Professional Documents
Culture Documents
3-Executive Summary (After Merger)
3-Executive Summary (After Merger)
iv
ISGS Inter State Gas Services
ISI Inter-Services Intelligence
IT Information Technology
JJVL Jamshoro Joint Venture Limited
JV Joint Venture
KBCA Karachi Building Controlling Authority
KCIP Korangi Creek Industrial Park
KFHA Korangi Fisheries Harbour Authority
KIBOR Karachi Inter-Bank Offered Rate
KS&EWL Karachi Shipyard & Engineering Works Limited
KSSL Kissan Support Services (Pvt.) Limited
KTDMC Karachi Tools, Dies and Moulds Centre
LAC Land Acquisition Collector
LAM Limit of Authority Manual
LC Letter of Credit
LD Liquidated Damages
LNG Liquefied Natural Gas
LPC Last Pay Certificate
LPG Liquefied Petroleum Gas
LPGCL Lakhra Power Generation Company Limited
LPO Local Purchase Order
LPS Late Payment Surcharge
LRRA Lahore Ring Road Authority
LTF-EOP Long Terms Finance for Export Oriented Projects.
MANCOM Management Committee
MBA Master of Business Administration
MCB Muslim Commercial Bank
MCF Million Cubic Feet
MCO Mobile Credit Officer
MD Managing Director
MFDAC Memorandum for Departmental Accounts Committee
MI Material Inspection
MIS Management Information System
MMBTU Million Metric British Thermal Unit
MMCF Million Metric Cubic Feet
MNA Member of National Assembly
MoD Ministry of Defence
v
MoDP Ministry of Defence Production
MoF Ministry of Finance
MoIP Ministry of Industries and Production
MoLJ&PA Ministry of Law Justice & Parliamentary Affairs
MoP Ministry of Production
MoP&NR Ministry of Petroleum and Natural Resources
MoU Memorandum of Understanding
MoW&P Ministry of Water & Power
MQ Model Quarry
MTRF Medium Terms Running Finance Facility
NAB National Accountability Bureau
NADRA National Database and Registration Authority
NBP National Bank of Pakistan
NDO National Database Organization
NESPAK National Engineering Services of Pakistan
NFC National Fertilizers Corporation Limited
NFML National Fertilizer Marketing Ltd
NFS&R National Food Security and Research
NGEP Natural Gas Efficiency Project
NGL Natural Gas Liquids
NGO Non Governmental Organization
NGRA Natural Gas Regularity Authority
NICL National Insurance Company Limited
NIH National Institute of Health
NIPD&MC National Industrial Parks Development and Management Company
NIT National Investment Trust
NITL National Investment Trust Limited
NLC National Logistic Cell
NOC No Objection Certificates
NRC NADRA Registration Centre
NTL NADRA Technologies Limited
NTS National Testing Services
NUF Non-Utilization Fee
OBS Order Booking Slip
OGDCL Oil and Gas Development Company Limited
OGRA Oil and Gas Regulatory Authority
vi
OM Observation Memo
OMCs Oil & Marketing Companies
P&D Planning & Development
P&L Profit and Loss
P&L Procurement & Logistics
P&NR Petroleum & Natural Resources
PAC Public Accounts Committee
PACO Pakistan Automobile Corporation
PAO Principal Accounting Officer
PARCO Pak Arab Refinery Company
PASDEC Pakistan Stone Development Company
PASSCO Pakistan Agriculture Services & Supplies Corporation
PBC Pakistan Broadcasting Corporation
PBM Pakistan Bait-ul-Mal
PBS Pakistan Bureau of Statistics
PCA Petroleum Concession Agreement
PCESSDC Pakistan Chemical and Energy Sector Skill Development Company
PC-I Planning Commission –I
PCSIR Pakistan Council for Scientific and Industrial Research
PDCs Peripheral Development Charges
PEC Pakistan Engineering Council
PECHS Pakistan Employees Cooperative Housing Society
PECO Pakistan Engineering Company Limited
PEPAC Pakistan Environmental Planning and Architectural Consultants
(Pvt) Limited
PER Performance Evaluation Report
PG&JDC Pakistan Gems and Jewellery Development Company
PGPL Pakistan Gas Port Limited
PHDEB Pakistan Horticulture Development & Export Board
PHDEC Pakistan Horticulture Development Company
PIAC Pakistan International Airlines Corporation
PICTL Pakistan International Container Terminal (Pvt) Limited
