Failing to disburse loans for various projects in a timely manner, the Economic Affairs Division (EAD) incurred a penalty worth $3.66 million (approximately Rs 311 million) during the financial year 2009-10. Audit Report 2010-11 on EAD’s accounts, a copy of which is exclusively available with Pakistan Today, reveals that commitment charges amounting to $ 3.66 million had been paid by EAD against un-disbursed portion of proceeds of various loans.
“Audit maintains that commitment charge is a kind of penalty for not utilizing the loan proceeds committed by lenders for disbursement in a particular year, ensuring efficiency and timeliness in utilization of loans,” says the report, adding the commitment charges paid in the cited cases indicated failure in project management. The federal audit authorities in the report have recommended that responsibility be fixed upon project managers.
“Further, commitment should be reflected in a separate grant in the annual budget so that it is reported as a separate item in the financial statement,” audit officials have further recommended.