Gratuity, in addition to CPF: AGP questions power of ISGS board for irregular payment to employees

ISLAMABAD: Auditor General of Pakistan (AGP) has questioned the power of the board of Inter State Gas Systems (Pvt) Limited (ISGS) for irregular payment gratuity in addition to contributory provident fund (CPF) to its employees annually.

According to the website of the company, ISGS is a private limited Company incorporated under the Companies Ordinance, 1984 (Now Companies Act, 2017) and a wholly owned subsidiary of Government Holding (Pvt) Ltd. The company has a Board of Directors comprising nine members. The authorised share capital of the company is Rs20 billion.

In a Public Accounts Committee (PAC)’s sub-committee held on Tuesday discussed the authority of the board in light of observations of audit report 2012-13. Audit report of ISGS observed that facility of gratuity in addition to CPF was allowed to employees appointed after October 16, 1984. Thus payment of gratuity in addition to CPF of Rs5.25 million made was held irregular.

Federal government service rules provide for the various other benefits such as the pension, medical, accommodation, tuition, vacation, social security etc which are currently not applicable on the employees of the ISGS. These are competitive with the current prevailing market practices.

The CPF scheme was being run by the government for its employees and not the private funds created. In case of ISGS the separate funds were being maintained for the gratuity and provident fund and no payment for gratuity was made out of the CPF scheme and therefore, there was no violation of the part of the ISGS of the instructions of the Finance Division.

This would have been applicable if the ISGS provident fund had been part of the government provident fund scheme. Furthermore, finance consultation with Finance Division was not warranted when payment of remuneration/ bonus did not involve budgetary impact for government.

In another audit report year 2022-23 pointed out that Petroleum Division collected GIDC amounting to Rs354 billion up to June 30, 2023. These funds meant to be utilised on TAPI, IP and Pakistan Stream Gas Pipeline Project but progress on these mega gas infrastructure development projects were slow and no significant headway could be made resulting in non-utilisation of GIDC funds.

Copyright Business Recorder, 2025