AUDIT REPORT

ON THE ACCOUNTS OF
SECRETARY LOCAL GOVERNMENT,
SECRETARY PUBLIC HEALTH
ENGINEERING AND RURAL
DEVELOPMENT, KARACHI MUNICIPAL
CORPORATION, KARACHI WATER &
SEWERAGE BOARD, DISTRICT COUNCILS,
MUNICIPAL CORPORATION/ COMMITTEES
& TOWN COMMITTEES OF SINDH
AUDIT YEAR 2016-17

AUDITOR-GENERAL OF PAKISTAN
 TABLE OF CONTENTS

ABBREVIATIONS AND ACRONYMS .......................................................................... i

PREFACE .......................................................................................................................... v

EXECUTIVE SUMMARY ............................................................................................. vi

SUMMARY TABLES & CHARTS .............................................................................. xii

CHAPTER-I (SECRETARY LOCAL GOVERNMENT, KMC & KW&SB) ...... 1-91

CHAPTER-II (SECRETARY PHE & RD) ........................................................... 92-140

CHAPTER-III (DMCs KARACHI DIVISION) ................................................. 141-180

SPECIAL STUDY ON TRADE LICENCES ISSUED BY DMCs ................................

CHAPTER-IV (HYDERABAD DIVISION) ....................................................... 181-252

CHAPTER-V (MIRPURKHAS DIVISION) ....................................................... 253-290

CHAPTER-VI (SHAHEED BENAZIRABAD DIVISION) ............................... 291-322

CHAPTER-VII (SUKKUR DIVISION) .............................................................. 323-385

CHAPTER-VIII (LARKANA DIVISION) ......................................................... 386-441

ANNEXES .............................................................................................................. 442-544

 ABBREVIATIONS AND ACRONYMS
AIR Audit & Inspection Report
A.A. Administrative Approval
APT Appointment Promotion & Transfer
ABL Allied Bank Limited
APPM Accounting Policies & Procedure Manual
BPS Basic Pay Scale
BISP Benazir Income Support Programme
BOQ Bill of Quantity
CDGK City District Government Karachi
CDWP Central Development Working Party
CDD Community Development Department
CE Chief Engineer
Cft Cubic feet
CPWA Code Central Public Works Accounts Code
CPWD Code Central Public Works Department Code
CTR Central Treasury Rules
CSR Composite Schedule of Rates
CMO Chief Municipal Officer
CODC Chief Officer District Council
CNIC Computerised National Identity Card
DAC Departmental Accounts Committee
DDO Drawing & Disbursing Officer
DO District Officer
DG Director General
DC Deputy Commissioner
DMD Deputy Managing Director
DMC District Municipal Corporation
DDWP Departmental Development Working Party
DDWC District Development Working Committee
DLFA Director Local Fund Audit
DPC Departmental Promotion Committee
DAO District Accounts Office / Officer
E&M Electrical & Mechanical
EOI Expression of Interest
ECNEC Executive Committee for National Economic Council
F.A Financial Advisor
FAO Field Audit Office
F&A Finance & Accounts
FBR Federal Board of Revenue

i
FD Finance Division / Department
F&P Finance and Planning
FY Financial Year
FTN Free Tax Number
GoS Government of Sindh
GPF General Provident Fund
GST General Sales Tax
HBA House Building Advance
H.R Hot rolled
HRD&A Human Resource Development and Administration
HRA House Rent Allowance
HRM Human Resource Management
HS&TO Hydrant Service & Tanker Operation
HMC Hyderabad Municipal Corporation
HESCO Hyderabad Electric Supply Corporation
HBL Habib Bank Limited
HDA Hyderabad Development Authority
HTP Housing & Town Planning
IPC’S Interim Payment Certificate
IPSAS International Public Sector Accounting Standards
ITO Income Tax Officer
ID Identifier
KIHD Karachi Institute of Heart Diseases
KMC Karachi Municipal Corporation
KMDC Karachi Medical & Dental College
KW&SB Karachi Water & Sewerage Board
KIBOR Karachi Interbank Offered Rate
K.N.S Khairpur Nathan Shah
KDA Karachi Development Authority
LG Local Government
LGB Local Government Board
LGD Local Government Department
LPR Leave Preparatory to Retirement
LPC Last Pay Certificate
LMC Larkana Municipal Corporation
LERP Lyari Expressway Resettlement Project
MC Municipal Committee
MDA Malir Development Authority
MD Managing Director
MFDAC Memorandum for Departmental Accounts Committee
M&I Monitoring & Inspection
MS Medical Superintendent/Services

ii
MT&RI Municipal Training & Research Institute
NAM New Accounting Model
NBP National Bank of Pakistan
NEK North East Karachi
NSUSC North Sindh Urban Services Corporation
NADRA National Database and Registration Authority
NTN National Tax Number
NIT Notice Inviting Tender
NOC No Objection Certificate
OPS Own Pay Scale
PAC Public Accounts Committee
PAO Principal Accounting Officer
PDWP Provincial Development Working Party
PS Personal Secretary
PC-I Planning Commission Proforma-I
PD Project Director
P&F Pumping & Filter
P/L Providing& Laying
P/F Providing &Fixing
POL Petroleum, Oil & Lubricants
PWD Public Works Department
PA Procuring Agencies
PHE Public Health Engineering
PEC Pakistan Engineering Council
PTA Permanent Traveling Allowance
PHED Public Health Engineering Department
RA Running Account
R.E Resident Engineer
Rft Running feet
RO&DP Reverse Osmosis & Desalination Plant
RRG Revenue Resource Generation
R&T Road & Transport
RCC Reinforce Cement Concrete
RDD Rural Development Department
R&M Repair & maintenance
RTS Revised Technical Santion
RTO Regional Tax Office
SE Superintendent Engineer
S.S (HTP) Special Secretary for Housing & Town Planning
SCS&LGTA Sindh Civil Services & Local Government Training
Academy
S/F Supplying & Fitting

iii
SFR Sindh Financial Rules
Sft Square Feet
SLG Secretary Local Government
SLGB Sindh Local Government Board
SMH Sobhraj Maternity Hospital
SO Section Officer
SPPRA Sindh Public Procurement Regularity Authority
SR Supplementary Rule
SRC Standing Rates Committee
SUV Sports Utility Vehicle
SNE Schedule of new entry
SEPCO Sukkur Electric Power Company
SCIP Sindh Cities Improvement Investment Program
SBCA Sindh Building Control Authority
SDA Sehwan Development Authority
SPPR Sindh Public Procurement Rules
SCUG Sinch Council Unified Grade
SRB Sindh Revenue Board
STRN Standard Technical Report Number
TMA Town Municipal Administration
T&C Transport & Communication
TR Treasury Rules
TS Technical Sanction/Services
TO Town Officer
TC Town Committee
VOL Volume
WD Water Distribution
XEN Executive Engineer

iv
 PREFACE
Articles 169 & 170 (2) of the Constitution of the Islamic Republic of Pakistan, 1973, read
with Sections 8 and 12 of the Auditor General (Functions, Powers and Terms and
Conditions of Service) Ordinance, 2001, require the Auditor General of Pakistan to
conduct audit of the receipts and expenditure of the Secretary Local Government
Department, Secretary Public Health Engineering and Rural Development, Development
authorities of Sindh, Karachi Metropolitan Corporation, Karachi Water & Sewerage
Board, District Councils/District Municipal Corporations, Municipal Committees, Town
Committees and Union Councils of Sindh.
This report is based on audit of the accounts of various offices of the Secretary Local
Government Department, Secretary Public Health Engineering and Rural Development,
Development authorities of Sindh, Karachi Metropolitan Corporation, Karachi Water &
Sewerage Board, District Councils/District Municipal Corporations, Municipal
Committees, Town Committees, for the financial years 2015-16. The Directorate General
Audit, Local Councils Sindh, Karachi conducted audit during 2016-17 on test check basis
with a view to reporting significant findings to the relevant stakeholders. The main body
of the Audit Report includes only the systemic issues and audit findings having value of
Rs 1 million or more. Relatively less significant issues are listed in the MFDAC of the
Audit Report. The audit observation listed in MFDAC shall be pursued with the Principal
Accounting Officer at the Departmental Accounts Committee level and in all the cases
where the PAO does not initiate appropriate action, the audit observation will be brought
to the notice of the Public Accounts Committee through the next year’s Audit Report.
Audit findings indicate the need for adherence to the regularity framework, besides,
instituting and strengthening internal controls to avoid recurrence of similar violations
and irregularities.
Some of the observations included in this Report have been finalized in the light of
written responses and discussion with the managements. PAO, Secretary, Local
Government had convened DAC meeting for the audit year 2015-16 & 2016-17 on 16-18
December 2016, however, the whole exercise remained futile due to absence of working
papers by the management concerned.
The Audit Report is submitted to Governor of Sindh in pursuance of Article 171 of the
Constitution of the Islamic Republic of Pakistan, 1973 read with Section 116 of the Sindh
Local Government Act 2013, for causing it to be laid before the Provincial Assembly of
Sindh.

Islamabad Rana Assad Amin

Dated: Auditor General of Pakistan

v
 EXECUTIVE SUMMARY

The Director General Audit, Local Councils, Sindh, Karachi is responsible to carry out
the audit of 1,506 entities under the administrative control of Secretary Local
Government Department, Secretary Public Health Engineering & Rural Development,
including all Development Authorities, Karachi Metropolitan Corporation, Karachi Water
& Sewerage Board, District Councils/District Municipal Corporations, Municipal
Committees, Town Committees. This Directorate General has a human resource of 41
officers and staff for the purpose of conducting audit, which comprise 10,291 man days.
The annual budget (Salareis, TA/DA, and Printing) allocated to this office for the
financial year 2016-17 is Rs 64.402 million. The office has a mandate to conduct
regularity audit (compliance with authority audit) on test check basis with a view to
reporting significant findings to the stakeholders. This office also conducts performance
audit of programmes / projects and Special studies/Special Audits.

The Province of Sindh consists of six Divisions namely, Karachi, Hyderabad, Shaheed
Benazirabad, Sukkur, Mirpurkhas, and Larkana.

Sr. Divisions Name of Districts

1 Karachi East, West, South, Central, Korangi, Malir
Hyderabad, Badin, Dadu, Thatta, Jamshoro, Sujawal,
2 Hyderabad
Matiari, Tando Allahyar, Tando Muhammad Khan
3 Shaheed Benazirabad Shaheed Benazirabad, Sanghar, Naushahro Feroze
4 Sukkur Sukkur, Ghotki, Khairpur
5 Mirpurkhas Mirpurkhas, Umerkot, Tharparkar
6 Larkana Larkana, Shikarpur, Jacobabad, Kamber, Kashmore

a. Scope of Audit
The combined expenditure of the Secretary Local Government Department, Secretary
Public Health Engineering & Rural Development, all Development Authorities,
Karachi Metropolitan Corporation, Karachi Water & Sewerage Board, District
Councils/District Municipal Corporations, Municipal Committees, and Town
Committees of Province of Sindh for the financial year 2015-16, was Rs 79,277.461
million against budget of Rs 122,439.345 million covering 465 formations under 02
Principal Accounting Officers (PAOs). Out of this, DG Audit, Local Councils Sindh,
audited an expenditure of Rs 63,421.969 million, which in terms of percentage is 80%

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for the financial year 2015-16. Annex-II (Audit Impact Summary) provides additional
information regarding the audit impact.

Expenditure 2015-16

Total budgeted receipts of the Secretary Local Government Department, Secretary

Public Health Engineering & Rural Development, all Development Authorities,
Karachi Metropolitan Corporation, Karachi Water & Sewerage Board, District
Councils/District Municipal Corporations, Municipal Committees, Town Committees
for the financial year 2015-16 were Rs 104,465.256 million. Out of this, DG Audit,
Local Councils, Sindh, audited receipts of Rs 62,679.154 million, in terms of
percentage is 60%.
The audited formations i.e. Drawing & Disbursing Officer (DDO) wise were selected
keeping in view the significance and risk assessment. The samples were selected after
prioritizing risk areas by determining significance and risk associated with identified
key controls.

vii
b. Recoveries at the instance of audit
Recoveries of Rs 74,145.354 million were pointed out during the audit. However,
recoveries of Rs 8.729 million were effected during 2016-17. The Less recoveries
were due to non-holding of DAC meetings.

c. Audit Methodology
Audit was performed through understanding the business process with respect to
functions, control structure, prioritization of risk areas by determining their
significance and identification of key controls. This helped auditors in understanding
the systems, procedures, environment, and the audited entity before starting field
audit activity. Audit used desk audit techniques for analysis of compiled data and
review of permanent files / record. Desk Audit greatly facilitated identification of
high risk areas for substantive testing in the field. The selection of audited formations
was carried out on the basis of materiality / significance & risk assessment. Selections
of samples were made on the basis like financial outlay, weaknesses in internal
controls, non-compliance of laws, rules, regulations, failure to achieve economy,
efficiency & effectiveness and prescribed procedures and then reporting and follow
up.

d. Audit Impact
On the pointation of audit, KW&SB has stopped the sanction of Petroleum, Oil and
Lubricants (POL) to the employees for their private vehicles. Besides, the Authority
has started deduction of house rent and electricity charges on fixed rates from the
salaries of employees residing in official accommodations. Moreover, KW&SB has
issued directives for preparation of Log Books, History Sheets, and Petrol
Consumption Accounts of each vehicle to justify the expenditure. TMAs have started
to post NITs on SPPRA website.

e. Comment on Internal Controls and Internal Audit Department

Several loopholes in the internal control system noticed during the course of audit,
have been included in the audit report for the year 2016-17. However, other less
significant observations regarding internal control weaknesses have been incorporated
in MFDAC.

viii
 Of all departments audited by DG Audit, Local Councils Sindh, internal audit
departments exist in KMC and KW&SB only, but are not functioning effectively,
whereas, Pre-Audit/Internal Audit of TMAs is being conducted by Local Fund Audit,
Government of Sindh.

f. The key audit findings of the report

i. Misappropriation/Fraud amounting to Rs 919.044 million was pointed out in 43

cases.

ii. Non-Production of Record amounting to Rs 17,096.130 million was pointed out

in 08 cases.

iii. Non-Compliance/Violation of Rules amounting to Rs 39,670.826 million was

pointed out in 314 cases.

iv. Internal Control weakness amounting to Rs 94,411.822 million was pointed out
in 56 cases.

v. Key Audit findings of Special Study related to “Issuance of Trade License in

District Municipal Corporations, Karachi”.

g. DAC meetings

Despite numerous correspondences with Secretary, Local Government Deaprtment,

GoS, Chief Secretary, Government of Sindh and Minister, Local Government, GoS,
the administrative units didn’t care to submit their working papers or replies to audit.
A schedule of DAC meetings was issued on 16-18 December, 2016 to discuss audit
observations, but the whole exercise remained futile. On the instance of Secretary,
Local Government a verification schedule was issued from December 2016 to January
2017; however, the response remained lukewarm. Most of entities didn’t reply or
produce their record for verification. The few replies, which were furnished, were
without valid justification and necessary record.

Audit paras for the audit years 2016-17 involving procedural violations including
internal control weakness and irregularities. Besides, MFDAC for the audit year

ix
 2015-16 has also been reproduced since paras were not discussed in DAC meeting and
no replies were submitted by auditee departments.

