The Auditor General of Pakistan (AGP) has raised audit observations amounting to Rs 69.55 billion during the audit of the Universal Service Fund (USF).
AGP in its Audit Report on the accounts of public Sector Organizations (Telecommunication Sector) audit year 2021-22 has pointed out irregularities of Rs 35.75 billion related to HR/employees, procurement and management of accounts with commercial banks.
The report also pointed out value for money and service delivery issues amounting to Rs. 32.87 billion. During the audit of USF for the year 2020-21, it was observed that the company entered into 25 service subsidy agreement contacts with different service providers for the provision of telecommunication services under optical fibre cable (OFC) and next-generation broadband sustainable development (NG-BSD) projects for a subsidy of Rs. 23.553 billion during the financial year 2020-21.
The award of contracts to service providers was held irregular as the approved areas prioritization plan by the Board was not available on record. Further GM projects and the technical department of USF did not recommend reserve prices of mentioned lots on the basis of net present value calculation. Demand drafts equivalent to 5 percent of the reserve price were also not obtained from prospective bidders before registration and auctions. It was also observed that the insurance documents of these projects were not available in the file as required.
During the audit of USF for the year 2020-21, it was observed that an amount of Rs. 32.869 billion remained unutilized as on June 30, 2021, as per the record of the Manger USF. USF could utilize only Rs. 36.192 billion in the last five years due to which the management could not achieve its goals.
The Audit pointed this out to the management and PAO in November 2021. In reply, the company said that it had already targeted the utilization of more than 50 percent of the fund balance during the fiscal year 2021-22.
The reply was not acceptable as a huge amount had piled up with the Fund which could not be utilized by the company to provide telecommunication services to the people in un-served and under-served areas of Pakistan.
The Audit also observed that the Board composition did not consist of independent members in violation of the rules. Out of a total of nine members, five members of the board were ex-officio and three had a direct interest in the USF being nominees of operators/service providers.
