOPI ..........................................................................................................................................48 1.3.1. IRREGULARITIES AND NON-COMPLIANCE .......................................................48 1.3.2. WEAK INTERNAL CONTROLS ...........................................................................55 1.4 AD LGE&RDD AND VC/NCS SWABI ..............................................................63 1.4.1 IRREGULARITIES AND NON-COMPLIANCE ......................................................63 1.4.2 WEAK INTERNAL CONTROLS ..........................................................................68 1.5 SWABI DEVELOPMENTAL AUTHORITY .......................................................70 1.5.1 IRREGULARITIES AND NON-COMPLIANCE ......................................................70 1.5.2 WEAK INTERNAL CONTROLS ..........................................................................71 ANNEXURES ..................................................................................................................72 Annexure-1 Detail of MFDAC paras ...............................................................................72 Annexure-2 statement showing detail of unauthentic/unjustified drawl out of designated bank account .....................................................................................................................76 Annexure-3 non-supply of medicines for heatlh facilities district Swabi 2017-18 ..........78 Annexure-4 detail of non-utilized amount of provincial ADP .........................................80 Annexure-5 statement showing detail of non-surrender of savings .................................81 Annexure-6 statement showing doubtful expenditure for purchase of science equipment ..........................................................................................................................................82 Annexure-7 statement showing detail of savings amount ................................................83 Annexure-8 detail showing release of funds for installation of solar system ...................84 Annexure-9 statement showing detail of non-deduction of income tax ...........................85 Annexure-10 statement showing doubtful expenditure on purchase of science equipment ..........................................................................................................................................86 Annexure-11 statement showing irregular retention of government revenue ..................87 Annexure-12 statement showing non-deduction of hra and conveyance allowance ........88 Annexure-13 statement showing late supply of machinery and equipment .....................91 Annexure-14 detail of HPA & conveyance allowance paid during leave period .............92 Annexure-15 statement showing unauthorized payment of NPA to doctors other than DHQ and THQ .................................................................................................................95 Annexure-16 statement showing penalty on late supply of furniture ...............................96 Annexure-17 detail showing release of funds for installation of solar system .................98 Annexure-18 statement showing penalty on late supply ................................................103 Annexure-19 income tax on purchases ...........................................................................104 Annexure-20 detail of less deduction of income tax from contractor of repair of transformer .....................................................................................................................105 Annexure-21 detail of less deduction of income tax ......................................................106 Annexure-22 detail of non-submitted accounts of receipts by VCS/NCS during 2017-18 ........................................................................................................................................107 Annexure-23 detail of irregular expenditure without pre-audit by VCS/NCS during 2017- 18 ....................................................................................................................................108 Annexure-24 detail of irregular expenditure without technical sanction by VCS/NCS during 2017-18 ...............................................................................................................109 Annexure-25 detail of penalty not recovered from contractors by VCS/NCS during 2017-18 ...........................................................................................................................110 Annexure-26 detail of bank profit not deposited by VCS/NCS during 2017-18............111 ABBREVIATIONS AND ACRONYMS ADP Annual Development Programme AIR Audit & Inspection Report APPM Accounting Polices and Procedural Manual AO M&R Annual Ordinary Maintenance & Repair BHU Basic Health Unit BOQ Bill of Quantities CPWA Code Central Public Works Account Code CVT Capital Value Tax DAC District Accounts Committee DAC Departmental Accounts Committee DDO Drawing and Disbursing Officer DG Director General DHO District Health Officer DPR Disable Person Rehabilitation GBS General Bus Stand GFR General Financial Rules GHS Government High School GPS Government Primary School HRA House Rent Allowance KP PPRA Khyber Pakhtunkhwa Public Procurement Regulatory Authority LG & RDD Local Government & Rural Development Department NC Neighborhood Council NPA Non practicing Allowance PAO Principal Accounting Officer PAC Public Accounts Committee PTC Parents Teachers Council RDA Regional Directorate of Audit TAC Tehsil Accounts Committee THQ Tehsil Head Quarter TMA Tehsil Municipal Administration VC Village Councils i 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 Government, Tehsil Municipal Administrations, Assistant Director Local Government Elections and Rural Development, VCs/NCs and Swabi Development Authority Swabi 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 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 Officers at the DAC level. In all cases where PAO’s do not initiate appropriate action, the audit observations will be brought to the notice of appropriate forum 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 a few cases certain departments 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