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AUDIT REPORT

ON

THE ACCOUNTS OF

DEFENCE SERVICES

AUDIT YEAR 2016-17

AUDITOR-GENERAL OF PAKISTAN

i

TABLE OF CONTENTS

Page

ABBREVIATIONS AND ACRONYMS iii

PREFACE vi

EXECUTIVE SUMMARY vii

AUDIT STATISTICS

I. Audit Work Statistics

II. Audit Observations Classified by Categories

III. Outcome Statistics

IV. Irregularities Pointed Out

V. Cost-Benefit Analysis

xi

xi

xii

xiii

xiii

CHAPTER-1 Ministry of Defence

1.1 Introduction 01

1.2 Status of Compliance of PAC Directives

01

AUDIT PARAS

Pakistan Army

1.3 Recoverables / Overpayments 03

1.4 Irregular / Un-authorized Expenditure 18

1.5 Mis-procurement of stores 31

1.6 Non-production of Record 38

Military Lands and Cantonments


1.8 Loss to State

1.9 Mis-procurement of stores

72

75

ii

Pakistan Air Force


1.11 Loss to State 83

1.12 Irregular / Unauthorized Expenditure 83


Pakistan Navy

1.14 Recoverables / Overpayments

1.15 Loss to State

1.16 Irregular / Unauthorized Expenditure


91

94

95

98

Military Accountant General




CHAPTER-2

Ministry of Defence Production

2.1 Introduction 112

2.2 Status of Compliance of PAC Directives 112

AUDIT PARAS


2.4 Loss to State 116



121

Annexure-I MFDAC Paras (DGADS North) 122

Annexure-II MFDAC Paras (DGADS South) 134

iii

ABBREVIATIONS AND ACRONYMS

ACAS Assistant Chief Air Staff

AGP Auditor-General of Pakistan

AHQ Air Headquarters

AMF Aircraft Manufacturing Factory

ASRF Advance System Rebuild Factory

BA (Fee) Building Application Fee

BMP Dte Budget Marketing and Procurement Directorate

BTS Base Trans receiver Station

AWACS Air Borne Warning and Control System

AOC Air Officer Commanding

CBR Cantonment Board Resolution

CLAR Cantonment Lands Administration Rules

CMA Controller of Military Accounts

CEO Cantonment Executive Officer

CIMLA Cantonment Institute of Municipal and Land

Administration

CMH Combined Military Hospital

CNE Civilian Non-Entitled

CNA Controller of Naval Accounts

COMSAT College of Management Science and Technology

CRV Certified Receipt Voucher

DAC Departmental Accounts Committee

DBA Director Budget Accounts

DG DP Directorate General Defence Purchase

DGP (Army) Directorate General Procurement (Army)

DG RV&F Director General Remount Veterinary and Farms

DHA Defence Housing Authority

DMA Daily Messing Allowance

DP (Air / Navy) Directorate Procurement (Air / Navy)

DP Draft Para

DSR Defence Services Regulations

EME Electrical and Mechanical Engineering

E-in-C Engineer in Chief

iv

ESD Engineering Stores Depot

FA Financial Advisor

FAM Financial Audit Manual

FBR Federal Board of Revenue

FOB Free on Board

FOR Free on Rail

FR Financial Regulations

GE Garrison Engineer

GHQ General Headquarters

GST General Sales Tax

HIT Heavy Industries Taxila

HRA House Rent Allowance

HRF Heavy Rebuilt Factory

HSR Hospital Stoppage Receipts

INTOSAI International Organization of Supreme Audit Institutions

JCOs Junior Commissioned Officers

JSHQ Joint Staff Headquarters

JSI Joint Services Instruction

KARF Kamra Avionics and Radar Factory

LC Letter of Credit / Local Currency

LD Liquidated Damages

LUMS Lahore University of Management and Sciences

MEO Military Estate Office

MES Military Engineering Services

MFDAC Memorandum for Departmental Accounts Committee

MH Military Hospital

MIS Management Information System

ML&C Military Lands and Cantonments

MoD Ministry of Defence

MoDP Ministry of Defence Production

MOQs Married Officer Quarters

MRF Mirage Rebuild Factory

NDU National Defence University

NHQ Naval Headquarters

NOC No Objection Certificate

NIV Not in Vocabulary

v

NLC National Logistics Cell

NUST National University of Science and Technology

OC Officer Commanding

PAC Pakistan Aeronautical Complex

PAF Pakistan Air Force

PAO Principal Accounting Officer

PESCO Peshawar Electric Supply Company

PNS Pakistan Navy Ship

PPRA Public Procurement Regulatory Authority

QMG Quarter Master General

RHQ Regional Headquarter

R&E Risk and Expense

RV&F Remount Veterinary and Farms

SMA Special Messing Allowance

SNGPL Sui Northern Gas Pipeline Limited

SOP Standing Operating Procedure

SRO Statutory Regularity Order

STA Special Transfer Account

TESCO Tribal Electric Supply Company

TIP Transfer of Immovable Property

TO&E Table of Organization and Equipment

UA Unit Accountant

UNRA United Nations Reimbursement Account

WAPDA Water and Power Development Authority

WTI Walton Training Institute

vi

Preface

Articles 169 and 170 of the Constitution of Islamic

Republic of Pakistan, 1973 read with Sections 8 and 12 of the Auditor-

General (Functions, Powers and Terms and conditions of Service)

Ordinance, 2001 require the Auditor-General of Pakistan to conduct audit

of accounts of the Federation and the accounts of any authority or body

established by the Federation.

The Report is based on Audit of receipts and expenditure of the

Defence Services (Ministry of Defence and Ministry of Defence

Production) for the Financial Year 2015-16. The Directorates General

Audit Defence Services conducted Audit of the accounts of Defence

Services during 2016-17 on test check basis with a view to reporting

significant findings to the relevant stake holders. The main body of the

Audit Report includes only the systemic issues and audit findings carrying

value of Rs. 1 million or more. Relatively less significant issues are listed

in the Annexure-I & II of the Audit Report. The audit observations listed

in Annexure-I & II shall be pursued with the Principal Accounting Officer

at the DAC level and in all cases where the PAO does not initiate

appropriate action, the Audit observation will be brought to the notice of

the Public Accounts Committee through the next year’s Audit Report.

The Audit findings indicate the need for adherence to the regularity

framework besides instituting and strengthening internal controls to avoid

recurrence of similar violations and irregularities.

Most of the observations included in this Report have been

finalized in the light of discussions in the DAC meetings.

The Audit Report is submitted to the President in pursuance of

Article 171 of the Constitution of Islamic Republic of Pakistan, 1973 for

causing it to be laid before the Parliament.

(Rana Assad Amin)

Auditor General of Pakistan

Islamabad

Dated:26-02-2017

vii

Executive Summary

The Directorates General of Audit Defence Services (North and

South) are Field Audit Offices (FAOs) of the Department of Auditor-

General of Pakistan responsible for conducting the audit of budgetary

grants of Defence Services (except Pakistan Ordnance Factories Wah) and

Federal Government Educational Institutions in Cantonments & Garrisons,

managed by Ministry of Defence (MoD) and Ministry of Defence

Production (MoDP). Audit of other allocations made to Defence Services

like Special Transfer Account, United Nations Reimbursement Account

and Defence Pension is also conducted by these FAOs. Moreover, audit of

the entities which are under these Ministries but do not get allocation from

the Government e.g. Cantonment Boards, Frontier Works Organization are

also under the audit purview of these offices.

The jurisdiction of Directorates General Audit Defence Services

(North & South) has been made on geographical basis. The two

Directorates conducted audit of 492 formations of MoD and 40 formations

of MoDP during the audit year 2015-16.

This report highlights systemic issues like huge outstanding dues

in various Cantonment Boards, rampant violations of Public Procurement

Rules across the formations, disregard to delegated financial powers and

contractual obligations.

a. Scope and objectives of Audit

Out of total expenditure of the Federal Government for the

financial year 2015-16, auditable expenditure under the jurisdiction of

Directorates General Audit Defence Services (North and South) was

Rs. 791.569 billion covering 02 PAO’s and 3620 formations. Of this,

Directorates General Audit Defence Services (North and South) audited an

expenditure of Rs. 306.794 billion which, in term of percentage, is 39% of

the auditable expenditure. In addition, Directorates General Audit Defence

Services (North and South) conducted performance audit of 02 projects

and 09 special audit studies. Reports of these audits are being published

separately.

viii

Overall audit objective was to assess compliance with financial

rules, assessment and accountal of receipts, examine the issues of

propriety, economy of expenditure and adequacy of internal controls.

b. Recoveries at the instance of audit

Recovery of Rs. 54.010 billion was pointed out during audit, out of

which recovery of Rs. 1.153 billion and US $ 0.110 million was effected

during year 2016-17 at the time of compilation of report.

c. Audit Methodology

The activities, policies, procedures and internal controls of audited

organizations were reviewed for identifying risk areas, where occurrence

of irregularities and misappropriation could be possible, and for devising

strategy for audit scrutiny. Audit was conducted on the test-check basis

with special emphasis on high monetary value and risk areas which could

be prone to irregularities. Budgeted allocations made by Services

Headquarters were compared and verified with the actual expenditure.

d. Audit Impact

(i) The issue of unauthorized use of A-I Land by Defence Services for

commercial purposes has regularly been raised by Audit since

1986. However, a policy was finalized in April, 2008 but instances

were noticed where Policy was being violated. Audit pointed out

the issue during DACs and PACs and as a result of the persistent

audit objections, a revised policy is being processed in the Ministry

of Defence. The said policy is being framed in the light of issues

raised by the audit from time to time.

e. In view of the proactive approach of the Public Accounts

Committee (PAC) and professional role of Audit, the MoD

constituted various audit committees at Services Headquarters and

also at lower level to comply with the observations.

f. Comments on Financial and Accounting Management

i. The final grant No. 26 pertaining to Ministry of Defence for

financial year 2015-16 was Rs. 799,480.147 million against which

ix

expenditure of Rs. 791,569.416 million was incurred. Thus,

showing an overall saving of Rs. 7,910.731 million.

ii. The accounts of CMA (RC), Rawalpindi revealed that Rs. 214.153

million was paid for purchase of medical store in excess of the

actual budget allocation for the financial year 2015-16. The case

was required to be regularized from Ministry of Defence which

was not done till finalization of this report.

g. Comments on Internal Control and Internal Audit

Department

i. An elaborate structure comprising rules, regulations and

procedures specifying internal checks regarding procurements,

personnel payments and receipts is available in MoD, MoDP and

MAG. An Internal Audit Department (Controller Local Audit,

Defence Services) also exists to check irregularities and violation

of rules and regulations in Defence Services. Despite existing

arrangement, recurrence of irregularities was observed.

ii. There is no internal audit structure available in Military Lands and

Cantonments.

h. The key audit findings of the report

i. Recoverables of Rs. 5,021.910 million and US $ 0.214 million in

61 cases1

ii. Loss to State valuing of Rs. 3,633.644 million and US $ 0.377

Million in 08 cases 2

iii. Unauthorized Expenditure of Rs. 4,215.200 million and US $

2.680 million in 23 cases 3

iv. Mis-procurement of Stores of Rs. 5,175.449 million in 22 cases 4

v. Non-production of Auditable Record of Rs. 36.077 million in 02

cases5

1 1.3, 1.7, 1.10, 1.14, 1.15, 1.18, 2.3 2 1.8, 1.11, 1.15, 2.4 3 1.4, 1.9, 1.12, 1.16, 1.19, 2.5 4 1.5, 1.13, 1.17, 1.20, 2.6 5 1.6

x

Audit Paras for the Audit Year 2015-16 involving procedural

violations including Internal Control weaknesses and irregularities not

considered worth reporting to the PAC are included in Annexure – I & II

MFDAC.

i. Recommendations

(i) Policy regarding payment of HRA to Armed Forces officers

availing facilities of non-standard Government accommodation be

formulated expeditiously and implemented after vetting from Ministry of

Housing and Works and Finance Division.

(ii) Serious irregularities in procurement contracts have been noticed.

Public Procurement Rules, 2004 are needed to be observed. Existing

departmental rules which are inconsistence with the PP Rules should be

amended accordingly.

(iii) Policy issued by the Government for expenditure out of allocation

for Al-Mizan was not being followed and funds were being incurred on

works not covered under the policy. PAO should take necessary steps to

follow Government policy while incurring expenditure from Al-Mizan

funds.

(iv) The unauthorized/unlawful use of A-I land should be checked

limiting its use for the specified purposes only. The income earned from

the use of A-I land should be made transparent, disclosed in the public

accounts and provided to Audit for scrutiny.

(v) The management needs to take steps to recover large amounts of

Government dues pointed out in this report and fix responsibility thereof.

(vi) An internal audit wing comprising qualified officers and staff

should be institutionalized in Military Lands and Cantonments Department

to mitigate the risk of errors / irregularities.

(vii) The scope of Corps Audit Committees at services HQrs should be

made more effective to fix responsibilities for violation of rules and to

take remedial measures to avoid recurrence of irregularities.

xi

Summary Tables & Charts

Table-1: Audit Work Statistics

(Rs. in Million)

Sr # Description No Budget/Actual

Expenditure

1 Total Entities (Ministries/PAOs) in Audit

Jurisdiction 2

799,480.147

2 Total formations in audit jurisdiction 3620

3 Total Entities (Ministries/PAOs) audited 2

306,794.888 4 Total Formations audited 532

5 Audit and Inspection Reports (LTAR) 532

6 Special Audit Reports 9 -

7 Performance Audit Reports 2 -

8 Other Reports - -

Table-2: Audit Observations by Categories (Rs in Million)

S # Description Amount placed under

Audit Observation

1 Unsound asset management 30,641.350

2 Weak financial management 67,212.940

3 Weak internal controls 62,296.933

4 Others 6,160.937

Total 166,311.710

xii

Table-3: Outcome Statistics

(Rs. in Million)

Sr

#

Description Expenditure

on

acquiring

Physical

Assets

Civil

Works

Others Receipts Total

current year

Total last

year

1 Outlays

Audited 126,024.621 93,837.022 51,703.089 35,230.156 306,794.88 166,225.697

2

Amount

under Audit

observation

79,422.993 51,996.341 6,160.937 28,731.439 166,311.710 109,727.342

3

Recoverables

pointed out

by Audit

3,394.134 23,598.517 1,262.969 25,754.880 54,010.500 34,393.970

4 Recoverables

accepted 498.749 329.265 296.356 786.966 1,911.336 1,989.801

5 Recoverables

realized 78.708 40.664

999.750 +

$ 0.110 34.493

1,153.615

+ $ 0.110

1,290.716

+ US $ 0.509

xiii

Table-4: Irregularities Pointed Out (Rs. in Million)

S # Description

Amount

under Audit

Observation

1 Violation of rules and regulations as well as principle of

propriety and probity 108,800.543

2 Cases of fraud, embezzlement, thefts and misuse of public

resources -

3 Misclassification of expenditure and receipts. 1,442.959

4 Weaknesses of internal control system 47,715.700

5 Established recoverable and overpayments, or misappropriation

of public money 1,911.336

6 Non-production of record 280.235

7 Others, including cases of accidental loss, negligence etc. 6,160.937

Total 166,311.710

Table-5: Cost-Benefit Analysis

(Rs. in Million)

S # Description Amount

1 Outlays audited (Item 1 of Table 3) 306,794.888

2 Expenditure on audit 275.723

3 Recoverable realized at the instance of audit 1,153.615

+ US $ 0.110

4 Cost - Benefit Ratio 1 : 4

1

CHAPTER-1

Ministry of Defence

1.1 Introduction

Ministry of Defence (MoD) deals with all policy and

administrative matters pertaining to the three armed forces, defence

treaties, defence agreements and military assistance to foreign countries.

MoD also administers Inter Services Organizations, Pakistan Military

Accounts Department, Military Lands and Cantonments and Federal

Government Educational Institutions in Cantonments and Garrisons.

1.2 Brief comments on the status of compliance with PAC's

directives

The status of compliance of Public Accounts Committee (PAC)

directives for the Audit Reports from 1985-86 to 2015-16 discussed during

its various meetings held from July, 1992 to December, 2016 is given

below:-

Year

Total

Paras

No. of Paras

Discussed

Compliance

Made

Compliance

awaited / Non

Complied

Percentage

of

Compliance

1 2 3 4 5 6

1985-86 76 05 02 03 40%

1986-87 36 06 03 03 50%

1987-88 49 08 01 07 12.5%

1988-89 48 15 03 12 20%

1989-90 69 03 0 03 0%

1990-91 63 04 01 03 25%

1991-92 65 05 0 05 0%

1992-93 91 12 06 06 50%

1993-94 198 83 28 55 34%

1994-95 91 03 0 0 0%

1995-96 102 09 01 08 11%

1996-97 106 104 78 26 75%

1997-98 651 05 01 04 20%

2

1998-99 762 762 705 57 92.52%

1999-00 443 222 85 137 38.29%

2000-01 699 85 34 51 40%

2001-02 570 12 0 12 0%

2002-03 166 166 151 15 90.96%

2003-04 112 112 90 22 80.36%

2004-05 55 55 34 21 61%

2005-06 138 121 73 48 60%

2006-07 95 35 13 22 37%

2007-08 56 56 40 16 71.43%

2008-09 39 18 0 18 0%

2009-10 Report yet not discussed




2013-14 69 35 11 24 31.43%

2013-14 Not yet discussed by Sub-PAC



Total 4849 1941 1360 578 70.07%

Ministry of Defence fully complied with 1360 PAC‟s directives

out of 1941. The Principal Accounting Officer should take necessary steps

to expedite further compliance of PAC‟s directives.

3

Pakistan Army

Audit Paras


1.3.1 Non-recovery of House Rent Allowance from Army

officers living in Married Accommodation –

Rs. 440.453 Million

According to Rule-66 of Pay and Allowances Vol-II 1999,

“Married officers not provided with Government/hired/requisitioned

married accommodation shall be entitled to House Rent Allowance”.

During audit, it was observed that officers of following 10

Army units were living in Government accommodations and were

regularly drawing HRA in their pay and allowances, which resulted into

an overpayment of Rs. 440.453 million.

(Rs. in Million)

S # DP No. Unit / Formation Amount

1 DP-N-243/2015-16 Pakistan Military Academy, Kakul 1.324

2 DP-N-299/2015-16 Military College, Murree 421.405

3 DP-N-282/2015-16 66 Medical Battalion, Lhr Cantt 1.324

4 DP-N-283/2015-16 HQ 30 Indep Int Brgde Lhr 2.200

5 DP-N-289/2015-16 CMH, Sargodha 2.923

6 DP-N-314/2015-16 CMH, Peshawar 4.328

7 DP-N-424/2015-16 CMH, Multan 3.939

8 DP-N-429/2015-16 502 Central Workshop, EME Rwp 1.577

9 DP-N-469/2015-16 HQ 333 Brgd, Rawalpindi 0.328

10 DP-N-19/2016-17 20-MBRL Regt Arty Bahawalpur Cantt 1.105

Total 440.453

4

When pointed out by Audit in January 2015, it was replied

that MAG authorized HRA to all married officers living in any

accommodation other than proper service accommodation vide letter dated

6th

December, 2003. However, 5% of the recovery of rank pay was being

made from the officers. The reply was not acceptable as the HRA was not

admissible under the rule cited above.

The paras were discussed by the DAC in its meetings held

on 28th

and 30th

September, 2016 and 4th

January, 2017. The DAC pended

the paras till formulation of Policy on House Rent Allowance in the light

of PAC‟s directives.

No further progress was reported till finalization of this

report. Audit stresses for recovery of HRA from Army officers.

DPs-N-243, 299, 282, 283, 289, 314, 424, 429 and 469/2015-16 and DP-N-19/2016-17

1.3.2 Non-recovery of lease rent from the lessee of

agriculture land – Rs. 260.042 Million

According to Rule-88 of Financial Regulations Volume-I

1986, “officers entering into contracts are charged with the responsibility

of making all arrangements necessary to effect a contract”.

During audit, it was noticed in 02 Military Farms that

agricultural land was being used by farmers on lease but its rent

amounting to Rs. 260,041,820 was not recovered as transpired from the

rent recovery register and trading profit and loss accounts, which needed

recovery.

(Rs. in Million)

S # DP No. Unit / Formation Period Amount

1 DP-N-201/2015-16 Military Farm, Sargodha 2013-14 10.398

2 DP-N-27/2016-17 Military Farm, Renala 2014-15 249.644

Total 260.042

5

When pointed out by Audit in May and August, 2016, no

reply was furnished by the executive.


on 30th


January, 2017. The DAC pended the para

till full recovery against serial No. 01. Against serial No. 02, the DAC

pended the para being subjudice.


report. Audit stresses for full recovery.

DP-N-201/2015-16, DP-N-27/2016-17

1.3.3 Non-realization of proportionate share from

allottees of Stud Land – Rs. 196.950 Million

According to General Head Quarters QMG‟s Branch (RVF

Dte) Rwp letter No. 5804/269/Rem/C, dated 1st August, 2001 those stud

grantees who are in litigation against resumption order of stud land 65% of

the total produce of land may be forfeited through concerned District

collector from the dates of their illegal possession under the provision of

clause-49(5) to lease deed 1983.

While examining the accounts of District Remount Office

Sahiwal, it was noticed that stud land was allotted to following allottees

for a period of 10 years on animal breeding conditions. After completion

of allotment period, Ministry of Defence issued orders for resumption of

stud land in favour of State. The ex-grantee entered into litigation against

resumption orders. The cases were decided in the favour of State for

illegal occupation, 65% share of total produce amounting to Rs. 196.950

million as detailed below required recovery.

6

(Rs. in Million)

S # DP No.

Name of

Unit /

Formation

Property

No.

Land

occupied Grantee Name

Amount

of Govt.

share

(65%)

1 23/16-17

District

Remount

Office

Sahiwal

Chak No.

2/14-L

Kassowal 32 square

Sardar Khizar

Hayat & others 171.600

2 24/16-17 -do- Chak 30/

2-9 Okara

198 kanal

12 marlas

Naib Sub

Maqbool Ahmed 4.875

3 25/16-17 -do-

Chak

No.30/2-R

Okara

399 kanal

16 marlas

Maj (Rtd)

Khalid Iftikhar

Asghar & others

14.625

4 26/16-17 -do-

Chak

No.28/2-R

Okara

397 kanal

15

marlas

Muhammad

Iqbal 5.850

Total 196.950

When pointed out by Audit in May, 2016 it was replied that

the case regarding recovery would be initiated with DCO office/Provincial

Government.

The matter was discussed by the DAC in its meeting held

on 4th

January, 2017. The DAC directed that case may be discussed with

the DGADS (North) and position be explained to find the way out.


report. Audit stresses for early recovery from occupants of land.

DP-N-23, 24, 25 and 26/2016-17

1.3.4 Non-recovery of training charges from foreign

trainees – Rs. 91.784 Million + USD 0.179 Million

According to Joint Services Instructions 4/2006, “Training

charges will be recovered from foreign trainees/cadets when they are

provided such facilities in various institutions of the Pakistan Armed

Forces training institutions”.

7

During audit of below mentioned formations, it was noticed

that training charges valuing Rs. 91,784,500 and USD 0.179 million

against foreign trainees were lying outstanding for the period April, 2014

to August, 2015, which needed to be recovered.

(Rs. in Million)


1 DP-N-199/2015-16 Pakistan Military Academy, Kakul 91.784

2 DP-N-450/2015-16 Junior Leader Academy, Shinkari US $ 0.179

Total 91.784

US $ 0.179

When pointed out by Audit in July and December, 2015 it

was replied that training charges of objected period in respect of foreign

trainees had already been forwarded to GHQ for realization of the same

from respective countries.

The para was discussed by the DAC in its meeting held on

28th

September, 2016. The DAC directed to recover outstanding training

charges.

During verification, no documentary evidence relating to

recovered amount was provided to audit by both units. No further progress

was reported till finalization of this report. Audit stresses that overall

amount of Rs. 91.784 million and US $ 0.179 million needed recovery.

DP-N-199 and 450/2015-16

1.3.5 Non-recovery of electricity and sui gas consumed

beyond authorization – Rs. 52.847 Million

Under Rule-81(a) of Quarter and Rents 1985, “free supply

of sui gas shall be made at places where fire wood and K-II is so

authorized for cooking/heating purpose as per scale given in the rule.

Excess consumption shall be paid by the consumer at the supplying

agency rates”.

8

While examining the accounts of following formations, it

was noticed that a sum of Rs. 52.847 million on account of excess

consumption of electricity and sui gas was lying outstanding against

different consumers.

(Rs. in Million)


1 DP-N-114/2016-17 GE (Army), Jhelum 1.647

2 DP-N-206/2016-17 GE (Army), Murree 51.200

Total 52.847

When pointed out by Audit in September, 2016, it was

replied that objected amount would be recovered from all concerned

shortly.


4th

January, 2017. The DAC directed to convene Board of Officers,

recovery be reconciled and action be finalized.


report. Audit stresses for early recovery action.

DPs-N-114 and 206/2016-17

1.3.6 Non-recovery of rent and allied charges from

various consumers – Rs. 19.572 Million

According to Para-442 of Defence Services Regulations

1998, “the GE is responsible for making demands for payment of all

revenue and for taking steps for its prompt realization”.

It was observed from the accounts of following G.E offices

that rent and allied charges amounting to Rs. 19.572 million were not

recovered.

