KARACHI: The Auditor General of Pakistan (AGP) has uncovered significant irregularities in the functioning of TDAP and Karachi Garment City Company Ltd.

The recent audit report for the year 2021-22 highlighted various discrepancies regarding the utilisation of funds.

According to the report, the Karachi Garment City Company (KGCC) had been allocated Rs 427.930 million from the EDF for the project between 2005-06 and 2019-20. However, only Rs 407.930 million was released to KGCC, as stated in file No TDAP 13(109)/2016-EDF, indicating a discrepancy of Rs 20 million.

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Furthermore, the audit report revealed that KGCC reported a total profit of Rs 48.942 million from investments made using the EDF funds. However, the management of the EDF failed to take any action regarding the investment and the profits earned, which directly violates the established rules.

Another issue highlighted by the audit is the incomplete status of the KGCC project. Despite the allocation of significant funds and the payment of Rs 300.00 million to the land utilisation department of the government of Sindh for 300 acres of industrial land in 2007, the lease for the land has not been transferred to M/s Karachi Garment City Company Ltd so far.

Furthermore, the audit report indicated a lack of proper documentation and record-keeping. The expenditure statement of the funds, along with financial statements, payment vouchers, and details of bank accounts, was not made available during the audit.

Additionally, the fund’s required internal audit and monitoring reports, as mandated by the EDF (Financial Procedures for Maintenance of Accounts) Rules 2006, were also missing.

The audit findings cast serious doubts on the legitimacy of the expenditure for establishing the Karachi Garment City, as no tangible development has been reported. The management of the EDF has also failed to respond within the given timeframe and until the finalization of the report, it said.

Similarly, the audit report further raised concerns related to the functioning of the TDAP, as outlined in Section 20 of the TDAP Act 2013.

According to Section 20 of the TDAP Act, the board of administrators of the TDAP is the supreme decision-making body responsible for supervising, controlling, directing, and regulating the authority’s affairs.

During the financial year 2020-21, the board of administrators of the EDF approved various projects worth Rs 1.319 billion. The EDF management subsequently released the approved amounts to the respective beneficiaries. However, the audit report raised concerns about TDAP’s involvement and potential conflict of interest in the approval process.

The audit observed that out of the total 35 EDF releases made during the financial year 2020-21, the TDAP was the beneficiary in 10 releases, amounting to Rs 803.356 million, representing approximately 61% of the total released amount, as the TDAP presented the project proposals in the board.

Furthermore, the audit report also cited the lack of information regarding the outcome of these projects in terms of their contribution to export promotion. The effectiveness and success of the projects remain unknown, raising questions about the impact and accountability of the TDAP’s decisions.

The audit report also noted that the TDAP, as the project proposed and recipient of funds, should have maintained a supervisory and monitoring role in implementing the projects. This potential conflict of interest undermines the transparency and fairness of the decision-making process.

Despite the audit findings, the management of the TDAP neither responded nor did the relevant Departmental Accounts Committee (DAC) address the matter. Keeping this in view, the AGP recommended a thorough inquiry against these observations and the identification of responsible parties. The irregularities and potential mismanagement of funds necessitate a swift and transparent investigation to ensure accountability and prevent similar occurrences in the future.

Copyright Business Recorder, 2023


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Tulukan Mairandi May 16, 2023 12:57pm
Nothing new. Pakistan was founded on irregularities.
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