No. of MFDAC Para No. of DAC

Amount involved in
(LG, District Amount meetings conducted No. of Paras
Year settled Paras
Governments /TMAs/ involved on MFDACs settled in DACs
(Rs in million)
UCs) Reports
2015-16 2,368 62,906.36 -Nil- -Nil- -Nil-
2014-15 2,745 79,696.62 -Nil- -Nil- -Nil-
2013-14 9,723 82,095.84 -Nil- -Nil- -Nil-

h. Non Pursuance to audit observations of fraud, embezzlement and recoveries by

Principal Accounting Officers (PAO) / Controlling Officers

This office is under legal obligation to report suspected cases of fraud, embezzlement
to investigation agencies. In this connection the suspected cases / paras to the tune of
Rs 270 million have already been communicated to Secretary, Local Government
(LG), GoS for financial year 2014-15. However, the Secretary, LG / Principal
Accounting Officer (PAO) has neglected the gross discrepancies in the financial
transactions despite pointation of audit.

i. Recommendations

i. The formatons under Secretary Local Government Department and Secretary

Public Health Engineering & Rural Development, should comply with the SPPRA
Rules 2010 for procurement of goods and services.
ii. Recovery should be effected and disciplinary action be taken against the officials
involved in cases of embezzlement of public money, violation of rules and
regulations.
iii. Inquiries should be held to fix responsibility for losses and wasteful expenditure.
iv. There is need to strengthen internal controls to ensure that reported lapses may not
be repeated in future and fair value for money is obtained from public spending.
v. Audit has recommended to Secretary, Local Government Department for issuance
of directives against compulsory pre-audit before releasing / processing financial
transaction. Moreover, there is need of uniform guidelines for a sound and efficient

x
 pre-audit and certification of accounts.
vi. It is recommended to work in liaison with DAGP to formulate a proper accounting
code and chart of accounts for TMAs / MCs / DMCs /UCs and Local Government
Departments. For instance there is no head of account for remittance of birth /
death / marriage / divorce certificates in the prevailing chart of account for Local
Government Departments.

xi
 SUMMARY TABLES & CHARTS

Table 1: Audit Work Statistics

[Rupees in Million]
Budget
Sr. Description No.
Expenditure Revenue

1 Total Entities (PAOs)in Audit Jurisdiction 02 122,439.345 122,439.345

2 Total formations in Audit Jurisdiction 465 122,439.345 122,439.345
3 Total formations Audited 180 63,421.969 62,679.154
4 Audit & Inspection Reports 180 63,421.969 62,679.154
5 Special Audit Reports - 0 0
6 Performance Audit Reports - 0 0
7 Other Reports (Relating to Local Councils) - 0 0

Table 2: Audit observation Classified by Categories

[Rupees in Million]
S. No. Description Amount under audit observation

1 Asset Management 50.734

2 Financial Management 3,215.716
3 Internal controls 94,410.793
4 Violation of rules 36,405.405
5 Others 18,015.174
Total 152,097.822

xii
 Table 3: Outcome Statistics
[Rupees in Million]
Expenditure
Total
on Acquiring Receipts Total
Non- Civil Last
Sr. Description Physical Salary (Revenue Others Current
Salary Works Year
Assets Targets) Year
(2015-16)
(Procurement)

Outlays Audited
1 33.754 28,506.132 15,855.492 19,026.591 62,679.154 - 126,101.123 113,083.113
(FY 2015-16)

Amount Placed
2 under Audit 31.475 3,623.543 12,552.992 30,667.538* 87,982.863* 17,239.411 152,097.822 127,683.839
Observation

Recoveries
3 Pointed Out at the - 515.727 105.235 395.122 73,105.556 23.714 74,145.354 90,153.817
instance of Audit
Recoveries
Accepted
4 - - - - - - - -
/Established at the
instance of Audit
Recoveries
5 Realized at the - 2.182 3.492 - 3.055 - 8.729 0.274
instance of Audit
*The amount placed under observation is more than the outlays audited for the current year because the audit observations include observations
pertaining to previous year’s also.

xiii
Table 4: Table of Irregularities pointed out
[Rupees in Million]
Amount Placed under
Sr. Description
Audit Observation
Violation of Rules and regulations and violation
1 of principle of propriety and probity in public 39,670.826
operations.
Reported cases of fraud, embezzlement, thefts
2 919.044
and misuse of public resources.
Accounting Errors (accounting policy departure
from NAM[1], misclassification, over or
understatement of account balances) that are
3 -
significant but are not material enough to result
in the qualification of audit opinions on the
financial statements.
Quantification of weaknesses of internal control
4 94,411.822
systems.
Recoveries and overpayments, representing
5 cases of establishment overpayment or -
misappropriations of public monies
6 Non-production of record. 17,096.130
Others, including cases of accidents, negligence
7 -
etc.
Total 152,097.822

Table 5: Cost Benefit

[Rupees in Million]
S. No. Description Amount
1 Outlays Audited 126,101.123
2 Expenditure on Audit 64.402
3 Recoveries realized at the instance of Audit 8.729
Cost-Benefit Ratio 1:0.14

1The Accounting Policies and Procedures prescribed by the Auditor General of

Pakistan which are IPSAS (Cash) compliant.

xiv
 CHAPTER-I

SECRETARY, LOCAL GOVERNMENT DEPARTMENT,

ALL DEVELOPMENT AUTHORITIES,
SINDH BUILDING CONTROL AUTHORITY,
KARACHI METROPOLITAN CORPORATION &
KARACHI WATER & SEWERAGE BOARD

1
1.1 INTRODUCTION/PROFILE OF THE ENTITIES
1.1.1 Secretary Local Government
Secretary, Local Government Department (LGD), Sindh, being the PAO is the
overall administrative head of all development authorities, KMC / Municipal
Corporations, KW&SB, Chief Officer, District Councils, defunct Town / Taluka
Municipal Administrations (TMAs) and Union Councils (UCs) etc.

1.1.2 Karachi Metropolitan Corporation

Activities of KMC are managed through offices of Administrator and Senior
Directors under Sindh Local Government Act, 2013. Each group of Office consists of a
Senior Director. The Senior Director, by means of a standing order, distributes the work
among the officers, branches, or sections of each office. Following is the list of
departments which manage the activities of KMC.
1. Administrator 2. Senior Director (F&P)
3. Senior Director (Law) 4. Senior Director (IT)
5. Directors (Education, LBW) 6. Senior Director (Literacy)
7. Senior Director (E&IP) 8. Senior Director (MS)
9. Senior Director, Health Services 10. Director General (KMTC)
11. Director General (P&H) 12. Senior Director (T&C)
1.1.3 Karachi Water & Sewerage Board
The office of Chairman / Managing Director, Water & Sewerage Board, Karachi,
comprises of five departments headed by Deputy Managing Directors. Besides, different
projects are executed under Project Directors. Following is the list of departments which
manage activities of KW&SB.
1. Deputy Managing Director, Planning,
2. Deputy Managing Director, Technical Services
3. Deputy Managing Director, Finance
4. Deputy Managing Director, Revenue Resource Generation
5. Deputy Managing Director, Human Resource Development and Administration

2
 1.1.4 Comments on Budget and Accounts (Variance Analysis)

i. Budget of 2015-16 of Entities of Secretary Local Government Audited

(Rupees in Million)
S. Excess (+)
Formation Particulars Budget Expenditure
No. Savings (-)
/ Revenue
Salary 754.774 641.558 (113.216)
Secretary Local Government Non-Salary 416.852 291.796 (125.055)
1
Department Development - - -
Revenue - - -
Salary 940.934 804.950 (135.984)
Hyderabad Development
2 Non-Salary 1,196.749 109.282 (1,087.467)
Authority
Development 7,159.400 490.037 (6,669.363)
Salary 1,936.754 2,741.242 804.488
Sindh Building Control Non-Salary 5,877.050 1,253.111 (4,623.939)
3
Authority Development - - -
Revenue 11,301.650 6,563.669 (4,737.981)
Salary 44.739 26.217 (18.522)
Karachi Development Non-Salary 17.930 2.091 (15.839)
4
Authority Development - - -
Revenue - - -
Salary 164.145 14.884 (149.261)
Director General, Lyari Non-Salary 44.304 43.884 (0.420)
5
Development Authority Development 285.395 6.720 (278.675)
Revenue - - -
Salary 41.199 34.333 (6.867)
Director General, Malir Non-Salary 19.226 13.733 (5.493)
6
Development Authority Development 32.959 20.600 (12.360)
Revenue - - -
Salary 92.567 77.139 (15.428)
Director General, Larkana Non-Salary 9.337 6.669 (2.668)
7
Development Authority Development - - -
Revenue - - -
Salary 198.984 169.136 (29.848)
Director General, Sehwan Non-Salary 40.065 28.046 (12.020)
8
Development Authority Development 1,701.811 1,021.087 (680.724)
Revenue 2,440.022 1,084.318 (1,355.704)
Salary 4,174.095 4,509.458 335.363
Non-Salary 7,621.513 1,748.611 (5,872.901)
Development 9,179.565 1,538.443 (7,641.122)
Grand Total 20,975.173 7,796.513 (13,178.660)
Revenue 13,741.672 7,647.987 (6,093.685)

3
 Expenditure 2015-16

The original budget of Secretary, Local Government Department and

development authorities, during financial year 2015-16, was Rs 20,975.173 million,
against which the total expenditure incurred was Rs 7,796.513 million, resulting in
overall savings of Rs 13,178.660 million, which was 62.830% of total budget.

ii. Budget of Karachi Metropolitan Corporation

(Rupees in Millions)
Expenditure Excess (+)
Formation Particulars Budget
/ Revenue Savings (-)
Salary 6,833.811 5,808.739 (1,025.072)
Karachi Metropolitan Non-Salary 2,372.907 1,661.035 (711.872)
Corporation Development 11,456.523 6,873.914 (4,582.609)
Total 20,663.240 14,343.688 (6,319.553)
Revenue 20,521.443 8,208.577 (12,312.866)

4
 Expenditure 2015-16

The original budget of Karachi Metropolitan Corporation, during financial year

2015-16 was Rs 20,663.240 million. The total expenditure incurred was Rs 14,343.688
million, resulting into overall savings of Rs 6,319.553 million, which was 30.584% of
total budget.

iii. Budget of Karachi Water & Sewerage Board 2015-16

[Rupees in Million]
Expenditure Excess (+)
Formation Particulars Budget
/ Revenue Savings (-)
Salary 4,996.506 4,247.030 (749.476)
Non-Salary 8,179.851 5,725.896 (2,453.955)
Karachi Water &
Development 19,034.241 11,420.545 (7,613.696)
Sewerage Board
Total 32,210.598 21,393.470 (10,817.128)
Revenue 32,210.598 17,715.829 (14,494.769)

5
 Expenditure 2015-16

The total budget of Karachi Water & Sewerage Board, during financial year
2015-16, was Rs 32,210.598 million against the expenditure incurred was Rs 21,393.470
million. However, there were overall savings of Rs 10,817.128 million, which was
33.583% of total budget.

1.1.5 Brief comments on the status of compliance with PAC Directives

The audit reports pertaining to audit year 2011-12, 2012-13, 2013-14, 2014-15
and 2015-16 have been submitted to Governor of Sindh. Detail of PAC meetings is given
below:

Sr. Audit Year No. of Paras Status of PAC Meetings

1. 2011-12 44 Held on 13-05-2016
2. 2012-13 39 Nil
3. 2013-14 43 Nil
4. 2014-15 58 Nil
5. 2015-16 59 Nil

As indicated in the above table, no PAC meeting was convened to discuss the
audit report of SLG, KMC and KW&SB for the audit years 2012-13, 2013-14, 2014-15
& 2015-16.
6
1.2 AUDIT PARAS
1.2.1 Fraud / Embezzlement / Misappropriation
1.2.1.1 Fraudulent allotment of plots - Rs 399.238 Million
According to Para 23 of GFR, “Every Government officer should realize fully
and clearly that he would be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will also be held
personally responsible for any loss arising from fraud or negligence on the part of any
other Government officer to the extent to which it may be shown that he contributed to
the loss by his own action or negligence.”
Ex-Project Director Lines Area Re-Development Project allotted 227
commercial plots of 32 square yards by illegally carving out one large plot measuring
7264 square yards at the throw away price of Rs 200 per Sq. Yard. The plot was
earmarked to be auctioned at the minimum reserve price of Rs 50,000 per Sq. Yard. This
was done by forging and fabricating the note sheet through forged signature of Ex-DCO,
Karachi Mr. Roshan Shaikh to seek change in approved auction process.
Audit is of the view that due to this fraudulent allotment of plots, Government
sustained a loss of Rs 399.238 million.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on account of fraudulent allotment of
plots.
[AIR Para: 35]

1.2.1.2 Doubtful Expenditure without Supporting Vouchers

Rs 114.587 Million
As per Rule-23 of Sindh Financial Rules, “Every Payment including repayment
of money previously lodged with Government for whatever purpose, must be supported
by a voucher setting forth full and clear particulars of the claim”.
Further, as per Section(I) of Appendix 18-A of SFR Vol-I, "Means should be
devised to ensure that every Government servant realizes fully and clearly that he will be

7
held personally responsible for any loss sustained by Government through fraud or
negligence on his part, and that he will also be held personally responsible for any loss
arising from fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his own action or
culpable negligence”.
Various formations working under Secretary (LGD), KMC & KW&SB, during
financial year 2015-16, paid an amount of Rs 114.587 million without supporting
vouchers/record to justify the expenditure, in violation of above rules. Details are
provided at Annex-SLG1.
Audit is of the view that due to non-availability of relevant supporting
vouchers/details, audit could not verify the authenticity of the expenditure incurred from
public money. Besides, chances of misappropriation of public money cannot be ruled out.
Violation of prescribed rule was due to weak internal control system.
The matter was reported to managements during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of doubtful expenditure
without availability of supporting vouchers/details. Besides, same be produced to audit
for scrutiny and verification.
[AIR Paras: 4, 31, 9, 11, 11, 23]

1.2.1.3 Loss to Government due to Illegal Water Connections

19.246 Million
According to Section 7 (Chapter-V, “Powers & Functions of the Board”) of the
Karachi Water & Sewerage Board Act, 1996, the board shall;
ii. Levy, collect or recover rates, charges of fees for water supply and
sewerage services, including arrears thereof;
iii. Have the power to reduce, suspend or disconnect the water supply in the
event of contravention of the provisions of this Act or regulation;
iv. Have the power to impose surcharge, not exceeding double the amount
due, if rates, charges of fees for water supply or sewerage services or the
arrears thereof are not paid within the fixed time by the Board”.