9

(Rs. in Million)


1 DP-N-250/2015-16 GE (Army) Svcs, Okara 6.317

2 DP-N-261/2015-16 GE (Svcs), Sialkot 1.035



5 DP-N-453/2015-16 GE (Army), Abbottabad 1.385

6 DP-N-483/2015-16 AGE (Army), D.I Khan 2.314

7 DP-N-128/2016-17 AGE (Army), Attock 2.332

8 DP-N-253/2016-17 GE (Svcs), Gujranwala 1.249

9 DP-N-255/2016-17 GE (Svcs), Multan 1.232

Total 19.572

When pointed out by Audit during the year 2015-16, it was

replied that partial recoveries were effected and balance would be

recovered shortly but no documentary evidence was presented for audit

verification regarding partial recoveries.

The DAC in its meeting held on 28th

September, 2016 and

4th

January, 2017 directed the executives to provide documentary evidence

of the recovered amount to audit and expedite the recovery of remaining

amount.



DPs-N-250, 261, 263, 264, 453 and 483/2015-16, DPs-N-128, 253 and 255/2016-17

1.3.7 Non-recovery of rent and allied charges –

Rs. 88.752 million

According to Para-442 of Defence Services Regulations for

MES 1998, the GE is responsible for making demands for payment of all

revenues, whether credited to Main Head VIII/X-H/XI-C or D, or

compiled as deduction from expenditure, and for taking steps for its

prompt realization.

10

It was observed from the record held with Army

formations/units that a sum of Rs. 88.752 million on account of rent and

allied charges was outstanding for the years 2014-15 and 2015-16. The

details are as under:-

(Rs. in million)

S.No. Unit/Formation DP No. Amount

1 GE (Army) Services Quetta S-290 41.011

2 GE (Army) Karachi S-233 16.873

3 GE (m Army) Services Quetta S-294 10.971

4 GE (Army) Services PanoAqil S-19 5.363


6 GE (Army) Hyderabad S-27 3.531

7 AGE (Army) Rahim Yar Khan S-79 1.669

8 GE (Army) Services PanoAqil S-330 1.287


10 AGE (Army)-Khuzdar S-156 0.930

11 GE (Army)-I Quetta S-221 0.740

T o t a l 88.752

When pointed out by Audit from July 2015 to December

2016, it was replied that efforts were being made to recover the

outstanding amount.

The paras were discussed during DAC meetings held on

28th

December, 2016, 10th

and 31st January 2017. The DAC in respect of

paras at serial No. 1 to 7, was apprised that partial recoveries had been

affected while efforts were being made to recover the outstanding amount.

The DAC directed that full recovery be effected and

recovered amount got verified from Audit. In respect of paras at serial No.

5, 9 and 10, the DAC directed that fresh reply be submitted within three

weeks for examination by Audit.

. During verification carried out by Audit, recovery of

Rs. 5.082 million in respect of para at serial No. 02 was verified. No

11

progress was reported in case of the remaining paras till finalization of this

report.

Audit suggests expeditious recovery of the pointed out

amount.

DP-S-290, 233, 294, 19, 287, 27, 79, 330, 288, 156 and 221/2016-17

1.3.8 Non-recovery of Sales Tax from contractors –

Rs. 32.302 million

Section 3 of Sales Tax Act, 1990 stipulates that subject to

the provisions of this Act, there shall be charged, levied and paid a tax

known as Sales Tax @ 17% of the value of taxable supplies made by a

registered person in the course of furtherance of any taxable activity

carried on by the person.

In various Army units, amount was expended on purchase

of store from suppliers/ market, but the Sales Tax amounting to Rs. 32.302

million was either not deducted or less deducted. Besides, no Sales Tax

invoices were available on record. The details are as under;

(Rs. in million)


1 GE (Army)-II Malir S-401 19.27

2 GE (Army)-I Malir S-398 7.55

3 GE (Army) PanoAqil S-302 2.101

4 AGE (Army )Chorr S-144 1.215

5 GE (Army) PanoAqil S-303 0.855

6 AGE (Army) Khuzdar S-157 0.821


T o t a l 32.302

When pointed out in March 2015 to October 2016, the

executive stated that contract agreements in question were for execution /

completion of works. No particular supply was made by contractor,

therefore, no Sales Tax was deducted.

12



and 31st January, 2017 directed the executive to provide relevant record to

Audit for verification.

No record / documents were produced to Audit for

verification till the finalization of this report.

Audit suggests expeditious recovery of pointed out amount.

DP-S-401, 398, 302, 144, 303, 157 and 09/2016-17

1.3.9 Non-recovery of Income Tax from contractors –

Rs. 23.936 million

As per Section-153 of Income Tax Ordinance 2001 as

amended from time to time, every prescribed person making a payment for

rendering or providing of services is liable to deduct tax from the gross

amount of the bills at prescribed rates.

In various Army units, a sum of Rs. 23.936 million on

account of income tax was not deducted from the final bills of contractors.

The details are as under:

(Rs. in million)


1 GE (Army) Services, Quetta S-286 6.932

2 GE (Army) Karachi S-235 6.667

3 Station HQ, Quetta S-206 6.375

4 GE (Army)-I, Quetta S-220 3.962

T o t a l 23.936

When pointed out by Audit in March 2015, the executive

replied that the efforts were being made for recovery.

The paras were discussed during DAC meeting held on 10th

January, 2017. The DAC in respect of paras at serial 1 and 2 directed that

documents be provided to Audit for examination/verification. For paras at

13

serial no 3 and 4, the DAC directed the executive to submit fresh replies

within three weeks for examination by Audit.


verification till the finalization of this report. Besides, replies from the

executive were also awaited.


DP-S-286, 235, 206 and 220/2016-17

1.3.10 Non-deposit of Government’s share of rental

income – Rs. 15.628 Million

According to policy on use of A-1 Land circulated vide

MoD letter dated 2nd

April, 2008, in order to launch essential commercial

activities required to serve the residents of the respective garrison, survey

will be conducted by a board of officers to determine the actual area under

usage. The rent shall be charged @ 6% per annum of existing revenue rate

of the said land. Government‟s share @ 25% of the rent so charged will

be deposited into Government treasury. Besides, the entire amount of rent

charged for use of A-I land for agricultural purposes will be deposited into

Government treasury.

In Central Ordnance Depot, Karachi commercial/

agricultural activities were being carried out on “A-1” land. However,

Government‟s share in the rent amounting to Rs. 15.628 million was not

deposited into Government Treasury. The details are as under;

(Rs. in million)

S.No. Detail of activities DP No. Amount

1 Banquet Halls/ Marriage Lawns S-346 12.749

2 Agricultural activities S-344 2.879

T o t a l 15.628

When pointed out by Audit in December 2016, the

executive replied that the cases for assessment of rent had been initiated

for approval from competent authority.

14

The paras were discussed in DAC meeting held on 31st

January, 2017. The executive apprised the DAC that agricultural activities

were being carried out on Ordinance Estate Land and not A-1 Land.

Furthermore, Government‟s share in the rent from banquet halls/marriage

lawns was being deposited as per A-1 Land Policy.

The DAC directed that clarification regarding existence of

land category „Estate Land‟ may be obtained from MoD and documents /

records be produced to Audit for examination / verification.


verification / examination till the finalization of this report.

Audit suggests early deposit of government share in

treasury.

DP-S-346 and 344 /2016-17

1.3.11 Non-recovery of stamp duty from contractors –

Rs. 7.903 Million

As per Section 35 of Stamp Act 1899, no instrument

chargeable with duty shall be admitted in evidence for any purpose by any

person having by law or consent of parties authority to receive evidence,

or shall be acted upon, registered or authenticated by any such person or

by any public officer, unless such instrument is duly stamped.

As per Government of Sindh Finance Act 2009, “Stamp

duty of Thirty paisa for every hundred rupees or part thereof of the amount

of the contract will be charged”.

Contrary to above rule, the record held with the

units/formations revealed that a sum of Rs. 7.903 million on account of

stamp duty was not recovered against certain contracts during the years

2012-13, 2013-14 and 2014-15. The details are as under;

15

(Rs. in Million)


1 ACE 5 Corps, Karachi S-25 1.798

2 GE (Army)-II, Malir S-404 1.569

3 C.M.H, Malir S-386 0.924

4 GE (Army)-I, Malir S-400 0.921

5 SSD, ASC, Hyderabad S-97 0.880

6 SSD, ASC, Karachi S-99 0.653

7 GE (Army) Karchi S-236 0.570

8 602, EME, Workshop, Karachi S-160 0.357

9 Station Headquarter, Quetta S-205 0.231

T o t a l 7.903

When pointed out by Audit in December 2015 to

November 2016, it was replied that Finance Act of Government of Sindh

was not applicable on departments working under Federal Government.

The paras were discussed during DAC meetings held on

28th

December, 2016 and 10th

and 31st January, 2017. The DAC directed

the executive to refer the case to Ministry of Defence for clarification.

No progress was reported to Audit till finalization of this

report. Audit suggests recovery of the pointed out amount.

DP-S-25, 404, 386, 400, 97, 99, 236, 160 and 205/2016-17

1.3.12 Non-recovery of gas charges on account of excess

consumption beyond free authorization limit –

Rs. 6.338 Million

According to Rule-81 of Quarters and Rents Rules, 1985 as

amended vide letter No. F.5620/109/Qtg-4/F-2/D-3(AIII)/2002 dated

October 14, 2009, scale for free consumption of Sui Gas to a cook house is

prescribed by the government @ 400 cft per month. Consumption in

excess of this scale is to be paid by the consumer concerned. Further,

according to Para-442 of Defence Services Regulations for MES 1998, the

16

GE is responsible for making demands for payment of all revenue, and

taking steps for its prompt realization.

In four Army units, gas was consumed in excess of

authorized quantity amounting to Rs. 6.338 million during the year

2014-15 and 2015-16. However, the amount was not recovered from the

concerned units/formations. The details are as under:-

(Rs. in million)



2 GE (Army) Services Malir S-295 1.130

3 Station Headquarters Quetta S-208 1.063

4 AGE (Army) SI&T Quetta S-01 1.059

T o t a l 6.338

When pointed out by Audit from March 2016 to November

2016, the executive replied that efforts were being made to recover the

outstanding amount.

The Paras were discussed in the DAC meeting held on 10th

January, 2017. The DAC in respect of Para at serial No. 1 and 2 was

apprised that partial recoveries had been made. In respect of para at serial

No 4, the executive informed that a case had been sent for regularization

to HQ, Southern Command.

In respect of paras at serial No. 1 and 2, the DAC directed

the executive to recover the amount in question and get the recovery

verified from Audit. In respect of para at serial No. 3, the DAC directed

the executive to submit fresh reply within three weeks for examination by

Audit. In respect of the para at serial No. 4, the DAC directed that status of

gas meter be got verified from Sui Southern Gas Company Limited.

No progress of the cases was reported till the finalization of

this report. Audit suggests for expeditious recovery of pointed out amount.

DP-S-291, 295, 208 and 01/2016-17

17

1.3.13 Non-recovery of electricity charges on account of

excess consumption beyond free authorization

limit – Rs. 3.845 Million

According to Para-772 of Defence Services Regulations for

MES 1998 “Energy for any unauthorized appliances will be charged for.

Any allowance for hot weather establishment which would be admissible

may be drawn where fans are installed at unit expense and the energy is

paid for by the unit.

Further, according to Rule-85, Quarters and Rents Rules,

1985 “ Except when occupied by non-entitled consumers, military

buildings for which power points are authorized in Barrack Synopsis, shall

be supplied free electric energy for authorized consuming apparatus.”

In Garrison Engineer (Army) Services, payment of electric

bills was made to QESCO on account of unit/formation lines in excess of

authorization, amounting to Rs. 3.845 million which needed to be

recovered from concerned units.

When pointed out by Audit in November 2016, the

executive replied that the electric supply was being provided to units /

formation through bulk electric meters and recovery was under process.

The para was discussed in the DAC meeting held on 10th

January, 2017. Since no reply was submitted, the DAC directed the

executive to submit fresh reply within three weeks for examination by

Audit.

No progress of the case was reported to Audit till the

finalization of this report.

Audit recommends expeditious recovery of pointed out

amount.

DP-S-289/2016-17

18

1.4 Irregular / Un-authorized expenditure

1.4.1 Unauthorized expenditure on works out of Al-

Mizan funds – Rs. 658.867 Million

As per Para-1(v) of Ministry of Defence letter No.

7/6/2004-05/D-21 (Budget) dated 30th

November, 2004, the releases from

Special Transfer Account shall be used for procurement of stores and for

replenishment of stock. According to Standing Operating Procedure of Al-

Mizan Package-2008 Para-1(a) issued by GHQ Chief of Logistic Staff

Secretariat Monitoring and Budget Cell, “This fund is utilized only for the

procurement of store/equipment required for the troops deployed in

operation Al-Mizan”.

During audit of following formations, it was noticed that

contracts valuing Rs. 658.867 million were concluded for different types

of works out of Al-Mizan funds, which were not covered as per above

cited letter. Therefore, the expenditure incurred on this account stood

unauthorized and needed regularization by the Government of Pakistan.

(Rs. in million)

S # DP No. Name of Unit / Formation Amount

1 DP-N-353/2015-16 GE (Army)-I, Kharian 19.935

2 DP-N-377/2015-16 GE (Army)-I, Sialkot 109.679

3 DP-N-413/2015-16 EME College, Rawalpindi 13.312

4 DP-N-446/2015-16 GE (Army)-II, Gujranwala 43.677

5 DP-N-479/2015-16 AGE (Army) Chunnian 36.691

6 DP-N-488/2015-16 GE (Army) Constn, Lahore 85.505

7 DP-N-511/2015-16 GE (Army), Mangla 20.983

8 DP-N-16/2016-17 GE (Army), Multan 42.969

9 DP-N-83/2016-17 GE (Army) Svcs, Rawalpindi 33.173




13 DP-N-204/2016-17 GE (Army), Murree 22.808


15 DP-N-216/2016-17 GE (Army) Constn, Lahore 13.323

19

16 DP-N-239/2016-17 AGE (Army) Khanewal 38.810

Total 658.867

When pointed out by Audit in August, 2015 and March,

2016, it was replied that works were carried out on the basis of funds

released by the QMG Branch GHQ Rawalpindi. The reply was not correct

as incurring of expenditure other than procurement of stores and

replenishment of stock was not admissible under Ministry of Defence

letter dated 30th

November, 2004.


on 29th

, 30th


January, 2017. The DAC directed for

verification of relevant record/documents from Audit.

During verification, no relevant record was provided for

verification. Audit suggests early regularization of the expenditure.

DPs-N-353, 377, 413, 446, 479, 488 and 511/2015-16,

DPs-N-16, 83, 95, 113, 122, 204, 207, 216 and 239/2016-17

1.4.2 Un-authorized advance payment on account of

electricity and water charges bills – Rs. 609.626

Million

Under rule-47(e) of Financial Regulations Volume-I 1986,

“the most careful supervision over expenditure will be exercised and on no

account shall money be spent simply because it is available”.

While examining the accounts of GE (A) Services

Rawalpindi and Peshawar, it was noticed that advance payments

amounting to Rs. 609.626 million were released on account of

electricity/water bills to WAPDA, PESCO and TESCO in the month of

June to avoid lapse of funds, which was violation of above rule.

When pointed out by Audit in August 2015 it was replied

that funds for payment to WAPDA/PESCO/TESCO were not received

during July, August and September. Usually funds for these months were

20

received in advance during June and payments were made accordingly to

avoid late payment surcharge.


5th

January, 2017. The DAC directed to hold departmental inquiry and fix

responsibility.


report. Audit suggests early implementation of DAC‟s directives.

DP-N-84 and 245/2016-17

1.4.3 Un-authorized utilization of fund out of United

Nation Reimbursement Account – Rs. 308.987

Million

According to provision of Government of Pakistan,

Ministry of Defence letter No. 7/7/2004/05/D-21(Budget) dated 27th

November, 2004 expenditure out of UNRA could be utilized for:-

(a) Purchase and replenishment of equipment and stores for

Army contingents deployed on UN peace keeping missions.

(b) Pay and allowances and transportation of troops.

(c) Incidental and misc expenditure of Army contingents

directly related to UN peace keeping mission.

Further, as per amendment made by the Ministry of

Defence letter dated 7th

March, 2009, expenditure can be incurred on

projects approved by the Chief of Army Staff and financially concurred by

the Finance Secretary on case to case basis.

During audit, it was noticed in 08 Army units that an

amount of Rs. 308.987 million was expended on different works out of

UNRA in violation of above authority.

21

(Rs. in million)


1 DP-N-253/2015-16 GE (Army) GHQ, Rawalpindi 58.449

2 DP-N-374/2015-16 GE (Army) Constn-I, Rawalpindi 20.028

3 DP-N-388/2015-16 Ordnance Depot, Nowshera 10.688





8 DP-N-248/2016-17 ESD, Jhelum 1.655

Total 308.987

When pointed out by Audit in February 2015, no reply was

furnished by the executive authorities.


on 29th

, 30th


, 5th

January, 2017. The DAC

directed for verification of relevant documents / record from audit.

No documentary evidence regarding funds approval by the

Ministry of Finance was produced till finalization of this report. Audit

stresses for early regularization.

DPs-N-253, 374, 388 and 494/2015-16, DPs-N-01, 115, 131 and 248/2016-17

1.4.4 Un-authorized encroachment on Army land by

civilians – Rs. 267.300 Million

As per Rule-26 (ix) (a) of Cantonment Land Administration

Rules (CLAR) 1937, an encroachment is an un-authorized occupation of

government land and should not be permitted to remain in existence under

any circumstances unless it is properly regularized.

While examining of the accounts of 399 EME Battalion,

Dhamial Road, Rawalpindi, it was noticed that 48 Kanal 12 Marlas A-I

Army land valuing Rs. 267,300,000 (972 Marlas x Rs. 275,000 (DC Rate

2014) situated at Qasim Aviation Base was encroached, as evident from

22

the Garrison HQ C/O HQ 10 Corps Chaklala letter dated 7th

April, 2008.

Therefore, the same needed to be vacated.

When pointed out by Audit in May 2015, it was replied that

encroachment on the land was initially highlighted in 1996 by HQ 10

Corps. Responsibility for demarcation was assigned to HQ 101 Aviation

Group and 399 EME Bn. Efforts were being made by this Battalion to

remove the encroachment on the land. However, any forced demarcation

at present will damage the civil-military relations.


30th

September, 2016. The DAC constituted a committee consisting of

MEO Rwp, Representative of Land and Qtg Dte GHQ under the

chairmanship of JS-I.

The committee will determine the demarcation of

encroached land and submit report to DAC in its next meeting.

Progress of the constituted committee was not reported till

finalization of this report. Audit suggests immediate implementation of

DAC‟s directives.

DP-N-477/2015-16

1.4.5 Un-authorized conclusion of contracts beyond

financial power – Rs. 63.393 Million

According to Annexure-H of Rule-89 of Financial

Regulations Volume-I 1998 (Army & Air Force) as amended vide

Ministry of Defence letter No. F.3/1/98/D-15, dated 23rd

February, 2008,

the contractual power of DGRV&F for conclusion of contracts is

Rs. 4,500,000.00.

During audit, it was noticed in 02 Army formations that the

contracts for procurement of Cattle Feed/LW Bhossa/MO Cake and works

projects valuing Rs. 63.393 million was accorded by the DGRV&F

beyond his financial powers.

23

(Rs. in Million)


1 DP-N-200/2015-16 Remount Depot, Mona 35.700

2 DP-N-202/2015-16 Military Farm, Sargodha 27.693

Total 63.393

When pointed out by Audit in August 2015, it was replied

that the procurements were made after approval of the competent

authority.


30th

September, 2016. The DAC directed for verification of relevant

documents/record from Audit.


report. Audit stresses for early regularization of the expenditure.

DPs-N-200 and 202/2015-16

1.4.6 Unauthorized payment of project allowance in

violation of Government orders – Rs. 3.065 Million

According to Govt. of Pakistan, Ministry of Finance

(Regulation Wing) letter No.F-16 (1)R-14/2003 dated 18th

April, 2012,

project allowance will be discontinued in all types of projects with

immediate effect to remove distortion in the system.

While examining the accounts of National University of

Science and Technology (NUST) Islamabad, it was noticed that project

allowance amounting to Rs. 3,065,000 was paid to officers of NUST

though all type of project allowances had been discontinued by the

Ministry of Finance (Regulation Wing) vide its letter dated 18th

April,

2012.

When pointed out by Audit in January, 2016 it was replied

that comprehensive reply would be furnished to audit shortly.

24

No DAC was convened by the Ministry of Science and

Technology on paras relating to NUST. Audit stresses for recovery of

unauthorized project allowance.

DP-N-201/2016-17

1.4.7 Unauthorized payments to contractors before

physical completion of work – Rs. 534.618 Million

According to Rule-408 to 417 of Defence Services

Regulations for MES 1998, “there is no provision of advance payment to

contractor except secured advance”.

In various Army units, final payments against different

contracts were released during June 2015 and June 2016, showing

completion of 100% work. However, Audit observed that the works were

still in progress and the final payments were released to contractors to

avoid the lapse of funds at the end of June 2015 and June 2016, instead of

surrendering the funds.

Final / Running payments were made to contractors without

physical completion of works resulted in undue financial aid to contractor

amounting to Rs. 534.618 million. The details are as under:-

(Rs. in Million)


1 GE (Army) Chorr S-332 217.508


3 AGE (Army) Chorr S-200 70.105




7 GE (Army) Pano Aqil S-301 14.140

8 GE (Army)-II, Quetta S-66 8.612


10 AGE (Army) Construction, Karachi S-189 7.289


12 GE (Army) Construction, Karachi S-184 3.516

25

13 GE (Army) Construction, Karachi S-185 1.453

T o t a l 534.618

When pointed out by Audit from February 2016 to

November 2016, it was replied that payments were released to contractors

after completion of 100% work done / work actually executed. In this

regard completion certificates were issued by SDO/Engineer in–charge.

Hence, no undue favor was given to contractors.



and 31st January, 2017, directed to hold fact finding inquiry besides fixing

responsibility and taking disciplinary action against those found

responsible and report be submitted to MoD/Audit. Furthermore,

regularization action may be initiated. The paras at serial No. 2 and 3 were

pended by the DAC due to non-receipt of reply.

No progress was reported to Audit till the finalization of

this report.

Audit recommends regularization of the unauthorized

payments.

DP-S-332, 179, 200, 180, 141, 232, 301, 66, 50, 189, 68, 184 and 185/2016-17

1.4.8 Unauthorized advance payment to QESCO –

Rs. 241.235 Million

According to Para-408 to 417 of Defence Services

Regulations for MES 1998, “there is no provision of advance payment to

contractor except secured advance”.

Contrary to above rule, in Garrison Engineer (Army)

Services, Quetta, an amount of Rs. 241.235 million was paid as advance to

QESCO on account of electric bills for the month of June 2016. The

payment was made just to avoid lapse of funds.


executive replied that the consumption of electricity for the month of June

26

2016, was not included in the bill. To avoid arrears and late payment

surcharge, payment was made which had already been adjusted.

The para was discussed in DAC meeting held on 31st

January, 2017. The executive reiterated their earlier stance. The DAC

directed that relevant record/documents be produced to Audit for

examination / verification. The DAC also directed to discontinue such

advance payments in future.

Audit recommends regularization of the unauthorized

advance payment.

DP-S-293/2016-17

1.4.9 Unauthorized utilization of Al-Mizan Grant –

Rs. 75.504 Million

As per Para 1(v) of MoD letter No.7/6/2004-05/D-

21(Budget) dated 30th

November 2004, the releases from “Special

Transfer Account” (Al-Mizan) shall be used for replenishment of stores

and for procurement . Further, according to Standing Operating Procedure

of AL-Mizan Package-2008 Para 1(a) issued by GHQ Chief of Logistics

Staff Secretariat, Monitoring and Budget Cell, “This fund is utilized only

for the procurement of store/equipment required for the troops deployed in

operation AL-Mizan”.

In three Army units, Rs. 75.504 million were utilized from

Al-Mizan funds for procurement of machinery/equipment and

construction work in areas which were not declared as operational area for

the Al-Mizan Package. The details are as under;

(Rs. in million)

S No. Unit / Formation DP No. Amount

1 C.M.H, Malir S-360 62.371

2 GE (Army)-II Quetta S-56 11.029


Total 75.504

27

As the said funds could be only used for procurement of

Defence Stores for the troops deployed in operation AL-Mizan, the

expenditure stood as unauthorized,

When pointed out by Audit in October, 2016, the executive

stated the funds were allocated by the competent Authority i.e. QMG.

The DAC in its meetings held on 28th


and 31st January, 2017 directed for regularization of the expenditure in

respect of para at serial No. 2. With respect to paras at serial No. 1 and 3,

the DAC directed the executive to provide relevant record / documents to

Audit for examination / verification.

No further progress was reported / record produced to

Audit till finalization of this report.

Audit suggests regularization of unauthorized expenditure.

DP S-360, 56 and 230/2016-17

1.4.10 Unjustified expenditure on repair of pumps –

Rs. 51.870 Million

According to Rule-11 of Equipment Regulations Volume-II

(Instructions) 1987, for stores condemned as unserviceable/repairable due

to wear and tear, a copy of the condemnation board proceedings will be

linked with the office copy of the demand to meet the audit requirements.