PIDC Pakistan Industrial Development Corporation
PIM Pakistan Institute of Management
PKR Pak Rupee
PL Petroleum levy
PLD Procurement & Logistic Department
vii
PM Prime Minister
PMDC Pakistan Mineral Development Corporation
PMG Petroleum Motor Gasoline
PMNH Pakistan Museum of National History
PMTF Pakistan Machine Tool Factory
PN Pakistan Navy
PNSC Pakistan National Shipping Corporation
PO Principle Office
POFs Pakistan Ordnance Factories
POL Petrol, Oil and Lubricant
PRC Program Reviewing Committee
PPL Pakistan Petroleum Limited
PPRA Public Procurement Regulatory Authority
PPRs Public Procurement Rules
PQA Port Qasim Authority
PR Price Reduction
PR Pakistan Railway
PRCL Pakistan Reinsurance Company Limited
PRI Pakistan Remittance Initiatives
PSDP Public Sector Development Programme
PSEB Pakistan Software Export Board
PSEs Public Sector Enterprises
PSF Pakistan Science Foundation
PSFCL Pakistan Steel Fabricating Company Limited
PSM Pakistan Steel Mills
PSO Personal Staff Officer
PSOCL Pakistan State Oil Company Limited
PSPC Pakistan Security Printing Corporation
PTCL Pakistan Telecommunication Company Limited
PTDC Pakistan Tourism Development Corporation
PTNO Personal Ticket No.
PTVC Pakistan Television Corporation Ltd
PWWB Punjab Worker Welfare Board
Q.C Quality Control
QICT Qasim International Container Terminal
QRBS Quality Related Benchmark System
QRC Quality Review Committee
viii
RDFC Regional Development Finance Corporation
REAP Rice Exporters Association of Pakistan
RECP Rice Export Corporation of Pakistan
RFF Running Finance Facility
RHO Regional Headquarter Office
RIC Rice Inspection Cell
RLNG Regasified Liquefied Natural Gas
RoW Right of Way
RTFB Ready to Fill Bulk
SAM Special Asset Management
SBFC Small Business Finance Corporation
SBMP Single Buoy Mooring of Pakistan
SBP State Bank of Pakistan
SCP Supreme Court of Pakistan
SDA Special Deposit Account
SDF Special Deposit Fund
SEC State Engineering Corporation
SECP Securities and Exchange Commission of Pakistan
SIP Sargodha Industrial Park
SLIC State Life Insurance Corporation of Pakistan
SME Small and Medium Enterprises
SMEDA Small and Medium Enterprises Development Authority
SMEL SME Leasing Limited
SML Saindak Metal Limited
SMS Service Meter Station (SNGPL)
SNGPL Sui Northern Gas Pipelines Limited
SO(FA) Section Officer (Financial Advisor)
SOP Standard Operating Procedure
SRL Skyrooms Limited
SRO Statutory Regulatory Order
SSGCL Sui Southern Gas Company Limited
T Bills Treasury Bills
TA/DA Travelling Allowance / Daily Allowance
TAPI Turkmenistan, Afghanistan, Pakistan & India
TAT Turn Around Time
TCP Trading Corporation of Pakistan
TDAP Trade Development Authority of Pakistan
ix
TDR Term Deposit Receipt
TFCs Terms Finance Certificates
TIP Transparency International Pakistan
TLFA Term Loan Fixed Assets
TLWC Terms Loans for Working Capital
TMFBL Tameer Micro Finance Bank Limited
ToR Terms of Reference
TSHD Trailing Suction Hopper Dredger
TTC Technical Training Centers
TUSDEC Technology Upgradation and Skill Development Company
UAE United Arab Emirates
UBL United Bank Limited
UFG Unaccounted for Gas
UK United Kingdom
UK £ United Kingdom Pound
UPS Uninterrupted Power Supply
USA United States of America
USC Utility Stores Corporation of Pakistan (Pvt.) Limited
USD US Dollar
VSS Voluntarily Separation Scheme
WBM Wah Brass Mills
WIL Wah Industries Limited
WPI Wholesale Price Index
ZTBL ZaraiTaraqiati Bank Limited
x
Preface
Articles 169 and 170 of the constitution of the Islamic Republic of
Pakistan 1973 read with Sections 8 and 15 and other relevant provisions of the
Auditor General’s (Functions, Powers and Terms and Conditions of Service)
Ordinance 2001 require the Auditor General of Pakistan to conduct audit of the
expenditure from the Federal Consolidated Fund, Public Account and that of
Government Commercial Undertakings and of any Authority or Body established
by the Federation.
