The Auditor General of Pakistan (AGP) has detected an unauthorized payment of Rs 272.443 million in three cases and one case of excess payment of Rs30.345 million in Local Government Department of Khyber Pakhtunkhwa, said the AGP Report 2016-17.
The report has already been presented in the Khyber Pakhtunkhwa Assembly that has referred it to Public Accounts Committee of the house. The Assembly PAC is headed by the Speaker of the house.
According to the AGP report, during the financial year 2014-15, in the office of Director General (DG) Peshawar Development Authority (PDA), Peshawar, expenditure of Rs 208,780,000 were incurred on 26 works from the project funds in violation of PC-1 and grant agreement of the project 'Up-gradation & Remodeling of Ring Road'. The expenditure was therefore unauthorized. The audit holds that the payment from the project fund for the other schemes were unauthorized, which please by regularized. The irregularity occurred due to financial indiscipline.
When pointed out in March 2016, the management stated that detailed reply would be furnished later on. The audit requested the department repeatedly, through management letter and DO letter for holding Departmental Accounts Committee (DAC) meeting. However neither DAC meeting was convened nor any progress intimated till finalization of this report. The AGP has recommended regularizing the unauthorized expenditure.
In the second case, the office of the Project Director "Up-gradation & Remodeling of Ring Road (Southern Section) Project" (PDA portion), escalation of Rs 58,780,000 was paid to the contactor M/S Karcon (PVT) Ltd for their Interim Payment Certificate (IPC), which was unauthorized because the delay in the completion of work was on the part of the contractor as reported by the Associates Consultants. Moreover, no base price was quoted by the contractor for the purpose of escalation in the contract agreement. Moreover, the PDA also deducted overhead charges of Rs.6,928,768 on the invalid payment of escalation. The unauthorized payment therefore needs recovery.
When pointed out, the management replied that extension without penalty was recommended by the consultants and duly approved by the Director General PDA. The delay was due to law and order situation. The reply was not tenable as the delay was on the part of contractor as reported by the consultant. Audit requested repeatedly the department for holding the DAC meeting. However, neither DAC meeting was convened nor any recovery was affected till finalization of the audit report. So the AGP has recommended that fact finding inquiry be conducted and escalation paid should be recovered.
In the third case, consultancy charges of Rs. 4,883,650 were paid to M/s Global Consultants out of the project funds instead of its recovery from the contractor M/S Karcon (PVT) Ltd as per steering committee decision, which was unauthorized and needs recovery. When pointed out, the management offered no reply. The audit requested the department repeatedly for holding of the DAC meeting. However, neither the DAC meeting was convened nor recovery was affected till finalization of this report. The audit has recommended that the recovery may be affected from the contractor or the persons responsible.
Meanwhile, excess payment to the tone of Rs.30.345 million was also noticed during the financial year 2014-15 in the office of DG PDA Project 'Up-gradation & Remodeling of Ring Road (Southern Section) Peshawar that originally the cost of the scheme was approved for Rs.3,030,202,000 by ECNEC including consultancy cost of Rs.35,769,000, later on the scope of the work was reduced to Rs.1,581,532,000, however, consultancy cost was not reduced. The consultant was paid Rs. 49,205,000 against the provision of Rs. 18,860,000 resulting in excess payment of Rs. 30,345,000. When pointed out, the management stated that detailed reply will be submitted after verification of record. The audit requested the department repeatedly for holding of the DSAC meeting. However, neither DAC meeting was convened nor any progress intimated till finalization of the report.
The AGP has recommended that detailed inquiry be conducted, fix responsibility against the persons at fault, besides recovery of the excess payment and position be explained before PAC.