In SCARP-VI, Rahim Yar Khan, an amount of Rs. 51.870

million was incurred on repair/replacement of 99 submersible pumps of

1.5 cusecs due to less discharge of water. Examination of contract

agreement revealed that each pump had same fault and required same type

of repair which was not understood and not justified. Furthermore, no

documentary evidence regarding holding of condemnation board or board

proceedings was produced to Audit. Therefore, the expenditure was held

irregular and doubtful in audit.

28

When pointed out in March 2016, the executive replied that

all repair/replacement works were done on the report received from

concerned SDOs. Further, repair and maintenance works were segregated

category wise for similar type of fault/repair and contracts concluded for

each category separately.


December, 2016

directed the executive to provide relevant documents to Audit for

verification within one month.

No record / documents were produced for verification till

the finalization of this report.

Audit suggests regularization of the expenditure.

DP S-85/2016-17

1.4.11 Irregular expenditure on replacement of heating

system – Rs. 37.658 Million

According to Rule 25 of Defence Services Regulations for

MES 1998, the power of administrative sanction of QMG for all ordinary

repairs renewal and replacement work is up to Rs. 6,000,000.

In Garrison Engineer (Army) Command and Staff College

(C&SC) Quetta, a sum of Rs. 37,658,189 (Rs. 29,960,699 + Rs.

7,697,490) was incurred during 2014-15, against two administrative

approvals of Rs. 28.000 and Rs. 7.000 million, issued by QMG for

replacement of unserviceable Boiler Heating System installed in main

building. However, the QMG was empowered to issue sanction up to

Rs. 6.000 million only. Thus the said expenditure stood as irregular.

When pointed out by Audit in March, 2016, the executive

replied that the expenditure sanctioned by QMG pertained to budget “Cost

of War” Main Head 26. “Cost of War” was a special code head under

which QMG was empowered to sanction work of any value.

29


December, 2016

directed for regularization of the expenditure within two months.


report.


DP S-20/2016-17

1.4.12 Irregular revision of sanction for change in

structural design after construction of building –

Rs. 2.573 Million

Under Rule-6(a) F.R. Vol –I 1986“ Every officer should

exercise the same vigilance in respect of expenditure incurred from

Government revenue as a person of ordinary prudence would exercise in

respect of the expenditure of his own money.”

In Garrison Engineer (Army)-I Quetta, admin approval for

construction of 16 x BOQs (D/S) at Quetta Cantonment, dated 26th

March

2013, was issued by QMG for Rs. 17,652,000. Later, revised admin

approval, dated 11th

May 2015, for the said work for

Rs. 20,213,000 was issued by the same authority and final payment of

Rs. 19,762,187 was paid to the contractor.

It was observed from 1st Running Accounts Receipt (RAR)

that Rs. 15,939,613 were paid to a contractor against percentage of work

done shown in RAR as 99.99% vide CBI No. 149 dated 19th

June, 2013.

As per record, the work was completed on 09th

April, 2014 and the only

formality left was payment of final bill. Instead, however, a revised admin

approval was issued by QMG on 11th

May 2015. Further, an amendment

in contract, bearing No. 1 for Rs. 2,573,158 was approved by DGW&CE

on 01st June, 2015 through which the reason for revision was recorded as

“due to change of structural drawing for Seismic Zone-IV.”

Audit was of the view that reason for amendment was not

valid as 100% structural work had already been completed. The revised

30

admin approval and amendment were issued just to favour the contractor,

which needed recovery/regularization.

When pointed out by Audit in October 2016, the executive

replied that as per amendment attached in final bill, drawing as per

Seismic Zone - IV was prepared on 23rd

April, 2016 and was incorporated

accordingly during execution on site. There was only a delay in sanction

from competent authority and financial effect of amendment was paid in

final bill.

Reply was not tenable as the work was completed 99.99%

as per 1st RAR and reason for amendment was not valid.


January, 2017 directed

the executive to submit fresh reply to Audit within three weeks for

examination.

Response of the executive was awaited till finalization of

this report.

Audit recommends recovery / regularization of the

expenditure.

DP-S-215/2016-17

1.4.13 Irregular expenditure on repair of footpath -

Rs. 2.384 Million

According to Para 12.22, Schedule of Rates, 2014 the sub

base for the areas to be used for pedestrians only, well compacted earth is

sufficient.

In Garrison Engineer (Army) Services, Quetta, payment for

repair/replacement of footpath was made to a contractor, but quantity and

rates of cement concrete and crush stone were incorporated in the

composite rate. As these items were not required, it resulted in

unjustified/irregular payment of Rs. 2,384,795 to the contractor.

31


executive replied that the work was executed as per drawings approved by

competent technical authority according to the site requirement. The

specification could be verified from the drawings and specifications. The

generalized specification could be altered by the competent technical

authority according to the site requirement.

The reply was not tenable as method of laying footpath was

clearly defined under Para-12.22 Schedule of Rates 2014, duly approved

by E-in-C. The drawings mentioned in the reply were not part of the said

contract.



the executive to submit fresh reply to Audit for examination within three

weeks.

Response of the executive was awaited till finalization of

this report.


DP S-283/2016-17


1.5.1 Mis-procurement of stores in violation of Public

Procurement Rules – Rs. 726.801 Million

According to Rule-12(1-2) of Public Procurement Rules-

2004, “all procurement over one hundred thousand rupees and up to the

limit of Rs. 2.000 million shall be advertised on the authority‟s website.

Further procurement over Rs. 2.000 million should be advertised on the

authority‟s website as well as in two national dailies, one in English and

the other in Urdu”.

During audit, it was noticed in 30 formations that contracts

valuing Rs. 726.801 million were awarded to different contractors without

32

calling for open competition through newspapers and PPRA‟s website,

which was violation of above PP rules.

(Rs. in million)


1 DP-N-239/2015-16 Military Farm, Sargodha 34.245

2 DP-N-240/2015-16 CMH (AK), Rawalakot 20.050

3 DP-N-286/2015-16 HQ 23 Div, Jhelum 85.818

4 DP-N-287/2015-16 Remount Depot, Sargodha 23.127

5 DP-N-300/2015-16 Military College, Jhelum 4.079

6 DP-N-320/2015-16 CMH, Gujranwala 34.000





11 DP-N-367/2015-16 Military Farm, Jhelum 34.200

12 DP-N-368/2015-16 CMH, Rawalakot 2.500

13 DP-N-493/2015-16 CMH, Bannu 9.638



16 DP-N-112/2016-17 4 Engr Btn, Bahawalpur 7.000




20 DP-N-159/2016-17 AGE (Army), Risalpur 22.223

21 DP-N-166/2016-17 GE (Army), Terbella 12.760

22 DP-N-168/2016-17 HQ Engr Centre, Risalpur 2.500

23 DP-N-175/2016-17 HQ Engr Centre, Risalpur 4.500

24 DP-N-200/2016-17 SSD, D.I. Khan 1.950

25 DP-N-202/2016-17 Arty Centre, Attock 4.819

26 DP-N-209/2016-17 GE (A) Services Mangla 5.783

27 DP-N-213/2016-17 Signal Training Centre Kohat 9.000

28 DP-N-242/2016-17 GE (Army), Abbottabad 2.904

29 DP-N-244/2016-17 GE (Army) Svcs, Rawalpindi 41.505

30 DP-N-256/2016-17 GE (Army), Kohat 4.576

Total 726.801

When pointed out by Audit in 2015 and 2016, it was

replied that contracts of stores and works were awarded to firms after

33

meeting all codal formalities. The replies of executives were not

acceptable as documentary evidences regarding advertisement in

newspapers or PPRA‟s invoices were not produced.


on 28th

, 30th


, 5th

January, 2017. The DAC

directed to hold inquiry and fix responsibility.


report. Audit stresses for implementation of DAC‟s directive.

DPs-N-239, 240, 286, 287, 300, 320, 322, 323, 327, 328, 367, 368 and 493/2015-16,

DPs-N-02, 94, 112, 116, 130, 150, 159, 166, 168, 175, 200, 202, 209, 213, 242, 244 and

256/2016-17

1.5.2 Award of contracts without open tendering in

violation of PPRA Rules – Rs. 564.321 Million

According to Rule-12 (1, 2) of PPRA Rules-2004, all

procurements over one hundred thousand rupees and upto the limit of

Rs. 2.000 million shall be advertised on the authority‟s website. Further,

procurement over Rs. 2.000 million should be advertised on the

authority‟s website as well as in two national dailies, one in English and

the other in Urdu.

During audit of different units/formations, it was observed

that contracts were concluded without advertisement on PPRA website/

newspapers in violation of PPRA Rules, 2004. The details are listed

below:-

(Rs. in million)

S # Name of Unit / Formation DP No. Amount

1 SSD ASC, Hyderabad S-61 249.674

2 305 Spare Depot, Karachi S-248 134.532

3 C.M.H Malir S-353 49.421

4 SSD ASC, Karachi S-98 42.495


6 C.M.H Malir S-381 21.176

34

7 C.M.H, Badin S-171 12.238


9 C.M.H Malir S-358 5.930

10 C.M.H, Malir S-384 4.400

11 AGE (Army Rahim Yar Khan S-81 2.745

12 GE (Army)-I, Quetta S-223 1.525

13 Station Headquarter Badin S-183 0.580

Total 564.321

When pointed out by Audit from December 2015 to

November 2016, the executive submitted evasive replies without

substantive documentary evidence.


December, 2016, and

10th

and 31st January, 2017 directed the executive to hold inquiry, fix

responsibility, take disciplinary action against those found responsible and

submit report to MoD/Audit. Furthermore, in respect of paras at serial no

2, 3, 4, 7, 9 and 11, the DAC directed that documents be provided to Audit

for examination/verification.

No progress was reported / record produced to Audit till


Audit suggests regularization of the PPRA Rules violation.

DP-S-61, 248, 353, 98, 48, 381, 171, 142, 358, 384, 81, 223 and 183/2016-17

1.5.3 Conclusion of contracts giving less than prescribed

response time in bidding process – Rs. 33.135

Million

According to Rule-13(1) of PPRA Rules, 2004 under no

circumstances the response time shall be less than 15 days for national

competitive bidding.

In two Army units/formations, contracts were concluded

with less than fifteen days response time given in the bidding process. The

details are listed below:-

35

(Rs. in million)


1 GE (Army) Services, Quetta. S-292 30.00


Total 33.135

When pointed out by Audit in October and December 2016,

the executive either did not furnish reply or submitted evasive replies

without substantive documentary evidence.



the executive to conduct fact finding inquiry, fix responsibility and take

disciplinary action against the person(s) found at fault. The DAC also

directed that the violation of rules may be got regularized.


report.


DP-S-292 and 158/2016-17

1.5.4 Award of contracts before publication of tenders –

Rs. 14.839 Million

According to Rule-38 of PPRA Rules, 2004 the bidder with

the lowest evaluated bid, if not in conflict with any other law, rules,

regulations or policy of the Federal Government, shall be awarded the

procurement contract, within the original or extended period of bid

validity.

In three Army units/formations tenders were advertised on

the PPRA website but the related contracts had already been awarded to

contractors. The irregular advertisement /tendering process was carried out

merely to fulfill a formality. The details are as under;

36

(Rs. in million)


1 GE (Army)-I, Malir. S-397 5.660

2 GE (Army)-II Quetta. S-53 3.951

3 GE (Army)-II Quetta. S-59 3.044


Total 14.839

When pointed out by Audit from June 2015 to August

2016, the executive either did not furnish reply or submitted evasive

replies without substantive documentary evidence.


December, 2016 and

10th

and 31st January, 2017 directed the executive in respect of paras at

serial No 2 to 4 to hold fact finding inquiry, fix responsibility and take

disciplinary action against the person(s) found at fault. Furthermore, the

violation of rules may be got regularized. In respect of the para at serial

No 1, the DAC directed that relevant record / documents be produced to

Audit for examination / verification.

No progress was reported / record produced to Audit till



DP-S-397, 53, 59 and 155/2016-17

1.5.5 Purchase of medicines from other than lowest

bidders without prior formulation of evaluation

criteria- Rs 4.744 Million

According to Rule 29 of PPRA Rules, 2004 states that

procuring agencies shall formulate an appropriate evaluation of criteria,

listing all relevant information against which a bid is to be evaluated. Such

evaluation criteria shall form an integral part of the bidding documents.

Failure to provide for unambiguous evaluation criteria in the bidding

documents shall amount to mis-procurement. Furthermore, Rule 38 states

37

that “the bidder with the lowest evaluated bid, if not in conflict with any

other law, rules, regulations or policy of the Federal Government, shall be

awarded the procurement contract, within the original or extended period

of bid validity.”

In CMH Malir, orders for purchase of medicines were

issued to bidders who did not offer lowest rates. As a result, the

Government sustained a loss of Rs 4,743,504 on account of difference

between the rates at which medicines were procured and the lowest rates

offered.


stated that medicines were being purchased on recommendations of

consultants. None of the items had been purchased at higher rates.

The reply was not tenable since no evaluation criteria was

formulated and made an integral part of bidding documents as required

under PPRA Rules.


January, 2017. The DAC directed the executive to hold fact finding

inquiry, fix responsibility, take disciplinary action against the responsible

persons and initiate regularization action.


this report.


DP-S-382/2016-17

1.5.6 Rejection of a bid after technical acceptance in


According to Rule 33(1) of PPRA Rules 2004, The

procuring agency may reject all bills or proposals at any time prior to the

acceptance of a bid or proposal.

38

In CMH Malir, Karachi, tender was called for purchase of

medical equipment amounting to Rs. 1.760 million. M/S Endo Kare

submitted technical bid conforming to specifications of equipment as per

tender requirement. The bid was first accepted but later on rejected and

contract was awarded to M/S Allmed Solutions. M/S Allmed Solutions

had submitted bid for a medical equipment which did not meet the

requisite specification. The award of contract was, therefore, in violation

of PPRA rules.

When pointed out by Audit in October, 2016, the executive

stated that equipment was purchased on recommendation of a consultant.


January, 2017. The DAC directed the executive to provide relevant record

/ documents to Audit for examination / verification.


examination / verification.


DP-S-357/2016-17

1.6 Non-production of auditable record

1.6.1 Non-provision of auditable documents – Rs. 36.077

Million

As per Article 170(2) of the Constitution of Islamic

Republic of Pakistan 1973, “the audit of the accounts of the Federal and of

the Provincial Governments and the accounts of any authority or body

established by, or under the control of, the Federal or a Provincial

Government shall be conducted by the Auditor-General, who shall

determine the extent and nature of such audit”.

According to Para-5(d) of Government of Pakistan

Ministry of Defense Rawalpindi letter No F.2/5/D-12/ML&C/99 dated

20th

November, 2009 issued in continuation of Ministry‟s letter No.

39

F.2/5/D-12/ML&C/99 dated 2nd

April, 2008, accounts for use of A-1 land

for commercial and welfare purpose (for category A & C activities) shall

be auditable.

While examining the accounts of Station Head Quarter

Lahore, it was noticed that four accounts i.e. Pakistan Park Account,

Vehicle Sticker Account, E-Lane Account, Cable Account were being

maintained by the Station Headquarters Lahore. An amount of Rs.

36,076,984 was received by Station HQ against above mentioned accounts

during the year 2013-14 since the activities were being carried out on A-I

land therefore relevant record was requisitioned for audit but not provided.

According to Para-2(b)(2) of Government of Pakistan Ministry of Defense

Rawalpindi letter dated 2nd

April, 2008, an amount of Rs. 9,019,246 (25%

of Rs. 36,076,984) was required to be deposited by the Station HQ into


When pointed out by Audit in June, 2014 it was replied that

available documents of these accounts were already provided to audit. The

reply was not acceptable as complete record of these accounts was not

produced.


28th

September, 2016. The DAC constituted a Board of Officers under the

chairmanship of DS (PAC) and representative from HQ 4 Corps and Audit

to resolve the issue.

The Director Audit Lahore being member of the

aforementioned committee informed the Ministry of Defence vide letter

dated 2nd

November, 2016 regarding non-production of the record by the

formation concerned. Audit stresses for implementation of DAC‟s

directive.

DP-N-268/2015-16

1.6.2 Non-provision of record of NUST Funds Account

As per Article 170(2) of the Constitution of Islamic

Republic of Pakistan 1973, “the audit of the accounts of the Federal and of

40

the Provincial Governments and the accounts of any authority or body

established by, or under the control of, the Federal or a Provincial

Government shall be conducted by the Auditor-General, who shall

determine the extent and nature of such audit”.

During audit of National University of Science and

Technology Islamabad, it was noticed that NUST Funds Account was

maintained by the NUST authorities but record regarding receipts during

July, 2013 to June, 2015 was not produced to audit, which was against the

above cited Constitutional provisions.

When pointed out by Audit in January, 2016 the

management stated that as per NUST Act Part II, Chapter 15, Clause 124,

only Government budgetary allocations/grants shall be carried out by

auditors appointed by the Auditor General of Pakistan. The reply was not

satisfactory because statutory audit of both allocations and receipts is

mandatory under the Constitution.

No DAC was convened by the Ministry of Science and

Technology on the paras relating to NUST. Audit stresses for provision of

auditable documents of NUST Funds Account.

DP-N-61/2016-17

41

Military Lands and Cantonments


1.7.1 Non-recovery of property tax from Lahore

University of Management and Sciences –

Rs. 1,036.246 Million

According to Para-92(1) of the Cantonment Act 1924 “ if a

person liable of the payment of any tax does not pay within 30 days from

the receipt of notice of demand pay the amount or show sufficient cause

of non-payment of the same to the satisfaction of the Cantt Executive

Officer such sum with all costs of recovery may be recovered under

warrant”.

While examining the accounts of Cantonment Board

Lahore, it was noticed that Lahore University of Management and

Sciences was running business on commercial basis but property tax

amounting to Rs. 1,036,246,916 was not paid by the LUMS Management,

which resulted into loss to the Cantt Fund.

When pointed out by Audit in August, 2015, it was replied

that matter had already taken up with LUMS management. The reply was

not acceptable, as property tax of LUMS was lying outstanding since

2005.


16th

December, 2016. The DAC was apprised that the appeal filed by the

LUMS for exemptions of property tax is under consideration with DG

ML&C Rawalpindi. The DAC directed that the case be finalized at the

earliest.


report. Audit stresses for immediate recovery of property tax from LUMS

management.

DP-N-124/2016-17

42

1.7.2 Non-recovery of property tax from various

property owners – Rs. 337.048 Million

Under section-259 of Cantonment Act 1924, Cantt Board is

liable to recover any tax and any other money together with the cost

recovery either by suit or an application to Magistrate.

During audit, it was noticed in 14 Cantonment Boards that

an amount of Rs. 337.048 million was outstanding on account of property

tax, which needed recovery.

(Rs. in Million)

S No. DP No. Unit / Formation Amount

1 DP-N-506/2015-16 Cantt Board, Abbottabad 6.375

2 DP-N-12/2016-17 Cantt Board, Nowshera 2.507

3 DP-N-105/2016-17 Cantt Board, Sargodha 2.463

4 DP-N-123/2016-17 Cantt Board, Abbottabad 4.727

5 DP-N-126/2016-17 Cantt Board, Lahore 12.879

6 DP-N-176/2016-17 Cantt Board, Walton Lahore 21.490

7 DP-N-181/2016-17 Cantt Board, Chaklala 171.801

8 DP-N-193/2016-17 Cantt Board, Lahore Cantt 2.258


10 DP-N-228/2016-17 Cantt Board, Rawalpindi 44.394





Total 337.048

When pointed out by Audit in August, September,

November, 2016 and January, 2017, it was replied that assessment was

made under section 60 and 64 of the Cantt Act, 1924 and notices for

recovery had already been issued.


on 16th

and 22nd

December, 2016. The DAC directed all Cantt Boards for

taking immediate measures for recoveries. Against serial No. 14, the DAC

43

was apprised that the case is subjudice. The DAC directed to pursue the

case in court.


report. Audit stresses for implementation of DAC‟s directives for early

recovery.

DP-N-506/2015-16,

DPs-N-12, 105, 123, 126, 176, 181, 193, 221, 228, 233, 234, 236 and 237/2016-17

1.7.3 Non-recovery of premium and development

charges due to unauthorized use of residential

property as commercial – Rs. 325.355 Million

As per Para-3 (h) (General Conditions) of Government of

Pakistan Ministry of Defence letter No. 3/6/D-12/(ML&C)/97-2007 dated

31st December, 2007 “usage of residential property for commercial

purpose will require NOC from respective Station HQrs. Paid premium of

revenue rate applicable for the said purposes, imposition of composition

fee by the respective Cantt Board and those who fail to pay the above their

property will be resumed”.

During audit it was noticed that in 05 Cantonment Boards,

under mentioned properties were held on lease for residential purpose but

the same were un-authorizedly being used for commercial purpose, which

resulted into loss to Cantt Funds amounting to Rs. 325.355 million on

account of premium and development charges.

(Rs. in Million)

S

No. DP No. Unit / Formation Property No. Amount

1 DP-N-10/2016-17 Cantt Board,

Nowshera 958, Moti Bazzar NSR 1.753

2 DP-N-11/2016-17 -do- Bungalow No. 108,

Sher Shah Road, NSR 41.485

3 DP-N-42/2016-17 -do-

1231 & 1231/1-6

Khushal Coly, NSR

Cantt

60.813

44

4 DP-N-44/2016-17 -do-

1062/1-2 and House

No. 1056-57, Manki

Road NSR

29.771

5 DP-N-229/2016-17 Cantt Board, Rwp Bungalow No. 30,

Haidar Road, Rwp 162.943


Jhelum

Bangalow No. 12

Lalazar Coly, Jhelum 28.590

Total 325.355

When pointed out by Audit in September, 2015 and

January, 2016 it was replied that action for determination of lease or

regularization of unauthorized commercial use was under process.


16th

and 22nd

December, 2016. The DAC directed that the case for

determination of lease or regularization be finalized. Whereas the DAC

against serial No. 2 and 4 directed to pursue the court case.


report. Audit stresses for early determination of lease or regularization of

the case.

DP-N-10, 11, 42, 44, 229 and 232/2016-17

1.7.4 Non-recovery of development charges and House

Tax from COMSATS Institute – Rs. 272.910

Million

According to Section-92 (1) of Cantonment Act-1924, if a

person liable of the payment of any tax does not, within 30 days from the

service of notice of demand, pay the amount due or show sufficient cause

of non-payment of the same to the satisfaction of the executive officer,

such sum with all costs of recovery, may be recovered under a warrant.

During audit of Cantonment Board Abbottabad, it was

noticed that COMSATS Institute of Information Technology was

established on 38 kanal on B-3 land vide Ministry of Defence letter dated

15th

January, 2008 and GHQ letter dated 25th

May, 2001 but house tax

45

amounting to Rs. 86,570,000 and development charges amounting to

Rs. 186,340,000 as evident from Ministry of Defence letter dated 30th

April, 2004 and CBR No. 9 dated 24th

November, 2006 were still lying

outstanding.

When pointed out by Audit in October 2014, it was replied

that objected amount would be recovered shortly.


4th

October, 2016. The DAC was apprised that the matter is subjudice. The

DAC directed to pursue the case in the Court of Law.

No further progress was made till finalization of this

report. Audit stresses for vigorous pursuance of court case.

DP-N-515/2015-16

1.7.5 Non-recovery of property tax from WAPDA –

Rs. 200.000 Million

According to Para-92 (1) of the cantonment Act 1924 “if a


the receipt of notice of demand pay the amount due or show sufficient

cause of nonpayment of the same to the satisfaction of the Cantonment

Executive Officer such sum with all costs of recovery may be recovered

under warrant.”

While examining the accounts of Cantt Board Walton

Lahore, it was noticed that an amount of Rs. 199.861 million on account

of property tax was outstanding against WAPDA since 1984, but after

passage of three decades no efforts were made to recover outstanding

Cantt fund dues.

When pointed out by Audit in August, 2015 it was replied

that matter was already taken up with WAPDA authorities. The reply was

not convincing, as amount is outstanding since 1984.

46


16th

December, 2016. The DAC directed Cantt Board authorities to file

civil suit against WAPDA.


report. Audit stresses for early recovery.

DP-N-238/2016-17

1.7.6 Non-recovery of conversion / development charges

from property developers/owners – Rs. 118.601

Million

According to Para-16(a)(1) of Government of Pakistan

Ministry of Defence (ML&C Deptt) Rawalpindi letter No.

55/45/Lands/ML&C/99, dated 17th

February, 2011, “Depending on usage

of land on which the housing scheme as purposed, following conversion

charges will apply according to area carved for Agricultural to Residential

or commercial”.

(i) Agriculture to residential 5% of the valuating table

(ii) Agriculture to commercial 25% of valuating table

(iii) Residential to commercial 20% of valuating table

During audit of Cantonment Board Sargodha, it was

noticed that agricultural land was converted into residential and

commercial plots, but conversion / development charges of Rs. 118.601

million were not recovered from the owners.


that objected amount would be recovered from the concerned owners

shortly.


16th

December, 2016. The DAC was apprised that a sum of Rs. 20.000

million out of Rs. 118.601 million had already been recovered. The DAC

47

directed that recovery made so far be got verified and balance amount be

recovered.

No evidence in support of recovery was produced till

finalization of this report. Audit stresses for immediate recovery of

conversion/development charges from the owners.

DP-N-106/2016-17

1.7.7 Non-recovery of hoarding charges – Rs. 107.830

Million

Under Section-259 of Cantt Board Act, 1924, any tax or

any other money recoverable by a board may be recovered together with

the cost of recovery either by suit or, on application to Magistrate having

jurisdiction in the Cantt.