8
 During audit of office of the Deputy Managing Director Revenue Resource
Generation (RRG) KW&SB, for the Financial Year 2015-16, it was observed that office
failed to take effective punitive action against 80 illegal water connections, which
resulted into loss of revenue in violation of above rules.
Audit is of the view Government sustained loss due to illegal water connections
which constituted weak financial management.
Deviation from prescribed rules & procedures constituted weak internal control
system.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for not taking
appropriate action against illegal water connections, under intimation to audit
[AIR Para: 1]

1.2.1.4 Misuse of Public Fund - Rs 8.802 Million

As per Section 5.2.2.1 and 5.2.2.2 of Accounting Policies and Procedure Manual
issued by the Auditor General of Pakistan, “All monies received as revenue of the
Government, must be banked in the name of the Government without delay and included
in the Consolidated Fund of the respective Federal or Provincial Government and Public
Account receipts, other than revenue, must be banked in the name of the Government
without delay and included in the Public Account of the respective Federal or Provincial
Government”.
Further, as per Section 5.2.2.11 of Accounting Policies and Procedure Manual
issued by the Department of Auditor General of Pakistan, “Any public monies received
by a Government office, where permitted under the above direction are not revenues on
the part of the collecting entity. No public monies received by a Government office will
be retained to meet departmental or other forms of expenditure unless otherwise
permitted by the Government”.
In violation of above rules Regional Director Town Planning (SBCA)
Hyderabad, during financial year 2015-16, has drawn an amount of Rs 4.706 million
from SBCA account NBP CD4002734907. The said amount was deposited by sponsors
of various housing schemes against scrutiny / approval fee. The department has not
9
deposited the said amount in the consolidated fund of the Province and Rs 4.706 million
has been drawn illegally, without any approval. On the pretext of meeting out
contingencies, an amount of Rs 4.706 million was misappropriated. Audit observed
following discrepancies in the withdrawal of said amount.
i. The office of Director, Town Planning has drawn money without necessary
pre audit either from the Accountant General Sindh or Local Fund Audit,
GoS.
ii. The transactions were neither shown in the main cash book nor in reconciled
expenditure statement (from Treasury / DAO).
iii. The expenditure was incurred in gross violation of General Financial Rule,
Treasury Rule and DDO handbook.
Moreover, PD, Lines Area Re-Development Project, KDA, had incurred an
amount of Rs 4.096 million, during financial year 2014-15 on account of payment of pay
of staff from budget allocated for development works, in violation of above rules.
Audit is of the view that withdrawal of public money constituted
misappropriation of public money.
Violation of prescribed rules was due to weak internal control which constituted
weak financial management.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends holding inquiry to fix responsibility on person(s) at fault,
besides; recovery may be initiated for audit verification.
[AIR Paras: 8, 24]

1.2.1.5 Doubtful Withdrawal of Cash from the Accounts of Housing Schemes

Rs 4.625 Million
As per Rule-23 of Sindh Financial Rules, “Every Payment including repayment
of money previously lodged with Government for whatever purpose must be supported
by a voucher setting forth full and clear particulars of the claim”.
Further, as per Rule 9.2.1.1 of APPM, “Each self-accounting entity is
responsible for all aspects of its own financial transactions from budgetary control,

10
approval, certification, authorization through to recording, reconciliation reporting and
monitoring of transactions”.
Director General, Sehwan Development Authority withdrew public funds
amounting to Rs 4.625 million, during financial years 2014-16, in cash from the bank
accounts of different housing schemes. However, no vouchers, bills or supporting
vouchers were found against the transactions. Moreover, the counterfoils of the
chequebooks showed that the crossed cheques were issued, but the bank statements
revealed that transaction were made in cash, in violation of rules. Details are provided at
Annex-SLG2.
Audit is of the view that management withdrew cash from bank account which
should have been paid through cross cheque, so that money trail could be established,
resulted into fraudulent withdrawal of cash and weak financial management.
Withdrawal of cash from the bank was due to weak internal control system.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management on account of
fraudulent withdrawal of cash from the accounts of housing schemes. Moreover, amount
be recovered from the person(s), under intimation to audit.
[AIR Para: 21]

1.2.1.6 Doubtful Payment on Earth Work - Rs 3.000 Million

As per Rule-17(1) of SPPRA Rules 2010, “Procurements over one hundred
thousand rupees and up to one million rupees shall be advertised by timely notifications
on the Authority’s website and in print media in the manner and format prescribed in
these rules”.
Further, as per Rules (11) (1), ibid, “All procuring agencies shall devise a
mechanism for planning in detail for all proposed procurements, determining the
requirement of the procuring agency, within its available resources, and prepare an
annual or a longer term rolling plan, detailing the procurement methods applicable for
specific procurements (12) (1) all proposed procurements for each financial year and
shall proceed accordingly without any splitting or regrouping”.

11
 Director General, Sehwan Development Authority, made payment of Rs 3.000
million, during financial year 2015-16, by preparing thirty identical quotations of earth
work embankment in deserted area through two cheques issued on the same dates. Audit
observed that the said payments were made without work estimates as well as
non-inviting open tender. Moreover, neither sales tax registration was provided nor PEC
category of contractor was available in the record, in violation of above rules.
Audit is of the view that payments made without recording measurement dates
on bills/payment vouchers resulted into fraudulent payment through bogus bills and was
due to weak financial management.
Deviation from prescribed rules and procedures resulted into weak internal
control system.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management on account of
fraudulent payment on earth work embankment carried out through identical quotations,
under intimation to audit.
[AIR Para: 14]

1.2.1.7 Illegal purchase of Toyota Corolla GLI Car - Rs 2.100 Million

According to Notification issued by Finance Department, Government of Sindh
with the directives of Chief Minister, Sindh vide no. FD/B&E-1/2(360)/Ban/2012-13
dated 17-5-2013, “the ban was imposed by the Chief Minister for a. Procurement of
vehicles of all categories and luxury items like air conditioners, furniture, computer etc
from non-development budget”.
As per Finance Division (Expenditure wing), Government of Pakistan, office
memorandum No.F7(1) Exp.IV/2011, 18th march 2011, “Total ban on purchase of
physical assets including all vehicles was imposed”.
The Director General, Malir Development Authority, Karachi executed
development work Construction of water reservoir in sector 81 in Taiser town scheme 45
MDA. The contract was awarded to M/s Glamour Engineering by adding the provision of
purchase of luxury car in work order, amounting to Rs 2.100 million without lawful
authority and having provision in PC-I in violation of above rule.

12
 Audit is of the view that the management did not observe the prescribed
procedure laid down for the financial discipline in the department that shows lack of
internal controls in the department, which constituted weak financial management.
Non-compliance of rules may lead to misuse of public funds and loss of
Government.
The matter was reported to managements during October, 2016, but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit recommends that responsibility may be fixed upon the person(s) at fault
for misuse of public funds and purchase of car.
[AIR Para: 6]

1.2.1.8 Misuse of Funds on Private Rest House - Rs 1.500 Million

As per Rule 274 of SFR Vol-I, “the superintendent engineer, works department
will keep of register of all buildings within a circle”.
Further according to Rule 272 of SFR Vol-I, “as no suitable Government
building available, private may be hired for public purposes, the rent being paid by the
public office or department of occupying. When the building is entity used for office
accommodation, the rent is wholly chargeable to Government, while, when it is partially
for office purposes and partially for the residential purposes and the share of the rent
payable by the Government will be proportionate to the amount of building set aside
solely for office use but will not exceed half rent of the house”.
Director General, Sehwan Development Authority incurred expenditure of
Rs 1.500 million, during financial years 2014-16, on acquiring of a private bungalow
from Mr. Burhan Memon. The entity had its own rest house worth Rs 8.000 million,
which was constructed in 2009, but not utilized. Despite this fact another rented building
was hired without approval and technical vetting from Works Department, Government
of Sindh. Moreover, the detail of official usage and accommodation of Government
servant for residential purposes was not mentioned in payment, in violation of above rule.
Audit is of the view that the wastage of public funds on rent of rest house
resulted into financial indiscipline when the authority was already facing difficulties to
pay salaries to the employees.

13
 Deviation from prescribed rules resulted into loss of public money and was due
to weak financial management and internal controls.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management, under intimation to
audit.
[AIR Para: 3]

1.2.1.9 Illegal Approval of Layout Plans of Housing Societies

As per Circular by Director of Settlement, Survey And Land Records, Sindh,
Hyderabad vide No GM/MISC/449 DTD 03/03/2016, stating that henceforth no
agriculture land/housing scheme shall be approved without proper verification from this
Directorate, also the land record produced for approval of various schemes may also be
sent to this office for verification and updating of record as directed by the Honorable
Supreme Court Of Pakistan and to avoid above mentioned obligations and litigations.
According to Karachi Building & Town Planning Regulations-2002 adopted by
Sindh Building Control Authority vide office memorandum No.SO(L&C)HTP/SBCA/12-
17/12 dated: 13 March, 2012 following pre-requisites are required by Director, Town
Planning, Sindh Building Control Authority for approval of layout plan.
 NOC from concerned Taluka Municipal Administration. (TMA).
 NOC from Utility Service Departments (where applicable).
 Applicant`s ownership, lease deed (99 years), Form VII-B, Sale deed and
General Power of Attorney (if applicable).
 Field Book Otaras, Deh Map of involved Rupees and Survey numbers. on
which the schemes exists, Roop kari duly signed by the concerned
Mukhtiarkar.
 The applicant on demand will produce non-Encumbrance certificate duly
signed by the Sub Registrar Concerned.
 Sponsor shall submit undertaking on Stamp-paper of Rs 100/- denomination
that: No Government dues are outstanding against the proposed land of
scheme.

14
  The Development of infrastructure i.e. metaled roads; water supply, sewerage
disposal etc. shall be completed by the Sponsors or concerned Taluka
Municipal Administration under a mutual agreement.
 Sponsor of the scheme shall be responsible for demarcation of plots, and
handing over the physical possession of amenity plots shown in Layout Plan
to the concerned Taluka Municipal Administration within three months under
intimation to the Town Planning Department.
 Sponsor/Developer/Builder shall also be responsible for measurement and
dimension of plots, ownership and any type of litigations etc. if arises at any
stage.
 The owner has liability to complete the entire development within three years
of approval
 The Owner or Sponsor is bound to furnish quarterly development progress
report to department without fail which shall lead to cancellation of schemes,
if in case of non-compliance.
 The owner in bound to provide schedule of development and there is binding
on master plan office to ensure that no addition or alteration shall be made in
approve layout plan.

The Regional Director, Town Planning (SBCA, Hyderabad Region) illegally

approved layout of different housing schemes, which got approved during financial year
2015-16. Audit selected cases on test case basis however the sample represented a serious
violation of procedures and rules. Detail is provided at Annex-SLG3.
Audit is of the view that the whole exercise of approving layout of housing
schemes in presence of all mentioned discrepancies has no provision in established rules
and regulations. It constituted irregular transactions where the authority exceeded its legal
domain.
Deviation from prescribed rules instruction resulted into weak internal control
system which constituted weak financial management.
The matter was reported to managements during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for illegal approval
of layout of housing schemes, under intimation to audit.
[AIR Para: 1]
15
1.2.1.10 Illegal Sale of Bahria Town 1,165 Acres
As per Circular by Director of Settlement, Survey and Land Records, Sindh,
Hyderabad vide No GM/MISC/449 DTD 03/03/2016, henceforth no agriculture
land/housing scheme shall be approved without proper verification from this Directorate,
also the land record produced for approval of various schemes may also be sent to this
office for verification and updating of record of this record as directed by the Honorable
Supreme Court Of Pakistan and to avoid above mentioned obligations and litigations.
As per Notification No.SO(Dev)/HTP/102/2000 dated 26-06-2001 and Circular
No.SO(L&C)/HTP/3/119/2007 dated 07-07-2007, “No private housing scheme can be
launched unless its layout plan and building plan has been got approved from Town
Planning Department, Government of Sindh.
According to Sindh Disposal of Urban Land Ordinance, 2002 Section (11)
Conversion of plot, “No residential plot shall be converted for any other purpose except
with the prior approval of the prescribed authority and on the prescribed conditions. The
competent authority for change of plan/plot is regularization committee under Sindh
Board of Revenue”.
As per Section 7A of Sindh Building Control Ordinance, 1979, “[7-A. Violation
of certain provisions.- Where the provisions of sub-section (1) of Section 6 are violated
the building may without prejudice to any other action including sealing of the building
or ejectment of the occupants be ordered by the Authority or any officer of the Authority
authorized in this behalf to be demolished, at the cost of the builder in the case of
public buildings and the owner in other cases”.
In the Office of Regional Director, Town Planning, (SBCA), Hyderabad, the
sponsors of Bahria Town have submitted their layout plan for approval and scrutiny of
proposed Bahria Town, Qazi Ahmed, District Shaheed Benazirabad. Following
discrepancies were noted in the said scheme.
i. The sponsors of Bahria Town have already sold their scheme to General
public, even before legally acquiring the land.
ii. The acquisition of land has mutation as agricultural land. Any proposal of
a Housing Scheme on agricultural land is illegal in accordance with the
Colonization of Government Lands Act, 1912 and Sindh Urban Disposal
of Land Ordinance 2002.

16
 iii. Instead of informing the General Public and relevant Authorities of this
fraudulent transaction and initiating necessary legal proceeding, the
department has started the process of legalization of the said scheme.
Audit is of the view that in-action on the part of management will create Public
nuisance in future.
Deviation from prescribed rules instruction resulted into weak internal control
system prevailing in the department.
The matter was reported to the management during December, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for not taking timely
and appropriate action, under intimation to audit.
[AIR Para: 15]

1.2.1.11 Illegal Conversion of Residential Plots into Commercial Plots

According to Sindh Disposal of Urban Land Ordinance, 2002 Section (11)
Conversion of plot, “No residential plot shall be converted for any other purpose except
with the prior approval of the prescribed authority and on the prescribed conditions. The
competent authority for change of plan/plot is regularization committee under Sindh
Board of Revenue”.
Further, as per Section 4 of Sindh Urban Land Ordinance 2002, “Assessment of
Loss. — (1) Government may appoint a committee for carrying out the purposes of this
Ordinance. (2) Where the committee, after making such enquiry as deemed fit, is satisfied
that the allotments, conversions or exchanges of Government land are obtained or granted
for residential, commercial or industrial purposes at the rates lower than the market value
in violation of law or ban, it shall determine the amount of loss caused to Government
and call upon the person concerned to pay such amount within the specified period. 5.
Regularization of allotments, conversions and exchanges.–The allotments, conversions or
exchanges made at the market value or in respect of which the amount determined”.
Regional Director, Town Planning (SBCA), Hyderabad, has illegally converted
64,621 Square yards of land from residential housing schemes to commercial schemes
and granted illegal approval from 2013 to 2016, in violation of rules. The conversion of
said land was in violation of authority of High Powered Regularization Committee / Land
Committee constituted by Sindh Board of Revenue.
17
 Audit is of the view that the whole exercise of conversion of a category of an
already approved layout plan has no provision in establish rules and regulations regarding
disposal of urban land. It constituted fraudulent transactions where the authority exceeded
its legal domain.
Deviation from prescribed rules / instructions resulted into unauthorized
conversion of category of plots. Moreover, the public was deprived of benefits of amenity
plots, which created hindering in provision of civic amenities.
The matter was reported to managements during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for illegally
converting residential plots to commercial plots while also violating the 63:37 formula of
residential + commercial / amenity plots), under intimation to audit.
[AIR Para: 2]

