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Pakistan: Billions kept in private accounts, PAC told


ISLAMABAD, (The News): The Public Accounts Committee (PAC) was told on Tuesday that billions of rupees of funds of the Ministry of Defence Production were kept in private accounts instead of state accounts.

The revelation came in a meeting of the PAC on Tuesday with Nadeem Afzal Gondal in the chair. Auditor General of Pakistan (AGP) Buland Akhtar Rana told the committee that that mechanism of internal audit was too weak in the Heavy Industries Taxila (HIT) and it has not deposited billions of rupees in the national kitty and kept it in the company’s account. Audit paras relating to the Ministry of Defence Production (MoDP) were taken up in the meeting.

The AGP said that the HIT never gave an indication to the government from where the billions of rupees come and where they went. He feared a big scandal brewing in case the situation persisted.

The PAC chairman gave the MoDP secretary 15 days to furnish a certificate that no amount will be kept outside government accounts and also to brief the committee in this regard. The PAC also demanded details of the cases of the MoDP pending in the superior courts, adding that the PAC decided to write to the Attorney General for Pakistan to expedite the cases of the MoDP in the superior courts.

The MoDP secretary admitted the weakness in the internal audit mechanism but said thatthey always made best effort to overcome these. “The audit officials only pinpoint 10 percent mistake while 90 percent are not traced,” he added.

Meanwhile, the audit officials objected to the non-verification of record for the purchase of weapons worth $511,000 and rules were not followed during the year 2004-05. The MoDP secretary was directed to verify the record for settlement of the para.

PAC member Yasmeen Rehman pointed out that there were irregularities and violation of rules in the paras relating to the MoDP and no responsibility was fixed.The secretary said that if the mistakes were committed deliberately, those responsible would be punished.

The audit officials objected to the non-recovery of rent of Rs751,689 from private school/college at Mirage Rebuild Factory, Kamra for 17 months at the rate of Rs44,217 per month. The Auditor General did not agree with the assertion that it was a welfare project.

The PAC chairman asked whether rules were followed to turn this project into a welfare project run by an NGO. He referred the case back to the Departmental Accounting Committee to resolve it.

The MoDP secretary assured that the rules will be followed to make this a welfare project. Meanwhile, the PAC summoned the Presidency, Prime Minister Secretariat and Supreme Court Registrar to appear before the committee in the second week of the December for audit of their accounts.

The PAC chairman specially mentioned the Registrar of the Supreme Court, saying that the PAC has now decided that the Registrar should appear before the committee for settlement of audit paras.

The PAC had summoned government departments which had refused the audit of the accounts through the Auditor General office.National Press Trust, FWO and Nadra were also summoned to appear next week and explain why, after the passage of the 18th Amendment, they had refused audit of their accounts through Auditor General of Pakistan (AGP).

The PAC took serious note of the decision of the Economic Coordination Committee (ECC) of the cabinet allowing import of three years old cars and summoned the Federal Bureau of Revenue (FBR) chairman, Industries and Commerce secretaries to explain the impact of the decision on the local car producers.

He also sought the report from all the ministries about how many secretaries were availing the perks and privileges from the autonomous department of their respective ministries as chairman of board of the department.

Meanwhile the AGP revealed that two departments of MoDP — Wah Nobel (Pvt) Ltd and Pakistan Ordnance Factory Welfare Fund — refused the audit of their accounts.To this Secretary MoDP said that the Law Ministry has given the advice that there was no need of audit through the AGP.

On this the Chairman PAC remarked that following the enactment of the 18th Amendment, there is no need to seek the opinion of the Law Ministry as it is already mentioned in the Constitution.

He said there are 25 departments which were still resisting and refusing the audit of their accounts through the AGP even after the 18th Amendment. “We do not want to open the Pandora’s box but if these departments continue to refuse the audit then we have no other option but to open the box,” he added.

Chairman PAC said that departments refusing audit through AGP were, prima facie, violating the Constitution and the committee would send a reference to the parliament against the recalcitrant department. Secretary MoDP observed that the Law Ministry is also a government department.

However, the PAC chairman said that he had raised the issue with the prime minister and he was also on same page with the PAC and AGP that the Constitution should be respected. “Law Minister Farooq H Naek also endorsed the PAC view in this issue and was of the opinion that the departments are bound to get their accounts audited,” he said.

Chairman PAC referred the issue of refusal of audit by departments to a committee comprising the joint Secretary of PAC, representative of the AGP and representative of the PAC.

He directed that the committee should also summon the Additional Secretary of Law Ministry to seek his opinion and report back to the PAC within a week. “On the basis of the committee report, the PAC would decide to summon the Secretary Ministry of Law and after that we will send the reference to the parliament either to take action against the departments which were refusing the audit of their accounts or to amend the Constitution,” he observed.

The Pakistan Telecommunication Ltd (PTCL) has also refused the audit of their accounts on the plea that the company has been privatised and a private company is operating it.Senior Joint Secretary Ministry of Information Technology (MoIT) told the PAC that the PTCL has been privatised.

PAC member Hamidyar Hiraj asked whether it was not a fact that Secretary MoIT is Chairman of the board of the PTCL and government has 74 percent shares in the PTCL.Joint Secretary MoIT told the committee that the four directors of the board were nominated by Eitsalat.

PAC member Yasmeen Rehman questioned the privatisation of PTCL and remarked that the privatisation was irregular and its agreement was anti-Pakistan.

The AGP revealed that Secretary MoIT has written a letter to PTCL for cooperation with the AGP for audit of its accounts.The AGP remarked that if the writ of the government is restored in the PTCL, all the issue would be settled.

Chairman PAC referred this issue also to the special committee of the PAC formed on the departments which were refusing the audit of the accounts.He was of the opinion that both are private companies which were registered under Companies Act 1984 and also with the Securities Exchange Commission of Pakistan.In the meanwhile, the Virtual University and Pakistan Poverty Alleviation Fund told the PAC that they were ready for the audit of their accounts.

APP adds: The PAC chairman sought the details of dual posts holder government officials. He directed the heads of all departments to submit details of officers, who holds dual offices. Earlier member of PAC Hamid Yar Hiraj pointed out that some officers are holding dual posts and drawing undue perks and privileges. Such practice should be stopped.

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