Audit officials detect Rs 855 million irregularities in POFs

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The Auditor General of Pakistan has pointed out financial irregularities of Rs 855 million in Pakistan Ordnance Factories (POFs). This comes at a time when certain factions have criticised the 12 percent rise in defence budget and Finance Minister Dr Abdul Hafeez Shaikh’s emphasis on transparency and accountability of defence allocations’ utilisation.
Pakistan Ordnance Factories is the largest defence industrial complex, producing conventional arms that meet international standards. The POF head quarter, situated at Wah Cantt, comprises of 14 ordnance factories and three commercial subsidiaries. The audit report 2010-11 of POFs’ accounts for financial year 2009-10 revealed Rs 855 million irregularities. The report said that inspection authorities had not cleared ammunition dues of Rs 494.677 million.
“It was observed that massive ammunition, valued at Rs 494.677 million, was rejected or not cleared by inspection authorities due to various deviations in accuracy qualification,” said the report. In addition, audit officials unveiled violation of Public Procurement Rules 2004 in procurement of Rs 166.778 million. “POFs Hospital, Wah issued 84 tender enquires for procurement of medicines and other medical equipments worth Rs 163.874 million in the year 2009-10. Similarly, the management procured two Olympus Binocular Microtome model CX-31 and BX-412 for Rs 1.349 million and Microtome model 5040-01 for Rs 1.555 million during 2009-10 without observing PPRs 2004,” the report disclosed.
Audit objection also objected embezzlement of Rs 4.020 million by the transport section establishment officer of POFs. “The establishment officer of POFs’ transport section received advanced cash and affixed his initials on both indents and duty slips, thereby issuing handmade receipts to indenters. The officer deposited Rs 3,293,805 against the actual receipt of Rs 7,131,781 from 1995 to 2009. An inquiry was conducted and embezzlement of Rs 4.020 million was proved. However, nothing was recovered,” the report said. In another audit objection, the report stated a loss of Rs 14.444 million to POFs due to store purchase at a higher rate. The report also showed losses of Rs 15.040m due to reshipment of rejected store to Jamaica. POFs’ export division dispatched 1164 SMG rifles to Jamaica without tests. The rifles were later rejected by the buyer. Resultantly, Rs 15.040m were paid on reshipment of rejected rifles to Jamaica and for back loading. Audit officials also pointed out blockage of Rs 41.022m public funds due to supply of defective stores to Bangladesh. In this case, the Bangladesh government blocked the remaining payment of $482,607 as 3000 rounds of cartridge QF mm APFSDS proved defective.
The audit report further pointed out breach of Public Procurement Rules 2004 on electro-medical equipments’ procurement of Rs 19.883 million. Another audit objection disclosed failure of POFs high-ups in recovering Rs 15.280 million from defaulting firms.