As per record of following Cantonment Boards, hoardings

were installed within the cantonments limit but hoarding charges

amounting to Rs. 107.830 million was not recovered.

(Rs. in Million)

S No. DP No. Unit / Formation Amount

1 DP-N-326/2015-16 Cantt Board, Walton, Lahore 18.600




Total 107.830

When pointed out by Audit in September 2015, it was

replied that partial recoveries had been effected and rest of the cases are

subjudice.

The paras were discussed by the DAC in its meeting held

on 4th

October, 2016 and 22nd

December, 2016. The DAC directed against

serial No. 1 and 2 that recovery be expedited. However, serial No. 3 and 4

were subjudice.

48


report. Audit suggests expeditious recovery of the amount.

DPs-N-326 and 349/2015-16, DPs-N-125 and 169/2016-17

1.7.8 Non-recovery of premium due to unauthorized use

of residential property as commercial – Rs. 77.177

Million

According to Para-3 of “General condition” contained in

sub Para-h to Ministry of Defence letter No 3/6/D-12 (ML&C)/97-2007

dated 31st December, 2007, residential property being used for commercial

purpose will be charged premium @ 100% revenue rates applicable for the

said purpose and after approval, composition fee also be charged as per

existing rules.

While examining the accounts of MEO Rawalpindi, it was

noticed that residential properties were being used by the lessees for

commercial purpose without obtaining approval of the Competent

Authority. Thus, premium at full market price as well as development

charges amounting to Rs. 77.177 million needed to be recovered from the

lessees.


that notices were issued to concerned lessees and case for determination of

lease was being processed against the said properties.


4th

October, 2016. The DAC pended the draft para till finalization of

process of commercialization and determination of lease of properties

involved.


report. Audit stresses that the case for determination of lease be finalized

expeditiously.

DP-N-211/2015-16

49

1.7.9 Non-recovery of rent from CIMLA/WTI building –

Rs. 70.924 Million

Under Section 259 of Cantonment Act, 1924, any tax or

any other money recoverable by a board may be recovered together with

the cost of recovery either by suit or, on application to Magistrate having

jurisdiction in the Cantt.

While examining the accounts of Cantt Board Walton

Lahore, it was noticed that rent of CIMLA/WTI building @ Rs. 1,000,000

per year and 10% annually increase w.e.f. 1st January, 2011 was fixed by

Cantt Board authorities, but no rent was recovered from CIMLA/WTI,

which resulted into loss to Cantt funds amounting to Rs. 70.924 million.


that the matter had already been taken up with CIMLA authorities.


16th

December, 2016. The DAC directed the Cantt Board authorities to

finalize the recoveries within 01 month.


report. Audit stresses for recovery action.

DP-N-196/2016-17

1.7.10 Non-recovery of rent of A-1 Land used for

commercial purpose – Rs. 64.529 Million

As per policy on use of A-1 land for welfare and other

projects of the armed forces by Ministry of Defence, Rawalpindi letter No.

F-2/5/D-12/ML&C/99 dated 2nd

April, 2008 that rent was required to be

charged @ 6% per annum of existing revenues rates of the land used in

commercial projects. Out of total amount so calculated, 25% was to be

deposited into the Govt. treasury and 75% balance was to be utilized by

the respective formation. Moreover, Rule-14(3) of cantonment land

administration (CLA) 1973 provides land in class-A would not be used

or occupied for any purpose other than those stated in sub rule (i) of Rule-

50

5 without prior sanction of the Central Government or such authority as

they may appoint in this behalf.

During Audit of MEO Rawalpindi, it was noticed that

below mentioned properties were being run on commercial basis but

neither 25% Government share on rent as per above Government policy

was recovered from the occupants nor Government approval was obtained

for commercial use of A-I Land, which needed recovery amounting to

Rs. 64.529 million.

(Rs. in Million)

S

No. Property No. Area of

Plot Period

Amount

(25% Govt.

share)

1 Shell Pump, Bangalow No. 142

Murree Road Rwp

33 Marlas 2008 to

2015

4.208

2 Total Pump, Khasra No. 16 and 715

Chaklala Cantt

143

Marlas

-do- 12.441

3 Blue Lagoon AWT 320

Marlas

-do- 45.840

4 Safe Way, CNG Murree Road, Rwp 16 Marlas -do- 2.040

Total 64.529


that the requisite properties are being run directly by Army authorities and

governed under A-I land policy.


22nd

December, 2016. The DAC pended the para as the same would be

discussed in presence of Army representative.


report. Audit stresses for early recovery of rent.

DP-N-197/2015-16

51

1.7.11 Non-recovery of Transfer of Immovable property

tax – Rs. 53.542 Million

According to Federal Board of Revenue S.R.O No. 382

(1)/94 dated 3rd

May, 1994, the Federal Government imposed a tax on the

transfer of immovable property (lands and buildings) payable by the

transferee at the rate of three percent of the consideration money of such

property as recorded in the sale deed or as assessed by the Cantonment

Executive officer for the purpose of assessment of tax as market value of

the property whichever is higher.

While examining the accounts of following Cantonment

Boards, it was noticed that Transfer of Immovable Property (TIP) Tax

amounting to Rs. 53.542 million was not recovered.

(Rs. in Million)

S

No.

DP No. Unit / Formation Property owner Amount

1 DP-N-144/2016-17 Cantt Board, Rawalpindi Shell, Pakistan 4.144

2 DP-N-147/2016-17 Cantt Board, Rawalpindi Daewoo, Pakistan 17.528

3 DP-N-194/2016-17 Cantt Board, Lahore PTCL 9.310

4 DP-N-198/2016-17 Cantt Board, Walton,

Lahore

UBL Officer Co-

operating Housing

Society

22.560

Total 53.542


that the cases were under process for recovery.


on 16th

and 22nd

December, 2016. The DAC directed to recover/resolve

the cases.


report. Audit stresses for immediate recovery action.

DP-N-144, 147, 194 and 198/2016-17

52

1.7.12 Non-recovery of premium from owners of the shops

– Rs. 17.796 Million

According to Para-92 (1) of the Cantonment Act-1924 “if a


the receipt of notice of demand pay the amount due or show sufficient

cause of non-payment of the same to the satisfaction of the Cantt

Executive Officer such sum with all costs of recovery may be recovered

under warrant”.


Nowshera, it was observed that an amount of Rs. 17,796,500 was lying

outstanding against the owners of the shops situated at commercial

complex Nowshera Cantt, which needed to be recovered.

When pointed out by Audit in January 2016, it was replied

that an amount of Rs. 575,000 out of Rs. 17,796,500 had already

been recovered and notices for balance amount were also issued to

defaulters.


22nd

December, 2016. The DAC directed that reported recovery be got

verified from audit and balance amount be recovered.


report. Audit stresses for early recovery of premium from the owners.

DP-N-41/2016-17

1.7.13 Non-recovery of Cantt Board dues from M/s

Daewoo Pakistan Express Bus Services Ltd –

Rs. 13.044 Million

According to Cantt Board Resolution No. 36 dated 25th

September, 2013, Cantt Board dues was recoverable from Daweoo

Pakistan Bus Services.

53

While examining the accounts of Cantt Board Rawalpindi,

it was noticed that an amount of Rs. 13,043,575 was outstanding against

M/S Daewoo Pakistan Express Bus Service Ltd on account of checking

fee, BA Fee, Development charges and security, which was required to be

deposited into Cantt funds.

When pointed out by Audit in January, 2015 the executive

authorities agreed to recover the amount.


22nd

December, 2016. The DAC was apprised that the matter is subjudice.

The DAC directed to pursue the case in the Court.

Audit suggests vigorous pursuance of court case.

DP-N-146/2016-17

1.7.14 Non-recovery of composition and parking fee –

Rs. 9.647 Million

According to Ministry of Defence letter No. 75/853/Lands/

92/4970/D-2/ML&C/94 dated 6th

November, 1994, “unauthorized

construction within the limits of cantonment board is an offence and the

Board is empowered to demolish the unauthorized construction or

regularize it on payment of composition fee”.

During audit, it was noticed in 03 Cantonment Boards that

an amount Rs. 9.647 million on account of composition/parking fee was

lying outstanding, which needed recovery action.

(Rs. in Million)

S # DP No. Unit / Formation Property No. Amount


Rawalpindi 784/75 Moza, Nothia 2.693


Rawalpindi

Khasra No.1704 and

1705, Mouza Chur Harpal 3.912


Chaklala Various properties 3.042

Total 9.647

54

When pointed out by Audit in November, 2014 and

January, 2015 the executives agreed to recover the amount.


on 22nd

December, 2016. The DAC directed that the objected amount be

reconciled and reported recovery be got verified from audit.



DPs-N-142, 148 and 182/2016-17

1.7.15 Non-recovery of composition fee – Rs. 8.466 Million

According to Ministry of Defence letter No. 75/853/Lands/

92/4970/D-2/ML&C/94 dated 6th

November, 1994, “unauthorized

construction within the limits of cantonment board is an offence and the

Board is empowered to demolish the unauthorized construction or

regularize it on payment of composition fee”.


Abbottabad, it was noticed that M/s Usman Bashir & Others constructed

Triple Story Hospital i.e. Rehmat Hospital without prior approval of

revised building plan and deposit of composition fee of Rs. 8,466,000 as

detailed below:-

1. Area of Plot 8295 Sft or 30 Marlas

Cost of land @ Rs. 1,495,000 per marla

8295 Sft or 30 marlas (30 marla x 1,495,000) = Rs. 44,850,000

2. Cost of Const

(i) Ground Floor 8295 sft

(ii) First Floor 8295 sft

(iii) Second Floor 8295 sft

Total covered area 24885 sft @ Rs. 1600 Per Sft = Rs.39,816,000

Total (1+2) = Rs. 84,666,000

10% Composition fee = Rs. 8,466,600

55


that the owner was asked for submitting revised building plan for approval

of the Board and composition fee would be recovered.


22nd

December, 2016. The DAC directed the executive for recovery of

composition fee.


report. Audit stresses for early recovery action. DP-N-225/2016-17

1.7.16 Non-recovery of rent of Cantonment fund building


According to Rule-2 (A) 5 of Cantonment Account Code

1955, “ it is duty of the Executive Officer and the staff employed by the

Cantonment Board to see that dues of the Board are correctly and

promptly assessed collected and paid into the treasury”.

While examining accounts of Cantt Board Chaklala, it was

noticed that Bungalow No. 84 Khadim Hussain Road was hired to MEO

Rawalpindi for official residence purpose of the ML&C officers, but rent

amounting to Rs. 6.484 million was lying outstanding against MEO

Rawalpindi.


that case was pended with MEO Rawalpindi for seeking final approval of

the DG ML&C.


22nd

December, 2016. The DAC directed that the case for hiring of MEO

Building be finalized and recovery be made accordingly.


report. Audit suggests early recovery action.

DP-N-219/2016-17

56

1.7.17 Non-recovery of antenna fee from Cellular

companies – Rs. 4.007 Million

According to Para – 7 (B) of the Government of Pakistan

Ministry of Defence (ML&C Deptt) Rawalpindi letter No. 51/1411/

Lands/ML&C/2005 dated 24th

June, 2015, “the cellular companies will be

required to pay an antenna fee @ Rs. 20,000 per month with an annual

enhancement @ 10 %”.


Sargodha, it was noticed that 03 cellular companies installed towers within

the Cantonment limits, but antenna fee / sky charges amounting to

Rs. 4.007 million were not deposited for the year 2015-16 which needed to

be recovered from cellular companies.


that objected amount would be recovered.


16th

December, 2016. The DAC directed that objected amount be

reconciled with audit and recovery be made accordingly.


report. Audit suggests for early recovery action.

DP-N-104/2016-17

1.7.18 Non-recovery of composition fee – Rs. 1.087 Million

Under Section-92 (1) of Cantonment Act, 1924, “If person

liable of the payment of any tax dues not, within 30 days from the service

of notice of demand, pay the amount due or show sufficient cause of

nonpayment of the same to the satisfaction of the executive officer, such

sum with all costs of recovery, may be recovered under warrant”.

During audit of Cantonment Board Shorkot, it was noticed

that composition fee and conversion charges amounting to Rs. 1,087,034

was outstanding against property No. CB-20 and 832 situated at Shorkot

57

Cantt as confirmed from C.B.R No. 38 & 39 of 31st January, 2014, which

needed recovery action.


that objected amount would be recovered.


4th

October, 2016. The DAC directed to recover the full objected amount.


report. Audit stresses for early recovery of amount involved.

DP-N-288/2015-16

1.7.19 Loss to state due to non-recovery of premium

and ground rent from WAPDA – Rs. 267.769

Million

As per Policy issued by the Government of Pakistan,

Ministry of Defence Rawalpindi vide letter dated 31st December, 2007,

fresh lease of land was to be granted on payment of premium @ of 50% of

DC rate of land. Moreover, ground rent was required to be charged @ Rs

4 per sq yds per annum.

In MEO Hyderabad, 11.33 acres of land were allocated to

WAPDA in the year 1973 . However, premium of Rs. 258.557 million

[11.33 acres x 4840 = 54837.2 sq yds x Rs. 9430 (DC rate) x 50%] and

ground rent of Rs. 9.212 million [54837.2 sq yds x Rs. 4 x 42 years] were

not recovered till to date.


stated that M.E.O office had forwarded a case to the ML&C Department

in June, 2008, for obtaining Government‟s sanction for transfer of land to

the WAPDA authorities. The sanction was still awaited.


January, 2017. The DAC directed that Government‟s sanction be obtained

58

immediately and recovery on account of premium and ground rent be

made within three months.


this report.

Audit suggests that recovery may be expedited.

DP-S-368/2016-17

1.7.20 Non-recovery of cantonment taxes – Rs. 178.174

million

Section-92 of Cantonments Act, 1924, states that if a

person liable for payment of any tax does not, within thirty days from the

service of the notice of demand, pay the amount due, or show sufficient

cause for non-payment of the same to the satisfaction of the Executive

Officer, such sum, with all costs of the recovery, may be recovered under

a warrant, issued in the form set forth in Schedule II, by distress and sale

of the movable property of the defaulter.

It was observed from the record for the year 2015-16 held

with six Cantonment Boards that a sum of Rs. 178.174 million was

outstanding on account of cantonment boards‟ taxes. The details are given

below:

(Rs. in million)

S.No. Name of Unit DP No. Amount

1 CB Clifton (Rs. 245.568 M – Rs. 213.196 M) S-249 32.372

2 CB Hyderabad S-277 53.834

3 CB Faisal S-52 30.644

4 CB Clifton S-372 22.122


6 CB Malir (Rs. 10.544 M – Rs. 2.569 M) S-209 7.975

7 CB Korangi Creek S-391 6.810

8 CB Manora S-95 3.595



T o t a l 178.174

59

When pointed out by Audit from January 2016 to

November 2016, it was replied that efforts were being made to recover the

outstanding amount.

The paras were discussed in DAC meetings held on 27th


and 30th

January, 2017. The DAC was apprised that

partial recoveries had been made in some cases. Efforts were being made

to recover the balance amount. The DAC directed the executive to recover

the balance amount in full and get the recoveries verified form Audit.

During verification carried out by Audit, recovery of

Rs. 213.196 million in respect of para at serial No. 01 and Rs. 2.569

million in respect of para at serial No. 06 was verified. No progress was

reported in case of remaining paras to Audit till finalization of this report.

Audit suggests expeditious recovery of outstanding dues.

DP-S-249, 277, 52, 372, 375, 209, 391, 95, 335 and 336/2016-17

1.7.21 Loss of scrutiny fee due to non-approval of building

plans of Army Housing Schemes – Rs. 145.855

Million

According to Rule-2(1) of Building By-Laws SRO

No.(1)/99 dated 30th

April, 1999 and SRO No.(1)/2006 dated 17th

April,

2006, every person intending to erect, re-erect or alter a building shall

apply for sanction under Section 179 of Cantonment Act, 1924 in Form 1

along with the necessary documents specified therein.

According to CBR No. 16 dated 4th

November, 2011

scrutiny fee @ Rs. 15 per sq ft will be charged.

In Cantonment Board Malir, 1870 houses were constructed

by Army without submission of building plans to the Cantonment Board

and without obtaining approval of the Board during the year 2015-16.

Due to non-submission of building plans for approval, the Cantonment

60

Board sustained a loss of Rs. 145.855 million, in the shape of Scrutiny

Fee.

When pointed out by Audit in August 2016, the executive

replied that the case would be taken up with the concerned quarters.

Further outcome would be intimated accordingly.


January, 2017, was

apprised that the case had been taken up with HQ ML&C Department/

concerned quarters in November, 2016. The DAC directed that the amount

may be recovered within two months and documentary evidence produced

to Audit for verification.

Further progress was not reported till finalization of this

report.

Audit suggests that building plans be got approved from the

Board and scrutiny fee recovered expeditiously.

DP-S-210/2016-17

1.7.22 Loss to state due to non-recovery of premium

and ground rent from M/s PTCL/Etisalat –

Rs. 51.575 Million

As per Policy issued by the Government of Pakistan,

Ministry of Defence Rawalpindi vide letter dated 31st December, 2007,

fresh lease of land was to be granted on payment of premium @ of 50% of

DC rate of land. Moreover, ground rent was required to be charged @

Rs. 4 per sq yds per annum.

In MEO Hyderabad, it was observed from Military Land

Register/Mutation entry that land measuring 2.88 acres in Freek Hill

Colony, Sukkur was leased out to PTCL on the basis of guarantee given

by Government of Pakistan, Ministry of Finance vide DO letter dated 28th

February, 2011. However, premium of Rs. 51,296,256 and ground rent of

Rs. 278,784 were still outstanding against the PTCL.

61

When pointed out in October 2016, the executive replied

that the ML&C Department had approached the Ministry of Finance. The

Ministry vide office memorandum dated 25th

August, 2016 stated that the

settlement would take place according to the said DO letter on receipt of

dues from M/s Etisalat.


January, 2017 was

apprised that partial recovery of ground rent amounting to Rs. 55,757 had

been made. DAC directed to pursue the matter vigorously to recover the

amount. The case may also be taken up with Finance Division, Islamabad

for early recovery.


report.

Audit suggests expeditious recovery of outstanding dues.

DP-S-279/2016-17

1.7.23 Non-recovery of conservancy charges from Pak

Army – Rs. 25.405 Million

Under Rule 2(A)(1) of the Pakistan Cantonments Account

Code, 1955, it is laid down that the Executive Officer is the principal

Executive Officer of the Board and all other officers and servants of the

Board are subordinate to him. He is the officer, who has been entrusted by

Government with the responsibility of assessing and collecting

cantonment revenues.

Cantonment Boards were providing conservancy services

regularly to Pakistan Army by concluding agreements with Station

Headquarters, but an amount of Rs. 25.405 million, as detailed below, was

outstanding upto June 30, 2016. The details are as under;

62

(Rs. in million)

S.No. Name of Units DP No. Amount

1 CB Hyderabad S-275 23.151

2 CB Malir

(Rs 30.096 M – Rs 27.842 M) S-211 2.254

Total 25.405

When pointed out by Audit in August, 2016, the executive

stated that the case for recovery of arrears had been initiated with Station

HQs.


January, 2017 was

apprised that in case of para at serial No 1, Rs. 27.842 million had been

recovered. In respect of para at serial No. 2 it was stated that efforts were

being made to recover the amount. DAC directed that recovered amount

be got verified from Audit and balance amount i.e. Rs. 2.25 million be

recovered within two months. In case of para at serial No. 02, DAC

directed that Army authorities be approached for recovery of amount

within six months.

During verification carried out by Audit, recovery of

Rs. 27.842 million in respect of para at serial No. 01 was verified. No

progress was reported in case of the other para till finalization of this

report.

Audit suggests expeditious recovery of conservancy

charges.

DP-S-211 and 275/2016-17

1.7.24 Non- Recovery of Cantonment Fund Loans

and Advances – Rs. 23.107 Million

According to rule-42 (1) & (2) of Pakistan Cantonment

Accounts Code, 1955, All advances, other than permanent advances and

advances from the provident fund, shall be entered in a Register. The

Executive Officer shall be responsible for the recovery or adjustment of all

63

such advances and shall bring to the notice of the Board twice a year all

cases in which the recovery of adjustment has not been made in due time.

Rule-76 of Pakistan Cantonment Account Code, 1955,

further provided that all loans received by the Cantonment Board shall be

recorded in a register of loans. Each entry in the register shall be attested

by the Executive Officer.

In Cantonment Board Clifton, Karachi, a sum of

Rs. 22,852,744 was outstanding since long on account of loans given to

other cantonment boards. Similarly, a sum of Rs. 255,260 was recoverable

from staff on account of advances given to them up to June 2015.

When pointed out by Audit in January 2016, the executive

replied that letters for refund of loans and advances amounting to

Rs. 23.107 million had been issued to all concerned.


January, 2017. The DAC was apprised that a sum of Rs. 1.784 million had

been recovered so far. The DAC directed that recovery made so far be got

verified from Audit and balance amount be recovered within three months.


verification till the finalization of this report.

Audit suggests early recovery of the outstanding amount.

DP-S-348/2016-17

1.7.25 Non-receipt of project dues from Housing

Directorate, QMG – Rs. 15.000 Million

According to Rule-2(A)(3) of The Pakistan Cantonments

Account Code, 1955, it is not sufficient that Cantt officer‟s accounts

should be correct to his own satisfaction. A disbursing officer has to

satisfy not only himself, but also the audit, that a claim, which has been

accepted, is valid, that a voucher is complete proof of the payment which

it supports, and that an account is correct in all respects.

64

In Cantonment Board Malir, an amount of Rs. 25.000

million was outstanding on account of sewerage network project against

Housing Directorate, QMG Branch, Rawalpindi. It was observed from the

accounts that only Rs. 10.000 million were received up to March 2008 and

Rs. 15.000 were still recoverable.


replied that the case would be initiated with Housing Directorate, QMG

Branch.



that amount be recovered within three months.


report.

Audit suggests expeditious recovery of outstanding

amount.

DP-S-228/2016-17

1.7.26 Non-recovery of composition charges – Rs. 14.852

Million

According to Section 185 of Cantonments Act, 1924, a

Board may direct the owner, lessee or occupier of any land in the

cantonment to stop the erection or re-erection of a building in any case in

which the Board considers that such erection or re-erection is an offence

under Section 184. The Board may direct the alteration or demolition of

the building or accept, by way of composition, such sum as it thinks

reasonable.

In Cantonment Board Malir, composition charges

amounting to Rs. 14.852 million were outstanding despite lapse of

considerable time. The details are as under;

65

(Rs. in million)

S.No. Name of Defaulter D.P No Amount

1 M/s Al-Farooq Builders S-213 13.452

2 M/s Orient Housing Services S-214 1.400

Total 14.852


replied that completion plan of buildings were under process. Action

would be completed after finalization of completion plan.



that full amount may be recovered and record produced to Audit for

verification.

No record / document was produced to Audit for

verification till finalization of this report.

Audit suggests immediate recovery of the outstanding

amount.

DP-S-213 and 214/2016-17

1.7.27 Overpayment to contractors due to non-deduction

of running payments while making final payments


According to Rule 65(6)(ii) of the Pakistan Cantonments

Account code, 1955, an undertaking shall be obtained from the contractor

before the payment is actually made that should the amount of advance

paid to him be subsequently found to be more than the cost of the work

done in respect of which the advance was paid, he shall refund forthwith

the amount overpaid. The Executive Officer shall be responsible for the

adjustment of the advance before final payment of the bill.

In Cantonment Board Quetta, two running payments

amounting to Rs. 4.000 million and Rs. 0.800 million were made to two

66

contractors namely, M/s Ghulam Hussain & Co. and M/s Aga Salahud-

din Bazai & Co. on 18th

November, 2013 and 29th

June, 2015

respectively. However, the same were not adjusted while making final

payments to them, resulting in loss of Rs. 4.800 million to Cantonment

Fund.

When pointed out in March 2016, the executive agreed to

affect recovery as pointed out by Audit.


December, 2016, was

apprised that recovery of Rs.1.071 million had been made. However, the

executive objected to the recoverable amount pointed out by Audit. The

DAC directed that relevant record/ documents be provided to Audit for

examination / verification and reconciliation of objected amount.

No record was produced to Audit for verification/

reconciliation till finalization of this report.

Audit suggests expeditious recovery of over payment made

to the contractors.

DP-S-15/2016-17

1.7.28 Overpayment to contractors due to calculation

errors /application of incorrect Rates – Rs. 5.795

Million

According to Rule-2(A)(3) of The Pakistan Cantonment

Account Code, 1955, it is not sufficient that an officer‟s accounts should

be correct to his own satisfaction. A disbursing officer has to satisfy not

only himself, but also the audit, that a claim, which has been accepted, is

valid, that a voucher is a complete proof of the payment which it

supports, and that an account is correct in all respects.

In Cantonment Board Quetta several cases of

overpayments were detected during the financial year 2015-16. The

details are as under;

67

(Rs. in million)

S. No DP No. Name of Unit Description Amount

1 S-10 CB Quetta Application of incorrect rates 2.949

2 S-12 CB Quetta Calculation errors 1.925

3 S-13 CB Quetta Calculation errors 0.265

4 S-16 CB Quetta Application of incorrect rates 0.656

Total 5.795

When pointed out in February, 2016 and March 2016, the

executive agreed to affect recovery as pointed out by Audit.


December, 2016, was

apprised that partial recoveries had been made. The DAC directed that

recoveries may be got verified from Audit and balance amount be

recovered within 01 month.

