Audit report finds irregularities in Islamabad Club affairs

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ISLAMABAD: The Federal government Directorate General Audit found irregularities such as illegal appointments, illegal investments, operating of illegal bank accounts, illegal membership and the construction of buildings without government approval by the Islamabad Club for audit year 2017-18, the copy of the audit report (available with Pakistan Today) stated.

The report found that that the newly hired club secretary was receiving a salary of Rs700,000, which is in violation of regulations governing club appointments.

The audit report also spotlighted the creation of the post of “President of Islamabad Golf Club” which violates Section 6 (1) of Islamabad Club (administration) ordinance 1978 – which clearly states that such appointments could only be made by the government.

It’s pertinent to mention here that Islamabad Club was registered in 1968 as a limited company and incorporated under the Companies Act, 1913, and later on the Islamabad Club Company was dissolved through Presidential Ordinance XXXIII of 1978 and its ownership and management was taken over by the government of Pakistan.

All payments made by the club, therefore, need the approval of the financial department – something which the audit report also observed in its remarks.

The audit report deemed a payment made by club authorities on account of leave encashment of Rs44.908 million as illegal and without government approval.

In addition, the report highlighted the appointment of 784 staff members made without the authorization of the finance department and the federal government.

The report stated that the club had drafted its own service and procurement rules along with passing a set of bylaws which in some cases have been in place for 38 years – which lack approval from the federal government.

The audit also observed illegal membership awarded to private persons and private companies in violation of their own ordinances as the club was established as a social club to be used by federal government officials and members of the diplomatic corps.

The report revealed that club management had failed to provide detailed record of projects amounting to Rs763.611 to the financial division despite repeated reminders.

The Audit traced out Rs1 billion in irregular purchase of items made by club management without advertisement and without competition process in violations of the Public Procurement Regulatory Authority (PPRA) rules and regulations.

According to the rule 12 (2) of PPRA all procurement opportunities over two million rupees should be advertised on the Authority’s website and in both Urdu and English newspapers having wide circulation, which the club failed to do.

The audit observed that the management procured certain items without advertising on PPRA and Islamabad Club websites, in addition to purchasing them on quotation basis – in violation of the rules and regulations.

The audit also highlighted the illegal construction of a “Riding Club” building costing Rs53.359 million – which lacks approval of the Capital Development Authority (CDA).

The audit underlined the club’s illegal commercial activities in violation of the lease agreement agreed upon with CDA on concessional rate of Rs1 per acre according to the Islamabad land disposal Regulations 2005.

The audit observed that the club was undertaking commercial activities, giving memberships to private persons and companies against hefty fees and subscriptions while being run on commercial lines.

In its response to the auditor general’s findings, the Islamabad Club said that governmental procedures for development projects is not applicable in its case since it is a corporate body and not the recipient of budgetary grants by the government, adding, “We have our own rules and procedures of executing developmental projects which are funded through indigenous resources.”