1.2.1.12 Misleading of General Public by Re-Launching Same Schemes with

Different Names
According to joint venture agreement reached between SDA and M/s Hussain
(Private) Limited on 5th August and 27th June 2009, the name of Highway town was
changed to Kohistan Valley and Mehran Bungalows-II was changed to Mehran Dream
City.
Further according to Para 11.2 of standard bidding documents for large works
issued by SPPRA “Bids submitted by a joint venture of two (2) or more firms shall
comply with the following requirements: (a) one of the joint venture partners shall be
nominated as being in charge; and (11) this authorization shall be evidenced by
submitting a power of attorney signed by legally authorized signatories of all the joint
venture partners; (b) the bid, and in case of a successful bid, the Form of Contract
Agreement shall be signed by the authorized partner so as to be legally binding on all
partners”.
Director General, Sehwan Development Authority (SDA), executed joint
venture agreement with M/s Hussain (Private) Limited to launch Highway Town in 1989.
However, the project was incomplete since both the parties failed to fulfill their
obligations. The same scheme was re-launched under the name Kohistan Valley in 2009,
but the composition of Joint Venture was not changed.
18
 Similarly, another scheme i.e. Mehran Bungalows-II scheme was launched in
1998 which was a joint venture project of SDA and M/s Hussain (Private) Limited, but
bungalows were not handed over to the allottee’s in due course of time. The same scheme
was re-launched with the Mehran Dream City in 2009 but the composition of Joint
Venture was not changed, hence, by design the investors were deceived which shattered
confidence of general public over Government sponsored housing schemes.
Audit is of the view that the joint venture failed to complete the schemes in
reasonable time frame and instead of completing the original scheme, the same projects
were re-launched with different names resulted into fraudulent activities committed by
management of SDA.
Non adherence to joint venture agreement was due to weak internal control
system.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for fraudulent
practices due to changing of schemes name to deceive general public, under intimation to
audit.
[AIR Para: 5]

1.2.1.13 Illegal Absorption & Out-of-Turn Promotion of Official

As per Para 2 of the Service & General Administration Department, GoS
Notification No.SOIX-REG(S&GAD)-2/D/1-74(Pt.II) (Vol-II) Dated 20-04-1976, “The
position has now changed as every regular appointment or promotion now made is to be
on the recommendation of a Statutory Selection Authority. Every appointment made
otherwise than in prescribed manner i.e. without getting clearance of the Selection
Authority concerned, will be adhoc appointment and that service will not count towards
seniority. It is therefore necessary that every appointment or promotion order or
notification should clearly point out that appointment or promotion, as the case may be is
regular or has been made on adhoc basis”.
In office of Director General, SBCA, Karachi, during financial years 2009-2016,
the officials on detailment were awarded out-of-turn promotions through up-gradation of
post without approval of Finance Department, GoS and recommendation of the
Provincial Selection Board. Latter on the officials were absorbed in SBCA and further
19
 promoted to BPS 20. The officials were not repatriated to their parent department, in
violation of Supreme Court of Pakistan’s order. Further, the service book/personal files of
the concerned officials were not produced to verify the record further. Detail is as under:

Promotion
Name of Promotion Order Promoted
Sr. Date of
Employee From To Criteria No. by
Promotion
Director Director
(Legal (Legal SBCA/DD(Admn-
Mr. Shahid Promotion
Affairs) & Affairs) 27-05- P- GoS
1 Jamil-ud- without
Provincial & Provincial 2015 I)2015/1430/92/579 (Absorbed)
Din DPC
Law Officer Law Officer dated 27-05-2015
BPS-19 BPS-20
A.D
Syed D.D
(Public 03-01- Department
2 Muhammad (Admn) -do- -
Relation) 2012 (Absorbed)
Ali Naqvi BPS-18
BPS-17

Audit is of the view that the official were illegally absorbed, promoted &
up-graded, in violation of rules which constituted weak internal control and financial
management.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for irregular
absorption, out-of-turn promotion & up-gradation of officer, besides the same be
repatriated to parental department, under intimation to audit.
[AIR Para: 30]

1.2.1.14 Illegal Reinstatement of Officer in Violation of the Orders of Sindh

High Court
According to the order of High Court Circuit Court Hyderabad in Constitutional
Petition No.D-558 of 2009 dated 17-12-2009 “We in order to save the public money from
further embezzlement dislodge the DG (SDA) so that it should start smooth functioning.
We have inquired from Secretary Local Government in this regard who in the given
circumstances concedes to this. Mr. Munir Ahmed Soomro, DG (SDA) will hand over the
charge to Mr. Khawaja Shafiq today”.

20
 Management of Sehwan Development Authority Jamshoro, during financial
years 2014-16, allowed joining to Munir Ahmed Soomro again as DG, SDA in July 2014
despite the fact that he was earlier dislodged on the charges of embezzlement by Sindh
High Court. However, the Management allowed posting in violation of Apex court
orders. Subsequently the issue was bought into the notice of Supreme Court, when in
short order issued by Mr. Justice Amir Hani Muslim of Supreme Court on 26-02-2015,
the following comments were accorded.
“We are shocked to see that now the officer who has been appointed as DG,
SDA was removed earlier by the Government on serious allegation in SDA”.
It is pertinent to mention that no disciplinary or legal proceedings were taken
against the management, who was responsible for posting the said official.
Audit is of the view that Secretary Local Government reinstated the officer, who
was removed, on the charges for embezzlement, in violation of Court orders.
Non-observance of Court orders constituted contempt of court.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends inquiry into the matter for fixing of responsibility on
person(s) at fault, under intimation to audit.
[AIR Para: 2]

21
1.2.2 Non-Production of Record
1.2.2.1 Non-Production of Record – Rs 12,549.164 Million
As per Section 14 (1) (b) of the Auditor General (Functions, Powers & Terms
and Conditions of Service) Ordinance, 2001, The Auditor-General shall, in connection
with the performance of his duties under this Ordinance, have authority to require that
any accounts, books, papers and other documents which deal with, or form, the basis of
or otherwise relevant to the transactions to which his duties in respect of audit extend,
shall be sent to such place as he may direct for his inspection.
Moreover, “Chief Secretary vide letter No.DO.NO.SO(C-II)/SGA&CD/1-
73/2012 dated 25th October, 2013 duly endorsed by Secretary of LGD vide letter No.
SOA/(LG)LG/4/(77)2013, dated 21.11.2013 was pleased to direct to all Municipal
organizations / Local Councils for immediately providing record to audit, so that,
financial discipline may be restored to respective organizations. In case of failure to
provide record to audit by auditee organizations, the cases may be taken up under
disciplinary proceedings against officers concerned that may include suspension of
officers”.
Various formations working under Secretary, Local Government Department
(LGD), KMC & KW&SB, incurred an expenditure of Rs 12,444.440 million, but failed
to provide record, for the financial years 2014-16, to audit, in violation of the above rule
and instructions. Details are provided at Annex-SLG4.
Moreover, various formations working under Secretary, LGD, have not provided
any Log Books, Vehicle Maintenance Record, History Sheets and Petrol account registers
against POL expenditure amounting to Rs 104.724 million, during financial year
2015-16.
Audit is of the view that due to non-provision of record authenticity of
expenditure cannot be ascertained by audit.
The matter was reported to managements during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for
non-provision of record in accordance with rules and regulations and same be produced
to audit for verification.
[AIR Paras: 1, 2, 1,9, 1, 9, 1, 1, 7, 1, 1, 3, 12, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 8, 1, 11, 1+27, 10, 11, 8, 14, 1, 6, 3,
12, 7, 7, 7, 5, 7, 2, 5, 3, 5, 4, 4, 2, 12, 5, 6, 19, 3, 6, 3]

22
1.2.3 Irregularity / Non-Compliance
A. Recovery, Targeted receipts/Outstanding dues
1.2.3.1 Non-Recovery of Outstanding Dues - Rs 70,705.601 Million
According to Section 7 (Chapter-V, “Powers & Functions of the Board”) of the
Karachi Water & Sewerage Board Act, 1996, the board shall; (ii) Levy, collect or recover
rates, charges of fees for water supply and sewerage services, including arrears thereof;
(iii) Have the power to reduce, suspend or disconnect the water supply in the event of
contravention of the provisions of this Act or regulation; (iv) Have the power to impose
surcharge, not exceeding double the amount due, if rates, charges of fees for water supply
or sewerage services or the arrears thereof are not paid within the fixed time by the
Board;
Further, as per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer
should see that all sums due to Government are regularly received and checked against
demands and that they are paid into treasury claiming credit for so much paid into the
treasury and compare with the figures in the statements supplied by the comptroller”.
Various formations working under LGD, KMC & KW&SB, during financial
years 2014-16, failed to recover outstanding dues amounting to Rs 70,705.601 million on
account of Sale of Plots, Transfer of Property, Ballot, Water and sewerage charges, long
outstanding dues from retail consumers (defaulters) and water supply through private
water tanker service to various Government functionaries/dignitaries and departments, in
violation of above rules. Details are provided at Annex-SLG5.
Audit is of the view that due to inaction by the managements of LGD, KW&SB
and KMC could not recover the outstanding revenue that also contributed towards poor
financial health of these entities.
Failure to implement prescribed rules resulted in non-recovery of Government
Revenue that is a reflection of weak financial management and internal control system.
The matter was reported to the managements during August to December, 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for
non-recovery of longstanding dues, besides, effecting recovery of the Government
Revenue without any further delay.
[AIR Paras: 17, 3, 2, 1, 6, 6, 2, 4, 7, 8, 1, 10, 18]

23
1.2.3.2 Non-Achievement of Targeted Receipt - Rs 10,816.848 Million
As per Section 96 (1) of Sindh Local Government Act 2013, “A council may
levy, in the prescribed manner all or any taxes, rates, tolls, and fees mentioned in
Schedule V”.
Further, as per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer
should see that all sums due to Government are regularly received and checked against
demands and that they are paid into treasury claiming credit for so much paid into the
treasury and compare with the figures in the statements supplied by the comptroller”.
Various formations working under LGD, KMC & KW&SB, failed to recover
the targeted receipts amounting to Rs 10,816.848 million during financial years 2013-16,
in violation of the above rule. Details are provided at Annex-SLG6.
Audit is of the view that management failed to take necessary steps and enforce
the prescribed procedures for recovery of arrears/achievement of targeted revenue.
Weak internal control system had resulted into non-compliance of prescribed
rules and procedures.
The matter was reported to the managements during August to December, 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the concerned official(s), besides,
effecting recoveries against the Government dues/targeted receipts.
[AIR Paras: 2, 2, 4, 5, 3, 2, 1, 9, 4, 3, 6]

1.2.3.3 Non-Recovery from Defaulters - Rs 643.494 Million

According to Section 7 (Chapter-V, “Powers & Functions of the Board”) of the
Karachi Water & Sewerage Board Act, 1996, “the board shall; (ii) Levy, collect or
recover rates, charges of fees for water supply and sewerage services, including arrears
thereof; (iii) Have the power to reduce, suspend or disconnect the water supply in the
event of contravention of the provisions of this Act or regulation; (iv) Have the power to
impose surcharge, not exceeding double the amount due, if rates, charges of fees for
water supply or sewerage services or the arrears thereof are not paid within the fixed time
by the Board”.
Further, as per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer
should see that all sums due to Government are regularly received and checked against
24
demands and that they are paid into treasury claiming credit for so much paid into the
treasury and compare with the figures in the statements supplied by the comptroller”.
Various formations working under LGD & KW&SB, during financial year
2015-16, failed to fulfil their responsibility by taking effective measures to recover dues
from defaulters, resultantly Government sustained loss of Rs 643.494 million, in violation
of above rules. Details are provided at Annex-SLG7.
Audit is of the view that Government sustained loss of revenue due to weak
financial management.
Deviation from prescribed rules & procedures constituted weak internal control
system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for
non-regularization of illegal water connections. Besides, same may be regularized and
recovery to-date may be effected and deposited into treasury, under intimation to audit.
[AIR Paras: 2, 2, 12, 2, 6, 2]

1.2.3.4 Non-Deduction of Sales Tax - Rs 574.204 Million

According to Sindh Sales Tax on Services Act, 2011 Amended upto 1st July,
2014, Section-3(1) “taxable services a services listed in Second Schedule to this Act,
which is provided (a) by a registered person from his registered office or place of
business in Sindh. Section-3(2) “ services that is not provided by a registered persons
shall be treated as a taxable service if the service is listed in the Second Schedule to this
Act (a) is provided to a resident person; (b). Section-8(1) Subject to the provisions of this
Act, there shall be charged, levied and collected a tax known as sales tax on the value of a
taxable service at the rate specified in the Schedule in which the taxable service is listed.
Tariff Heading Description Rate of Tax
Services provided or rendered by persons engaged in
9809.0000 14%
contractual execution of work or furnishing supplies
98013.8000 services provided as bank to an issue 16%
9815.2000 Legal Practitioners & Consultants 15%
SST net w.e.f. 01.07.2015 vide No.SRB-3-4/TP/01/2015/86554 Dated: 13th June 2015

25
 Further, as per Section 2 and 3 of the Sindh Sales Tax Special Procedure
(Withholding) Rules, 2014, federal and provincial Government including local and
district Government, department and offices have been prescribed as Withholding Agent
for the purpose of deduction and deposit of Sales Tax at applicable rate from unregistered
persons and one fifth of applicable rate from registered persons.
Various formations working under LGD, KMC & KW&SB, made payments to
service providers and suppliers on procurement of goods etc., but failed to deduct sales
tax amounting to Rs 574.204 million, during financial years 2009-16, in violation of
above rules. Details are provided at Annex-SLG8.
Audit is of the view that Government sustained loss due to non-deduction of
sales tax on services and resulted into weak financial management.
Non-observance of prescribed rules was due to weak internal control system.
The matter was reported to the managements during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for
non-deduction of sales tax. Besides, same be recovered under intimation to audit.
[AIR Paras: 26, 28, 2, 6, 1, 10, 6, 17, 11]

1.2.3.5 Non-Recovery of Overpaid House Rent/Other Allowances

Rs 209.267 Million
As per Para 07 of Finance Division Office O. M. No.F.1/7/IMP.II/87 dated
01-07-1987, “All employees not provided with Government accommodation shall
continue to be entitled to house rent allowance @ 45% of the minimum of the relevant
Basic Pay Scale”.
Various formations working under LGD, KMC & KW&SB, paid excess house
rent/other allowances amounting to Rs 209.267 million to employees, during financial
years 2009-16, in violation of above rules. Details are provided at Annex-SLG9.
Audit is of the view that over payment of house rent allowance to employees
resulted into loss to public exchequer.
Deviation from prescribed rules & procedures constituted weak internal control
system.
26
 The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for overpayment to
employees, besides, recovery be effected without further delay.
[AIR Paras: 5, 7, 4, 2, 1, 6, 5, 6, 3, 1, 6, 3, 10, 1+8, 11, 5, 1, 2, 2+6, 6, 4, 4, 7, 6, 1, 2, 5]