Neither record / documents were produced to Audit for

verification nor any progress reported till finalization of this report.


DP-S-10, 12, 13 and 16/2016-17

1.7.29 Non recovery of road cutting charges – Rs. 4.994

Million

According to Rule 2 (5&6) of Cantonment Accounts Code

1955, it is the duty of the executive officer and the staff employed by the

Cantonment Board to see that dues of the Board are correctly and

promptly assessed, collected and paid in to the treasury.

In Cantonment Board Manora, an amount of Rs. 4.994

million was outstanding on account of Road Cutting charges against AGE

(Navy) Maintenance, Manora, since January 2009.


did not furnish reply.

68


December, 2016,

directed that the recovery be pursued with AGE (Navy) vigorously and

amount be recovered within 03 months

Further progress was not reported to Audit till finalization

of this report.

Audit suggests expeditious recovery of cantonment dues.

DP-S-107/2016-17

1.7.30 Non Recovery of Sales Tax on auction of vehicles /

stores – Rs. 4.235 Million

As per Sales Tax Act 1990, amended from time to time,

Sales Tax @ 17% is to be recovered on auction amount from Sales Tax

registered persons / company and 18% from unregistered persons /

companies.

In Cantonment Board Clifton Karachi it was observed that:

(i) Unserviceable vehicles were auctioned for Rs. 10,485,000

during 2014-15 but Sales Tax amounting to Rs. 1,887,300

was not deducted.

(ii) Unserviceable stores were auctioned for Rs. 13,100,000

from May, 2011 to March, 2015 but Sales Tax @ 18%

Rs. 2,358,000 was not collected.

When pointed out by Audit in January 2016, the executive

replied that SRO for levy of Sales Tax against auctions had never been

served upon this office nor ever collected.


January, 2017. The DAC directed that the amount of Sales Tax be

recovered within two months.


report.

69

Audit suggests expeditious recovery of the outstanding

amount.

DP-S-334 and S-339/2016-17

1.7.31 Non-recovery of shop board fee from contractor –

Rs. 2.775 Million

Under Rule-2(A)(1) of the Pakistan Cantonments Account

Code, 1955, it is laid down that the Executive Officer is the principal

Executive Officer of the Board and all other officers and servants of the

Board are subordinate to him. He is the officer, who has been entrusted by

Government with the responsibility of assessing and collecting

cantonment revenues.

In Cantonment Board, Hyderabad contract for collection

rights of shop board fee for the financial year 2014-15, was awarded to

M/s. H.S. Enterprises for Rs. 11,100,000. Scrutiny of record revealed that

Rs. 2,775,000 were still recoverable from the contractor.

When pointed out by Audit in August, 2016, the executive

stated that F.I.R. had been lodged against the said contractor.


January, 2017

directed that civil suit be filed against the contractor for recovery of

Government dues. Case may be processed to black list the contractor.


report.


DP-S-276/2016-17

1.7.32 Irregular retention of income tax amount of –

Rs. 2.143 Million

Section 160 of Income Tax Ordinance 2001 provides that

any tax that has been deducted shall be paid to the Commissioner by the

person making the deduction within the time and in the manner as may be

70

prescribed. Section 161 of Income Tax Ordinance 2001 provides that

where a person fails to pay the tax to the Commissioner as required under

section 160, the person shall be personally liable to pay the amount of tax

to the Commissioner who may pass an order to that effect and proceed to

recover the same.

In Cantonment Board, Korangi Creek, Rs. 2,143,477

were deducted on account of Income Tax from suppliers/contractors

during the year 2015-16, but the same was not deposited into Government

treasury.

When pointed out by Audit in October, 2016 the

executive stated that Rs 2,268,594 were payable to the FBR. The Board

had approved to clear the financial liability.


January, 2017. The DAC directed that the objected amount be deposited

into Government treasury and got verified from Audit.



Audit suggests early deposit of income tax deducted at

source in government treasury.

DP-S-388/2016-17

1.7.33 Non-recovery of income tax on account of auction –

Rs. 1.110 Million

As per section 236(A) of Income Tax Ordinance 2001, the

rate of collection of tax shall be 10% of the gross sale price of any

property or goods sold by auction.

In Cantonment Board Manora, income tax amounting to

Rs. 1,110,600 was not recovered during the financial year 2014-2015,

from eight contractors on account of auction of different services.

71




December, 2016, was

apprised that notices to the contractors had been issued and necessary

proceedings for initiation of disciplinary action against responsible staff

had been recommended. The DAC directed that the recovery of Income

tax be made within 01 month and disciplinary proceedings against the

responsible be finalized within 02 months.


report.


amount.

DP-S-108/2016-17

1.7.34 Non-recovery of auction dues from contractors –

Rs. 1.345 Million

Rule-2(A)(1) of the Pakistan Cantonments Account Code,

1955, states that the Executive Officer is the principal Executive Officer of

the Board and all other officers and servants of the Board are subordinate

to him. He is the officer, who has been entrusted by Government with the

responsibility of assessing and collecting cantonment revenues.

In Cantonment Board Manora, Rs. 1.345 million were

outstanding against five contractors on account of auction of toll collection

etc. The executive did not recover full contract amount till to date

although the contracts were awarded in 2014-15.




December, 2016, was

apprised that efforts were being made for recovery of the amount. The

DAC directed that outstanding amount be recovered within 02 months.

72

No progress of the case was reported to Audit till


Audit suggests early recovery of the outstanding amount.

DP-S-110/2016-17

1.8 Loss to State

1.8.1 Loss due to encroachment of Government land –

Rs. 75.094 Million

According to Rule-26(ix) (a) of Cantonment Land

Administration Rules-1937, an encroachment is an un-authorized

occupation of government land and should not be permitted to remain in

existence under any circumstances unless it is properly regularized.

During audit of Military Estate Office Peshawar, it was

noticed that A-I land within Cantonment area was encroached un-

authorizedly, which resulted into loss of Government revenue amounting

to Rs. 75,093,600 on account of rent.

When pointed out by Audit in February 2016, it was replied

that efforts had been made for removal of encroachment as most of A-I

land was in occupation of Provincial Government Departments.


4th

October, 2016. DAC directed that the land encroached by the

Provincial Government be got vacated.


report. Audit stresses for implementation of DAC‟s directive.

DP-N-486/2015-16

73

1.8.2 Loss to Cantonment fund due to non-finalization of

cantonment code lease into regular lease –

Rs. 19.754 Million

In terms of Para-3 to Government of Pakistan Ministry of

Defence Rawalpindi policy-2007, “premium @ 20% of Revenue Rate for

conversion of residential accommodation into Regular lease will be

charged”.


Nowshera, it was noticed that the lessees of HATA No 1054, Survey No.

269/940 held on schedule-VI for “Residential Purpose” applied for

conversion of above lease in schedule-IX-C of CLA Rules-1937 for

“Residential Purpose” on 13th

December, 2012 as evident from “Schedule-

V Form” but premium, development charges and ground rent amounting

to Rs. 19,754,072 was not recovered against the property, which needed to

be deposited into cantonment fund.

When pointed out by Audit in January, 2016, it was replied

that the case for conversion of Schedule IX-C of the CLA rules 1937 for

residential purpose into regular lease in Schedule IX-C was forwarded to

RHQ Peshawar.


22nd

December, 2016. The DAC directed that the case for obtaining

sanction of the competent authority for finalization of cantonment code

lease into regular lease be finalized.


report. Audit recommends early regularization action.

DP-N-65/2016-17

74

1.8.3 Loss to cantonment fund due to irregular

conclusion of parking fee contract by Station HQ –

Rs. 4.000 Million

As per Para-259 of Cantonment Board Act-1924, “Any tax

or any other money recoverable by a Board under this Act may be

recovered together with the cost of recovery either by suit or on

application to a Magistrate having jurisdiction in the Cantonment”.

During audit of Cantonment Board Murree, it was noticed

that contract of parking fee was awarded for financial year 2009-10 @ Rs.

910,000 per annum. The subject contract was cancelled by the

Cantonment Board authorities vide Station Headquarters letter dated 13th

October, 2009 but recovery of parking fees @ Rs. 1,000,000 P.A for the

period 2009 to 2013 was not made from the Station Head Quarter Murree,

which needed to be recovered.


that the cases regarding recovery of parking fees and possession of

parking area had already been taken up with Station Headquarter. The

reply was not convincing, as outstanding parking fees needed to be

recovered and deposited into Cantonment fund.


4th

October, 2016. DAC pended the Para and decided to discuss the same

in presence of rep of Station HQ Murree.


report. Audit stresses for early recovery of parking fees.

DP-N-505/2015-16

75

1.9 Mis-procurement of Stores

1.9.1 Award of contracts in violation of Public


According to Rule-12(1,2) of PPRA-2004, all procurements

over one hundred thousand rupees and upto the limit of Rs. 2.00 million

shall be advertised on the authority‟s website. Further, procurement over

Rs. 2.00 million should be advertised on the authority‟s website as well as

in two national dailies, one in English and the other in Urdu.

In Cantonment Board Clifton, different contracts were

concluded during the financial year 2014-15, without advertisement on

PPRA website/ newspapers. The details are listed below;

(Rs. in million)

S # DP No. Description Amount

1 S-378 Local purchase of medical equipment 19.318

2 S-338 Local purchase of Pre-casted barriers 5.750

3 S-380 Local purchase of firefighting equipment 3.294

Total 28.362

When pointed out by Audit in February 2016, the executive

submitted evasive replies without substantive evidence.

The paras were discussed in the DAC meeting held on 30th

January, 2017. The DAC directed that violation of PPRA Rules may be

got regularized.

No further progress was reported to Audit till the


Audit suggests regularization of PPRA Rules violation.

DP-S-378, 338 and 380 /2016-17

76

Pakistan Air Force


1.10.1 Non-recovery of Base Trans-receiver Station tower

fee – Rs. 9.723 Million

According to Military Lands and Cantonment Department

Rawalpindi letter No. 50/14/Land/MLC/2005 dated 24th

June, 2005, the

cellular companies will be required to pay an antenna/tower fee @ Rs.

20,000 per month with annual enhancement of 10%.

While examining of the accounts of following units, it was

noticed that 20 BTS tower/antenna were installed at different locations,

but tower/antenna fee amounting to Rs. 9.723 million was not recovered

from the cellular companies.

(Rs. in Million)


1 DP-N-269/2015-16 GE (Air), Sargodha 2.811

2 DP-N-292/2015-16 PAF Base Lahore 2.112

3 DP-N-510/2015-16 GE (Air) Maintenance, Islamabad 4.800

Total 9.723

When pointed out by Audit in May, August and December

2014, it was replied that concerned authorities had been approached for

deposit of amount.


on 15th

December, 2016. The DAC directed that objected amount be

recovered.



DP-N-269, 292 and 510/2015-16

77

1.10.2 Non-recovery of House Rent Allowance from PAF

officers living in married accommodation –

Rs. 15.830 Million


Married officers not provided with Government/hired/requisitioned

married accommodation shall be entitled to House Rent Allowance.

While examining the accounts of following units, it was

noticed that certain PAF officers were living in Government

accommodations but were also drawing HRA in their monthly pay and

allowances, which resulted into loss to state amounting to Rs. 15.830

million.

(Rs. in Million)


1 DP-N-272/2015-16 PAF Base Lahore 3.317

2 DP-N-317/2015-16 PAF Base MM Alam, Mianwali 4.263

3 DP-N-439/2015-16 PAF Base Mushaf 4.960

4 DP-N-91/2016-17 PAF Base, Shorkot 3.290

Total 15.830

When pointed out by Audit, it was replied that HRA was

admissible to all married officers living in any accommodation other than

proper service accommodation vide MAG letter dated 6th

December, 2003.

However 5% of the recovery of the pay had been affected from the

officers. The reply was not acceptable as Army officers provided with

government accommodations including BOQs and MOQs shall not

receive HRA as per rule cited above.


on 15th

December, 2016. The DAC pended the paras till formulation of

policy on house rent allowance.

78


report. Audit suggests recovery of the objected amount till

finalization/approval of policy.

DPs-N-272, 317 and 439/2015-16, DP-N-91/2016-17

1.10.3 Non-deposit of Government share into Government

Treasury -Rs. 149.793 Million

Para-2 (b) (1) of the A-1 land Policy issued vide

Government of Pakistan, Ministry of Defence Rawalpindi letter dated

April 02, 2008 , the rent shall be charged @ 6% per annum of existing

revenue rate (earlier known as DC rates) of the said land used in

commercial projects and 25% of the calculated rent will be deposited into


In PAF Base Masroor, Karachi, 1.830 acres of A-1 land

within the Base were given to a commercial entity, M/s Shaheen

Knitwear. The government share of rent amounting to Rs. 149,793,658

from July 2008 to June 2016, as per A-1 Land Policy was not deposited

into government treasury.


executive stated that the land was acquired by M/s Shaheen Knitwear on

lease from Military Estate Office (MEO) Karachi and rent was being paid

to MEO as per lease agreement. The reply was not acceptable as A-1 Land

could not be awarded on lease.


January, 2017. The DAC was apprised that a Board of Officer had been

ordered to determine the Government‟s share in rent. The DAC directed

that the Board proceeding may be completed immediately and

Government share be deposited in treasury within two months.


this report.

79

Audit suggests early deposit of government„s share in

treasury.

DP-S-321/2016-17

1.10.4 Non-recovery of Sales Tax on services – Rs. 17.554

Million

The Sindh Sales Tax on Services Rules, 2011 prescribes the

procedure and manner for collection and payment of sales tax on taxable

services @ 16%.

In Project Shahbaz Islamabad, a contract for consultancy

services was concluded between Pakistan Air Force and M/s Kashif Aslam

and Associates (Pvt) Ltd in March, 2009, for up gradation of PAF Base

Shahbaz, Jacobabad. An amount of Rs. 109.714 million was paid to the

contractor upto October, 2015 for services rendered. However, Sales Tax

on services amounting to Rs. 17.554 million was not recovered from the

contractor.

When pointed out by Audit in May 2016, the executive

replied that Sales Tax was neither paid nor deducted from contractor as the

contract was executed within cantonment limits where Sales Tax on

services was not applicable.

Reply of executive was not tenable. The Sales Tax on

services was applicable without any exemption.

The DAC meeting held on 10th

January, 2017, directed that

documents be provided to Audit for examination / verification.

No record was produced to Audit till finalization of this

report.


DP-S-247/2016-17

80

1.10.5 Loss to state due to less recovery of water charges

from consumers – Rs. 9.129 Million

As per appendix “O” (i) of Defence Services Rules for

MES, 1998 the all Pakistan flat rate for water will be notified from time to

time. The annexed note to appendix „O‟ further elaborates that any

increase of water rates by supplying agency when notified shall be

recovered in addition to the rates specified above.

In GE (Air) Masroor Karachi, it was observed that Rs. 100

per 1000 Gallons of water were paid to Karachi Water & Sewerage Board

(KW & SB) and an amount of Rs. 5,000,000 was also paid for supply of

fresh water through water tankers during the financial year 2013-14.

However, recovery @ Rs. 40 per month was made from consumers for

water supplied. This was in contravention of above rule and resulted into

less recovery of Rs. 9,129,600. The details are as under;

S.# Accommodation

Type & No

Recovery per

month as per

Rules

Recovery

per month

made from

Consumers

Difference Recovery

(Rs.)

1 749

M.O.Q

Rs. 960 (9600

GL / 1000 GL x

Rs. 100 Per

1000 GL = 960)

Rs. 40 Rs. 920 920 x 749 x

12= 8,268,960

2 B.O.Q

163

Rs. 480 (9600

GL / 1000 GL x

50% for B.O.Q)

Rs. 40 Rs. 440 440x163x12=

860,640

Total 9,129,600

Water charges were being recovered @ Rs. 960 per month

in Pakistan Navy formations.


executive replied that PAF Base Masroor was facing shortage of water

81

since long, therefore, rate of water charges were not revised. The reply

was not tenable.


January, 2017 was

apprised that recovery affected @ Rs. 40 per month was already on higher

side. The DAC directed that the matter be discussed with Audit to resolve

the issue within one week.

No record was produced or discussion held with Audit by

the executive till finalization of this report.

Audit suggests that either special circumstances under

which subsidized rate is being charges may be explained or pointed out

amount may be recovered expeditiously.

DP-S-177/2016-17

1.10.6 Non-deduction of Sales Tax on account of purchase

of furniture – Rs. 8.736 Million

Section 3 of Sales Tax Act, 1990 stipulates that subject to

the provisions of this Act, there shall be charged, levied and paid a tax

known as Sales Tax @ 17% of the value of taxable supplies made by a

registered person in the course of furtherance of any taxable activity

carried on by the person.

Project Shahbaz, Air Head Quarter, Islamabad, purchased

furniture items, costing to Rs. 39.606 million, during the year 2015-16.

However, Sales Tax of Rs. 8.736 million was not deducted on those

supplies.

When pointed out by Audit in June 2016, executive replied

that Sales Tax was not applicable on construction package.


January, 2017. The DAC was apprised that as per Clause-14(iii) of Sindh

Sales Tax on Services Act, 2011 Government‟s civil works were

82

exempted from levy of Sales Tax. The DAC directed that relevant record /

documents may be got verified from Audit.

No record / document was produced to Audit during

verification carried out on 1st February, 2016. The rule quoted by the

executive were not relevant as Audit‟s objection was not on non-deduction

of Sales Tax on services.

Audit suggests expeditious recovery of the Sales Tax

amount in question.

DP-S-313/2016-17

1.10.7 Non-recovery of training charges from foreign

trainees – Rs. 5.865 Million

JSI-4/2006 provides complete procedure for recovering of

training and allied charges from the Governments of foreign trainees

attending courses in various institutions of the Pakistan Armed Forces

through their respective embassies.

In PAF Base Masroor Karachi, Rs. 5,865,900 (US $

58,659) were outstanding against 34 foreign trainees from different

countries on account of training charges upto 31st December, 2014.


replied that recovery of outstanding training charges was in process.



that efforts be made to recover the outstanding amount expeditiously.


report.

Audit recommends expeditious recovery of the training

charges.

DP-S-174/2016-17

83

1.11 Loss to State

1.11.1 Loss to State due to excess consumption of Sui gas –

Rs. 21.369 Million

Under Rule-81(a) of Quarter and Rents 1985, “free supply

of sui gas shall be made at places where fire wood and K-II is so

authorized for cooking/heating purpose as per scale given in the rule.

Excess consumption shall be paid by the consumer at the supplying

agency rates”.

While examining the accounts of GE (Air) Rafiuqui, it was

noticed that an amount of Rs. 24,305,690 was paid to the SNGPL on

account of Sui Gas charges. The free authorization of barracks, messes,

and hospital came to Rs. 2,936,794, which resulted into loss to state due to

payment of sui gas bills in excess of free authorization.

When pointed out by Audit in September 2015, it was

replied that mess authorities would be approached for depositing the

amount.


15th

December, 2016. The DAC directed for verification of Board of

Officers for authorization of Sui Gas besides reconciliation of amount with

Audit.


report. Audit stresses for recovery of sui gas charges.

DP-N-203/2015-16


1.12.1 Un-authorized conclusion of contract beyond

financial power – Rs. 33.000 Million

Under Rule-89 of Financial Regulations Volume-I, 1986 as

amended vide Government of Pakistan, Ministry of Defence, letter No.

84

F.3/98/D-15, dated 23rd

February, 2008, the financial powers of Base

Commander, AOC and ACAS for concluding the contract are

Rs. 13,500,000, Rs. 6,000,000 and Rs. 4,500,000 respectively.

While examining the accounts of PAF Hospital MM Alam

Mianwali, it was noticed that contract valuing Rs. 3,300,0000 for life

saving medicine of 2014-15 was concluded by the AOC/ACAS beyond

financial powers. The sanction of contract was required to be obtained

from CAS instead of AOC, which resulted into unauthorized payment of

Rs. 33,000,000 and needed regularization action.

When pointed out by Audit in November 2015, it was

replied that sanctions for local purchase of NIV lifesaving medicines were

accorded by the OC hospital/Base Commander being competent authority.


15th

December, 2016. The DAC directed the executive to amend the

existing policy so as to remove ambiguity in future cases. The DAC

directed for verification of contracts from Audit.


report. Audit suggests for early regularization.

DP-N-443/2015-16

1.12.2 Un-authorized payment of Special Messing

Allowance/Daily Messing Allowance to Airmen and

Officers – Rs. 23.225 Million

According to Para-39 and 81 of Pay and Allowances

Regulation (PAF) 1998 & Ministry of Defence letter No. 3/331/PP&A

dated 8th

May, 1999, SMA is only admissible for trainings, camps and

exercises in operational area.

While examining the accounts of PAF Base Lahore and

Mushaf, it was noticed that SMA/DMA amounting to Rs. 23.225 million

was paid to officers, airmen and civilian employees who were deployed

85

for security duties within Base area, which was not declared operational

area and thus resulted into un-authorized payment of SMA/DMA.

When pointed out by Audit in November, 2015 it was

replied that the Bases had the status of operational area/activities keeping

in view of prevailing security situation, The reply was not acceptable, as

both bases were not declared as operational area.


15th

December, 2016. The DAC directed for verification of deployment

orders duly issued by the competent authority from audit.


report. Audit stresses for implementation of DAC‟s directives.

DP-N-274 and 437/2015-16

1.12.3 Irregular construction of non-public buildings from

public fund – Rs. 5.660 Million

Rule-72(a) of Quarter and Rents Rules, 1985 refers to re-

appropriation of surplus military buildings, if required for use as welfare

centers, without any extra cost to Government subject to the condition that

such re-appropriation shall not entail new construction at a later date.

In Project Shahbaz, Air Head Quarters (AHQ), Islamabad,

a building for PAFWA, a non-public organization, was constructed,

costing to Rs. 5,660,722 through the budget allocation (2014-15) for

Project Shahbaz, AHQ Islamabad from Defence budget in violation of

rules. The MES Scale of Accommodation for Defence services also did

not authorize construction of such building.

When pointed out by Audit in June 2016, the executive

replied that in order to facilitate the Base personnel, the building was

constructed as per policy in vogue. The reply of executive was not

acceptable as expenditure was incurred in violation of rules.

86


January, 2017. The executive stated that PAFWA Center was constructed

as training center for welfare of troops. The same was allowed under Para

16 of the Defence Services Accommodation Scales, 2000 and Rule-72(a)

of the Quarter & Rents Rules, 1985. The DAC directed that the relevant

record / document may be provided to Audit for verification.

The rules had been misquoted in the DAC meeting. The

Para 16 of the Defence Services Accommodation Scales 2000, does not

mention training center. Moreover, the Rule-72(a) of Quarter & Rents

Rules, 1985 does not allow construction of building for use as welfare

center.


DP-S-316/2016-17




According to Rule-12 (2) of Public Procurement Rules

2004, “all procurement opportunities over two million rupees should be

advertised on the Authority‟s website as well as in the other print media or

newspapers having wide circulation. The advertisement in the newspapers

shall principally appear in at least two national dailies, one in English and


While examining the accounts of GE (Air) Mushaf

Sargodha, it was noticed that 02 contracts amounting to Rs. 15.614

Million were concluded without calling for open tendering in newspapers

and PPRA‟s website, which was violation of above PP rule.


that expenditure would be regularized.

87


15th

December 2016. The DAC directed for verification of relevant record.


report. Audit suggests prompt action for regularization of mis-procured

amount besides fixing responsibility on concerned officers/officials.

DP-N-152/2016-17

1.13.2 Irregular award of contracts without open

tendering – Rs. 2,299.610 Million

As per Rule 15, PPRA Rules 2004, a procuring agency,

prior to the floating of tenders, invitation to proposals or offers in

procurements proceedings, may engage in pre-qualification of bidders in

case of services, civil works etc.

In Project Shahbaz, Air Head Quarter, Islamabad three

different contracts for construction work, costing Rs. 2,299.610 million,

were concluded in 2013-14. It was observed that contracts were awarded

after advertisement for pre-qualification of contractors was published in

newspapers. However, no tenders were floated after pre-qualification, as

required under Rule-15 of PPRA Rules, 2004.

When pointed out by Audit in June 2016, the executive

replied that PPRA rules were followed. Advertisement was published in

newspapers on 25th

July, 2013 and on PPRA website.


January, 2017. The executive stated that newspapers clippings had been

obtained from concerned quarters for verification. The DAC directed that

relevant documents / record be provided to Audit for verification.

Verification of documents / record was carried out on 1st

February, 2017. It was verified from record that only advertisement for

pre-qualification of contractors was published in newspapers.

88


DP-S-314/2016-17

1.13.3 Irregular award of contracts without open

tendering – Rs. 61.724 Million

As per Rule 12, PPRA Rules 2004, All Procurement

opportunities over two million rupees should be advertised on the

Authority‟s as well as in other print media or newspapers having wide

circulation. The advertisement in the newspapers shall principally appear

in at least two national dailies, one in English and the other in Urdu.

In two PAF units/formations different contracts for costing

Rs. 61.724 million were concluded without advertisement on PPRA

website/ newspapers. The details are listed below;

(Rs. in million)


1 Project Shahbaz, AHQ, Islamabad S-323 37.787

2 Project Shahbaz, AHQ, Islamabad S-333 20.167

3 PAF Base, Masroor, Karachi S-202 3.770

Total 61.724

When pointed out by Audit in March 2016 and June 2016,

the executive in respect para at serial No. 1 stated that the contract was

awarded to contractor on the basis of experience. In respect of para at

serial No 2, it was replied that tender was not published due to security

reasons. In respect of para at serial no 3, the executive stated that

contracts were offered to prequalified contractors. The replies of the

executive were not convincing as deviation from advertisement

requirement was permissible with prior approval of the authority.

