Audit Paras

8/17/2019 Audit Paras

1/26

Audit Para:

1. Irregular expenditures amounting to Rs. 592.10 million:

According to para 2.82 B&R, no work shall be commenced unless administrative approval by the

competent authority is accorded, and properly detailed design and cost estimate have been sanctioned, allotment of

funds made and orders for its commencement issued by the competent authority as mentioned in the Administrative

Approval of the schemes being issued by the heads of concerned directorate with the approval of the competent

authority.

!" #&$ %AA 'ivision (ohmand Agency incurred e)penditure of Rs *+2.- million during financial year

2-2/ without obtaining technical sanction from the competent authority. 0details as anne)ed A1. $orks were

commenced by the department well before obtaining the technical sanction of cost estimates of the schemes as

evident, from the gap between dates of commencement of works and dates of obtaining technical sanction.

he irregularity occurred due to lack of internal financial control.

$hen reported to management in (ay,2- (anagement replied that they sent the 3 to #hief !ngineer but didnot

produced evident Reply is not satisfactory as !)ecution of works without technical sanction is a serious lapse and

against the spirit of public interest. hus the e)penditure incurred before technical sanction is held irregular andneeds regulari4ation from the competent authority.

"a5eeb 6llah 7han(Member of Internal Audit

team)


2/26

Audit Para:

2. Non-Maintenance of contractor’s ledger account:

According to para /-2 of #$A code, the contractor ledger accounts should be closed and

balanced monthly. he closing balance of each personal account should be detailed so as to show in respect of each

separate work 0stock & purchases1, the amount outstanding if any under each of three suspense account, advance

payment, secured advance and other transaction with a 9uotation in each case of the last running account bill and all

the vouchers supporting unad5usted outstanding under :other transaction; not incorporated in the last running bill.

#ontrary to above rule & regulation, !" #&$ %AA 'ivision(ohmand Agency has not maintained

contractor ledger account in any case of various pro5ects completed during the year and pro5ects in progress.

"onmaintenance of contractor ledger accounts is a serious lapse on the part of office concerned

which needs 5ustification.


team)


3/26

Audit Para:

. Non-maintenance of stoc!"stoc! Register:

ara 8 of


4/26

#. Non-maintenance of contractors $ills in proper %a&:

ara 28> of #$A read with para? #$', provides that immediately a work is finished, it is the

duty of the 'ivisional officer to close the account of it and to prepare the completion report. @f there is necessarily any

delay in closing the accounts, it should be seen in particular that further charges are not incurred without the

permission of the 'ivisional fficer.

#ontrary to above rule, records of !" #&$ %AA 'ivision (ohmand Agency revealed that in allcases, final payments to the contractors were made for the completed schemes but the word :final bill; has neither

recorded on the contractors bills nor the completion report were prepared in time and the accounts were kept open

by writing as :running bill; which is against the spirit of public interest. $hen asked, it was responded that later on,

they issue letter and considered the work as completed.

he matter, therefore, needs further clarification.


team)

Audit Para:


5/26

5. 'ess (eposit of )ender fees* +mounting Rs. 1029,9"-:

ara >01 of #R provides that all money received by >/>21 was re9uired to be received from the contractors on account of tender

forms fees 0detail attached1, against which an amount of Rs. 8?>- was shown deposited in to the 8+ 0Rs. 28+?8++ E 8?>-1 undeposited which needs

clarification and 5ustification.

he matter is reported for immediate recovery with intimation to the internal audit.

+genc& inance /fficer +3

Mem$er of Internal +udit team

Audit Para:


6/26

4. Non-recoer& of stamp dut&* amounting to Rs. 49#250"-:

According to #&$ authority "o. 8*Bud++2---+*2--, dated= 2-8++, stamp duty on

contract on e)ecution of works has been fi)ed by the *-

'uring 2-2/, a number of contract for e)ecution of various works were awarded to the

contractors but stamp duty at the prescribed rate, amounting to Rs. ?+2*- 0detail attached1 was not

recoveredcollected from the contractor concerned sustaining loss to the


7/26

Audit Para:

,. Non credit of Rs. 22.252 Million to 6oernment )reasur& and dou$tful pa&ment of Rs. 1.,,,

million:

ara >01 of #R provides that all money received by


8/26

Audit Para:

. Non urrender of laps (eposit into 6oernment )reasur& +mounting Rs. 0.09 Million.

Rule ?/* of the #R Gol@ provides that all balances unclaimed for more than three completeaccount years shall, at the close of Hune in each year, be credited to the


9/26

Audit Para:

9. /erpa&ment of Rs. 2.4 million to contractor $& non using of aaila$le art" tones and

non deduction of oids.

