The Auditor General of Pakistan has detected irregularities, embezzlements, unauthorised expenditure, non-recoveries and losses, amounting to Rs 7.75 billion in various sections of telecommunication. The AGP, in its report on accounts of this sector for 2008-09, observed that the national exchequer suffered a total loss of Rs 7.247 billion in the NTC; Rs 464.11 million in Special Communication Organisation (SCO) and Rs 8.399 million in Pakistan Telecommunication.
The telecommunication sector, comprises Pakistan Telecommunication Authority (PTA), Frequency Allocation Board (FAB), National Radio Telecommunication Corporation (NRTC), NTC and SCO. The AGO conducted audit on test check basis, and observed irregularities of Rs 3,879 million. The report says that the PTA management has not settled the issue of pay and allowances and other fringe benefits to its employees since 2004.
As a result, irregular payments were made on account of pay and allowances, honorarium, cash reward, leave encashment and foreign TA/DA, amounting to Rs 69.669 million, although the pay package was approved and rules were quite clear about the grant of these benefits, the report reveals.
The report says that “receivables” remained a weak area, which resulted in non-recovery of huge amount of Rs 1,008 million from variious telecom/mobile operators “The PTA incurred irregular expenditure on purchase of vehicles and laptops worth Rs 13.979 million.
“The instances of misappropriation and misuse of public money, totalling Rs 82.307 million, showing the inability of the management to avert losses,” the report says. The report laments that the FAB prepares only its “Receipt and Expenditure Account,” which does not reflect the status of its liabilities and assets.
“It made irregular payments on account of pay and allowances, leave encashment and house rent allowance, despite the approval of its pay package. The foreign TA/DA worth Rs 25.595 million was also paid without the approval of the Finance Division. The FAB also incurred irregular expenditure on purchase of vehicles worth Rs 1.628 million,” says the report.
The NRTC management also incurred irregular expenditure on purchase of vehicles worth Rs 2.617 million. The report says that it was not adhering to the Public Procurement Rules, which resulted in irregular procurements worth Rs 7.187 million. The report further says that the government exchequer sustained a huge loss due to non-deduction of income tax and sales tax worth Rs 1.089 million.
According to report, the NTC incurred irregular expenditure of Rs 18.925 million in violation of the Public Procurement Rules. “Stores, amounting to Rs 39.668 million, were purchased un-necessarily, resulting in blockage of public money. “It could not recover an amount of Rs 20.532 million from different agencies and made irregular payments on account of cash reward worth Rs 8.987 million without obtaining approval of Finance Division.”
The report says that the SCO management made unauthorised re-appropriation of funds of Rs 1,100 million without the approval of the Finance Division. The AGP recommended that the management of these organisations was sensitised with the importance of effective internal control systems.
The AGP recommends that the Principal Accounting Officers and management of these organisations should exercise due diligence and adherence to Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) while maintaining the books of accounts. It recommends that the organisations should ensure observance of the rules and regulations and introduce effective systems of stores and inventory management.