1.2.3.6 Non-Deposit of Government Receipts into Treasury

Rs 190.488 Million
According to Treasury Rules T.O. Section III, “Moneys standing in the public
account must be either retained in a treasury or deposited in the Bank. The conditions
under which they are deposited in the Bank are governed by the provisions of the State
Bank of Pakistan Act 1934.”
According to section 153 of the Income Tax Ordinance 2001 and Income Tax
Rules 2002 payment on account of supply of goods and rendering of services are subject
to deduction of income tax at source @ 4.5% and 7.5% respectively. Moreover,
according to section 160 (chapter X, part V) of the Income Tax Ordinance 2001, “Any
tax that has been collected or purported to be collected under division II of this part or
deducted or collected or purported to be deducted or collected under chapter XII, shall be
paid to the Commissioner by the person making the collection or deduction within the
time and manner as may be prescribed (i.e. within 7 days of deduction or collection).
Various formations working under LGD and KW&SB, during financial years
2011-16, deducted income tax from the bills of contractors’ suppliers etc. and scrutiny
fee / approval fee for layout plans of various housing schemes amounting to Rs 190.484
million, but same was not deposited into Government treasury, in violation of rules.
Further, PD, Lines Areas, have failed to remit the contribution of pension, provident
fund, and group insurance into relevant public accounts and failed to intimate to treasury
about said deduction. Details are as follow:
[Rupees in Million]
FY Name of Formation AIR Para Amount
2011-16 Regional Director, Town Planning (SBCA), Hyderabad 9 118.555
2015-16 04 1.412
XEN, Canal Maintenance Division (Civil) under ADP/PSDP Schemes
2015-16 08 0.375
2015-16 River Osmosis Water Desalination Plants Keamari & Lyari Towns 02 62.661
2014-15 PD, Lines Area Resettlement Project 13 7.300
2014-15 Chairman Secretariat, KW&SB 3 0.185
Total 190.488

27
 Audit is of the view that non-deposit of Government revenue is a serious
violation of Government standing order and has caused a loss of hundreds of millions of
rupees to national exchequer.
Deviation from prescribed rules instruction resulted into weak internal control
system, which constituted weak financial management.
The matter was reported to the management during December, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for incurring of
unauthorized & unjustified expenditure, under intimation to audit.
[AIR Paras: 9, 4, 8, 2, 13, 3]

1.2.3.7 Non-Deduction of Income Tax - Rs 96.008 Million

According to Income Tax Ordinance, 2001 (Amended up-to 30th June, 2015)
vide Finance Act, 2014 to Section 153. Payment for goods and services (1) “Every
prescribed person making a payment in full or part including payment by way of advance
to a resident person or (a) for the sale of goods; (b) for the rendering or providing of
services; (c) on the execution a contract for the sale of goods or the rendering of or
providing services, shall , at the time of making the payment, deduct tax from the gross
amount payable (including sales tax, if any) at the rate specified in Division III of Part-III
of the First Schedule.
Description Filler Non-Filer
For sale of goods other than sale of rice , cotton , seed of Companies 4% 6%
edible oil, referred to clause (a) of Section – 153(1) Other 4.5% 6.5%
For rendering or providing services other than transport Companies 8% 12%
services referred to clause (b) of section -153(1) Other 10% 15%
On execution of contracts referred to clause (c) of section - Companies 7% 10%
153(1) Other 7.5% 10%
(Division III, Part-III of the First Schedule amended w.e.f. 01-07-2015)
Further, Income Tax Ordinance 2001- Section 161, “Failure to pay tax collected
or deducted- Where a person (1) (b) having collected tax under Division II of this Part
1[or Chapter XII] or deducted tax under Division III of this Part 2[or Chapter XII] fails to
pay the tax to the Commissioner as required under section 160”.
Various formations working under LGD, KMC & KW&SB, during financial
year 2015-16, failed to recover/deduct income tax amounting to Rs 96.008 million from
28
the payments made to contractors and salaries of staff etc., in violation of rules. Details
are provided at Annex-SLG10.
Audit is of the view that due to non-deduction of income tax, Government
sustained financial loss resulted into weak financial management.
Non observance of prescribed procedure was due to weak internal control
system.
The matter was reported to the managements during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person at fault for non-deduction
of income tax from the payments made to contractors and salaries of staff. Besides,
recovery of income tax may be effected, under intimation to audit.
[AIR Paras: 5, 5, 13, 5, 1, 5, 13, 1, 5, 6, 1, 5, 11, 14, 12, 11]

1.2.3.8 Non-Recovery of Salary Paid to Staff Appointed on Fake Degrees

Rs 69.909 Million
As per Rule-28 of G.F.R. Vol-I, “No amount should be left out standing without
sufficient reasons, and where any dues appear to be irrecoverable the orders of the
competent authority for their adjustment must be sought”.
Further, as per Rule 214 of TR Volume-I, “When an Accountant General
disallows a payment as unauthorized, the disbursing officer is bound not only to recover
the amount disallowed without listening to any objection or protest but to refuse to pay it
in future till the Accountant General authorizes the payment to be resumed”.
Director General, SBCA, Karachi, during financial years 2009-16, appointed 51
employees on fake degrees, but failed to recover salaries of Rs 69.909 million paid, in
violation of above rules.
Audit is of the view that due to failure of management to safeguard public
interest on account of recoverable amount of salaries paid to the fraudulent candidates.
Violation of prescribed rules was due to weak internal control system.
The matter was reported to the management during December, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.

29
 Audit recommends fixing of responsibility on management for its inaction
against person(s) appointed on fake degrees, under intimation to audit.
[AIR Para: 1]

1.2.3.9 Non-Recovery of Mobilization Advance and Interest

Rs 45.278 Million
As per Serial No. 2(B)(IV) of Procurement Regulation (Works) by SPPRA,
Advance Payments: “Contractor shall pay interest on the mobilization advance at the rate
of 10% per annum on the advance as prescribed in Sindh Financial Rules. The rates may
vary and are subject to change from time to time as per instructions issued by the
Government”.
Following offices failed to recover mobilization advance and interest amounting
to Rs 45.278 million from contractors on account of mobilization advance, in violation of
above rules. Details are as under:
[Rupees in Million]
Sr. Name of Offices Description Amount
Executive Engineer, Canal Maintenance Division (Civil) Interest on
1 2.680
under ADP/PSDP Schemes mobilization advance
2 Project Director, S-III Project -do- 37.733
3 DG, Sehwan Development Authority Mobilization advance 4.865
Total 45.278
Audit is of the view that non-recovery of mobilization advance/interest on
mobilization advances resulted into loss to public exchequer and weak financial
management.
Deviation from prescribed rule resulted into undue favor to contractor and weak
internal controls.
The matter was reported to the managements during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing the responsibility for non-recovery of mobilization
advance/interest on mobilization advances. Besides, the same may be recovered, under
intimation to audit.
[AIR Paras: 14, 4, 15]

30
1.2.3.10 Non-Recovery of House Rent, Maintenance Charges and Electric
Charges - Rs 27.475 Million
According to para 07 of Finance Division Office O.M No.F.1/7/IMP-II/87, dated
01.07.1987, “All employees not provided with Government accommodation shall
continue to be entitled to house rent allowance at 45% of the minimum of the relevant
basic pay scales”.
Further, as per Para 09 of GOP, Finance Division (regulation wing) O.M
No.F.1(5) IMP/2011-419, dated 04.07.2011, “All special pay, special allowances or
allowances admissible as percentage of pay (excluding those which are capped by fixing
maximum limit) including House rent allowance and the allowances / special allowances
equal to one month basic pay granted to Federal Government /FBR/ Police employees
irrespective of his / her posting in ministry /division / department / FBR including civil
employees in BPS 1-22 of Judiciary shall stand frozen at level of its admissibility as on
30-06-2011”.
Various formations working under LGD and KW&SB, failed to recover house
rent allowance & maintenance charges/electric charges as per rules from the staff
availing/allotted Government accommodation amounting to Rs 27.475 million, in
violation of above rules. Details are as under:
[Rupees in Million]
Department Year Name of Formation AIR Para Amount
2009-16 D.G. Sindh Building Control Authority 4 24.940
LGD 10 0.431
2015-16 M.D, WASA (HDA)
11 0.288
2015-16 RE, Pipri 08 1.585
KW&SB 2015-16 Chief Engineer, E&M 05 0.150
2015-16 Chairman Secretariat 1 0.081
TOTAL 27.475
Audit is of the view that non-recovery of house rent allowance, electric charges
and maintenance charges, as per rules resulted into loss to public exchequer and weak
financial management.
Less recovery of house rent allowance & electric charges resulted into weak
internal control system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.

31
 Audit recommends fixing of responsibility on the managements for
non-recovery of house rent allowance and electric charges as per rules. Besides, loss to
public exchequer may be recovered, under intimation to audit.
[AIR Paras: 4, 10, 11, 8, 5, 1]

1.2.3.11 Less Recovery of Commercial Charges from Sponsors of Housing

Schemes – Rs 13.890 Million
As per Notification No.SO (L&C)/HTP/5-291/2009 amended dated 11-07-2012,
the scrutiny fee / charges for layout plan shall be Rs 300 per Sq Yd for commercial
plots”.
Regional Director, Town Planning (SBCA) Hyderabad, during financial years
2013-16, had performed the scrutiny of layout plan of commercial plots and had charged
commercial fee @ Rs 85 per sq yd instead of the approved rate of Rs 300 sq yd, hence,
causing a loss to national exchequer to the tune of Rs 13.89 million by converting 64,620
square yard of land into commercial plots, in violation of above notification.
Audit is of the view that management failed to recover the amount as per
approved from the owners / sponsors.
Deviation from prescribed rules instruction resulted into weak internal control
system which constituted weak financial management.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for violating clear
and explicit provision of SBCA Ordinance 1979.
[AIR Para: 7]

1.2.3.12 Non-Recovery of Conveyance Allowance - Rs 10.126 Million

According to Rule 13.5 of DDO handbook, “No conveyance allowance is
allowed to the employees, who are entitled to draw the same due to their posting in big
cities, while on leave of any kind, except casual leave.”

32
 Further, according to letter No.F.1 (1) Imp/2008 dated 30-06-2008 (7) (b),
“Conveyance allowance shall be admissible to officers who are not sanctioned official
vehicle”.
Different formations, working under SLG and KMC, during financial year
2015-16, paid conveyance allowance amounting to Rs 10.126 million during leave
period. Moreover, conveyance allowance was also paid to officials, who were allotted
official vehicles, in violation of above rules. Details are as under:
[Rupees in Million]
AIR
Department Year Name of Formation Particulars Amount
Para
D.G. Sindh Building Control Conveyance
SLGD 2009-16 20 0.185
Authority Allowance paid
despite having official
Director, Media Management 9 0.190
vehicles
Karachi Medical & Dental Excess conveyance
KMC 2015-16 7 9.552
College allowance paid
Conveyance paid
Chief City Wardens 3 0.199
during leaves
TOTAL 10.126
Audit is of the view that payment of conveyance allowance during leave and to
those officials, who were allotted official vehicles, resulted into undue favor to
employees and weak financial management.
Deviation from prescribed was due to weak internal control system.
The matter was reported to the management during September-November, 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management on account of
unauthorized payment of conveyance allowance. Besides, recovery may be effected
under intimation to audit.
[AIR Paras: 20, 9, 7, 3]

1.2.3.13 Irregular Payment of Leave Encashment - Rs 2.754 Million

As per Rule 18-A of Revised Leave Rules 1980, duly adopted by GoS, “A civil
servant may fifteen month before the date of superannuation or thirty years qualifying
service on or after the 1st July, 1983, at his option, be allowed to en-cash his leave

33
preparatory to retirement if he undertakes in writing to perform duty in lieu of the whole
period of three hundred and sixty five days or lesser period which is due and admissible”.
Various formations working under KW&SB, paid an amount of Rs 2.754
million, during financial year 2015-16, to officials on account of leave encashment on
yearly basis, in violation of the above rule. Details are as under:
[Rupees in Million]
Sr. Name of Formation Amount
1 RE, Pipri 2.288
2 DMD Finance 0.466
Total 2.754
Audit is of the view that undue benefit was extended to employees on account of
leave encashment on yearly basis. Violation of prescribed rule constituted weak financial
management.
Deviation from prescribed rules & procedures constituted weak internal control
system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for unauthorized
payments on account of leave encashment, besides, the practice may be discontinued in
future.
[AIR Paras: 1, 2]

1.2.3.14 Non-Charging of Stamp Duty on Contractors - Rs 2.404 Million

According to Stamp Act, 1899, Article-15(b), amended time to time, “Purchase
Order” that is to say, to supply or to undertake cortege of stores and material, proper
stamp duty is thirty five paisa for every hundred rupees or part thereof the amount of the
purchase order.
The management of Reserve Osmosis Water Desalination Plants Keamari &
Lyari, KW&SB, during financial year 2015-16, awarded work worth Rs 868.100 million
but failed to impose/ receive stamp duty on prescribed rates, resultantly Government
sustained loss amounting to Rs 2.404 million, in violation of rules. Details are as under:

34
 [Rupees in Million]
Bill No. S. Duty Less
Particular Contractor Cost
& date affixed S. Duty
Operation & Maintenance of Reverse M/s Pak
Nil Osmosis Water Desalination Plants at Oasis 868.100 0.200 2.404
Keamari and Lyari Towns Industries Ltd

Audit is of the view that undue favor was extended by management resulted into
loss to Government and weak financial management.
Deviation from prescribed rule was due to weak internal control system.
The matter was reported to the managements during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility upon the person(s) at fault. Beside
same be recovered under intimation to audit.
[AIR Para: 5]

1.2.3.15 Unauthorized Allowances Paid to KDA staff - Rs 0.906 Million

As per Rule 4.3 of DDO Handbook, “Generally public moneys should not be
utilized for the benefit of a particular person or section of the community. The amount of
allowances should be so regulated that it is not, on the whole, a source of profit to the
recipients.”
Further, according to para 188 of Sindh Financial Rules Volume-1, “No
payment should be made without the budget provision or prior permission be obtained
from Finance department in order to incur such expenditure”.
Director, Recoveries Department, KDA, Karachi, during financial years 2011 to
2015, incurred expenditure amounting to Rs 0.906 million on account of Special Audit
Allowance, Technical Allowance and Integrated Allowances in the monthly salaries of
the staff without any justification, in violation of rules. Details are as under:
[Amount in Rupees]
Monthly Annual Expenditure
Sr. Allowance
Expenditure Expenditure F.Ys 2011-15
1 Special Audit Allowance 11,854 142,248 568,992
2 Technical Allowance 1,020 12,240 48,960
3 Integrated Allowance 6,000 72,000 288,000
Total 18,874 226,488 905,952
Total in Million 0.019 0.226 0.906
35
 Non-observance of Government rules & procedures while making payments of
allowances in monthly salaries to the staff reflected weak internal control system in the
department.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on account of unauthorized payment
of allowances to the staff. Besides, same may be recovered under intimation to audit.
[AIR Para: 8]

B. Violation of Rules
1.2.3.16 Non-Revision of PC-I - Rs 9,421.000 Million
According to section 2.22 of SPPRA Procurement Regulation (Works),
“PC-I/PC-II of schemes/projects prepared by the administrative department is required to
be placed before the Development Working Party/Committee according to the
cost/competency of the forum as enumerated below:-

Sr. Competent Forum Cost of Scheme up to

1 District Development Working Committee (DDWC) Rs. 20 million
2 Departmental Development Working Party (DDWP) Rs. 40 million
3 Provincial Development Working Party (PDWP) Rs. Five billion
4 Central Development Working Party (CDWP) Rs. One billion
Executive Committee of the National Economic
5 Above Rs. One billion
Council (ECNEC). After clearance from CDWP

Further, according to SPPRA Rule 11.1.3, “administrative approval of PC-I of

the scheme is required to be revised when expenditure excess 15% of total cost”.
Moreover, according to rule 3.4 of planning commission’s manual for
development projects, “PC-11 to PC 1V are required to be prepared in large development
projects”.
PD, Shaheed Muhtarma Benazir Bhutto Township working under LGD,
executed project costing Rs 5,000 million without PC-II and cost was escalated to
Rs 9,421 million. The management failed to get PC-I revised from Planning Commission

36
and to obtain technical and administrative approval from the competent forum i.e. the
Planning Commission, in violation of above rules.
Audit is of the view that management did not observe the prescribed procedure
laid down for the financial discipline in the department that resulted into financial
mismanagement.
Non-observance of prescribed procedure was due to weak internal control
system.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for not obtaining revised technical
and administrative approval from the competent forum, under intimation to audit.
[AIR Paras: 12, 4]

1.2.3.17 Non-Completion of Lyari Expressway Resettlement Project

Rs 5,849.000 Million
As per Rule 2.4.1 of Planning Commission Manual, “For sustainability, all the
cost and benefits under varying conditions are vetted properly and project guarantees
acceptable level of financial and economic return”.
As per original PC-1, Lyari Expressway Resettlement Project was approved on
23-04-2002 by ECNEC. The project was to be completed in 36 months with an estimated
cost of Rs 2,871.652 million. However, even after (10) additional years and consuming
additional funds of Rs 5,848.728 million, the project is still incomplete. Moreover, during
the proceedings of Sindh High Court regarding inordinate delay in completion of project,
the Secretary, Finance, GoS, had admitted gross irregularities in expenditure, in violation
of above rule.
Audit is of the view that the non-completion of the project resulted into excess
expenditure of Rs 5,848.728 million. Deviation from prescribed rules resulted into weak
internal controls.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.

