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Tuesday, June 07, 2011
AGP unveils over Rs 25.6bn embezzlements in NHAISLAMABAD: The Auditor General of Pakistan (AGP) has detected embezzlements amounting to more than Rs 25.6 billion in the financial records of National Highway Authority (NHA) during fiscal year 2010-11.
The annual audit report made 86 observations in five categories comprising irregular awards of contracts costing Rs 9.43 billion, overpayments of Rs 2.25 billion due to officials’ negligence, Rs 1.54 billion loss to authority, unauthorised payments due to weak financial control valuing Rs 11.55 billion and non-recovery of dues of Rs 888 million.
The total budget of NHA for the fiscal 2010-11 was Rs 44.6 billion and the report exposed irregularities in award of contracts, unjustified payments and tenders to their to their blue-eyed contractors. The AGP report said several road contracts worth Rs 9.43 billions were awarded to selected contractors without adopting proper tendering procedure, contrary to NHA rules.
The NHA awarded irregular awards of work without calling tenders, acceptance of tender beyond permissible limit of 10 percent and unauthorised acceptance of bids beyond permissible limit, the report observed. The report says that due to negligence on part of NHA officials, the authority made overpayments of Rs 2.25 billion.
The report says that overpayments were made with regard to excessive use of fuel, overheads, profit, income tax, enhancement in rates of approved projects without competent authority, escalation of skilled labour, employment of trainee engineers, and change in item of work. The report further observed that NHA suffered a loss of Rs 1.54 billion due to short receipts of toll collection, non award of work to the lowest bidder, unjustified construction and maintenance of rest houses, etc.
The report claimed NHA officials could not recover an amount of Rs 888 million from the defaulting contractors, advance rent, cost of stolen vehicles from those responsible and use of vehicles without entitlement, non-recovery of liquidated damages, etc. The report identifies mismanagement of Rs 11.55 billion in accounts due to the unjustified payments, extra payments, unauthorised appointments, expenditure in excess of the approved limit, unauthorised acceptance of bids beyond permissible limit for different projects. In another para, the auditor observed that NHA accepted insurance policy forwarded by EFU costing Rs 29.7 billion violating the approved limit of Rs 844 million for the company, which it observed was done due to weak internal control as the company had not even the capacity to insure the contract sum.
This irregularity was pointed out in July 2010 and it was stressed to get the work insured according to approved engineering limits, besides fixation of responsibility for not obtaining insurance work in time. app
Courtesy www.dailytimes.com.pk