The paras were discussed in the DAC meetings held on 10th

and 30th

January, 2017. The DAC directed that relevant documents /

record be provided to Audit for verification.

89

Verification of documents / record of paras at serial No. 1

and 2 was carried out on 1st February, 2017. No documentary evidence

regarding prior approval for deviation from PPRA requirement was

produced. No progress regarding para at serial No. 3 was reported till



DP-S-323, 333 and 202/2016-17

1.13.4 Irregular procurement of medicine – Rs. 7.437

million

According to Rule-10 of PPRA Rules 2004, “Specifications

shall allow the widest possible competition and shall not favor any single

contractor or supplier nor put others at a disadvantage. Specifications shall

be generic and shall not include references to brand names, model

numbers, catalogue numbers or similar classifications. However if the

procuring agency is convinced that the use of or a reference to a brand

name or a catalogue number is essential to complete an otherwise

incomplete specification, such use or reference shall be qualified with the

words “or equivalent”.

In PAF Base Malir, Senior Medical Officer, issued demand

for medicines using brand names instead of generic names in violation of

rule during the year 2014-15. Thus entire expenditure of Rs. 7,437,755

stood as irregular.

When pointed out by Audit in December 2015, executive

replied that purchases were made as per prescription of specialists with

brand names on basis of efficacy.

The reply is not tenable. As per Rule 10, brand names

could be used only with the words “or equivalent”.


December, 2016

directed that relevant record be provided to audit for verification.

90

No record was produced to Audit for verification till



DP-S-136/2016-17

91

Pakistan Navy


1.14.1 Non-recovery of allied charges – Rs. 38.009 Million

According to Rule-442 of Defence Services Regulations for

MES, 1998, GE is responsible for making demands for payment of all

revenues and for taking steps for its prompt realization.

In three MES formations of Navy Rs. 38.009 million were

outstanding on account of allied charges up to June 2016. The details are

as under;

(Rs. in million)

S. No. Unit/Formation DP No. Amount

1 GE (Navy) East, Karachi S-326 32.268

2 GE (Navy) South, Karachi S-243 4.040

3 GE (Navy) Logistics Karachi S-327 1.701

T o t a l 38.009

When pointed out by Audit in August 2016 and October

2016, the executive replied that efforts were being made to recover the

outstanding amount.

The paras were discussed in the DAC meetings held on 12th

and 30th

January, 2017. The DAC was apprised in respect of para at serial

No 1 that Rs 15.375 million had been recovered. In case of remaining

paras, the executive stated that efforts were being made to recover the

amount. The DAC directed that amount recovered so far be got verified

from Audit and balance amount be recovered within three months.

No record /documents were produced to Audit for


92


amount.

DP-S-326, 243 and 327/2016-17

1.14.2 Non-recovery of income tax from contractors –

Rs. 26.986 Million

As per Section-153 of Income Tax Ordinance 2001, as

amended from time to time, every prescribed person making a payment for

rendering or providing of services is liable to deduct tax from the gross

amount of the bills at prescribed rates.

In various Naval units, a sum of Rs 26.986 million on

account of income tax was not deducted/less deducted from the final bills

of contractors. The details are as under;

(Rs. in million)


1 GE (Navy) Central Construction, Karchi S-259 8.531

2 GE (Navy) Construction, Turbat S-149 5.897

3 PNS Shifa, Karachi S-131 5.068

4 PNS Shifa. Karachi S-126 2.832



7 GE (Navy) East, Karachi S-06 0.799

8 GE (Navy) Comwest, Gawadar S-40 0.518

9 GE (Navy) Fleet, Karachi S-182 0.503


11 PNS Karsaz, Karachi S-37 0.259

T o t a l 26.986

When pointed out by Audit from August 2015 to August

2016, the executive replied that recovery in some cases was under process,

whereas in other cases income tax was rightly deducted.

93


and 12th

January,

2017 was apprised in respect of paras at serial No 2, 6, 9 and 11 that

recovery was in process. In respect of paras at serial No 1, 3, 4, 5, 7, 10,

and 12, the executive stated that the recovery of Income Tax was rightly

deducted. The DAC directed that balance amount of tax may be recovered

and got verified from Audit. The executive was also directed to provide

record/ documents to Audit for examination/verification that Income Tax

was rightly deducted.

No record / documents were produced to Audit till



amount.

DP-S 259, 149, 131, 126, 153, 260, 06, 40,182, 07 and 37 /2016-17

1.14.3 Non-recovery of stamp duty from contractors –

Rs. 16.370 Million

As per Section 35 of Stamp Act 1899, no instrument

chargeable with duty shall be admitted in evidence for any purpose by any

person having, by law or consent of parties, authority to receive evidence,

or shall be acted upon, registered or authenticated by any such person or

by any public officer, unless such instrument is duly stamped.

As per Government of Sindh Finance Act 2009, “Stamp

duty of thirty paisa for every hundred rupees or part thereof of the amount

of the contract will be charged”.

In various units/formations of Pakistan Navy Rs. 16.370

million on account of stamp duty was not recovered against certain

contracts during the years 2014-15 and 2015-16. The details are as under;

(Rs. in Million)


1 GE (Navy) Construction-I, Ormara S-365 6.195

2 GE (Navy) Central Construction, Karachi S-257 4.304

94

3 PN MSD, Karachi. S-62 1.300

4 GE (Navy) Construction Turbat S-104 1.099

5 AGE (Navy) Mehran, Karachi S-188 0.927

6 PNS Raza, Karachi S-74 0.761

7 AGE (Navy) Maint. Manora, Karachi S-181 0.511

8 GE (Navy) South, Karachi S-298 0.446

9 CMES (Navy) Comcoast, Karachi S-05 0.326


11 CMES (Navy) Comlog, Karachi S-04 0.205

T o t a l 16.370

When pointed out by Audit from February 2015 to October

2016, the executive stated that Finance Act of Government of Sindh was

not applicable on departments working under the Federal Government.


, 12th

and 30th

January, 2017 directed that clarification from MoD may be obtained and

produced to Audit for verification.

No progress of the case was reported to Audit till



amount.

DP-S-365, 257, 62 104, 188, 74, 181, 298, 05, 130, and 04/2016-17

1.15 Loss to State

1.15.1 Blockage of public money due to non-disposal of

inventory – Rs. 3,476.918 Million

According to Rule 0214 (3) (a) (2) of Financial Regulations

(Navy) 1993, disposal of unserviceable, waste and scrap stores of any

value held on charge of various PN Store Depots, will be arranged by

commanding officers of the respective stores depots through public

auction in accordance with instructions contained herein and detailed

procedure laid down in Annex-E.

95

In PNS Raza, Karachi, the Standing Stores Disposal

Committee (SSDC) in its meeting held on 19th

June, 2013, declared

20,384 inventory items of aircrafts as surplus/redundant, having assessed

value of Rs. 3,476,917,759. The SSDC recommended disposal of the

items by finding potential buyers. However, the same could not be

disposed till the close of audit.


stated that after SSDC‟s recommendations, continuous efforts had been

made to sell the spares to prospective buyers on every platform.


January, 2017

directed that efforts be made for disposal of the store at the earliest.


report.

Audit suggests early disposal of the inventory.

DP-S-100/2016-17


1.16.1 Irregular administrative sanction and conclusion of

contracts beyond sanctioning power – Rs. 1,082.473

Million

According to Table A of the Para 25 and the Para 389 of

Defense Services Regulations for MES, 1998, the power of administrative

sanction of DCNS is upto 30 million and the contractual powers of E-in-C

and DW& CE are Rs. 35 million and Rs. 30 million, respectively.

In GE (Navy) Central Construction, Karachi, seven

contracts, each valuing more than Rs. 35 million, totaling to Rs. 1,082.473

million were sanctioned by DCNS(A) and contracts accepted by DW&CE,

beyond their respective powers. Each contract required to be sanctioned

by Government of Pakistan and accepted by E-in-C with prior financial

concurrence.

96


stated that contracts were concluded by DW& CE. The GE office only

executed the works.



that action be taken to get the violation regularized.


report.


DP-S-256/2016-17

1.16.2 Irregular construction of building – Rs. 174.151

Million

According to the items mentioned in BQ of construction

contracts, the number of days required for completion of ground floor

were as under:

As per BQ No. of Days

1. Excavation 2

2. PCC foundation 5

3. RCC footing foundation 28

4. Beams 28

5. Roof slabs 28

According to BQ minimum days required for ground floor 91

In GE (Navy) Central Construction, Karachi, 3 contracts

for construction of three separate buildings (ground plus three floors each)

amounting to Rs 174,151,053 were executed during 2015-16. It was

observed that each building was completed and paid within a period of 80

to 86 days. However, minimum 91 days were required for execution of

work for only ground floor structure.


stated that the procedure was adopted as mentioned in Schedule of Rates.

97

DAC in its meeting held on 12th

January, 2017 was

apprised that works were executed under para -17 of DSR 1998. The DAC

directed to hold fact finding inquiry, fix responsibility, take disciplinary

action and get the irregular work regularized.


report.


DP-S-265/2016-17

1.16.3 Unauthorized payment of final bill to contractors

before completion of works – Rs. 30.571 Million

According to Para 412 of Defence Services Regulations-

1998, payment on running account may be made by the GE for work done.

The amount of such payment shall not exceed the difference between the

approximate value of work done and the cost of stores issued up-to-date.

In AGE (Navy) Mehran Karachi, various contracts were

concluded by the CMES/DW&CE and work orders issued by the AGE

(Navy) Mehran. A sum of Rs. 30, 571,143 was paid to contractors against

the final bills, but works were still in progress as per record. The final bills

were paid to contractors in advance just to avoid lapse of funds.

When pointed out by Audit in September 2016, the

executive did not furnish reply.

The para was discussed in the DAC meeting held on 31st

January, 2017. The DAC directed the executive to hold a fact finding

inquiry, fix responsibility and take disciplinary action those found

responsible. Furthermore, regularization action may also be initiated.


this report.

Audit suggests regularization of unauthorized payment.

DP-S-331/2016-17

98

1.16.4 Irregular purchase of non-schedule furniture –

Rs. 2.321 million

Section II, Para 182 of Defence Services Regulations for

MES, 1998 states that Articles of Barrack & Hospital furniture will be

manufactured in accordance with the general descriptions and dimensions

sanctioned by the Government of Pakistan. Further, Section II, Para-181

states that authorized scale of furniture will not be exceeded without the

previous sanction of the Government of Pakistan.

In CMES (Navy), COMPAK, a sum of Rs. 2.321 million

was spent on procurement of special/non-schedule furniture items under

different contracts without obtaining sanction from the Government of

Pakistan as per rules. Therefore, the expenditure was held irregular in

audit.


executive stated that HQ COMPAK had been approached for Ex-Post

Facto sanction.


January, 2017

directed that violation may be got regularized from competent Authority.


DP-S-111/2016-17





2004 “procurements over one hundred thousand rupees and up to the limit

of two million rupees shall be advertised on the Authority‟s website in the

manner and format specified by regulation by the Authority from time to

time. These procurement opportunities may also be advertised in print

media, if deemed necessary by the procuring agency”.

99

While examining the accounts of PNS Zafar Islamabad, it

was noticed that an expenditure amounting to Rs. 2.600 million was

incurred on procurement of stores for improvement of security without

calling for open competition through newspapers and PPRA‟s website,

which was violation of above PP Rule.


replied that due to high level of security threats, option of advertisement

was not opted. However, admin approval was obtained for inviting

contractors having cleared security from Naval for said work in the light

of PPRA Rule-42(c).


16th

December, 2016. The DAC directed for verification of competent

authority orders invoking emergency for procurement of equipment.


report. Audit stresses for early regularization action.

DP-N-85/2016-17

1.17.2 Finalization of tenders in violation of PPRA Rules –

Rs. 519.869 Million

According to PPRA Rule-2 (1) (c) “competitive bidding”

means a procedure leading to the award of a contract whereby all the

interested persons, firms, companies or organizations may bid for the

contract and includes both national competitive bidding and international


In PN Medical Store Depot, Karachi tenders for

procurement of drugs/medicines, totaling to Rs. 519.869 million were

published inviting bids only from registered firms during the year

2014-15. Invitation of tenders from only registered firms was in violation

of PPRA Rules which required open / competitive bidding in procurement

process.

100


executive stated that scrutiny method was adopted due to security reasons

and only registered persons were allowed to participate in tenders as

directed by HQ COMKAR.

Reply was not convincing as PPRA Rules provided equal

opportunities to all interested parties while registration imposed bar and

encouraged collusive/ limited competition to favor a few.


January, 2017

directed the executive to get the violation of PPRA Rules regularized from

the competent Authority.

No progress of the case was reported till finalization of this

report.


DP-S-88/2016-17

1.17.3 Conclusion of contracts through negotiations in


Rule-40 of PPRA Rules, 2004, states that “Save as

otherwise provided, there shall be no negotiations with the bidder having

submitted the lowest evaluated bid or with any other bidder; Provided that

the extent of negotiation permissible shall be subject to the regulations

issued by the Authority.” Furthermore, Rule 38 states that “The bidder

with the lowest evaluated bid, if not in conflict with any other law, rules,



validity.”

In PN Medical Store Depot, Karachi various firms

submitted bids in response to tenders invited by the Unit, amounting to

Rs. 194.864 million. The executive first selected firms from among the

bidders without regard to rates offered by them. Contracts were then

101

awarded to the selected firms after holding negotiations. Thus, the entire

procurement process was completed in violation of PPRA Rules.


executive stated that Standard Operating Procedure for local purchase

allowed price reasonableness meetings for brands selected on the basis of

quality. Final approval was accorded by DGMS.

The reply is not tenable as the procurement was done in

complete violation of the PPRA Rules quoted above.

The para was discussed in the DAC meetings held on 11th

January, 2017. The DAC directed that documents be provided to Audit for

examination/verification.

Neither documents were produced for examination /

verification nor any progress reported to Audit till finalization of this

report.


DP-S-90/2016-17

1.17.4 Award of works without publication of tender –

Rs. 190.469 Million

According to Rule 12 (1) of PPRA Rules 2004,

procurements over one hundred thousand rupees and up to the limit of two

million rupees shall be advertised on the Authority‟s website in the

manner and format specified by regulation of the Authority from time to


media, if deemed necessary by the procuring agency.

In GE (Navy) Central Construction, Karachi, six contracts

amounting to Rs 190.469 million were awarded to contractors without

publication of tenders during 2012 to 2016. To avoid publication of

tender, the executive published corrigenda in newspapers for change in

date of opening of tender, after expiry of the original date fixed for

102

tenders‟ opening. The Construction Account of each work indicated that

payment was made only for publication of corrigenda. Further,

documentary evidence (news clippings) of publication of original tenders

were not produced for verification. The details are as under;

(Rs. in million)

S # Contract No DP No. Amount

1 ENC-N-23/2016 & ENC-N-24/2016 S-255 139.136

2 CEN-N-43/2015 S-251 16.341

3 CEN-N-16/2013 S-253 15.349

4 CEN-N-02/2014 S-250 13.235

5 CEN-39/2013 S-252 6.408

Total 190.469


stated that contracts were concluded by DW&CE. The GE office only

executed the work after receiving the acceptance letter.


January, 2017 was

apprised that the dates were revised for issuance and opening of tenders.

The DAC directed to hold fact finding inquiry, fix responsibility, take

disciplinary action and initiate regularization action.


report.


DP-S-255, 251, 253, 250 and 252/2016-17

1.17.5 Award of contracts without open tendering –

Rs. 156.624 Million

According to Rule-12(1,2) of PPRA-2004, all procurements

over one hundred thousand rupees and upto the limit of Rs. 2.00 million

shall be advertised on the authority‟s website. Further, procurement over

Rs. 2.00 million should be advertised on the authority‟s website as well as

in two national dailies, one in English and the other in Urdu.

103

During audit of different Naval units/formations, it was

observed that contracts were concluded without advertisement on PPRA

website/ newspapers which was violation of Rule-12 of PPRA 2004. The

details are as under:-

(Rs. in million)


1 GE (Navy) Eastern, Karachi S-42 44.101



4 PNS Bahadur, Karachi S-31 21.360


6 AGE (Navy) Mehran, Karachi S-187 8.995

7 PN MSD, Karachi S-63 8.755


Total 156.624

When pointed out by Audit from December 2015 to

October 2016, the executive stated that all codal formalities were fulfilled.

However, the replies of the units/formations were not convincing as no

substantive evidence was provided.

The paras were discussed in DAC meetings held on 11th

and 12th

January, 2017. The DAC directed that documents/relevant record

be provided to Audit for examination/verification.

No record was provided to Audit till finalization of this

report.


DP-S-42, 127, 261, 31, 258, 187, 63 and 128/2016-17

1.17.6 Loss due to mis-procurement of medicines –

Rs. 124.851 Million

Rule 29 of PPRA Rules, 2004 states that procuring

agencies shall formulate an appropriate evaluation of criteria, listing all

104

relevant information against which a bid is to be evaluated. Such

evaluation criteria shall form an integral part of the bidding documents.

Failure to provide for an unambiguous evaluation criteria in the bidding

documents shall amount to mis-procurement.

According to PPRA Rule 38 “The bidder with the lowest

evaluated bid, if not in conflict with any other law, rules, regulations or

policy of the Federal Government, shall be awarded the procurement

contract, within the original or extended period of bid validity.”

In PN Medical Store Depot, Karachi, purchase orders were

issued for medicines to companies of choice without considering the

lowest rates offered during the financial year 2014-15. No evaluation

criteria were formulated to be made an integral part of bidding documents.

As a result, the Government sustained a loss of Rs. 124.851 million.


executive stated that brands were selected by a committee appointed by

DGMS. Since patients‟ health care was of prime importance, the quality of

medicines was never compromised for economy.

The para was discussed in DAC meeting held on 11th

January, 2017. The DAC was apprised that quotations were called as per

PPRA Rules. From the quoted brands, best brands having economy and

quality were selected. The DAC directed that violation of PPRA Rules

may be got regularized.


report.


DP-S-91 2016-17

105

1.17.7 Irregular contract for supply of medicine –

Rs. 112.638 Million

According to Rule 10 of PPRA Rules 2004, “Specifications

shall allow the widest possible competition and shall not favor any single

contractor or supplier nor put others at a disadvantage. Specifications shall

be generic and shall not include references to brand names, model

numbers, catalogue numbers or similar classifications. However if the

procuring agency is convinced that the use of or a reference to a brand

name or a catalogue number is essential to complete an otherwise

incomplete specification, such use or reference shall be qualified with the

words “or equivalent”.

In PNS Shifa, Karachi, an amount of Rs. 112.638 million

was expended for procurement of medicines during the financial year

2014-15, using brand names of medicine instead of generic names in

violation of above Rule. It indicated that purchases were made on

favoritism basis instead of competitive rates.

When pointed out by Audit in March 2016, the executive

replied that PNS Shifa‟s medical store purchased medicines which were

NA in PVMS / NIV and NIF. It was also stated that local purchase of

medicines could not be made on generic names basis as consultants were

prescribing medicines using brand names.


January, 2017

directed to hold fact finding inquiry, fix responsibility, take disciplinary

action and get the violation regularized.


report.


DP-S-140/2016-17

106

1.17.8 Conclusion of contract by giving less than

prescribed response time in bidding process –

Rs. 5.750 Million

According to Rule-13(1) of PPRA 2004, under no

circumstances the response time shall be less than 15 days for national


In GE (Navy) Central Construction, Karachi, tender for a

construction work amounting to Rs. 5.750 million was published in two

newspapers on 10th

March 2016. The date for opening of tender was given

as 18th

March 2016. Thus, response time of only 8 days was allowed,

which was violation of above Rule.


stated that contract was awarded as per financial and contractual powers of

CMES. The GE office only executed and monitored the work.

The DAC in its meeting held on 12th January, 2017

directed for regularization of the expenditure.


report.


DP-S-271 /2016-17

1.17.9 Award of contract before the publication of tender


Rule-38 of Public Procurement Rules, 2004, “the bidder

with the lowest evaluated bid, if not in conflict with any other law, rules,



validity”

Further, Rule-12(1) of PPRA Rule-2004 stipulated that

Procurements over one hundred thousand rupees and up to the limit of two

107

million rupees shall be advertised on the Authority‟s website in the

manner and format specified by regulation by the Authority from time to


media, if deemed necessary by the procuring agency.

In GE (Navy) Eastern Karachi, tender advertisements of 06

works for uploading on PPRA web site, showing the date of opening of

tenders as 30th

September 2014, were sent to PPRA Authority on 11th

September, 2014. However the contracts for above works were accepted

by Garrison Engineer between 1st September and 09

th September, 2014.

This resulted in irregular expenditure costing Rs. 3,637,490.

When pointed out by Audit in December, 2015 executive

replied that works were uploaded on PPRA website. More over due to

urgency for commencement / completion of work from users‟ side, the

contracts were concluded before due course of time.


January, 2017 was

apprised that the irregularity occurred as the concerned staff was not aware

of PPRA Rules. The DAC directed to hold fact finding inquiry, fix

responsibility, take disciplinary action and regularize the expenditure.


report.


DP-S-45/2016-17

108

Military Accountant General


1.18.1 Non-recovery of House Rent Allowance from

Officers living in married accommodation –

Rs. 2.029 Million


Married officers not provided with Government/hired/requisitioned

married accommodation shall be entitled to House Rent Allowance.

While examining the accounts of MAG Office Rawalpindi,

it was noticed that 08 civilian officers/officials living in MOQs were also

drawing HRA in their monthly pays, which was violation of rule cited

above.

When pointed out by Audit in April 2015, it was replied

that HRA was admissible at specified accommodation subject to recovery

of assessed or 5% rent. The reply was not acceptable as HRA to officers

living in Government accommodations was not admissible.


18th

October, 2016. The DAC pended the DP till formulation of new

policy regarding HRA.


report. Audit stresses for early recovery of HRA from officers.

DP-N-405/2015-16

1.18.2 Non-recovery of hoarding charges – Rs. 3.437

Million

Under Section-14(1)(b) of the Auditor General‟s

(functions, powers and terms and conditions of service) Ordinance No.

XXIII of 2001, the Auditor General of Pakistan shall, in connection with

the performance of his duties under this ordinance have authority to

109

require that any accounts, book, papers and other documents which deal

with or form the basis of or otherwise relevant to the transactions to which

his duties in respect of audit extend, shall be sent to such place as he may

direct for his inspection. After 18th

Amendment in Constitution of Islamic

Republic of Pakistan 1973, there is no room for denial of disclosure and

withholding of accounts from Auditor General of Pakistan.

During audit of CMA (LC) Lahore Cantt, it was observed

that 02 hoarding boards were located near CMA Dispensary but rent

recovery record was not produced to audit.

When pointed out by Audit in July 2015, no reply was

furnished by the executive.


18th

October, 2016. The DAC was apprised that relevant

documents/record had already been provided to audit. The DAC directed

to provide relevant record/documents for audit verification.

During verification of auditable documents, it was

transpired that rent on account of hoarding / sign boards valuing Rs. 3.437

million was yet to be recovered. No further progress was reported till

finalization of this report. Audit stresses for immediate expediting of

recovery pointed out.

DP-N-185/2015-16


1.19.1 Un-authorized advance payment of electricity bill

to WAPDA – Rs. 2.840 Million

According to Rule-51 of Financial Regulations (Volume-II)

1986, “It is not permissible to draw any money to prevent the lapse of

amounts provided in estimates”.

While examining the accounts of Dy. CAAF Lahore, it was

noticed that an advance amounting to Rs. 2,840,000 on account of

110

electricity bills was paid to WAPDA authorities in violation of above rule,

which need regularization action.

When pointed out by Audit in October 2015, it was replied

that the matter had already been referred to formation concerned for

resolving the issue. The reply was not agreed to as incurring of

expenditure merely to avoid lapse of funds was not permissible under

rules.


18th

October, 2016. The DAC observed that making advance payments

against utility bills has become a recurring feature to exhaust available

funds at the close of financial year. The DAC directed to regularize the

expenditure and to avoid recurrence of such cases in future.



DP-N-427/2015-16



Procurement Rules


According to Rule-12 (2) of PP Rules-2004, “all

procurement opportunities over two million rupees should be advertised

on the Authority‟s website as well as in the other print media or

newspapers having wide circulation. The advertisement in the newspapers



While examining the accounts of E-section CMA (LC)

Lahore, it was observed that contract agreements worth Rs. 12,170,809 as

detailed below for supply of furniture items were concluded during the

financial year 2014-15 by the Garrison HQs of different stations without

111

calling for open competition through newspaper and PPRA‟s website,

which was violation of above PP rules.

S.

No.

Contract Agreement/Job

No.

Work

Awarded by

Contract

awarded to

Total amount

of contract

(Rs.)