According to 7ara 220 and 221 of #$A #ode, u$ (iisional /fficer, before making payments

to contractor, is re9uired to compare the 9uantities in the bills and see that all the rates are correctly entered and that

all the calculations have been checked arithmetically.

'uring Audit the accounts records of #&$ Building 'epartment (ohmand Agency for the year

2-2/, it was observed that !)ecutive !ngineer $orks and 3ervices 'epartment (ohmand Agency overpaid Rs.

2?8/? durring financial year 2-2/ in ro5ect Rehabilitation of road !kkaghund 3. I. 7ilometer 2, /, and

formation 9uantity was paid vide Bill "o. -( dated 2>?2-/. (B 22+ and related (Bs shows that road way

e)cavation was carried out on the same R' for 22m/ and *+-2 m/. !mbakment formation was paid J

Rs.22?.>- instead of rehandling rate of earth JRs. *- which resulted into overpayment of Rs. 2/*-*** as per

following detail=

Kty Rate Re9uired 'ifference verpayment

///8 22?.>- *- >?.2/ 2/*-***

@n addition voids J L was also not deducted in most R's, which resulted into overpayment of Rs. //2?-+ as per

followsM

Rs. ///8 ) L F ?>.8 ) 22?.>- rate F Rs. //2?-+

(atter is reported for recovery as most of the road way e)cavation was not covered undertechnical sanction.


team)


10/26

Audit Para:

-. /erpa&ment of Rs. 2.4,0 million to contractor $& not using of aaila$le art at site




'uring Audit the accounts records of #&$ Building 'epartment (ohmand Agency for the year

2-2/, it was observed from voucher "o. ( dated 28? 2-/ and (B "o. 8*+ that !)ecutive !ngineer

$orks and 3ervices 'epartment (ohmand Agency overpaid Rs. 2?>->2 to contractor by non paying of

rehandling of earth work available at site from road way e)cavation in @mprovement and Rehabilitation of 7(

e)isting road at (A 3. I. !kkaghund 7ilometer +, -, and , during financial year 2-2/. %ormation of

!mbakment was paid for ** m/ J 22?.>- instead of earth handling rate of Rs. *-, resulted into overpayment of

Rs. 2?>->2 as per following

!mb. Kty Rate paid Re9uired rate 'ifference verpayment

**.2/ 22?.>- *- >?.2/ 2?>->2

@n addition the item was also not covered in echnical 3anction.

(atter is reported for recovery under intimation to audit.

.


team)


11/26

Audit Para:

. /erpa&ment of Rs. ,,95"- to contractor $& not using of aaila$le art at site

According to 7ara 220 and 221 of #$A #ode, u$ (iisional /fficer, before making payments tocontractor, is re9uired to compare the 9uantities in the bills and see that all the rates are correctly entered and that all

the calculations have been checked arithmetically.

(B +* page 8*+ and other related (Bs to voucher "o. ( dated 28?2-/ of !)ecutive !ngineer

#&$ 'ivision (ohmand Agency shows that embakment formation 9uantity of **.2/ m/ was carried out in

different R's in Rehabilitation of 7( +,- and , but in most of the R's deduction of L as re9uired under the

agreement was not deducted from the contractors bills, which resulted into overpayment of Rs. /288 to contractor

as per follows=

** ) L F ???.+ ) rate 22?.>- F Rs. />>8+*./


.


team)


12/26

Audit Para:

2. /erpa&ment of Rs. ,441"- to contractor

According to 7ara 220 and 221 of #$A #ode, u$ (iisional /fficer, before making paymentsto contractor, is re9uired to compare the 9uantities in the bills and see that all the rates are correctly entered and that


'uring Audit the accounts records of #&$ 'ivision (ohmand Agency for the year 2-2/, it was

observed from voucher "o. 2( th running bill dated /? 2-/ and (B "o. 8*+ for construction of 8 km shingle

road from 7u4 chinari o @n4ar 3rakhwa marble deposit 3afi area, shows that embakment 9uantity was paid for

2*/m/ J /*- instead of 2+* with km lead which resulted into overpayment of Rs./>??/ as per the followingM

Kty paid Rate paid Re9uired rate 'ifference verpayment

2*/m/ /*- 22? 2 //8

Add 2-L ?2>?8

otal />??/


.


team)


13/26

Audit Para:

/. /erpa&ment of Rs. 1.00 million to contractor

According to 7ara 220 and 221 of #$A #ode, u$ (iisional /fficer, before making paymentsto contractor, is re9uired to compare the 9uantities in the bills and see that all the rates are correctly entered and that


Goucher "o ( dated -2-/ and (B "o 22? at page - shows D of double bitumen

treatment for R' -2>2- for *-**.>? m/ against the technical sanction provision of +?.>/ m/ in R' -8-- of

the Rehabilitation of road from (omad


14/26

Audit Para:

. /erpa&ment of Rs. 14149"- to 8ontractor.




