Delays, irregularities, losses mar construction of FSA hostel building


-Irregular expenditures worth 362.3 million rupees cited in audit

–Loss of 108.6 million rupees due to execution of work at higher rates than approved by ECNEC

A special audit has pointed out delays and irregularities worth millions in the accounts related to the construction of a hostel for trainees of the Foreign Service Academy (FSA) during 2017-18.

The wide range of irregularities include the project’s execution without the approvals of a PC-1 and technical sanction, non-recoupment of loan from the fund for the improvement of government owned buildings, excess payments of consultancy charges, defective tendering and pre-qualification of firms, and the project’s completed in over a decade.

In accordance with Article 3.3 of the Planning Commission Project Management Guideline, it is mandatory that in house feasibility is carried out for low cost project. Based on the data and findings of the feasibility study, a PC-1 is prepared and submitted for approval by the competent authority.

According to paragraph 51 read with the provisions of paragraph 102,106 of Central Public Works Department code (CPWD), for each individual work proposed to be carried out, except petty works, petty repairs, and repairs for which a lump sum provision has been sanctioned, a properly detailed estimate must be prepared for the sanction of competent authority; this sanction is known as the technical sanction.

Furthermore, it is a fundamental rule that no work shall be started and no liability shall be incurred in connection with it until an administrative approval has been obtained, an expenditure sanction has been accorded, a properly detailed design and estimate have been sanctioned, and the allotment of funds has been carried out.

A PC-I of the project “Construction of Hostel for Trainees (National / International) of Foreign Service Academy at Sector F-5/2, Islamabad” showing an estimated cost of Rs157.50 million was prepared by the Ministry of Foreign Affairs (MOFA) in December 2004 but its approval was not available.

In December 2010, another PC-T amounting to Rs404.058 million was prepared; however, this too was not approved by the CDWP. The technical sanction of the estimate was also not obtained. The ministry incurred a total expenditure of Rs362.301 million on the project during 2005-2013.

The audit holds that the project’s execution without an approval of the PC-I was in violation of the Project Management Guidelines (PMG); hence, the entire expenditure was irregular.

Reply of the Ministry was not tenable as project was executed without obtaining approval of the PC-I and technical sanction from the competent forum.

The Public Affairs Office (PAO) secretary was requested in September to convene a Department Advisory Committee (DAC) meeting twice; however, the meeting was not convened until the audit report’s finalisation.

Additionally, the audit has pointed out that MOFA allowed payments without observing provisions of the General Financial Rules (GFA), overpayments and undue financial assistance to contractors in four other cases.

The ministry also failed to maintain permanent accounting records like cash book, measurement books, contractor’s ledger, pre-qualifications of the contractors enlisted for the execution of civil works.