37
 Audit recommends fixing of responsibility on person (s) at fault for delay in
completion of project. Besides, all out efforts be taken to complete the project, under
intimation to audit.
[AIR Para: 5]

1.2.3.18 Un-Authorized Approval of Development Schemes

Rs 4,322.188 Million
According to section 2.22 of SPPRA Procurement Regulation (Works),
“PC-I/PC-II of schemes/projects prepared by the administrative department is required to
be placed before the Development Working Party/Committee according to the
cost/competency of the forum as enumerated below:
Sr. Competent Forum Cost of Scheme up to
1 District Development Working Committee (DDWC) Rs 20 million
2 Departmental Development Working Party (DDWP) Rs 40 million
3 Provincial Development Working Party (PDWP) Rs Five billion
4 Central Development Working Party (CDWP) Rs One billion
Executive Committee of the National Economic
5 Above Rs One billion
Council (ECNEC). After clearance from CDWP

Director General, Technical Services, KMC, Karachi approved 07 development

schemes costing Rs 4,322.188 million, during financial year 2015-16, without referring to
the competent forum, i.e, Provincial Development Working Party (PDWP), in violation
of above rule.
Audit is of the view that approval of the development schemes by Administrator
resulted into weak financial management.
Deviation from prescribed rule resulted into non-observance of delegated
financial powers and weak internal controls.
The matter was reported to the management during December, 2016 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on official(s) at fault for
non-obtaining approval of development schemes from competent authority, under,
intimation to audit.
[AIR Para: 6]

38
1.2.3.19 Unauthorized Appointments - Rs 2,450.614 Million
As per Notification issued from Local Government Department, Government of
Sindh vide No.SOA/(LG)1(27)/2011 dated 6-6-2011, no appointment in any grade shall
be made henceforth without consolidated advertisement and fresh Approval of the
Government. Earlier notification issued in this regard may be treated cancelled /
withdrawn.
Further, as per Para 1 (1) of the Law Department, Government of Sindh
Notification No.S.GENL:5-217/78 (N) 33 dated 26-07-1980, “Whenever any vacancy in
the legal Adviser’s post is required to be filled, the concerned Department/Council or
organization shall send such requisition to the Law Department specifying therein the
relevant data as to nature of assignment, financial and other fringe benefits it carries and
the tenure for which the appointment is to be made” and in continuation of above letter
No.S.GENL:5-22/2011/712 dated 18-04-2011.
Moreover, according to Rule-59 of SPPRA 2010, “Small consultancies are
consultancies with a value under Rs 0.5 million for Individual Consultants and Rs 2.0
million for Consulting Firms. The duration of an assignment for an individual consultant
shall not exceed six months. According to SPPRA 2010, Rule-61 “The selection shall be
guided by the following considerations: (1) Best quality of services available; (2) Need
for economy and efficiency;(3) Need to give all qualified consultants an equal
opportunity to compete; (4) Encouragement of local consultants without any unfair
competitive advantage;(5) Transparency in the selection process
Various formations under LGD & KMC, made 3,413 appointments, during
financial years 2009-16, without going through prescribed procedures for appointment
and making unauthorized payment of salaries amounting to Rs 2,454.399 million, in
violation of the above rules. Details are provided at Annex-SLG11.
Moreover, Director General, SBCA, Karachi, during financial years 2009-16,
appointed 04 overage candidates without age relaxation certificate from the competent
authority and fulfillment of other codal formalities, in violation of above rule.
Audit is of the view that irregular appointments were made in violation of the
above rules.
Violation from prescribed rules was due to weak internal control.

39
 The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for irregular
appointments and expenditure on employees’ salaries, under intimation to audit.
[AIR Paras: 2, 3, 11, 7, 8, 9, 11, 12, 5, 8, 5, 4, 22, 8+11, 9]

1.2.3.20 Non-Payment of Pensions and Salaries– Rs 2,361.633 Million

As per Para 289 of Treasury Rules (TR) Vol-I & II, , “all charges incurred must
be paid and drawn at once and under no circumstances may be allowed to stand over to
be paid from grant of another financial year.
Further, as per FD, GoS O.M No.FD/B&E –I/51/2007 dated 02-07-2007,
“liability of previous years shall not be allowed to be cleared unless concurrence is given
by Finance Department (FD)”.
Various formations working under LGD and KMC, did not paid Pension
emoluments and Salaries of Employees on time and created liabilities worth Rs 2,361.633
million, during financial year 2015-16, in violation of the above rules. Details are as
under:
[Rupees in Million]
AIR
Department Year Name of Formation Amount
Para
2015-16 Secretary Local Govt: Board 13 156.443
LGD
2014-16 DG Sehwan Development Authority 10 200.000
KMC 2015-16 Senior Director Finance/Financial Advisor, KMC 09 2005.190
TOTAL 2361.633

Audit is of the view that non-payment of salaries, pension and commutation and
creation of liabilities was due to weak financial management.
Deviation from prescribed rules was due to weak internal control system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements
[AIR Paras: 13, 10, 09]

40
1.2.3.21 Non-Maintenance of Cash Book - Rs 1,109.966 Million
According to Rule-65(1) of Local Government Accounts Manual, “After the
several subsidiary registers have been written up and completed in respect cash and
transfer items, the daily total of each register shall be carried out into the cash book”.
Further, as per Rule 34 (b) of SFR Vol-I, “The cash book should be closed and
balanced each day and the balance of each column at the end of the month, should be
verified with balance of cash in hand and a certificate to that effect recorded in the cash
book under the signature of the Government servant responsible for the money”.
Various formations working under LGD, KMC & KW&SB, incurred
expenditure amounting to Rs 1,109.966 million, during financial year 2015-16, but failed
to maintain Cash Book, in violation of above rules. Details are provided at
Annex-SLG12.
Audit is of the view that due to non-maintenance of Cash Book, audit did not
verify the authenticity of expenditure.
Violation from prescribed rule was due to weak internal controls.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for incurring expenditure without
maintenance of Cash Book.
[AIR Paras: 14, 5, 11, 6, 3, 8, 15, 2, 9, 1]

1.2.3.22 Procurement in Violation of SPPRA Rules

Rs 813.904 Million
According to Rule 10 of SPPRA 2010, “The procuring agency shall,
immediately upon award of contract, make the evaluation report of the bid, and the
contract agreement to public through hoisting on the Authority’s website as well as on
procuring agency’s website, if the procuring agency has such a website.”
Various formations working under LGD and KMC awarded different works
costing 463.977 million through notice inviting tender (NIT), during financial year
2015-16, but did not hoist bid evaluation reports on the SPPRA website, in violation of
above rule. Details are as under:

41
 [Rupees in Million]
AIR
Year Name of Formation No. of works Amount
Para
2015-16 PD Housing II, HDA 1 04 61.174
2015-16 PD Shaheed Muhtarma Benazir Bhutto Township 3 19 303.250
2015-16 Director Safari Park/Aladin Park 2 02 52.670
2015-16 Director Charged Parking 2 40 41.883
2015-16 KM&DC 3 05 5.000
Total 463.977
Further, the formations under LGD and KMC during financial year 2015-16
uploaded their tenders on SPPRA website; however, due to certain deficiencies the
SPPRA withheld the IDs / NITs. The managements were required to remove the
deficiencies and to get ID released. However, the managements awarded the works
costing Rs 349.927 million, in violation of above rules. Details are as follows:

[Rupees in Million]
Sr. Name of Formation AIR Para Amount
1 PD Shaheed Muhtarma Benazir Bhutto Township 1 314.927
2 DG SBCA 10 0
3 Senior Director Information Technology, KMC 3 35.00
Total 349.927
Audit is of the view that violation of SPPRA rule resulted into non-transparency
in award of contracts.
Violation of prescribed rule was due to weak internal controls.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for non-hoisting of
evaluation reports on SPPRA website, under intimation to audit.
[AIR Paras: 1, 3, 2, 2, 3, 1, 10, 3]

1.2.3.23 Irregular Execution of Work Beyond 15% of Estimates

Rs 697.290 Million
According to Rule 16 (e) of SPPR 2010, Alternate Methods of Procurements:
Repeat Orders means procurement of additional quantities of the item(s) from the original
contractor or supplier, where, after the items originally envisaged for the project or
scheme have been procured through open competitive bidding, and such additional

42
quantities of the same item(s) of goods or works are needed to meet the requirements of
the project or scheme; Provided that;
(i) The cost of additional quantities of item(s) shall not exceed 15% of the
original contract amount;

Director General, Technical Services and Parks & Horticulture, KMC, allowed
additional quantities of various works over and above the original contract amount
beyond permissible limit of 15%, amounting to Rs. 697.290 million, during financial year
2015-16, in violation of rule. Details are as under:
[Rupees in Million]
Sr. Name of Formation AIR Para Amount
1 D.G Technical Services 05 285.083
2 D.G Technical Services 08 402.765
3 D.G Technical Services 11 2.795
4 D.G Parks & Horticulture 07 6.647
Total 697.290
Audit is of the view that authorization of additional quantities to execute beyond
permissible limit of 15% of the original contract amount resulted into weak financial
management.
Deviation of prescribed rules of SPPRA resulted into weak internal control.
The matter was reported to the management during September-November, 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that irregular additional quantities executed beyond
permissible limit may be justified and responsibility be fixed on person(s) at fault, under
intimation to audit.
[AIR Paras: 5, 8, 11, 7]

1.2.3.24 Non-Reconciliation of Revenue Collection - Rs 691.958 Million

As per Section 100 of the Sindh Budget Manual, “The consolidated accounts of
the controlling officer have as pointed out in the paragraph 98, to be reconciled monthly
with the accounts of comptroller. The object of this procedure is to ensure the accuracy of
departmental control really effective and to prevent classification or other errors in
account”.

43
 According to Rule-83 of Part-XIII of the Sindh District Government & Taluka
/Town Municipal Administration (Budget) Rules 2002, “(1) the controlling officers shall
reconcile his figures with the record maintained by the Accounts officer by the 10th day
of the month following the month to which the statement relates. (2) In order to enable
the Head of offices concerned to verify whether the amounts shown as realized in the
statements have actually been realized and credited to the proper head of account, the
Accounts Officer concerned shall provide the Head of Offices with statements
confirming the actual amounts credited under the relevant receipt heads”.
Various formations working under LGD, KMC and KW&SB, during financial
year 2015-16, collected an amount of Rs 691.958 million in respect of various receipts
but failed to reconcile the same with Treasury / Finance Department, thus, rendering the
authenticity of financial transactions as doubtful, in violation of above rules. Details are
as under:
[Rupees in Million]
S. No. Name of Formation AIR Para Amount
1 Director, Planning & Development Control (HDA) 3 138.617
2 Incharge Hydrant Services & Tanker Operation 3 233.010
3 MS Sobhraj Maternity Hospital, KMC 5 0.968
4 Executive Director, Karachi Institute of Heart Diseases 4 47.958
5 MS Gizri Maternity Home & Hospital 6 2.292
6 Director Estate , KMC 5 99.733
7 PD, Lines Area, Karachi 4 38.576
8 Director, Land Enforcement 7 130.804
Total 691.958
Audit is of the view that due to non-reconciliation of collection/receipts resulted
into non-authentication of receipts and weak financial management.
Non-observance of prescribed procedure resulted into weak internal control
system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends that collection may be reconciled the same with Treasury /
Finance Department, under intimation to audit.
[AIR Paras: 3, 3, 5, 4, 6, 5, 4, 7]

44
1.2.3.25 Unauthorized Payments on Blank Agreements - Rs 690.234 Million
According to Para 89(c) of CPWD Code, “The agreement with the contractors
selected must be in writing and should be precisely and definitely expressed; it should
state the quantity and quality of the work to be done, the specifications to be complied
with, the time within which the work is to be completed”.
Various formations working under LGD and KMC, during financial years
2011-16, paid an amount of Rs 690.234 million to various contractors on blank
agreements of 34 works, in violation of the above rule. Details are as under:
[Rupees in Million]
Sr. Name of Formation No. of Works Amount
1 D.G Rural Development Department 23 265.415
2 P.D. Housing-I, HDA 4 107.700
3 Chief Medical Officer, KDA 7 317.119
TOTAL 690.234
Audit is of the view that management misused its authority at the cost of public
interest and Government interest was not safeguard. Violation of prescribed rules was
due to weak internal controls.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for execution of schemes and making
payments without execution of contract agreement, under intimation to audit.
[AIR Paras: 1, 5, 4]

1.2.3.26 Undue Favor to Contractors Due to Non/Less Obtaining of Bid

Security - Rs 417.843 Million
According to Rule 37 (1) of SPPRA 2010, “the procuring agency shall require
the bidders to furnish a bid security not below one percent and not exceeding five percent
of the bid price, which shall remain valid for a period of 28 days beyond the validity
period for bids, in order to provide the procuring agency reasonable time to act, if the
security is to be called”.
Following formations working under LGD, KMC & KW&SB, during financial
year 2015-16, awarded various works to contractors without obtaining bid security/bank
guarantee worth Rs 417.843 million, in violation of above rule. Details are as under:

45
 [Rupees in Million]
Year Name of Formation AIR Para Amount Remarks
2015-16 DG Rural Development Department 8 203.915 Less bid security
DG, Technical Services 14 183.849 Bid security
DG, Parks & Horticulture 11 3.19 Less bank guarantee
2015-16
Solid Waste Management 7 10.343 Bank Guarantee
Medical & Health Services 7 15.506 Bank Guarantee
Executive Engineer, Canal Maintenance 02 0.700
2015-16 Division (Civil) under ADP/PSDP Bid Security
07 0.340
Schemes
TOTAL 417.843

