Climate ministry, attached depts.: AGP detects massive malfeasance

ISLAMABAD: The Auditor General of Pakistan (AGP) has detected irregularities to the tune of millions of rupees in its annual audit report on the accounts of Ministry of Climate Change and Environmental Coordination and its attached departments.

The AGP, in its yearly report for the audit year 2023-2024, covering fiscal year 2022-23, has pointed out issues involving financial management at the Climate Change Ministry to the tune of Rs225.78 million.

The report reveals that loss due to non-utilisation of foreign grant caused an approximated loss of Rs186.16 million to the exchequer.

The report states that according to Grant Agreement between Pakistan and International Bank for Reconstruction and Development, an amount of $7.84 million was allocated as readiness Fund (REDD+ Readiness Preparation Grant) of the Forest Carbon Partnership Facility.

The REDD+ Project utilised an amount of $6.96 million till closure of the project on 30 November last year, the report adds.

During the audit of REDD+ Project for the financial year 2022-23, it was observed that out of the total grant of $7.84 million, the project management claimed and received an amount of $7.59 million through withdrawal applications during the period 2015-16 to 2022-23, the document notes. Resultantly, an amount of $224,024 remained unclaimed till closure of the project.

The audit notes that out of claimed/received amount, only $6.9 million were utilised, leaving an amount of $624,645 or Rs137.02 million unutilised which was returned back to the donor.

“The non-utilisation of grant is a serious lapse on the part of management resulting in loss to government amounting to $848,669 ($224,024+$624,645) equivalent to Rs186.16 million,” the audit report noted.

The audit recommends that inquiry be conducted by the ministry for fixing responsibility for non-utilisation of the committed grant resulting in loss to the government.

The AGP further points out that the exchequer suffered a loss of Rs28.45 million due to non-declaration of Maintain Area Conservancy Fund (MACF), working under the Climate Change Ministry, as a non-profit organisation (NPO). The audit notes that the MACF was registered as an NPO under Companies Ordinance 1984. The MACF maintained three bank accounts amounting to Rs785.34 million on which a profit of Rs134.86 million was earned in FY 2022-23, according to the audit document.

The MACF management did not apply to be declared as an NPO, causing the banks to deduct Rs28.45 million as withholding tax on the profit/interest earned by MACF despite that MACF, being an NPO, was exempted from withholding tax, reveals the audit

The AGP observed that the same matter was reported in report for the audit year 2022-23. “Recurrence of same irregularity is a matter of serious concern,” says the report.

The audit report has revealed that non-utilisation of Clean Environment Fund (CEF) and non-investment of surplus funds caused a loss of Rs11.64 million to the exchequer. The audit recommends that CEF be operationalised and surplus funds be invested in it. Pakistan Environmental Protection Agency (Pak-EPA) heads the CEF.

Copyright Business Recorder, 2024