1 No. SC/SLK/01 of 2014-15

(Job No. 1613 of 2014-15)

Garrison HQ

Sialkot

M/S SAM

Traders Gujrat

2,482,584

2 LC/LHR/05 of 2014-15

(Job No. 1680 of 2014-15)

Garrison HQ

Lahore

M/S Khokhar

Wood Crafts

Lahore

2,382,575

3 GC/KHN/02 of 2014-15

(Job No. 1649 of 2014-15)

Garrison HQ

Kharian

M/S SAM

Traders Gujrat

2,375,250

4 No. GC/SGD/03 of 2014-15

(Job No. 1688 of 2014-15)

Garrison HQ

Sargodha

M/S SAM

Traders Gujrat

2,469,150

5 GC/KHN/03 of 2014-15

(Job No. 1689 of 2014-15)

Garrison HQ

Kharian

M/S SAM

Traders Gujrat

2,461,250

Grand Total Rs. 12,170,809

When pointed out by Audit in July, 2015 the Accounts

authorities replied that concerned formations were approached to submit

replies on audit observations. The reply was not correct, as compliance of

rules was required to be checked by Accounts authorities during pre/post

audit of vouchers.


18th

October, 2016. The DAC directed the executive to get the relevant

documents and record verified from Audit.

During verification, no relevant record was provided by

executive. Audit suggests for early regularization action.

DP-N-309/2015-16

112

CHAPTER-2

Ministry of Defence Production

2.1 Introduction

Ministry of Defence Production deals with procurement,

indigenous production and manufacture of defence equipment and stores.

This Ministry negotiates agreements and Memorandums of Understanding

(MoUs) for foreign assistance or collaboration, loans for purchase of

military stores, technical knowledge and transfer of technology. It also

deals with export of defence products, marketing, and promotion of

activities relating to export of defence products and procurement and

research & development related matters of the defence sector. Under

Armed Forces Development Plan this Ministry has undertaken mega

projects like JF-17, Al-Khalid Tank, F-22P Frigate and AWACS Air

Refueling System as well as F-16 Block 52, Radar System etc.

2.2 Brief comments on the status of compliance with PAC's

directives.

The status of compliance of Public Accounts Committee (PAC)

directives for the Audit Reports from 1985-86 to 2015-16 discussed during

its various meetings held from July, 1992 to December, 2016 is given

below:-

Year Total

Paras

No. of Paras

Discussed

Compliance

Made

Compliance

awaited / Non

Complied

Percentage

of

Compliance

1 2 3 4 5 6

1985-86 15 01 0 01 0%

1986-87 12 0 0 0 0%

1987-88 17 13 01 12 7.6%

1988-89 14 05 0 05 0%

1989-90 14 02 0 02 0%

1990-91 10 02 01 01 50%

1991-92 15 04 0 04 0%

113

1992-93 15 03 0 03 0%

1993-94 26 04 0 04 0%

1994-95 22 0 0 0 0%

1995-96 28 12 03 09 25%

1996-97 91 63 15 48 24%

1997-98 55 05 0 05 0%

1998-99 0 0 0 0 0%

1999-00 86 33 03 30 9%

2000-01 140 48 34 14 17%

2001-02 44 27 10 17 37%

2002-03 0 0 0 0 0%

2003-04 01 01 01 0 100%

2004-05 08 08 04 04 50%

2005-06 27 06 05 01 83%

2006-07 07 06 02 04 33%

2007-08 08 08 08 0 100%

2008-09 16 03 03 03 100%

2009-10 Report not yet discussed







Total 671 254 90 167 35.433%

Ministry of Defence Production fully complied with only 90

PAC‟s directives out of 254 which indicates that compliance of PAC

directives was very slow and the Principal Accounting Officer should take

necessary steps to expedite compliance of PAC‟s directives.

114

Audit Paras


2.3.1 Non-imposition of L.D charges USD 34,625

According to Para-I of Chapter-XI of Purchase Procedures

& Instructions 2002, the specified delivery period is the essence of the

contract. All the deliveries must be completed by the specified date. Upon

failure by the supplier to deliver the stores within the stipulated time frame

the purchaser has to resort to the following in the best interest of state.

(a) To cancel the contract on the firm‟s risk and expense in

case of complete failure.

(b) To impose liquidated damages @ 2% per month up to a

maximum 10% against the unsupplied stores.

While examining the accounts of Aircraft Manufacturing

Factory, Kamra it was noticed that delivery period against 12 contracts

valuing USD 346,249.89 were neither extended by procuring agency nor

LD charges amounting to US $ 34,625 were imposed under relevant

clause of contract.

When pointed out by Audit in February 2016, it was replied

that all the contracts pertained to current financial year and LD charges

would be imposed on receipt of payment documents of the supplier. The

reply was not acceptable, as the contract delivery period was already

expired and needed imposition of LD.


7th

November, 2016. The DAC directed the executive to take following

actions: imposition of LD charges, amendment in delivery period and

finalization of contract.

115

During verification, relevant record was not produced to

audit. Audit stresses for implementation of DAC‟s directive.

DP-N-76/2016-17

2.3.2 Non-recovery on account of liquidated damages –

Rs. 4.470 Million

According to Para-I of Chapter-XI of Purchase Procedures

& Instructions 2002, upon failure of supplier to deliver the stores within

the stipulated time frame the purchaser has to resort to the following in the

best interest of state.

(a) To cancel the contract on the firm‟s risk & expense in case

of complete failure.

(b) To impose liquidated damages @2% per month up to a

maximum 10% against the unsupplied stores.

While examining the accounts of Director General

Procurement (Army) Rawalpindi, it was noticed that an amount of

Rs.4,470,008 was lying outstanding on account of liquidated damages

against Contract No‟s 27-0979-3-0 dated 30th

June, 2007 and 27-1147-2-0

dated 30th

June, 2010, which needed recovery action.

When pointed out by the Audit in January, 2016 it was

replied that CMA (DP) Rwp was already proposed for recovery of LD

charges of Rs. 3,237,275 in the light of DGP (Army) letter dated 3rd

January, 2014.


14th

December, 2016. The DAC directed that recovered amount be got

verified from audit.

During verification, relevant record was not provided by

the executive. Audit stresses for early recovery action.

DP-N-60/2016-17

116

2.4 Loss to State

2.4.1 Loss to State due to non-replacement of rejected

stores – Rs. 36.529 Million

Para-02 of standard warranty/guarantee clause of contract

provides that in case of failure to replace the defective stores free of cost

within a reasonable period specified by the purchaser, the suppliers will

refund the relevant cost.

During audit of Mirage Rebuild Factory, Kamra it was

noticed that the stores valuing Rs. 36.529 million against six contracts

were found defective and rejected during inspection. Technical authorities

raised discrepancy reports during the period from 2013 to 2015 but neither

defective stores was replaced by the firms nor 80% payment already made

to firms on shipment documents against rejected stores was recovered by

the procuring agency.


replied that replacement of rejected items was ongoing process and firms

were being pressed hard for its early replacement.


7th

November, 2016. The DAC directed for imposition of LD charges on

all firms.



DP-N-504/2015-16

2.4.2 Loss to State due to un-necessary blockade of

public money USD 342,319

According to Rule-480 of Army Regulation that purchase

may only be resorted to when the required stores is not held with

authorized supply agency and when circumstance of emergent requirement

arises.

117

During audit of Advance System Rebuilt Factory (ASRF)

Taxila, it was noticed that 54 different spares valuing US $ 342,319 were

procured and taken on charge vide CRV No. 07/OPT/S-5/ASRF dated 31st

December, 2013, but entire quantity of spares were held in balance till

April 2015, which resulted into un-necessary blockade of public money.

When pointed out by Audit in April 2015, it was replied

that due to sustenance of Tank Al-Khalid, T-80UD and Tank T-59 /69, a

delay was occurred to obtain expertise of a technical team for the project

which resulted non consumption of store.


November 15, 2016. The DAC directed for verification of relevant

record/documents by audit.

During verification, it was transpired that out of 54 items,

only 21 items having nominal value were issued and remaining 33 items

were still lying in stock. Audit stresses for holding of inquiry against

responsible(s).

DP-N-48/2016-17

2.4.3 Non-replacement of rejected stores USD 25,425 and

non-forfeiture of Performance Bank Guarantee

USD 9,350

According to Para-2 of Annex-E DPL-15 of contract

agreement No. 223/2006/5041/IT-Gen/CP/P-871/Proc dated 28th

April,

2006, in case of failure to replace the defective stores as stipulated in the

contract, the supplier hereby undertakes to refund the relevant cost as the

case may be in the currency/currencies in which paid plus freight charges.

During audit of HRF (M), HIT Taxila, it was noticed that

Part No. 8925578 Starter Engine Qty 53 valuing USD 25,425 were

rejected vide BMP Directorate letter dated 7th

April, 2008 and 15th

December, 2014 but firm consistently failed to replace the rejected stores.

118

Moreover, performance bank guarantee USD 93,500 was also required to

be forfeited but the same was already expired.

When pointed out by Audit, it was replied that the case had

already been taken up with BMP Dte for recovery action.


15th

November, 2016. The DAC directed for verification of relevant

record/documents from audit.

During verification, executive did not provide documentary

evidence regarding recovery of amount of rejected stores and forfeiture of

Performance Bank Guarantee.

Audit recommends for holding of inquiry to fix

responsibility.

DP-N-38/2016-17


2.5.1 Unauthorized extension in delivery period of

contract US $ 2.680 Million

According to Para-6(b)-3 of Chapter-VIII of Purchase

Procedures and Instructions 2002, the extensions beyond 18 months will

be granted by Secretary MoDP / DGDP in consultation with finance,

keeping in view value of contract i.e. upto Rs. 40.00 million by DGDP and

above Rs. 40.000 million by Secretary MoDP.

While examining the accounts of Director General

Procurement (Army) Rawalpindi, it was noticed from Contract Agreement

No. 27-1277-1-0 dated 30th

June, 2012 for procurement of Linear

Accelerator System (Dual Photon and Multiple Electron Energy) of

valuing US $ 26,80,000 (Rs. 246,024,000) was concluded. The record

revealed that extensions in delivery period beyond 18 months were

granted without obtaining approval of the Secretary MODP.

119

When pointed out by the Audit in January 2016, it was

replied that subject contract consisted of two consignments having two

different LCs. Extension request in delivery date was entertained on

merits. However, imposing of LD would be determined after shipment of

complete stores.


14th

December, 2016. The DAC directed to produce proprietary certificate

from Secretary MoDP and relevant documents of CRVs and imposition of

LD to audit for verification within two weeks.

During verification, relevant record was not provided by

the executive. Audit stresses early regularization action.

DP-N-70/2016-17

2.5.2 Unjustified expenditure on procurement of vehicles


Rule-51 of Financial Regulation Vol-II 1986 stipulates that

it is not permissible to draw any money to prevent the lapse of amounts

provided in estimates. Further, Rule-46(a) of Financial Regulation Vol-II

1986 explains that all payments should be made through pre-audit/post

audit from the concerned Controller of Accounts.

While examining the accounts of Mirage Rebuild Factory

Kamra, it was noticed that FOR Contract No.

PACB/741/51415107/0557/P-1 dated 30th

June 2015 was concluded with

M/s Suzuki Taxila Motors Taxila for procurement of 06 No‟s of vehicle.

Following discrepancies were pointed out:

i. The payment of FOR contracts was required to be paid

through CMA (ISO) on pre-audit basis whereas the

payment was released by Director Budget Accounts MRF

Kamra itself instead of placing funds on the disposal of

CMA (ISO) as per procedure in vogue.

120

ii. The contract for the above vehicles was concluded with

M/s Suzuki Taxila on 30th

June, 2015 and under Contract

Clause No. 03 the stores were required to be delivered on

29th

September, 2015. However, the firm provided all

vehicles on 10th

June, 2015 as transpired from CRV even

before conclusion of contract and got all the payment on

30th

June, 2015.

As per contract clause-13, 100% payment will be made to

firm on production of Certified Receipt Voucher (CRV) and inspection

reports. Relevant log books of vehicles revealed that the vehicles were

inducted/delivered in October, 2015 and inspection of vehicles were

carried out on 16th

October, 2015. The executive had violated the rules and

made 100% advance payment on the date of conclusion of contract i.e.

30th

June, 2015.


replied that the payment was made to the firm through DBA MRF as per

contractual clauses and the case was duly concurred by Member Finance

and the Chairman PAC Board. The reply was not convincing as releasing

of 100% advance payment to firm before actual deliveries and inspection

reports was against CA clause-13.


7th

November, 2016. The DAC directed the management to hold a court of

inquiry at PAC Board level and take disciplinary action.


report. Audit stressed for implementation of the DAC directives.

DP-N-68/2016-17

121





2004, all procurement opportunities over Rs. 2.000 million should be

advertised on the Authority‟s website as well as in order print media or

newspapers having wide circulation. The advertisement in newspapers


other in Urdu.

While examining the accounts of following procuring

agencies, it was noticed that stores valuing Rs. 93.630 million were

procured without calling for open tendering through newspapers as well as

PPRA‟s website, which was violation of above PP Rule.

(Rs. in Million)


1 DP-N-236/2015-16 PAC Board, Kamra 11.567

2 DP-N-71/2016-17 DGP (A), Rawalpindi 82.063

Total 93.630

When pointed out by the audit in November, 2014 and

January, 2016 it was replied that procurements were made after getting

approval from the competent authority.


on 7th

November, 14th

December, 2016. The DAC directed the executive

mentioned at serial No. 01 to justify reasons of spot tendering. In the

second case the DAC pended the draft para till regularization action.



DP-N-236/2015-16 and DP-N-71/2016-17

122

Annexure-I

MFDAC Paras (DG North) 2015-16 and 2016-17

Pakistan Army (Rs. in million)

S

No.

DP

No. Year Subject Unit/Formation Amount

1. N-5 2016-17 Non regularization of expenditure

incurred under para-17 of DSR GE (A) Jhelum 112.882

2. N-6 2016-17 Un-authorized local purchase of

stores GE (A) Multan 2.499

3. N-7 2016-17

Payment made to contractor

without completion of

work

AGE (Army)

Attock 20.346

4. N-17 2016-17 Un-authorized expenditure on

abnormal repair GE (A) Multan 15.325

5. N-21 2016-17 Un-authorized payment through

cash instead through cheque

MT Trg Bn

Nowshera 262.320

6. N-22 2016-17

Non-adoption of proper procedure

for supply of material & execution

of works

HQ 31 Corps

Bahawalpur 3.240

7. N-28 2016-17 Running of Military Farm in loss Military Farm

Renala Khurd 5.867

8. N-45 2016-17 Unjustified secured advance

payment

GE (Army) PMA

Kakul 20.449

9. N-47 2016-17

Un-authorized conclusion of

contract after 15th

April without

proving urgent military necessity

GE (NDU)

Islamabad 43.393

10. N-82 2016-17 Unauthorized release of advance

payment to contractors GE (A) Mangla 5.930

11. N-90 2016-17 Un-authorized conclusion of

contracts

AGE (Army)

Chunian 36.691

12. N-97 2016-17 Unauthorized expenditure on

abnormal repair GE (A) Multan 12.219

13. N-99 2016-17 Purchase of stores without

advertisement

HQ 31 Corps

Bahawalpur 233.895


advertisement

HQ 31 Corps

Bahawalpur 10.000

123


advertisement

HQ 31 Corps

Bahawalpur 150.000

16. N-102 2016-17 Unauthorized payment to

contractor

HQ 31 Corps

Bahawalpur 1.713

17. N-103 2016-17 Overpayment to contractor due to

non-application

HQ 31 Corps

Bahawalpur 12.704


non-application of schedule rates

HQ 31 Corps

Bahawalpur 1.009


non-application of schedule rates

HQ 31 Corps

Bahawalpur 7.838

20. N-110 2016-17 Non-recovery of assessed rent

from occupants

GE (Services)

Multan 4.349

21. N-111 2016-17

Irregular expenditure made out of

Defence Fund Grant for the FY

2015-2016

4 Engr Bn

Bahawalpur 8.355

22. N-127 2016-17 Irregular expenditure on

construction of different buildings

HQ 31 Corps

Bahawalpur 225.150

23. N-129 2016-17 Unauthorized release of advance

payment to contractors GE (A) Mangla 13.700

24. N-153 2016-17 Irregular conclusion of contracts GE (A)-I Lahore 1.399

25. N-155 2016-17 Irregular conclusion of contract

by splitting of financial powers

GE (A)-II

Bahawalpur 7.901

26. N-156 2016-17 Non recording of payment /

expenditure in contractor ledger

AGE (Army)

Risalpur 8.826

27. N-157 2016-17 Irregular expenditure due to

execution of special work

AGE (Army)

Risalpur 3.917

28. N-158 2016-17 Less recovery of income tax AGE (Army)

Risalpur 2.590

29. N-160 2016-17 Un-justified payment made to

contractors

AGE (Army)

Risalpur 43.363

30. N-161 2016-17 Irregular conclusion of contracts

in piecemeal

AGE (Army)

Risalpur 20.988

31. N-162 2016-17 Irregular conclusion of

contracts in piecemeal

AGE (Army)

Risalpur 89.393


in piecemeal GE (A) Terbela 102.683


in piecemeal GE (A) Terbela 90.788

34. N-168 2015-16 Un-authorized payment to

contractor

GE A-II

Bahawalpur 40.006

124

35. N-170 2015-16 Loss to state due to non-recovery

of market rent

GE (Services)

Okara 1.757

36. N-187 2015-16 Expenditure in excess of budget

allotment CMH Peshawar 24.727

37. N-188 2016-17 Less recovery of Income tax GE (A) Murree 2.698

38. N-189 2016-17 Less recovery of Income tax AGE (Army)

Bannu 4.742

39. N-192 2015-16 Non production of sales tax

invoices

GE A-I

Bahawalpur 2.669

40. N-193 2015-16

Un-authorized sanctioning of

work in piecemeal to avoid

Government approval

GE Army GHQ

Rawalpindi 6.227

41. N-198 2015-16 Un-authorized expenditure

beyond the financial powers PMA Kakul 4.950

42. N-203 2016-17 Blockade of Government money Arty Centre Attock 2.127

43. N-205 2016-17 Overpayment to contractors due

to less deduction of income tax GE (A) Murree 3.495

44. N-206 2015-16 Over payment to contractor GE Army GHQ

Rawalpindi 1.134

45. N-207 2015-16 Unauthorized expenditure of

flooring / tiling PMA Kakul Atd 5.400

46. N-208 2016-17 Un-authorized release of advance

payment to contractors

GE (Services)

Mangla 14.079

47. N-210 2016-17 Less recovery on account of

income tax from contractors GE (A) Abbottabad 5.765


account of electricity charges GE (A) Abbottabad 209.157

49. N-212 2016-17 Un-authorized payment on

account of IS allowance

HQ Sig Centre

Kohat 8.301

50. N-214 2016-17 Irregular conclusion of contracts Remount Depot

Mona 47.453

51. N-237 2015-16 Overpayment to contractor Remount Depot

Mona 1.770


Mona 3.727

53. N-240 2016-17 Unauthorized approval of work GE (A) Murree 41.000

54. N-241 2015-16 Un-authorized expenditure against

lapsable grant 174 Engr Bn Okara 1.566

125

55. N-241 2016-17 Non-recovery of outstanding

amount from contractor GE (A) Murree 2.970

56. N-244 2015-16 Mis-appropriation of public

money PMA Kakul 4.050

57. N-246 2016-17 Irregular local purchases beyond

the financial power CMH, Lahore 14.611


in piecemeal

Remount Depot

Mona 159.336

59. N-249 2016-17 Unjustified procurement of store

at exorbitant rate ESD Jhelum 7.510

60. N-250 2016-17 Loss to State due to un-authorized

retention of staff

Military Farm,

Okara 1.437

61. N-252 2015-16 Irregular payment GE (Services)

Multan 5.201

62. N-252 2016-17 Un-authorized release of advance

payment to contractors GE (A) Jhelum 13.574

63. N-254 2016-17 Splitting up financial powers GE (A)-I

Gujranwala 131.534

64. N-262 2015-16 Un-authorized payment of Pay &

Allowances

GE (Services)

Sialkot 1.304


Mona 1.830

66. N-280 2015-16 Non-recovery of allied charges GE (Services)

Sialkot 1.340

67. N-281 2015-16 Un authorized payment to Un

authorized staff

GE (Services)

Sialkot 4.372

68. N-291 2015-16 Over payment to contractor Remount Depot

Sargodha 1.315

69. N-295 2015-16 Splitting up financial powers GE A-II

Bahawalpur 52.646

70. N-306 2015-16 Un-authorized expenditure GE (Services)

Multan 79.646

71. N-311 2015-16 Loss to State due to purchase of

store on exorbitant rate CMH Peshawar 0.820

72. N-324 2015-16 Loss to State due to purchase of

store on exorbitant rate CMH Peshawar 12.000

73. N-325 2015-16 Un-authorized use of Government

building

GE (Services)

Multan 0.000

74. N-332 2015-16 Less recovery of income tax CMH Gujranwala 1.610

126

75. N-339 2015-16

Un-authorized acceptance of

charges of pension contribution

and cost of new construction work

by the Cantt board in the

conservancy contract for the year

2014-15

SHQ Gujranwala 1.420

76. N-341 2015-16

Un-authorized expenditure made

out of defence fund grant for the

FY 2014-2015

173 Engr Bn

Lahore 46.960

77. N-342 2015-16 Payment from Defence Estimate

for non Govt expenditure

173 Engr Bn

Lahore 4.658

78. N-347 2015-16 Un-authorized issuance of high

speed diesel (D-20) on payment

POL Depot

Sargodha 2.379

79. N-351 2015-16 Loss to State due to irregular

transfer of profit to private fund CMH Peshawar 0.921

80. N-383 2015-16 Non recovery of cost of ration BSD Rawalpindi 5.610


store beyond financial powers

173 Engr Bn

Lahore 44.460


contractor GE (A) Kakul 8.815

83. N-406 2015-16 Non finalization of CNE cases CMH Attock 7.766

84. N-412 2015-16 Non recovery of allied charges AGE (Army)

Risalpur 3.396


contractor

GE (Services)

Lahore 4.478


electro medical equipment’s CMH Multan 15.000

87. N-430 2015-16 Un-authorized retention of money

on Unit Account

502 CWS

Rawalpindi 3.395

88. N-455 2015-16

Loss to State due to charge off

12066 Ltrs of POL on packed

stock

POL Depot

Sargodha 0.976

89. N-459 2015-16

Un-authorized expenditure due to

provision of fiber class parking

sheds for BOQs

AGE (Army)

Risalpur 5.041

90. N-461 2015-16

Excess payment to firm for an

item of work neither required nor

provided at site

GE (A) Bagh 1.500

91. N-470 2015-16 Un-authorized expenditure Garrison Furniture

Yard Lahore 14.078

127

92. N-497 2015-16 Un-justified expenditure on

provision of parameter lights

AGE (Army) D.I

Khan 1.815

Total 183,496.252

ML&C Department

(Rs. in million)

S

No.