!" #&$ 'ivision (ohmand Agency over paid Rs. ??8+ to contractor in Rehabilitation of road

from 3enator @drees killy 0km1 A' "o. ?+/ upto 2nd Running bill during financial year 2-2/.an item of work water

bound (acadam Base course was paid with depth of 2N in R' --- instead of -.//N on Goucher "o ( dated

-2-/ and (B "o 22? at page 2, which resulted into overpayment of Rs. ??8+ as per the following detailM

Kty paid Re9uired 'ifference Rate verpayment

2/>./2m/ *?.+8 8-./ +?.>/ */++-

Add *L >?++

otal ??8+

(atter is reported for recovery.

.


team)


15/26

Audit Para:

*. /erpa&ment of Rs. ,254 to 8ontractor on account of m$a!ment ormation.




(B 22? at page and shows embakment of formation 9uantity of *22.+/ m/ and -8>.2-

m/ in Rehabilitation of road from 3enator @drees killy 0km1and (omad > ?+-8Add *L /**

otal >2*?/8

(atter is reported for recovery with intimation to the audit

.


team)


16/26

Audit Para:

?. Irregular pa&ment. /f Rs. .955 Million on tructure %or!.




!" #&$ 'ivision %AA (ohmand Agency paid Rs *-8>8+* for Rehabilitation of *- km road

'< to Attokhel A' "o. ?+/ 02/1 vide (B "o. 22? at page --, the payment include Rs. /+**2 for structure

work, the payment is irregular as the same was not provided in echnical sanction #@ sent to #hief !ngineer %AA

eshawar vide "o. /8>?2- dated 2>/2-.

(atter is reported for 5ustification and recovery with intimation to Audit.


team)


17/26

Audit Para:

>. Irregular pa&ment. /f Rs. 2#5 Million on tructure %or!.




$hile e)amining (B "o. 22? at page 2 an item of work D of shingle gravel material ic

compaction as speed J +/.** for a 9uantity 2?>? which comes a total of Rs. 2//*/ charged to the scheme

Rehabilitation of *- km in (ohmand agency for shewa farsh to 3enator @drees killy0km1 were paid while there is no

provision for the item in technical sanction.

he matter is reported for recovery with intimation to Audit.


team)


18/26

Audit Para:

8. /erpa&ment /f Rs. ,05#4"- to 8ontractor $& Misclassification of Rate.




!" #&$ 'ivision %AA (ohmand Agency paid Rs. 2-/2*+8 vide Goucher "o. 2( dated 8

2-/ for construction of R## Bridge at Ambar and 3wat river during financial year 2-2/. An item of work

e)cavation was paid J // by applying road way e)cavation in surplus unsuitable material instead of item "o. -/

-+b : !)cavation in shingle gravel rock formation not re9uired blasting J 2?.+ m/. his resulted into overpayment

of Rs. >-/*? as per the following.

Rate paid Rate Re9. difference Kty verpayment

// 2?.+ >.8 />* **8

Add #ost %actor *L 2*>>-

*+-

Add /-L above ?2/*?

otal >-/*?

he matter is reported for recovery with intimation to Audit.


team)


19/26

Audit Para:

+. /erpa&ment /f Rs. 1.224 million to 8ontractor.




(B "o. 22? at page 2* for the pro5ect Rehabilitation of *- km road in (ohmand agency for '< to

Attokhel shows triple surface treatment for R' -22-- for 9uantity of 2*/.*/ and paid for Rs. 22?>?* at page 2>

of the (B. ripple surface treatment for 7mO7m? was measured at page /*- for total 9uantity of 2?2.+ m2

and were paid at page ? for Rs ?/2-+*. ayment of Rs 22?>?* leads to double payment as the 9uantity was not

ad5usted in triple surface treatment 9uality and needs to be recovered from the contractor.Ience, reported for recovery with intimation to audit.

"a5eeb 6llah 7han

(Member of Internal Auditteam)


20/26

Audit Para:

2-. /erpa&ment /f Rs. 1.224 million to 8ontractor.




