PESHAWAR: The Auditor General of Pakistan (AGP) has detected losses of Rs2,450.9832 million in the accounts of KP Mines & Mineral Department due to non-recovery in 10 cases during the financial year 2018-19, said Audit Report on the Accounts of KP Departments Audit Year 2019-20.
The Audit Report has already been presented in the provincial assembly wherein the Speaker has referred it to Public Accounts Committee (PAC) for further proceeding.
The highest loss was occurred due to illegal mining in blocks A, B, C & D at Gawari minor mineral block. The matter first came into lame-light with a letter of the Assistant Director Mineral Development, Abbottabad on 17.11.2017 to Deputy Commissioner (DC) and District Police Officer (DPO) Haripur regarding stoppage of illegal mining in the block.
During audit of the Assistant Director Mineral Development, Abbottabad for the financial year 2017-18, it was observed that minor mineral leases were granted to various persons. However, the former lessee of Block A &B M/S Jamshid Ali s/o Khan Pervez, resident of district Nowshera was provided an opportunity of the illegal mining in Gawari Haripur minor mineral Blocks A, B, C & D, resulting in a loss of Rs1,525.183 million. The lapse occurred due to weak internal controls.
When pointed out in October 2018, the management stated that detailed reply will be submitted in light of the relevant record. The management was requested twice for arranging of Departmental Audit Committee (DAC) meeting. However, no DAC meeting was convened. So, the audit recommended recovery, besides investigating the matter to fix responsibility against the persons at fault.
In second case, a loss of Rs427.321 million was occurred due to non-recovery of royalty from the work contractors of small dams.
According to the summary approved by the Chief Minister KP dully circulated by the Section Officer-II, Chief Minister’s Secretariat KP dated 10.12.2014, the chief minister directed the Irrigation Department to pay the estimated cost of Minor Minerals to the Mineral Department through contractors, since all mineral belongs to the provincial government as per provision of Section 49 of the Land Revenue Act 1967. During audit of the Director General (DG) Mines & Mineral Khyber Pakhtunkhwa Peshawar for the financial year 2017-18, it was observed that in KP 10 small dams have been constructed by the Irrigation Department. The work contractors of these small dams illegally excavated the minor mineral and were utilized in the construction of the said dams.
The Mineral Department carried out an assessment of illegal mining for recovery against the contractors of the dams. The matter was moved on a summary to the Chief Minister KP, for approval and the same approved for recovery against the dam’s contractors as per the assessment report of the Mineral Department. But, neither the assessed amount was recovered/ deposited in government treasury nor was the same waived-off to any contractor. Hence, the directives of the Chief Minster set aside and the amount was not recovered till date of the audit.
The audit has attributed the lapse to weak internal controls and non-adherence to rules and directives of the Chief Minister. When pointed out in June 2017, the department stated that a detailed reply will be furnished after consultation with the concerned section. The audit directed twice for holding DAC meeting, but no DAC meeting was convened till finalization of this audit report.
The audit has recommended recovery of all outstanding dues tom the lease holders.
Third loss amounting to Rs.266.175 million was occurred to the public exchequer due to less deposit of royalty collected departmentally. According to the Accounting Policies and Procedure Manual (APPM), all funds received as revenue of the government, must be banked in the name of the government without delay and included in the Consolidated Fund of the respective federal or provincial government.
During audit of the DG Mines & Mineral KP for the financial year 2017-18, it was observed that royalty collection of Kohat Division (Kohat & Karak districts) was done departmentally and a sum of Rs.57,300,000/- was collected on account of royalty. Comparison of the production report of Kohat Division, i.e., Kohat and Karak districts, shown extraction/ mining of various minerals, against which a sum of Rs.323,745,980/- was recoverable as royalty as per production report.
The sum of Rs.266.175 million (Rs.323,745,980 and 57,300,000/-) was departmentally less collected, on account of royalty collected against the actual production of minerals.
The less deposit of royalty against the actual extraction of mines is a serious lapse on the part of the administration and shows the negligence of the Headquarter Office, for taking no action against the Regional Office, Kohat.
When pointed out in June 2019, the department stated that a detailed reply will be furnished after consultation with the concerned section. Audit requested the department for holding DAC meeting. But, no DAC meeting was convened till finalization of the audit report.
The audit has recommended recovery of all outstanding dues from the lease holders.
A loss of Rs.88.012 million was also occurred on account of under-reporting/ concealment of mineral production. Under Section 48of the Mineral Sector Governance Act 2017, under reporting of mineral production is heinous crime and the Licensing Authority is empowered to charge up to 10 times of the notified rate, on the quantity of mineral under-reported, forfeit the security deposit and performance guarantee and may also cancel the mineral title on the merits of the case; provided that no action under this section shall be taken without giving an opportunity of hearing to the holder of mineral title; and (2) an entry in the record of the holder of the mineral title shall be made regarding under-reporting.
During audit of the Project ‘Assessment Study & Establishment of Mines Monitoring & Surveillance Units in Mineral-bearing Areas of KP’ for the financial year 2017-18, it was observed that leaseholders were involved in massive under-reporting of mineral production, causing concealment and evasion of royalty of the government.
The assessment of under-reporting of mineral production was carried out by the monitoring team of the project and reported to the government (Mineral Development Department KP) for recovery of the royalty. However, no action has been taken in these cases to recover assessed royalty concealed/ evaded. A number of cases that have been reported by the monitoring team of the project but no actions were taken by the government till date of the audit. The audit in its final report has recommended recovery of all outstanding dues from the lease holders.
Copyright Business Recorder, 2022