xi
xii
EXECUTIVE SUMMARY
Out of total man days 18,766 were allocated for undertaking field audit
activities and 28,935 were reserved for allied audit activities. The annual budget
of the Directorates General allocated for audit of Federal organizations for the
year 2014-15 amounted to Rs 203.632 million. This report contains results of
audit inspection and evaluation of financial performance of public sector entities
for the financial year 2014-15 conducted during the year 2015-16.
a. Scope of Audit
There are 111 commercial entities of the Federal Government under the
jurisdiction of DsG, CA&E, (North and South). These entities operate under the
administrative control of 27 Principal Accounting Officers (PAOs). As per Audit
Plan 2015-16, the DsG, CA&E, (North and South) audited the accounts
pertaining to year 2014-15 of 35 Federal commercial entities. This report also
xiii
contains audit observations of 12 organizations which were audited during the
previous years.
Out of total budget of the entities for the financial year 2014-15, auditable
transactions under the jurisdiction of the DsG, CA&E, (North and South) valued
Rs 2,724,907 million covering 111 entities falling under 27 PAOs. The
Directorates General audited the expenditure and receipts of Rs 1,838,572 million
which in terms of percentage is 67.47% of auditable transactions including the
audit of receipts of Rs 1,014,720 million pertaining to these entities.
d. Audit Impact
xiv
e. Comments on Internal Controls
Inventory Management
It was noticed that the Public Sector Enterprises were not observing
regulations for acquisition of human resources while making fresh
appointments, re-employment of retired personnel or appointment of
consultants.
Receivables/Debt Management
xv
f. The key audit findings of the report;
1
1.1.4.1, 4.3.4.1, 4.4.4.1, 6.6.4.1, 8.22.4.1, 8.22.4.2, 8.22.4.3, 8.27.4.1, 8.27.4.2, 11.1.4.1, 15.4.4.1,
15.4.4.2, 15.4.4.3,
2
4.2.4.1, 6.4.4.1
3
1.1.4.2, 1.1.4.4, 1.1.4.5, 1.1.4.6, 1.1.4.9, 1.1.4.14, 1.2.4.1, 2.3.4.2, 5.2.4.2, 5.2.4.4, 6.4.4.6, 6.3.4.2,
6.3.4.4, 6.3.4.5, 6.4.4.4, 6.4.4.8, 8.2.4.1, 8.4.4.1, 8.4.4.2, 8.9.4.1, 8.9.4.9, 9.11.4.5, 11.1.4.2,
11.1.4.15,15.1.4.1, 15.1.4.2, 15.2.4.10, 15.4.4.4, 15.4.4.5, 15.4.4.6, 15.4.4.8, 15.4.4.10, 15.4.4.13,
15.4.4.16, 15.4.4.18, 15.4.4.20,15.6.4.3, 16.1.4.1, 17.3.4.5, 17.4.4.2, 17.4.4.4, 16.1.4.5, 20.1.4.3.
4
1.1.4.10, 2.2.4.2,4.1.4.2, 4.2.4.2, 4.3.4.3, 4.3.4.4, 6.2.4.2, 6.2.4.3, 6.4.4.3, 8.9.4.2, 8.9.4.4, 8.12.4.1,
8.12.4.2, 9.1.4.5,12.1.4.3, 12.1.4.4, 12.1.4.7, 12.1.4.10, 14.1.4.3, 14.1.4.7, 15.2.4.5, 15.2.4.7, 15.2.4.8,
15.2.4.9, 15.2.4.14, 15.4.4.9, 15.4.4.12, 15.4.4.15, 15.4.4.19, 15.6.4.8, 15.6.4.13, 15.6.4.21,17.2.4.2,
17.2.4.3, 17.2.4.5, 17.3.4.4, 17.4.4.9, 17.4.4.11, 17.4.4.13, 17.4.4.14, 15.6.4.7, 20.1.4.2, 20.1.4.5,
20.1.4.6, 20.1.4.7.