Audit is of the view that bid security was mandatory for participating in contract
and any contract could not be awarded without depositing bid security but management
failed to observe SPPRA Rules-2010 in letter & spirit resulted into weak administrative
& financial management.
Deviation from SPPRA Rules-2010 resulted into weak internal control system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for willful deviation from SPPRA
rules, under intimation to audit.
[AIR Paras: 8, 14, 11, 7, 7, 2, 7]

1.2.3.27 Non-Imposition of Penalty - Rs 219.081 Million

As per Clause 2 of the Contract Agreement, “Quantity of work is to be done
within the particular time as specified and within the proportionate time, such as 1/4th of
work in 1/4th of the time, and contractor will abide by the program of detailed progress
laid down by the executive engineer. In the event of the contractor failing to comply with
this condition, he shall be liable to pay as compensation not exceeding 10% of the
estimated cost of the work as shown in the tender”.
Further, as per Chief Engineer, Highways Sindh, Hyderabad’s circular No.
PA/CE(R)/116 dated 21-02-1976, “The Executive Engineer is not competent to grant
extensions to the contractors for delay in completion of works without imposing penalty”.
Various formations working under LGD & KW&SB, awarded different works
to contractors, during financial year 2015-16, but they failed to complete the same works
46
within stipulated time period, but penalty of Rs 219.081 million @10% was not imposed
on contractors, in violation of rules. Details are as follows:
[Rupees in Million]
S. AIR No. of
Name of Formation Amount
No. Para works
1 DG Rural Development Department 16 15 145.722
2 PD (Housing -I) HDA 4 2 8.338
3 PD (Housing -II) HDA 2 3 2.689
4 PD Shaheed Mohtarma Benazir Bhutto Township 2 3 21.509
5 Project Director, S-III Project 8 2 40.823
Total 219.081

Audit is of the view that undue favor was extended to the contractors resulted
into weak administrative & financial management.
Deviation from prescribed procedure rules resulted into weak internal control
system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of non-imposing penalty
on contractors. Besides, the same may be recovered under intimation to audit.
[AIR Paras: 16, 4, 2, 2, 11, 8]

1.2.3.28 Award of Works without Open Tenders - Rs 193.950 Million

As per Rule-17(1) of SPPRA Rules 2010, “Procurements over one hundred
thousand rupees and up to one million rupees shall be advertised by timely notifications
on the Authority’s website and in print media in the manner and format prescribed in
these rules”.
Further, Rules (11)(1), ibid, “All procuring agencies shall devise a mechanism
for planning in detail for all proposed procurements, determining the requirement of the
procuring agency, within its available resources, and prepare an annual or a longer term
rolling plan, detailing the procurement methods applicable for specific procurements
(12)(1) all proposed procurements for each financial year and shall proceed accordingly
without any splitting or regrouping”.

47
 Various formations working under LGD (PD Housing-I, HDA) & KMC,
incurred expenditure of Rs 193.950 million without calling open tender, during financial
year 2015-16, in violation of above rules. Details are as under:
[Rupees in Million]
AIR
Department Year Name of Formation Amount
Para
LGD 2015-16 PD Housing-I, HDA 3 82.124
2015-16 Director General, Technical Services 4 106.48
KMC 2015-16 Karachi Institute of Heart Disease 9 3.879
2015-16 Senior Director Finance/Financial Advisor 2 1.467
TOTAL 193.950
Audit is of the view that managements did not invite tenders which resulted in
award of contracts in a non-transparent manner. Violation from prescribed rules resulted
into unauthorized expenditure and was due to weak internal controls.
The matter was reported to the managements during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements on account of
procurements/execution of works without tenders under intimation to audit.
[AIR Paras: 3, 4, 9, 2]

1.2.3.29 Acquisition of Land at Exorbitant Rates – Rs 179.072 Million

According to Rule 110(iii) of Sindh Financial Rules, Volume-I, “(land acquired
by negotiation) the Officer who settles the price should draw up Form-A in Appendix 5
Prescribed for use in the case of an award and this should be made the basis of
subsequent payment”.
Further, according to Sub Section (2) of Section 4 of the Sindh Financial
Management and Accountability Act, 2011, “The rules shall be consistent with the
following principles:-
a) All financial transactions shall be duly authorized;
b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
Project Director, Lyari Expressway Resettlement Project (PD, LERP), Karachi,
during financial years 2012-15, acquired land and audit noticed the following
irregularities in the acquisition of land:
48
 i) No substantial / tenable evidence was provided to the audit to support the fair
value of land acquired
ii)Copies of Lease documents of land acquired was not found attached with the
payment documents
iii)Assessment Report of Chief Engineer of KMC to assess the value of
construction was also not found
In addition to above irregularities, audit also observed that same payment was
made to the occupants of leased and un-leased land. Furthermore, since amount of
compensation paid was not for the cost of land but was assessed and valued on
construction only, hence, the amount paid to the occupants on account of construction is
treated as exorbitant and over-valued.
[Rupees in Million]
Area Land
Rate
Sr. Acquired Amount Acquisition Remarks
(Rs/Sq.Yds)
(Sq.Yds) Officer
D.C. Central, 49 constructed houses,
1 4,157 13,000 98,351,828
Karachi Liaquatabad “A” area
27 constructed houses,
2 1,551 6,000 24,416,679 -do-
Angara Goth area
02 constructed houses,
3 471 13,000 11,350,356 -do- Lalukhet, Liaquatabad
area
09 constructed houses,
A.C Nazimabad,
4 711 10,000 27,972,300 Qureshi Cooperative
Karachi
Society, Gulbahar
11 open plots, Qureshi
5 990 10,000 16,981,200 -do- Cooperative Society,
Gulbahar
Total 7,880 179,072,363
Total in Million 179.072
Audit is of the view that due to acquisitions of land on exorbitant rates
Government sustained loss which resulted into weak financial management.
Deviation from prescribed rules was due to weak internal control system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit desires that the departmental point of view on the above irregularity as
observed be explained along with supporting documents.
[AIR Para: 10]
49
1.2.3.30 Unauthorized Clearance of Liabilities - Rs 168.496 Million
As per Para 289 of Treasury Rules (TR) Vol-I & II, “all charges incurred must
be paid and drawn at once and under no circumstances may be allowed to stand over to
be paid from grant of another financial year.
Further, as per FD, GoS O.M No.FD/B&E –I/51/2007 dated 02-07-2007,
“liability of previous years shall not be allowed to be cleared unless concurrence is given
by Finance Department (FD)”.
Following formations under LGD & KMC, during financial year 2015-16,
incurred expenditure amounting to Rs 168.496 million on account of clearance of
liabilities of previous years from the budget grant of current financial year without
concurrence/approval from Finance Department, in violation of above rules. Details are
as under:
[Rupees in Million]
AIR
S. No. Year Name of Formation Amount
Para
1 2015-16 Director General Lyari Development Authority 02 5.256
2 2015-16 Director General (Parks & Horticulture) 08 58.857
3 2015-16 Director, Media Management 04 13.964
4 2011-15 Chief Medical Officer, KDA 9 90.419
TOTAL 168.496
Audit is of the view that management failed to observe procedures of financial
discipline which constituted weak financial management.
Deviation from prescribed rules & procedures constituted weak internal control
system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for payment of liabilities without
concurrence of Finance Department, under intimation to audit.
[AIR Paras: 2, 8, 4, 9]

50
 1.2.3.31 Award of Work by Transgression of Financial Power - Rs 163.076
Million
As per Director General (Technical) Local Government Department,
Government of Sindh Hyderabad letter No. DB/ 329/ 2005 Hyderabad Dated 16-08-2005,
officers of grade-18 and above have the powers as under:
Sr. Category Delegated Financial Power
1 Assistant Engineer/ TO (I&S) (BPS-17) No Power
2 Executive Engineer/ TO (I&S) (BPS-18) The work having A.A cost of Rs. 0.6 million
3 Superintending Engineer (BPS-19) The work having A.A cost of Rs. 3.00 million
4 Director General/ Chief Engineer (BPS-20) Full Powers

Director, Solid Waste Management, KMC, during financial years 2013-14,

obtained technical sanction of two schemes worth Rs 163.076 million from Executive
Engineer beyond his delegated financial powers, in violation of above rule. Detail is as
under:
[Rupees in Million]
Addendum
Amount of
W. O Work Order
Date Name of Work M/S Technical
No. (for another 12
Sanction
months)
Operation and Maintenance of landfill M/S Astro
582 06/08/2013 site Deh, Jam Chakro, Surjani Town, Tech 12/12-01-2015 97,969,515
Karachi International
Operation and Maintenance of landfill
M/S Sanco
583 06/08/2013 site Deh, Gond Pass, Hub river road, 11/12-01-2015 65,106,944
Technologies
Karachi
Total 163,076,459
Total in Million 163.076

Audit is of the view that the technical sanction obtained from officer without
delegation of powers was unauthorized which constituted weak financial management.
Non observance of prescribed procedure constituted weak internal control
The matter was reported to the management during November 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for not obtaining technical sanction
from competent authority and the same may be regularized, under intimation to audit.
[AIR Para: 2]
51
1.2.3.32 Payment of Utility Allowance – Rs 141.704 Million
According to FD/(SR-III)5-145/2012 dated 26-02-2015, “the benefit of Utility
Allowance is extended to all regular employees of Secretariat side, who are posted by
SGA&CD in CM’s Inspection, Enquiries & Implementation Team.”
Director General, SBCA and SLGB Karachi, paid an amount of Rs 141.704
million as utility allowance, during financial years 2009-2016, to its staff who were
serving other than Secretariat, in violation of above rule. Details are as under:
[Rupees in Million]
S. No. Year Name of Formation AIR Para Amount
1 2015-16 Secretary, Local Government Board, Sindh 2 44.992
2 2009-16 Director General, SBCA, Karachi 6 96.712
TOTAL 141.704
Audit is of the view that expenditure incurred on Utility Allowance beyond
entitlement constituted weak financial management.
Payment of utility allowance without any legal justification was due to weak
internal controls.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for payment of utility allowance
without entitlement and justification. Besides, recover the amount, under intimation to
audit.
[AIR Paras: 2, 6]

1.2.3.33 Irregular Mutation without Maintaining Land Register

Rs. 127.519 Million
As per Section 26 (Mutation of Names) of The Sindh People’s Local Councils
(Land) Rules, 1975, “The Council shall keep land register showing the names of the
lessees, transferees or other persons who may acquire any right over the land or plot
under these rules”.
Director Land Management-II, KMC, Karachi, during financial year 2014-15,
collected an amount of Rs 127.519 million as Mutation Fee & Land Rent on account of
Transfers of Land/Plots but the department failed to produce duly maintained and
updated “Land Register”, without maintaining the names of original allottee and
52
acknowledgement of transferee in accordance with provision of land register, in violation
of above rule.
[Rupees in Million]
S. No Head Amount
1 Transfer Fee (Mutation) 65.887
2 Land Rent 61.632
Total 127.519

Transfer of Lands (Mutations) & Land Rent without first verifying the original
owner from the KMC record i.e. from the Land Register is a serious irregularity and
chances of fraudulent transfer of lands cannot be ruled out.
This shows weak internal control on part of the management and Government
may sustain losses on account of litigations and court cases from the genuine owners of
the land.
The matter was reported to the management during December, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that relevant record be maintained and produced to audit for
verification.
[AIR Para: 4]

1.2.3.34 Irregular Award of Works- Rs 124.113 Million

According to Rule-50 of SPPRA 2010, “Within seven days of the award of
contract procuring agency shall publish on the website of the Authority and on its own
website, if such a website exists, the results of the bidding process, identifying the bid
through procurement identifying number, if any, and the following information”.
As per SPPRA Notification No. Dir (A&F)/SPPRA/1-3(GEN)/13-14/087 dated
03-07-2013 “IDs of the NIT/EOI are released after receipt of the Bid Evaluation Report
in terms of Rule-45 of SPP Rules, 2010. (2). SPPRA will release ‘SPPRA-ID’ to the
procuring agencies (PAs), once PAs submit the following documents, complete in all
respect, as required under the rules: -
i. Annual Procurement Plan as required under Rule-11 of SPP Rules, 2010;
ii. Notice Inviting Tender, Expression of Interest (EOI) and Pre-qualification
Notice (Requirement of Rule 17);
53
 iii. Bid Evaluation Reports (Prescribed by Rule 45);
iv. Contract Evaluation Form along with Letter of Award, Form of Contract
(Agreement) and Bill of Quantities (Requirement of Rule 50); and
v. Integrity Pact (where applicable) (Requirement of Rule 89).
Following formations working under LGD and KMC, during financial year
2015-16, awarded work amounting to Rs 124.113 million to Contractors without
fulfillment of following codal formalities:
1. Contract agreements were not executed,
2. Call deposits were not accounted for,
3. Date of measurements were not shown to audit,
4. Integrity pact not executed,
5. Performance security was not obtained,
6. The work awarded before opening date of bids.

[Rupees in Million]
AIR No. of
S. No. Name of Formation Amount
Para Works
1 D.G. RDD Hyderabad 10 09 60.696
2 D.G Technical Service KMC 12 01 63.417
TOTAL 124.113
Audit is of the view that management awarded work without fulfillment of codal
formalities resulted into non-transparency in the award of work and weak financial
management.
Non-observance of prescribed rules and procedures was due to weak internal
control system.
The matter was reported to the management during September to December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of non-transparency in
the award of work due to non-fulfillment of codal formalities, under intimation to audit.
[AIR Paras: 10, 12]

1.2.3.35 Non-Certification of Accounts - Rs 102.930 Million

According to Rule 55(1 to 3) of Larkana Development Authority Act, 1994,
“The accounts of Authority and an Agency shall be maintained in such form and in such

54
manner as may be prescribed. The accounts maintained under sub-section (1) shall be
audited by not less than two Chartered Accountants. A statement of accounts duly
audited by the auditors under sub-section (2), shall be furnished to Government, as soon
as may be, after the end of every financial year”.
Director General’s, Larkana Development Authority & Sehwan Development
Authority, incurred expenditure Rs 102.930 million, during financial year 2015-16, but
failed to get accounts audited through Chartered Accountants firms, in violation of the
above rule. The accounts are incomplete, non-transparent and are not kept in accordance
with Generally Accepted Accounting Principle. Details are as follows:
[Rupees in Million]
S. No. Year Name of Formation AIR Para Amount
1 2015-16 Director General, LDA 1 83.807
2 2014-16 Director General, SDA 6 19.123
Total 102.930
Audit is of the view that management failed to get accounts of the authority
audited by the Chartered Accountants firms and gets them certified from DG Audit which
resulted into non-authenticity of expenditure incurred from public funds which
constituted weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for not getting accounts of the
authority audited by Chartered Accountants firms, under intimation to audit.
[AIR Paras: 1, 6]

