AGP detects over Rs25.6 billion embezzlements in NHA
ISLAMABAD: The Auditor General of Pakistan (AGP) detected embezzlements amounting to more than Rs25.6 billion in the financial records of the National Highway Authority (NHA) during the fiscal 2010-11.
The annual audit report made 86 observations in five categories, comprising irregular awards of contracts costing Rs9.43 billion; overpayments of Rs2.25 billion due to negligence of the officials; Rs1.54 billion loss to the authority; unauthorised payments due to weak financial control valuing Rs11.55 billion and non-recovery of dues of Rs888 million.
The total budget of the NHA for the fiscal 2010-11 was Rs44.6 billion and the report exposed irregularities in award of contracts, unjustified payments and tenders to blue-eyed contractors of the NHA officials. The AGP report said several road contracts worth Rs9.43 billion were awarded to selected contractors without adopting proper tendering procedure, contrary to the NHA rules.
The NHA awarded irregular awards of work without inviting tenders, acceptance of tender beyond permissible limit of 10 per cent and unauthorised acceptance of bids beyond permissible limit, the report observed. The report says that due to negligence on part of the NHA officials, the authority made overpayments of Rs2.25 billion.
The report says that overpayments were made with regard to excessive use of fuel, overheads, profit, income tax, enhancement in the rates of approved projects without competent authority, escalation of skilled labour, employment of trainee engineers, and change in item of work. The report further observed that NHA suffered a loss of Rs1.54 billion due to short receipts of toll collection, non-award of work to the lowest bidder, unjustified construction and maintenance of rest houses, etc.
The report claimed that the NHA officials could not recover an amount of Rs888 million from the defaulting contractors, advance rent, cost of stolen vehicles from those responsible and use of vehicles without entitlement, non-recovery of liquidated damages, etc.
The report identifies mismanagement of Rs11.55 billion in the accounts due to unjustified payments, extra payments, unauthorised appointments, expenditure in excess of the approved limit, unauthorised acceptance of bids beyond permissible limit for different projects.
In another para, the auditor observed that the NHA accepted insurance policy forwarded by the EFU, costing Rs29.7 billion, violating the approved limit of Rs844 million for the company, which, it observed, was done due to weak internal control as the company had not the capacity even to insure the contract sum.
This irregularity was pointed out in July 2010 and it was stressed to get the work insured according to approved engineering limits, besides fixation of responsibility for not obtaining insurance work in time.