As different quarters constantly are raising questions on internal haemorrhages in public sector enterprises (PSEs) and propose structural reforms or the privatisation of sick state-owned institution, the serious financial irregularities and losses of as many as 48 out of 87 commercial entities reached Rs 32 billion in the financial year 2009-10. A number of PSEs has even refused submitting their audited accounts to the Directorate Generals of Commercial Audit and Evaluation (DGCA&E). The audit report 2010-11 on the accounts of PSEs revealed financial losses, embezzlements, wasteful expenditures and unauthorised payments amounting to Rs 32029 million (around Rs 32 billion in FY 2009-10). The report says out of 87 commercial entities of the federal government under the jurisdiction of DGCA&E Lahore and Karachi, only 49 commercial entities passed through the audit under Audit Plan 2010-11.
Key audit findings of the report are: Embezzlement of public money and fictitious payments amounting to Rs 1, 269. 654 million in 10 cases; loss of Rs 6,604.134 million pointed out in 38 cases; recoveries and overpayments pointed out in 32 cases amounting to Rs 8, 802. 575 million; wasteful expenditure in seven cases amounting to Rs 214.439 million and 11 cases of blockage of public funds costing Rs 3,275.752 million. It also mentions unauthorised payments of Rs 217.381 million in five cases; 28 cases of irregular expenditure/payments and violation of rules costing Rs 1, 356. 071 million; lack of internal control involving an amount of Rs 1, 080.074 million and irregular investments of Rs 496.350 million noted in four separate cases.
The report also reveals irregular award of fuel consultancy services in violation of procurement rules at a cost of Rs 4.464 million; sale of gas at subsidised rate to fertilizers causing shifting of low cost burden on other industrial and commercial consumers amounting to Rs 8,300.000 million and undue/unjustified adjustment of exemption of sales tax by shifting burden on consumers amounting to Rs 27.244 million. The auditors tell about short receipt of security deposit from commercial consumers amounting to Rs 369.941 million and irregular retention of a pilot appointed on bogus certificates involving remuneration of Rs 16.200 million. Throwing light on the recoveries at the instance of audit, the report says an amount of Rs 128.147 million was recovered during year 2010-11 out of a total of Rs 189.301 million. “Out of the total recoveries pointed out, an amount of Rs 59.665 million was not in the notice of the respective managements before audit,” the report adds.
The audit report in Annexure-3 says, “Despite repeated requests, the organisations failed to provide their annual audited accounts for the year 2009-10 as well as for the previous years by the prescribed date. While non-submission of accounts needs to be explained, efforts need to be made to finalise and provide the accounts immediately. None of these companies enjoy benefit of exemption under the Auditor General’s (Functions, Powers and Terms and Conditions of Service) Ordinance, 2001,” says the report.
The corporations which have not submitted their yearly accounts to the audit authorities are: Oil and Gas Regulatory Authority (year of accounts 2009-10), Pakistan Tobacco Board (2008-09 and 2009-10), Expo Lahore (Pvt) Limited (2008-09 and 2009-10), Karachi Shipyard and Engineering Works (2009-10), National Book Foundation (2009-10), Agricultural Marketing and Storage Limited (2009-10), Pakistan Housing Authority (2002-03 to 2009-10), National Institute of Health (2009-10), Export Processing Zones Authority (1998-99 to 2009-10), Pakistan Steel Mills Corporation (Pvt) Limited (2009-10), Pakistan Steel Fabricating Company (Pvt) Limited (2005-06 to 2009-10), Utility Stores Corporation of Pakistan (Pvt) Limited (2009-10), Small and Medium Enterprises Development Authority (2008-09 and 2009-10), State Enterprises Display Centre (Pvt) Limited (2009-10), Pakistan Machine Tool Factory (2009-10), Shalimar Recording and Broadcasting Company Limited (2003-04 to 2009-10), Associated Press of Pakistan Corporation (2003-04 to 2009-10), Pakistan Broadcasting Corporation (2009-10), National Database and Registration Authority (2005-06 to 2009-10), Employees Old-Age Benefits Institution (2009-10), Overseas Employment Corporation (Pvt) Limited (2008-09 and 2009-10), Korangi Fisheries Harbour Authority (2008-09 and 2009-10), Livestock and Dairy Development Board (2009-10), Overseas Pakistanis Foundation (2008-09 and 2009-10), Kaghan Bricks Works Limited (2007-08 to 2009-10), National Logistic Cell (2009-10), Gwadar Port Authority (2002-03 to 2009-10) Gwadar Fish Harbour (1986-87 to 2009-10), Port Qasim Authority (2004-05 to 2009-10), Lakhra Coal Development Company Limited (2009-10), Government Holdings (Pvt) Limited (2009-10), Pakistan Science Foundation (2007-08 to 2009-10), Pakistan Tourism Development Corporation Limited (2007-08 to 2009-10), Pakistan Tours (Pvt) Limited (2009-10), PTDC Motels North (Pvt) Limited (2009-10), PTDC Associated Hotels (Pvt) Limited (2009-10) ,Malam Jabba Resorts (Pvt) Limited (2009-10) and National Engineering Services Pakistan (Pvt) Limited (2009-10).
The report also points that some commercial entities introduced changes in rules, practices and systems. For example, salary advances were being paid by the Pakistan Housing Authority to the employees under the policy approved by the Housing and Works secretary, in contravention of the rules and regulations, while the Sui Northern Gas Pipelines Limited was paying motivational incentives to the young engineers, beyond salary structure. The audit officials while giving recommendations to Principal Accounting Officers advise that the executives (Principal Accounting Officers) need to take necessary steps to evaluate, institute and strengthen the management, budgeting and accounting functions by ensuring recovery against overpayments and shortages from the employees; ensuring timely recovery of sundry debts, loans and advances; expediting recovery of liquidated, damages, late delivery charges & risk and cost expenses from the defaulting firms; streamlining inventory of stores/spares to achieve economy, efficiency and effectiveness; streamlining the recruitment policies to protect the inalienable rights of every citizen, as provided for in the constitution; ensuring compliance with the Public Procurement Rules 2004; ensuring the application of government instructions issued from time to time; improving financial health of loss making enterprises; avoiding delay in award of contracts; pursuing legal cases actively; completing and verifying the documents before disbursement of loans; ensuring timely submission of annual audited accounts to audit; and expediting liquidation of closed enterprises to avoid recurring expenses and deterioration of properties.
Financial indiscipline cost Rs 32b to national kitty
