The National Disaster Management Authority’s (NDMA) efforts during the recent earthquake were nothing to boast about, and the Audit Report for 2014-15 only helps add to the injury that is their performance.
The Audit Report 2014-15 reveals that the people at the helm of the NDMA have been more focused in indemnifying and providing relief to the defaulting firms, which failed to deliver relief goods in time, causing a damage of Rs 36.464 million to the exchequer.
The earthquake, which claimed around 300 precious lives and left over a thousand people injured, fully exposed the disaster management body last week, leaving the armed forces to spearhead relief and rescue operations.
NDMA FAILS TO IMPOSE PENALTY ON LATE DELIVERY OF TENTS
Clause 2(c) of Agreement for supply of family tents signed between the NDMA and M/s Mahroz Textiles Industries Lahore on 03-07-2013 states that the supplier should complete 100 per cent delivery of tents within a period of 20 days from the issuance of supply order.
Clause 2(e) of the agreement for supply of family tents signed between the NDMA and M/s Mahroz Textiles Industries Lahore provides that the supplier shall be solely responsible for any delay occurring in the supply of family tents, except due to the events of Force Majeure such as acts of God & War directly affecting/delaying the supply.
Clause 2 (f) of the agreement states that as time is the essence of this agreement, so in case of any delay in supply caused by any reason except mentioned above, a penalty to the tune of one percent of the cost of items delivered the deadline for each day of delay shall be imposed on the supplier.
The management of NDMA issued a supply order No.F.2(1)2013-NDMA(Procurement) dated 16-07-2013 to M/s Mahroz Textiles Industries Lahore for the supply of 49,000 family tents at different stations throughout Pakistan within 20 days i.e. date of delivery up to August 5, 2013.
AUDIT OBSERVATIONS:
The management allowed the supplier to complete the delivery of 100 per cent tents on August 15, 2013, as per calculation of the supplier (excluding holidays), whereas as per agreement the supplier was bound to supply 100 per cent of the tents by August 5, 2013.
The management, however, directed the supplier vide letter No. 2(1)/2013-NDMA(Procurement-Insp) dated September 2, 2013 to stop further supply of tents forthwith as the supply was not in accordance with the approved specifications attached with the agreement, in violation of clause 2(c) of the agreement.
The supplier delivered only 32,268 tents while the remaining 16,732 tents were not delivered. The management imposed a penalty of Rs 29.992 million for late delivery, although the actual penalty, which was to be imposed, was Rs 66.456 million.
Audit is of the view that due to imposition of a smaller penalty, the government sustained a loss of Rs 36.464 million.
The management replied that NDMA had not built up its dedicated storage capacity due to paucity of funds, higher security, handling and administrative cost for maintaining the stock at strategic locations in the provinces. The supplier was allowed 30 working days instead of 20 days for supply of tents as mentioned in para 2(c) of the agreement. The stoppage of supplies was inevitable to ensure quality standards as per specification and to ensure value for money as envisaged in rule 4 of the public procurement rules, 2004.
The reply was not accepted because the 20 days period was mentioned in the agreement, including holidays.
Furthermore, if the storage capacity was not available, why was the order placed for such a large number of tents? This stance further strengthens the view of the audit that undue favour was granted to the supplier.
The Principal Accounting Officer (PAO) was informed on November 24, 2014 but Departmental Accounts Committee (DAC) was not held until the finalisation of the report. The audit recommends that penalty may be recovered from the supplier and deposited into the government treasury.
IRREGULAR PROVISIONS FOR NDMA OFFICERS:
Rule 5(11) of Staff Cars Rules, 1980 states that entitled officers shall forgo the conveyance allowance and shall be permitted the free use of staff car for official and private purpose. Rule 2(x) of Rules for the Use of Staff Cars 1980 states that Entitles Officers means officers of Grade 22, 21 & 20 of the Federal Government borne on the sanctioned establishment of a division or an organisation under its administrative control.
However, in clear violation of all rules, the NDMA management authorised monthly POL entitlement to around 17 officers of BS-17 & 18 for their personal vehicles, causing a loss to the exchequer of Rs 7,552,500.
The management replied to the audit observation, claiming that Rule 47 to 53 of NDMA Rules, 2007 prescribed the ceiling of officers for POL use and Rule 52 of the NDMA Rule states that the Chairman may authorise any officer of the authority to avail the POL. Hence, the POL facility to officers of BS-17 & 18 of NDMA was in accordance with law.
The reply was not accepted because the NDMA Rules 2007 were not approved by the federal government as provided under section 47 of the NDMA Act 2010. Secondly, the chairman may authorise POL ceiling only to ‘entitled officers’ i.e. grade 20-22 officers.
The audit recommends that responsibility may be fixed for the irregularity besides discontinuing the illegal practice and conveyance allowance is recovered.