DP


93. N-13 2016-17 Non-recovery of income tax from

owners of the shops

Cantt Board

Nowshera 4.092

94. N-14 2016-17

Loss to cantonment fund due to

non-realization of Conservancy

charges

Cantt Board

Nowshera 3.112

95. N-15 2016-17

Non-recovery of income tax from

owners of the shops (commercial

complex)

Cantt Board

Nowshera 4.859

96. N-40 2016-17 Non-recovery of antenna fee from

cellular companies

Cantt Board

Sargodha 1.140

97. N-66 2016-17

Non conversion of old grant into

regular lease in schedule IX-C for

commercial use

Cantt Board

Nowshera 22.201

98. N-93 2016-17 Non-recovery of development

charges

Cantt Board

Sialkot 1.622

99. N-107 2016-17 Loss of revenue due to non-

recovery of house tax

Cantt Board

Sialkot 1.363

100. N-120 2016-17

Loss to Cantonment fund due to

non-recovery of conservancy

charges from Army authorities

Cantt Board

Abbottabad 11.964

101. N-137 2016-17

Non-production of auditable

documents and non-deposit of

rent on account of agriculture land

MEO Sargodha 15.370

102. N-141 2016-17 Loss to Cantt fund due to irregular

approval of extension of land

Cantt Board

Rawalpindi 6.126

103. N-143 2016-17

Less recovery of premium &

surcharge due to irregular

conversion of property into Sch-

IX-C

Cantt Board

Rawalpindi 2.865


contractor

Cantt Board

Rawalpindi 7.200

105. N-177 2016-17 Non recovery of Cantt fund dues Cantt Board

Abbottabad 1.671

128

106. N-179 2016-17 Loss to Cantt fund due to un-

litigate expenditure,

Cantt Board

Rawalpindi 4.000

107. N-180 2016-17 Non assessment and construction

without approval of building plan

Cantt Board

Rawalpindi 17.760

108. N-182 2015-16 Unauthorized use of A-1 Land MEO Abbottabad 167.200

109. N-187 2016-17 Loss due to non-assessment of

commercial building,

Cantt Board

Chaklala 2.246

110. N-191 2016-17

Irregular approval and non-

recovery of conversion charges

from green fort housing society

Cantt Board

Walton 59.862

111. N-195 2016-17 Non recovery of advertisement

charges

Cantt Board

Lahore 10.078

112. N-197 2016-17

Irregular approval and non-

recovery of Government dues

from Premier Villas Housing

Society

Cantt Board

Walton 18.828

113. N-213 2015-16 Loss due to less recovery of

conservancy charges

Cantt Board

Gujranwala 16.212

114. N-215 2015-16 Non-recovery of rent from Cantt

fund commercial buildings

Cantt Board

Gujranwala 1.116

115. N-216 2015-16 Non-recovery of tower fee from

cellular companies

Cantt Board

Gujranwala 1.095

116. N-217 2015-16 Non-realization of pension share Cantt Board

Gujranwala 2.544

117. N-218 2015-16 Non-recovery of outstanding

property tax

Cantt Board

Gujranwala 1.550

118. N-218 2016-17

Loss to cantonment fund due to

non-realization of conservancy

charges

Cantt Board

Chaklala 66.700

119. N-222 2016-17 Non deposit of Income tax into

Govt treasury

Cantt Board

Chaklala 2.000

120. N-223 2016-17

Loss to Cantt fund due to non-

recovery of dues on account of

conservancy charges

Cantt Board

Abbottabad 48.484

121. N-224 2016-17 Loss to Cantt fund due to non-

realization of BTS tower fee

Cantt Board

Abbottabad 8.740

122. N-230 2016-17


payment of hoarding charges

(open sites) Rs.1.622 million and

submission of fake CDRs

Cantt Board

Jhelum 1.622

129

123. N-235 2016-17 Loss to Cant fund due to non-

recovery of shops rent

Cantt Board

Chaklala 3.100

124. N-302 2015-16 Non recovery of conservancy

charges

Cantt Board

Sargodha 1.680

125. N-310 2015-16

Loss of revenue due to non-

recovery of rent from Cantt fund

commercial buildings

Cantt Board

Sargodha 1.107

126. N-329 2015-16 Non-recovery of composition fee Cantt Board

Multan 2.209

127. N-331 2015-16 Non-production of auditable

documents MEO Sargodha 15.720

128. N-333 2015-16 Unauthorized encroachment of

Cantt acquired land DHA

Cantt Board

Chaklala 508.284

129. N-350 2015-16 Un-authorized expenditure on

account of re-carpeting of road

Cantt Board

Rawalpindi 2.000

130. N-387 2015-16 Non deposit of Income Tax Cantt Board

Rawalpindi 30.000

131. N-391 2015-16

Non-recovery of long outstanding

dues on account of conservancy

charges

Cantt Board D.I

Khan 13.400

132. N-398 2015-16 Less recovery of premium from

SBP, D.I.Khan

Cantt Board D. I

Khan 4.280

133. N-399 2015-16 Non-recovery of arrears on

account of conservancy services

Cantt Board

Murree 7.294

134. N-404 2015-16 Non-recovery of Cantt dues Cantt Board

Risalpur 1.290

135. N-421 2015-16

Loss to Cantt fund due to less

assessment of house tax (Askari-I

& II)

Cantt Board

Multan 2.049

136. N-448 2015-16 Non-realization of pension share Cantt Board

Sargodha 14.890

137. N-473 2015-16


recovery of conservancy charges

from Army authorities

Cantt Board

Abbottabad 72.923

138. N-474 2015-16 Loss to Cantt fund due to non-

recovery of dues

Cantt Board

Abbottabad 7.139

139. N-484 2015-16 Loss to Cantt fund due to less

recovery of conversion charges Cantt Board Kamra 0.509

140. N-499 2015-16

Non-recovery of composition fee

development charges and other

CB dues from the owner of

commercial building

Cantt Board Kamra 0.893

130

141. N-508 2015-16 Loss due to less recovery of

transfer fee

Cantt Board

Abbottabad 73.392

Total 1282.441

Pakistan Air Force (Rs. in million)

S

No.

DP


142. N-88 2016-17

Un-authorized incurred of

expenditure

GE (Air) Lahore 10.166

143. N-251 2016-17

Un-authorized provision of non-

scheduled furniture items without

obtaining sanction of Government

of Pakistan

AGE (Air) Mureed 2.143

144. N-258 2016-17

Extra / un authorized expenditure

on construction of garages with

BOQs

GE (Air) Risalpur 1.794

145. N-259 2016-17

Un-authorized construction of

MOQs against the sanction for

BOQs


146. N-261 2016-17

Un-due benefit to the contractor

by releasing payment before

completion of work


147. N-271 2015-16

Un-authorized payment of pay

and allowances to the staff

deputed in “AFOHS”

PAF Base Lahore 12.720

148. N-273 2015-16 Un-authorized consumption of pol

against Fazaia Housing Scheme PAF Base Lahore 2.070

149. N-275 2015-16 Loss to State due to excess issue

of chicken and mutton PAF Base Lahore 3.720


abnormal repairs GE Air Sargodha 35.969

151. N-319 2015-16 Loss to State due to excess issue

of mutton

PAF Base

Mianwali 6.238

152. N-415 2015-16

Non-recovery of expenses

incurred on MES employees as

CNE patients

PAF Hospital

Raifqui 0.950

153. N-426 2015-16 Non-recovery of treatment

charges

PAF Hospital

Mushaf 2.766

154. N-438 2015-16

Un-authorized receipt of allied

charges from the Officers Airmen

and non-booking in account

PAF Base Mushaf 25.110

131

155. N-460 2015-16

Un-authorized payment for

provision of 03 (x) phase

electricity for AC units in officer

mess


156. N-498 2015-16 Non-depositing of electric charges

other than free authorization GE (Air) Lahore 4.400

Total 145.084

Pakistan Navy (Rs. in million)

S

No.

DP


157. N-86 2016-17 Un-authorized payment of daily

messing allowance

PNS Zafar

Islamabad 2.576

Inter Services Organization (Rs. in million)

S

No.

DP


158. N-385 2015-16 Loss due to non fulfilment of

contracts

AFIU

Rawalpindi 1.946

159. N-407 2015-16 Un authorized transfer of profit to

Pvt fund

AFIC

Rawalpindi 12.491

Total 14.437

132

DP Division (Rs. in million)

S

No.

DP


160. N-33 2016-17

Non recovery of overdrawn amount

US $ 15,548 against rejected store

and liquidated damages US $

24,493 from defaulted firm

HRF (M) HIT

Taxila US $ 0.040

161. N-35 2016-17 Blockade of Government money HRF (M) HIT

Taxila 12.400

162. N-36 2016-17 Non recovery of risk and expense

and liquidated damages from firm

HRF (M) HIT

Taxila US $ 0.019

163. N-37 2016-17 Non recovery from firm against

rejected and deficient store

HRF (M) HIT

Taxila US $ 0.057

164. N-43 2016-17 Doubtful payment Gun Factory

HIT Taxila 0.790

165. N-49 2016-17

Non deposit of labour and overhead

charges of commercial projects in

to Government treasury

APC Factory

HIT Taxila 92.715

166. N-54 2016-17

Un-authorized finalization of

contract and un-justified payment

thereof

DGP (A)

Rawalpindi US $ 0.159

167. N-56 2016-17 Un-authorized extensions and non-

imposition of LD charges

DGP (A)

Rawalpindi US $ 0.734

168. N-58 2016-17 Non recovery from suppliers DGP (A)

Rawalpindi 16.537

169. N-67 2016-17 Unauthorized payment to the firm MRF Kamra 2.443

170. N-69 2016-17

Loss to state due to non-

cancellation of contract on firm’s

risk & expense

DGP (A)

Rawalpindi 6.210

171. N-74 2016-17 Non conclusion of contract on risk

& expense of the contractor AMF Kamra 2.179

172. N-77 2016-17

Non-replacement of rejected store

against regular contracts & non-

receipt of outstanding store against

regular and rate running contracts

ARF Kamra US $ 0.166

173. N-79 2016-17 Un-due benefit to supplier on

account of advance payment

GE (DP) Const

Kamra 16.040

174. N-81 2016-17 In-fructuous expenditure on

purchase of UPS

GE (DP) Const

Kamra 18.451

133

175. N-217 2016-17 Loss to State due to non-receipt of

rejected stores

HRF (M) HIT

Taxila 6.303

176. N-361 2015-16 Non rec of rent and allied charges GE DP Maint

Taxila 1.149

177. N-401 2015-16

Un-justified/un-authorized

execution of work without approval

of competent authority

DGMP

Rawalpindi 12.168

Total 54.111

Ministry of Science & Technology

S No. DP No. Year Subject Unit/Formation Amount

178. N-215 2016-17

Uneconomical expenditure on

repair & maintenance of triple

play services for the residential

area out of public fund

NUST

Islamabad 4.795

134

Annexure-II

MFDAC Paras (DG South) 2016-17

Pakistan Army (Rs. in million)

S # DP No. Year Subject Unit/Formation Amount

1. S-207 2016-17

Outstanding Conservancy charges

of Cantt Boards against Station HQ

Quetta

Station HQ Quetta 144.924

2. S-396 2016-17 Split-up of contracts to avoid

sanction of Government of Pakistan GE (Army) I, Malir 114.937

3. S-204 2016-17 Irregular sanction of abnormal

work

CMES (Army)

Malir 95.622

4. S-359 2016-17 Unauthorized/ irregular expenditure

on local purchase of Electro

Medical Equipment

CMH Malir 62.867

5. S-54 2016-17 Unlawful award of contracts GE (Army) II,

Quetta 38.092

6. S-02 2016-17 Irregular expenditure due to split of

Project

AGE (Army) SI&T,

Quetta 29.999

7. S-285 2016-17

Irregular expenditure on

repair/maintenance of POL Bulk

installation through MES without

obtaining admin approval from

Govt. of Pakistan

GE (Army)

Services, Quetta 23.888

8. S-22 2016-17 Irregular award of two contracts to

same contractor

GE (Army) C & S

College, Quetta 23.176

9. S-347

2016-17

Irregular Establishment of UNMSD

and Recruitment of Civilian Staff. C.O.D Karachi 12.758

10. S-218 2016-17 Irregular expenditure on provision

of solarization for tube wells GE (Army) I, Quetta 10.022

11. S-225 2016-17 Non confirmation of saving GE (Army) I, Quetta 9.492

12. S-222 2016-17 Irregular/unjustified budget

allocation without record

GE (Army) I, Quetta

8.85

13. S-280

2016-17

Irregular expenditure without

obtaining Admin approval from

Govt. of Pakistan

GE (Army)


14. S-159

2016-17

Irregular Administrative approval

without drawing and release of

payment in advance

AGE (Army) ,

Khuzdar 8.303

15. S-356

2016-17

Non recovery of House Rent

Allowance of officer allotted

accommodation

CMH Malir 7.276

135

16. S-227 2016-17 Non-recovery of sales tax on

services Station HQ Quetta 6.375

17. S-282

2016-17

Avoidable extra expenditure on

redesigning of existing speed

breakers and Introducing a new

practice

GE (Army)


18. S-284 2016-17

Irregular expenditure on provision

of footpath without obtaining

admin approval from competent

authority

GE (Army)


19. S-385 2016-17 Non-recovery of income tax CMH Malir 5.106

20. S-363 2016-17 Award of contract on choice

without considering the

specifications

CMH Malir 5.100

21. S-219 2016-17


repair/maint work without

obtaining admin approval from

competent authority

GE (Army)-I Quetta 4.821

22. S-84 2016-17 Irregular retention of time bared

claims outside state revenue

SCARP VI-Rahim

Yar Khan 4.526

23. S-278 2016-17 Irregular sanctioning / execution of

work

CMES (Army)

Hyderabad 4.468

24. S-355 2016-17 Award of purchase order on

favoritism in violation of PPRA

Rules

CMH Malir 3.600

25. S-178 2016-17 Illegal collection of security

charges costing

F.G Minwalia Girls

Public School

Karachi

3.222

26. S-362 2016-17 Award of contract on choice

without considering the

specifications

CMH Malir 2.970

27. S-67 2016-17 Non-obtaining of GST invoice from

contractors

GE (Army)-II

Quetta 2.747

28. S-217

2016-17 Irregular issue of RTE store to units GE (Army)-I Quetta 2.680

29. S-234

2016-17

Unauthorized electric connection to

commercial consumers caused extra

burden on Defence Budget

GE (Army) Karachi 2.400

30. S-367

2016-17

Irregular expenditure through D.O.

against the amendment issued by

sanctioning authority

GE (Army) Services

Quetta 2.353

31. S-118 2016-17 un-authorized collection of security

charges

FG School Malir

Cantt 2.196

136

32. S-345

2016-17

Non Deposit of Revenue Generated

From Agricultural Activities into

Government Treasury.

C.O.D Karachi 2.000

33. S-304

2016-17

Irregular/ unauthorized excess

payment made to contractor beyond

permissible limit without obtaining

revised sanction

GE (Army) Services

Pano Aqil 1.998

34. S-341 2016-17 Irregular award of conservancy

contract C.O.D, Karachi 1.964

35. S-361 2016-17 Purchase of medicine without

calling tenders CMH Malir 1.668

36. S-226 2016-17 Irregular/unjustified expenditure

through requisition from works

saving Rs 1.518 million

GE (Army)-I Quetta 1.518

37. S-26 2016-17 Non-Deposit of tender fee in the

Government treasury ACE 5 Corps Khi 1.450

38. S-402 2016-17 Non-Recovery of electricity

charges GE (Army)-II Malir 1.439

39. S-349 2016-17

Irregular expenditure on account of

Repair/Maintenance & purchase of

Air Conditioners.

HQ Signal 5 Corp,

Karachi 1.300

40. S-281 2016-17 Irregular/unjustified replacement of

LED lights in excess of demolition

GE (Army) Services

Quetta 0.952

41. S-395 2016-17 Non-Recovery of electricity

charges GE (Arm) I, Malir 0.926

42. S-191 2016-17 Irregular payment made to

contractor before allotment

GE (Army) const

Karachi 0.881

43. S-224

2016-17 Less deduction of sales tax from the

suppliers GE (Army)-I Quetta 0.772

44. S-320

2016-17

Loss to state due to non-recovery of

cost of X-Ray films used for CNE

patients

CMH Hyderabad 0.701

45. S-72

2016-17

Non recovery of House Rent

Allowance of officer allotted

accommodation

Army S&RC, Khi 0.655

46. S-151 2016-17 Non-Deposit of Rent of BTS towers

into Govt. treasury

Com & Staff

College, Quetta 0.480

47. S-403 2016-17 Non-recovery of water charges GE (Army) Services

Quetta 0.475

48. S-216 2016-17 Overpayment to the contractor GE (Army)-I Quetta 0.466

49. S-113 2016-17 Irregular payment of House Rent

Allowance

Army S & R Centre,

Hyd 0.332

50. S-399 2016-17 Non-recovery of water charges GE (Army)-I Malir 0.312

137

51. S-231 2016-17 Non-Obtaining of GST Invoice

from Contractors

AGE (Army) Rahim

Yar Khan 0.273

Total 723.538

Pakistan Air Force (Rs. in million)

S # DP No. Year Subject Unit/Formation Amount

52. S-312 2016-17

Irregular local purchase of electro

medical equipments without

approval of unit To&E from

Government of Pakistan

Project Shahbaz,

AHQ, Islamabad 192.389

53. S-105 2016-17 Non-recovery of rent and allied

charges

GE (Air) Shahbaz,

Jacobabad 142.893

54. S-319

2016-17

Irregular Development of Non-

public fund buildings and

infrastructure from public fund and

payment of engineering design fees

Project Shahbaz,


55. S-322 2016-17 Irregular award of wire line access

network

Project Shahbaz,


56. S-139

2016-17

Irregular purchasing of misc. stores

and doubtful payment made to

contractors

PAF Base Malir,

Karachi

11.993

57. S-311 2016-17 Undue favouritism extended to

contractor

Project Shahbaz,


58. S-175 2016-17 Irregular conclusion of joint filling

contracts and overpayment to

contractor R

GE (Air) Masroor,

Karachi 10.056

59. S-172

2016-17

Irregular conclusion of conservancy

contract without observing PPRA

Rules

PAF Base Masroor,

Karachi 8.400

60. S-238 2016-17 Outstanding Allied charges against

Private consumers

GE (Air) Korangi

Creek, Karachi 6.981

61. S-310

2016-17

Non Imposition of Liquidated

Damages due to late Supply of

Electro Medical equipment and less

recovery of Income Tax

Project Shahbaz,


62. S-237 2016-17 Loss to state due to non-recovery of

rent

GE (Air) Korangi


63. S-300

2016-17 Non-recovery of sales tax on supply

of fresh water

GE (Air) Masroor

Karachi 2.538

64. S-239

2016-17

Unauthorized electric connection to

private consumer causing loss to

state

GE (Air) Korangi


138

65. S-212 2016-17 Non recovery of rent & allied

charges against SIF contractor

PAF Base Masroor,

Karachi 1.978

66. S-135

2016-17

Loss to State due to non-availing of

discount on trade price

PAF Base Malir,

Karachi 1.145

67. S-242

2016-17

Unauthorized expenditure incurred

on supply of fresh water

GE (Air) Korangi


68. S-176

2016-17

unjustified provision of additional

furniture for newly constructed

B.O.Qs and non-recovery of GST

GE (Air) Masroor,

Karachi 1.081

69. S-299 2016-17 Non-deposit of Government share

against the A-1 land

GE (Air) Masroor,

Karachi 1.022

70. S-296

2016-17

Non recovery of Electric charges

from residents of Falcon Housing

Scheme

GE (Air) Malir,

Karachi 0.796

71. S-24

2016-17

Un-authorized purchase of non-

schedule furniture without govt.

sanction

GE (Air) Masroor,

Karachi 0.597

72. S-134 2016-17 Less recovery of Income Tax from

the supplier

PAF Base Malir,

Karachi 0.260

73. S-241 2016-17 Non-recovery of Stamp Duty GE (Air) Korangi


Total 561.495

ML&C Department (Rs. in million)

S.No DP No Year Subject Unit/Formation Amount

74. S-392 2016-17 Loss to state due to non-utilization

of land

M.E.O

Hyderabad 19,785.324

75. S-69

2016-17

Illegal construction of houses on a-1

land by AFOHS without

reclassification of land

M.E.O Karachi 6,472.613

76. S-389

2016-17

Undue favor extended M/s NIP in

the shape of non-recovery of

Development Charges and non-

Utilization Fee

CB Korangi

Creek 428.340

77. S-337 2016-17 Non-adjustment of Octroi Share CB Clifton Khi 308.896

78. S-371 2016-17 Non recovery of cantonment dues

from hotel CB Clifton Khi 44.157

79. S-373 2016-17 Non recovery of cantonment dues

from three cinemas CB Clifton Khi 43.800

139

80. S-49 2016-17 Encroachment of land By M/S.

Shaheen Knitwear MEO Khi 30.419

81. S-379 2016-17 Irregular local purchase of medical

equipment and non-recovery of

income tax and G.S.T

CB Clifton Khi 29.310

82. S-393

2016-17

Illegal construction of marriage

Hall on land under litigation and

non-recovery of Premium and

Ground Rent

MEO Hyderabad 23.625

83. S-376 2016-17 Irregular hiring of private water

tankers CB Clifton Khi 16.320

84. S-18 2016-17 Irregular purchase of store CB Quetta 14.128

85. S-46 2016-17 Loss to Cantt. Fund due to non-

assessment of various properties for

tax purpose

CB Faisal Khi 6.575

86. S-11 2016-17 Infructuous expenditure CB Quetta 4.800

87. S-369

2016-17

Loss to state due to non-deposit of

premium and ground rent of

Majestic Cinema

M.E.O

Hyderabad 4.754

88. S-51 2016-17 Loss to cantt. fund due to non-

assessment of a building for tax

purpose

CB Faisal Khi 4.275

89. S-229

2016-17

Less recovery of additional

sewerage charges from residents CB Malir 2.674

90. S-14 2016-17 Expenditure without sanction of the

Board CB Quetta 2.301

91. S-109

2016-17

Non-Recovery of road

cutting/reinstatement charges from

karachi Port Turst

CB Manora 1.991

92. S-94 2016-17 Non-collection of Octroi/GST share

from Provincial Government CB Manora 1.225

93. S-377 2016-17 Unjustified payment of monthly

mobile phone charges CB Clifton Khi 0.861

94. S-390 2016-17 Less recovery of G.S.T CB Korangi

Creek 0.844

95. S-340 2016-17 Illegal payments to Judicial

Magistrates CB Clifton Khi 0.682

96. S-308 2016-17 Overpayment to contractor due to

Incorrect application of length CB Clifton Khi 0.661

97. S-17 2016-17 Loss to state due to less recovery of

income tax CB Quetta 0.331

98. S-370 2016-17 Illegal construction and

encroachment of Pak City Towers MEO Hyderabad 0

Total 27,228.906

140

Pakistan Navy (Rs. in million)

S.No DP No Year Subject Unit/

Formation Amount

99. S-89 2016-17 Finalization of tenders in violation

of directives of DGMS. PN MSD Khi 519.869

100. S-114

2016-17

Publication of tender before

administrative sanction of

construction work

GE (Navy)

Const.Turbat 395.293

101. S-266

2016-17 Irregular execution of work under

para 17 of DSR 1998.

GE (Navy)

Central Cons.

Karachi

182.478

102. S-254

2016-17 Irregular award of new capital work

after 15th April

GE (Navy)

Central Cons.

Karachi

99.032

103. S-154 2016-17 Un-justified expenditure made

without Budget/funds allocation

PNS Himaliya

Karachi 88.000

104. S-324

2016-17

Irregular Repair and Maintenance

carried out at Sea view

Flats/Bungalows

GE (Navy) East,

Karachi 84.000

105. S-273

2016-17 Irregular execution of contracts of

water supply in piecemeal

AGE (Navy)

Maint Manora,

Karachi

69.999

106. S-196

2016-17

Un-justified expenditure made

without allocation of budget/funds

allocation

PNS Haider,

Karachi 60.950

107. S-264

2016-17

Award of tenders after negotiation

in violation of PPRA

GE (Navy)

Central Cons.

Karachi

49.674

108. S-246 2016-17 Irregular/Unauthorized expenditure

incurred on supply of fresh water

GE (Navy)

South, Karachi 45.000

109. S-262

2016-17

Irregular award by split of two

contracts to same contractor

GE (Navy)

Central Cons.

Karachi

40.441

110. S-328

2016-17 Irregular free gas supply to NSSD

GE (Navy)

Logistics D/Yard

Karachi

26.616

111. S-263

2016-17

Unauthorized contract of

consultancy by superseding the

mandate of MES

GE (Navy)

Central Cons.

Karachi

21.968

112. S-120 2016-17 Less recovery of income tax from

whole sellers

PN MSD,

Karachi 18.195

141

113. S-270

2016-17

Loss to state by paying excess per

Sft Rate payment against the work

having less bearing capacity for

same type of contract with same

specification

GE (Navy)

Central Const,

Karachi

16.274

114. S-44

2016-17

Irregular expenditure due to

sanctioning of minor works by

incompetent authority

GE (Navy)

Eastern, Karachi

12.743

115. S-43

2016-17

Irregular payment of fresh water

through Bowzer to contractor

within one or two days after

conclusion of contract Rs. 12.500

million

GE (Navy)

Eastern, Karachi 12.500

116. S-244

2016-17

Less Recovery of G.S.T/Non-

production of documentary

evidence of deposit of G.S.T

GE (Navy)

South, Karachi 9.378

117. S-199 2016-17 Unjustified work issued to

contractors.

AGE (Navy)

Mehran Karachi 9.160

118. S-197 2016-17 Irregular execution of electrical

work by unlicensed contractor

AGE (Navy)


119. S-190 2016-17 Undue benefit given to contractor

not enlisted with MES

AGE (Navy)


120. S-101

2016-17


consumption of POL & repair

against unauthorized vehicles

V.S.D Karachi 5.223

121. S-148 2016-17 Unauthorized allocation of POL for

generator PNS Himalya 2.645

122. S-267 2016-17 Less recovery from contractor

against retained store

GE (Navy)

Central Const,

Karachi

2.541

123. S-29 2016-17 Non-recovery of sales tax PNS Bahadur,

Karachi 2.136

124. S-73 2016-17 Non recovery of House Rent

Allowance

PNS Raza,

Karachi 1.917

125. S-35 2016-17 Irregular Expenditure due to

splitting up of contract

PNS Karsaz,

Karachi 1.800

126. S-33 2016-17 Non-recovery of sales tax PNS Karsaz,

Karachi 1.038

127. S-272 2016-17 Recoverable excess payment issued

for Soil Investigation

GE (Navy)

Central Const,

Karachi

1.000

128. S-08 2016-17 Irregular repair of furniture items

GE (Navy)

Comwest,

Gawadar

0.791

142

129. S-325 2016-17 Over Payment to Contractor on

Account of wrong Implementation

of Schedule of rates

GE (Navy) East,

Karachi 0.775

130. S-329 2016-17 Irregular conclusion of contract

before sanction / approval

GE (N) logistic

Dockyard, Kci 0.718

131. S-123 2016-17 Non-Recovery of Sales Tax on

Services

PNS Shifa,

Karachi 0.693

132. S-34 2016-17 Less recovery of GST/Non

production of GST invoice Rs

0.631 million

AGE (Navy)

Maint Ormara 0.631

133. S-268 2016-17 Non recovery of sales tax on

furniture

GE (Navy)

Central Const,

Karachi

0.570

134. S-186 2016-17 Unjustified award of works without

obtaining security deposit from the

contractors

AGE (Navy)


135. S-76 2016-17 Non-recovery of sales tax on

services

PNS Raza,

Karachi 0.382

136. S-38 2016-17 Non-production of auditable record PNS Karsaz,

Karachi 0

Total 1658.245

Military Accountant General (Rs. in million)

S.No DP No Year Subject Unit/

Formation Amount

137. S-309 2016-17

Irregular Execution of F.M.I.S.

Project for Development of Data

Centre Rs. 177.60 million, Non

Recovery of Income Tax

Rs. 17.760 million & G.S.T.

.C.N.A Karachi 225.560

138. S-201 2016-17 Non-deduction of income tax C.M.A Karachi 0.201

Total 225.761

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