5
1.1.4.7, 1.1.4.12, 1.1.4.19, 4.1.4.5, 4.4.4.5, 6.4.4.7, 8.9.4.6, 14.1.4.5, 15.2.4.1, 15.4.4.21, 15.4.4.23,
17.2.4.1, 17.3.4.1, 17.3.4.2, 17.4.4.12
6
1.1.4.11, 2.3.4.3, 3.1.4.6,4.3.4.7, 4.4.4.2, 4.4.4.4, 4.5.4.16,6.3.4.1, 6.5.4.5,8.6.4.4, 8.7.4.1, 8.12.4.7,
9.6.4.2,15.2.4.15, 15.4.4.14, 17.4.4.10, 17.4.4.15, 15.6.4.10, 15.6.4.17, 15.6.4.18, 15.6.4.20, 15.7.4.10,
15.7.4.13, 20.1.4.4.
7
4.5.4.10, 10.1.4.8, 10.1.4.10, 12.1.4.11, 15.4.4.7, 17.2.4.4,
8
4.4.4.7, 8.12.4.3,14.1.4.2
9
1.1.4.13, 1.1.4.17, 8.2.4.2, 8.9.4.7, 15.4.4.11
10
1.1.4.3, 1.1.4.8, 1.1.4.15,1.1.4.16, 1.1.4.18, 3.1.4.3, 3.2.4.4,4.1.4.3, 4.3.4.6, 4.3.4.5, 4.4.4.6, 6.3.4.3,
6.4.4.5, 6.4.4.9, 5.2.4.5, 5.2.4.16, 7.1.4.3, 8.6.4.3, 8.9.4.3, 8.10.4.1, 8.11.4.1, 8.12.4.6, 14.1.4.4, 14.1.4.6,
14.1.4.9, 14.1.4.10, 14.1.4.12, 14.1.4.13,15.2.4.3, 15.2.4.11, 15.2.4.12, 17.1.4.1, 17.1.4.2, 17.1.4.3,
17.3.4.3, 17.4.4.3, 17.4.4.5, 17.4.4.6, 17.4.4.7, 17.4.4.8,
11
1.2.4.2, 4.1.4.4, 8.6.4.1, 8.6.4.5, 8.12.4.8, 15.2.4.2, 15.2.4.4, 15.2.4.6, 17.1.4.4
xvi
xii. There were 15 cases of loss of revenue – Rs 12,440.141 million12.
xiii. There were 04 cases of irregular investment – Rs 460,145.258
million13.
f. Recommendations
12
4.1.4.1, 4.2.4.3, 4.3.4.2, 4.4.4.3, 8.4.4.3, 8.9.4.5, 8.11.4.2, 8.11.4.3, 8.11.4.4, 14.1.4.8, 14.1.4.11,
15.5.4.1, 15.2.4.13, 15.4.4.17, 17.4.4.1
13
6.4.4.2, 6.4.4.6, 8.12.4.4, 15.4.4.22
xvii
xviii
SUMMARY TABLES AND CHARTS
xix
xx
SUMMARY TABLES AND CHARTS
Table 1: Audit Work Statistics
(Rs in million)
S. No. Description No. Budget
xxi
Table 4: Table of Irregularities pointed out
(Rs in million)
Monetary value
S.
Description of audit
No.
observations
1. Violation of rules and regulations and violation of principle of propriety
and probity in public operations. 930,892.76
2. Reported cases of fraud, embezzlement, thefts and misuse of public
resources 5,635.64
3. Accounting Errors (accounting policy departure from IAS,
misclassification, over or understatement of account balances) that are
significant but are not material enough to result in the qualification of audit
opinions on the financial statements 1.81
4. Weaknesses of internal control systems 20,677.84
5. Recoveries and overpayments, representing cases of established
overpayment or misappropriations of public money 231,763.60
6. Non – production of record 4,612.96
7. Others, including cases of accidents, negligence etc. 303,368.96
Total 1,496,953.57
*Out of total recoveries valuing Rs 231,763.60million an amount of Rs 193.94 million was pointed out while
remaining Rs 231,569.66 million falls under the category, expedited by Audit.
Table 5: Cost-Benefit
(Rs in million)
S.
Description 2015-16 2014-15 2013-14
No.
1. Outlays Audited 1,838,572.19 1,960,872.79 2,666,179.89
2. Expenditure on Audit 183.20 282.57 215.69
3. Recoveries realized at the instance of 20,404.86* 2,502.74 14,389.51
Audit
Cost-Benefit Ratio 1: 111.380 1 : 8.857 1 : 66.714
*Recovery of Rs 20,404.86 million was expedited by Audit.
xxii