(B "o. 22? at page 2*, 2 and +? embakment of formation for +-2.?- m/ and */+.>2 m/ and

+>.*? m/ 9uantity for back filling behind retaining walls for the pro5ect Rehabilitation of *- km road in (ohmand

agency for '< to Attokhel. 'eduction for voids was not made, which resulted into loss of Rs. ?2>8+.2 as per

following detailM

Kty Goids J L Rate verpayment

!mbakment +-2.?- 2-./8? 2-- 2->>.2

%illing R$ ?/?.*? >-.-2 2+*.8- 2->2otal Rs.?2>8+.2

(atter is reported for recovery with intimation to audit.


team)


21/26

Audit Para:

21. Irregular +%ard of 8ontract for 10.024 Million and loss of Rs. 11.5,9 Million to 6oernment:

According to RA rules 2--, contract must be awarded through wide publicity.

!" #&$ (ohmand Agency awarded two contracts amounting Rs >/.>-? million and 2?./2

million to contractor Hason #onstruction during financial year 2-2/.

he following irregularities were noticed.

. pen tender system was not adopted as "@ was published addressing the pre9ualified

contractors only.2. pre9ualification tender system was not produced nor available on record./. #ontract was awarded with /-L premium which was unauthori4ed, as #@ of the scheme

were prepared on 2-L premium unauthori4dly.

. Authority for 2-L premium on #@ was neither produced nor available in agreement.*. By allowing /-L premium on #3R,


22/26

Audit Para:

22. ;nautori


23/26


24/26

Audit Para:

2#. Irregular %it dra%l of expenditures amounting to Rs. #25"-:

ara 2/ of the


25/26

Audit Para:

25. /erpa&ment of Rs. 14.011 Million to 8ontractors:

According to ara 22- and 22 of #$A #ode, 3ub 'ivisional fficer, before making payments to

contractor, is re9uired to compare the 9uantities in the bills and see that all the rates are correctly entered and that all

the calculations have been checked arithmetically.

!" #&$ Building 'ivision (ohmand Agency over paid Rs. ?--++8 to contractors on account ofe)cess payment of steel then re9uired actually consumed during financial year 2-2/ 0detail Anne)ed1.

he steel bar was calculated on N instead in 3 -.>* in foundation and -.??> in lintel beam.

he e)cess payment of steel is common in #&$ Building division (ohmand agency which needs detailin9uiry along with production of slab test.

(atter is reported for 5ustification and detail in9uiry at appropriate level.


team)


26/26

Audit Para:

24. Irregular xpenditures +mounting to Rs. 212.,1 million:

According to para 2.82 B&R, no work shall be commenced unless administrative approval by the

competent authority is accorded, and properly detailed design and cost estimate have been sanctioned, allotment of

funds made and orders for its commencement issued by the competent authority as mentioned in the AdministrativeApproval of the schemes being issued by the heads of concerned directorate with the approval of the competent

authority.

!" #&$ %AA 'ivision (ohmand Agency incurred e)penditure of Rs. 22.>/ million during financial

year 2-2/ without obtaining technical sanction from the competent authority. $orks were commenced by the

department before obtaining the technical sanction of cost estimates of the schemes

ADPNo. Name of Project

Total EstimatedCost

Expendituresin Million

26

Uprad. !f "# No. $c%ool to

Middle status in M&Aenc' 66.(2) #.(*

2+Uprad. !f , No. Middle to -i%status in M&Aenc' )+.()( .*

2*Uprad. !f 6 Primar' $c%ool tomiddle status in M&Aenc' ,).,"" ),.),

2(Uprad. !f ) middle sc%ool to%i% status in M&Aenc' )*."2 2+.##

2("Constr. !f /uildin for "# Nos.C-C in M& aenc' # )2.#(

+2,

Constr. !f 0a%ai daa Di1i. -

co1erin !3ces4 residences etc "2(.(" ,*.,6+

"#+2pro1. !f $%ed for Mac%iner' atMar/le uer' ").+" ",.#)(

Total 5s. n million 2"2.+)"

he irregularity occurred due to lack of internal financial control.

$hen reported to management, the (anagement replied that they have submitted the 3 to #hief !ngineer but did

not produced 3 evidence. Reply was not satisfactory as !)ecution of works without technical sanction is a serious

lapse and against the spirit of public interest. hus the e)penditure incurred before technical sanction is held irregular

and needs regulari4ation from the competent authority.

"a5eeb 6llah 7han

(Member of Internal Audit

team)

Audit Paras

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