1.2.3.36 Irregular Expenditure on Account of Secured Advance

Rs 97.793 Million
According to SPPRA Procurement Regulations (Works) 9.3, “Payments
(2-Advance Payment) Secured Advance on the written request of the contractor whose
contract is for finished work is allowed to a contractor on the basis of non-
perishable/non-combustible materials brought and properly stocked/stored to site of
work. Secured advance as a good practice is avoided/discouraged. However, wherever
allowed, it should be strictly in conformity with the rules and procedure in addition to the
condition mentioned below:-
55
 (i) on verification and certification of quality, quantity and market rates of the
material by the Assistant Engineer/Engineer‘s representative; (ii) contractor has to furnish
the “Indenture Bond” (Annexure I); (iii) secured advance shall be paid to the contractor
on the quantities brought and properly stored at site of work. Full quantities of materials
for entire work /contract should not be advanced; (iv) recoveries of advances so made
should be made from his bills for work done as the materials are used, the necessary
deductions be made whenever the items of work in which are used are billed for, or shall
be recovered in full within 90 days, even if unutilized”.
The Project Director, S-III Project, KW&SB, paid an amount of Rs 97.793
million, during financial year 2015-16, to contractors on account of secured advance
without observing codal formalities, in violation of above rules. Following discrepancies
noticed;
i. Request of Contractor for grant of secured advance not provided to audit.
ii. Nature of materials/items not provided to audit further entries in stock
register for which secured advance granted not found.
iii. Certificate regarding market value of material on which secured advance
granted not produced to audit.
iv. Indenture Bond required from contractor not provided to audit.
v. Site account was not maintained

Audit is of the view that expenditure on account of secured advance without

observing codal formalities resulted into weak financial management.
Non-observance of prescribed rules was due to weak internal control system.
The matter was reported to the managements during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for
irregular expenditure on account of secured advances, under intimation to audit.
[AIR Para: 3]

1.2.3.37 Payment of Bills without Pre-Audit – Rs 96.559 Million

As per Sub-Para 32(2) of the Local Government Accounts Manual, “Every bill
shall be pre-audited by the Accounts Office. The pre-audit shall ensure that the bill has
been sanctioned and that funds are available to make payment. The pre-audit shall also
involve scrutinizing the bill to identify possible fraud and irregularities”.
56
 Further, as per Rule 111(4) & (5) of Sindh Local Government Act 2013, “the
Provincial Director, Local Fund Audit shall pre-audit all the payments from the Local
Funds of the Councils and a Council shall not with draw or disburse money from the
Local Fund unless it is pre-audited in the prescribed manner”.
Various formations working under SLGB, incurred expenditure of Rs 96.559
million, during financial year 2015-16, on account of payments to contractors without
Pre-Audit by the Local Fund Audit, in violation of the above rules. Detail is as under:
[Rupees in Million]
Sr. Name of Formation AIR Para Amount
1 Secretary Local Government Board 12 68.897
2 PD SMBB Township 13 27.662
Total 96.559
Audit is of the view that payments without pre-audit of bills resulted into
non-transparency in public spending and weak financial management.
Deviation from prescribed rules was due to weak internal controls.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility against the official(s) at fault for
incurring expenditure without pre-audit, under intimation to audit.
[AIR Paras: 12, 13]

1.2.3.38 Non-Protection of Government Interest by Obtaining Bank

Guarantee - Rs 86.810 Million
As per SPPRA 2010, Rule 39(1) Procuring Agency shall, in all procurement of
goods, works and services, carried out through open competitive bidding, require security
in the form of pay order or demand draft or bank guarantee, an amount sufficient to
protect the procuring agency in case of breach of contract by the contractor or supplier or
consultant, provided that the amount shall not be more than 10% of contract price;
Project Director, Reverse Osmosis Water Desalination Plants, Lyari & Keamari
(KW&SB), during financial year 2015-16, awarded work worth Rs 868.100 million to
contractor without obtaining bank guarantee amounting to Rs 86.810 million to protect
department from unforeseen losses/breach of contract, in violation of above rules. Detail
is as under:
57
 [Rupees in Million]
Name of work Contractor Cost of Work B. Guarantee 10%
Operation & Maintenance of Reverse
MS Pak Ovais
Osmosis Water Desalination Plants at 868.100 86.810
Industries Ltd
Keamari and Lyari Towns
Total 86.810
Audit is of the view that Government interest was not safeguard and undue
favour was given to contractors resulted into non-transparency in the award of contract
and weak financial management.
Deviation from prescribed procedure was due to weak internal control system.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility against person(s) at fault for not
safeguarding Government interest by obtaining bank guarantee from contractor, under
intimation to audit.
[AIR Para: 6]

1.2.3.39 Unauthorized Advertisements – Rs 63.619 Million

As per Para No. 08 (f) of the Advertisement Policy-2011, “All classified Aids
i.e. Notice Inviting Tenders, Gallop Tender Notices, Expression of Interest, Vacancies in
Government Departments and such other Ads shall be issued/ released directly to the
print media through Information Department, Government of Sindh and not through any
Advertising Agency what so ever”.
Further, as per Para No. 09 (iii) of ibid, “If any client Department wants any
advertisement agency (ies) for the advertising purpose, it can only recommend and not
appoint the same. Eventually, the agency (ies) has to follow the same procedure of
observance of all codal formalities. The final decision again rests with Information
Department for the purpose”.
Director General, SBCA, Karachi, during financial years 2009-2016, made
payment of Rs 63.619 million, directly to advertising agency without approval of Press
Information Department, GoS, in violation of above rules.

58
 Audit is of the view that direct release of ads through an advertising agency
without approval of Information Department, GoS, resulted into unauthorized
expenditure and weak financial management.
Deviation from prescribed rules was due to weak internal control system.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on official (s) for direct release of ads
through an advertising agency without approval of Information Department, GoS, under
intimation to audit.
[AIR Para: 27]

1.2.3.40 Undue favour to Contractors on Escalation prices

Rs 49.059 Million
As per Clause 70.1 of Part II-B of contract agreement, “the Adjustment in
respect of change in cost (escalation in price) shall be determined by adjustment formulas
mentioned in this clause and the base cost indices or prices shall be those applying 28
days prior to the latest day for submission of bid & current indices shall be those applying
28 days prior to the last day of the billing period”.
Further, according to Rule-23 of Sindh Financial Rules, “Every Payment
including repayment of money previously lodged with Government for whatever purpose
must be supported by a voucher setting forth full and clear particulars of the claim”.
Following formations working under KW&SB, paid of Rs 49.059 million during
financial year 2015-16, to contractors & consultants due to change in price (escalation in
price) in absence of inputs regarding Monthly Statistical Bulletin of Federal Bureau of
Statistics in support of base cost indices, in violation of rules. Details are as follows:
[Rupees in Million]
AIR
S. No. Name of Formation Amount
Para
Project Director, Clifton Pumping Station (Sewerage)
1 12 5.553
KW&SB under ADP/PSDP Schemes
2 Project Director, S-III Project 07 43.505
Total 49.059

59
 Audit is of the view that payment of escalation without following proper
procedure resulted into undue favour allowed to contractor and resulted into weak
financial management.
Deviation from prescribed procedure rules was due to weak internal control
system.
The matter was reported to the managements during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management(s) for unauthorized
payment of escalation to contractors, under intimation to audit.
[AIR Paras: 12, 7]

1.2.3.41 Award of Contract without Inviting Fresh Auction

Rs 45.720 Million
According to Government of Sindh, Local Government Department’s Letter
NO.SOA/(LG)/I(102)/2010 dated: 24th may, 2012, “ Pursuant to the provision of section
45(1) of Sindh Local Government Ordinance, 1979 read with Sindh Council (Contract)
Rules, 1980, the following guidelines are prescribed for award of contracts for collection
of various fees / rates / levy / taxes during the year 2012-13:
i) All Local Councils are required to start the process for award of contracts
through open auction immediately in light of practice in vague.
ii) All contracts shall be leased out for one year through public auction which will
be visualized under the supervision of auction committee, compression for
KMC/DMC/Municipal Corporation is (a) Administrator (Chairman), (b)
Municipal Committee (Member), (c) A.O (Member), (d) Director Taxes/TO
(Member), (e) Respective DLFA (Member), (f) Director Local Government
(Member).”

The Incharge, Hydrant Services/Tanker Operation, KW&SB, lease out right of

“Water supplying through tanker at German school, Orangi Hydrant” to M/s Engineering
Group of Construction at Rs 45.720 million (@ Rs 80 per 1,000 Gallons) during financial
years 2010-11 and continued the same contract upto 2015-16 instead of inviting fresh
auction every year as per auction policy, in violation of above rules. Detail is as under:

60
 [Rupees in Million]
Description of Work Contractor Sanction Order Amount
German school, Orangi M/s Engineering No.
Hydrant @Rs.80 per 1,000 Group of EE(H.S)/KW&SB/2011/25 45.720
Gallons Construction dated 28-06-2011

Audit is of the view that contractor was provided undue favor resulted into
misuse of powers and weak administrative management.
Non-observance of prescribed procedure/policy of Governments resulted into
weak internal control system.
The matter was reported to the managements during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for irregular &
unjustified award of contract without inviting fresh auction, under intimation to audit.
[AIR Para: 4]

1.2.3.42 Irregular Expenditure on POL due to defective Millage Meter

Rs 42.686 Million
As per Rule 20 of the Staff Car Rules 1980, as amended in 2001, duly adopted
by GoS, “The log book, History Sheet, and Petrol Account Register shall be maintained
for each official vehicle”.
Further, according to Rule 88 of Sindh Financial Rules, “Every public officer
should exercise the same vigilance in respect of expenditure incurred from Government
revenues, as a person of ordinary prudence would exercise in spending his own money”.
Senior Director, Municipal Services, KMC incurred expenditure amounting to
Rs 42.686 million, during financial year 2015-16, on purchase of POL for firefighting
department but the millage meter was shown as defective in the log book in absence
which the authenticity of the claim cannot be verified.
Audit is of the view that expenditure incurred on POL without mentioning actual
running of vehicle resulted into non-transparency in spending from public funds and
weak financial management.
Deviation from prescribed rule resulted into unauthorized expenditure and weak
internal control.
61
 The matter was reported to the management during November 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management at fault and incurring
expenditure without justification/authentication, under intimation to audit.
[AIR Para: 15]

1.2.3.43 Expenditure without Revised Technical Sanction

Rs 41.630 Million
According to Para 532 of PWD Manual Volume-I, duly adopted by GoS, “A
revised estimate must be submitted duly approved by the competent authority when a
sanctioned estimate is likely to exceed by more than 5% either due to rate being found
insufficient or for any other reason”.
Further, as per SPPRA guidelines 11.2.2, “Revised Technical Sanction (RTS): -
Detailed Estimate needs revision when during execution it is anticipated that cost of
completion is to exceed beyond the permissible limit (5%). Revised detailed estimate is
timely prepared incorporating the work done and required to be done along with
deviation statement for submission to competent authority”.
Moreover, as per SPPRA 2010, Rule 39(1), Procuring Agency shall, in all
procurement of goods, works and services, carried out through open competitive bidding,
require security in the form of pay order or demand draft or bank guarantee, an amount
sufficient to protect the procuring agency in case of breach of contract by the contractor
or supplier or consultant, provided that the amount shall not be more than 10% of
contract price”.
Project Director, Housing-I, HDA and DG, MDA, during financial year
2015-16, paid an amount of Rs 41.630 million on account of extra items without revision
of estimates / technical sanction and approval of competent authority, in violation of
above rules. Detail is as under:
[Rupees in Million]
Sr. Name of Formation AIR Para Amount
1 PD, Housing-I, HDA 2 38.039
2 DG, Malir Development Authority 8 3.591
Total 41.630

62
 Audit is of the view that the managements did not observe the laid down
procedures and violate Sindh Public Procurement Rules, 2010.
Non-compliance of rules was due to weak internal controls.
The matter was reported to the managements during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends that responsibility be fixed upon the person(s) at fault for
execution of extra items of work without approval, under intimation to audit.
[AIR Paras: 2, 8]

1.2.3.44 Unauthorized Operation of Account in Private Bank

Rs 40.351 Million
According to Finance Department, Government of Sindh letter
No.FD/PS/85/2010-11 dated 18th May, 2011 and followed by other letters
No.FD(RES.IV)/Misc/2011-12 dated 30th March, 2012, No.FD-SO(RES.IV)/2(72)/
2011(Prov) dated 5th December, 2013, 21st May, 2014, “it has been desired by the
Honorable Chief Minister that different Departments/Projects/ Programs / Companies/
Endowment funds/Employees’ benefits & Charitable funds/ Autonomous & Semi-
autonomous Bodies are directed that all bank Accounts dealing with the public money,
other than Assignment Accounts, would be maintained in Sindh Bank Limited instead of
other Commercial banks.
Director General, Larkana Development Authority, Larkana, during financial
year 2015-16, operated bank account in United Bank Limited with an amount of
Rs 40.351 million, in violation of above directions. Detail is as under;
[Rupees in Million]
Name of Bank A/c No. Balance
UBL- Bunder Road Branch, Larkana 000215937843 40.351

Audit is of the view that management failed to deposit the Government funds in
Sindh Bank which constituted weak financial management.
Deviation from prescribed rule constituted weak internal control system.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
63
 Audit recommends fixing of responsibility for maintaining the Government
account with Private bank. Besides, available balance be deposited into Sindh Bank
Limited, under intimation to audit.
[AIR Para: 4]

1.2.3.45 Irregular Payment on Account of Cost of Bitumen- Rs 27.890 Million

As per Notification No. H/MIS/295-(i) dated 13-04-2009 issued by Chief
Engineer Highway Department Government of Sindh, Hyderabad, “The contractor would
only use bitumen from the National Refinery Ltd and that the invoice from National
Refinery Ltd would be provided to the department in support of procurement of
bitumen”.
The Director General, Malir Development Authority, Karachi paid an amount
of Rs 27.890 million on account of cost of bitumen without obtaining purchase invoice of
bitumen from the National Refinery Ltd to ensure the quality of bitumen used. Thus the
quality of bitumen used was not monitored by the department, in violation of above rule.
[Rupees in million]
Description Rate Qty Payments
Providing and laying hot mix asphalt wearing
8,274.73 337050 27.890
course of compacted thickness in single layer

Audit is of the view that the management did not observe the prescribed
procedure laid down for the financial discipline in the department that shows lack of
internal controls in the department, which constituted weak financial management.
Non-compliance of rules may lead to misuse of public funds and loss of
Government
The matter was reported to managements during October, 2016, but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility for the irregularity, under intimation
to audit.
[AIR Para: 9]

64
1.2.3.46 Payment on Open Cheques - Rs 20.206 Million
As per Rule 157 (1) & (2) of CTR, “The cheques for more than Rs 200/- drawn
in favor of Corporate or Local Bodies, firms, private persons or Government servants (in
respect of their personal claims) shall always be crossed”.
Following formations of Local Government Department made payments
amounting to Rs 20.206 million, through open cheques instead of cross cheque, in
violation of rules. Details are as follows:
[Rupees in Million]
Year Name of Formation AIR Para Amount
2015-16 DG, Larkana Development Authority 5 6.829
2009-16 DG, Sindh Building Control Authority 12 2.104
2014-15 PD, Lines Area Re-Development Project 25 11.273
TOTAL 20.206
Audit is of the view that payments made through open cheques rendered the
transactions doubtful and chances of misappropriation cannot be ruled out. Deviation
from prescribed rule was due to weak internal controls.
The matter was reported to managements during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on official(s) at fault on account of
withdrawal of public funds through open cheques, under intimation to audit.
[AIR Paras: 5, 12, 25]

1.2.3.47 Un-Authorized Payment of Compensation – Rs 19.964 Million

According to Rule 3 of the Powers-Of-Attorney Act, 1882, “Payment
by attorney under power, without notice of death, etc., good.– Any person making or
doing any payment or act in good faith, in pursuance of a power-of-attorney, shall not be
liable in respect of the payment or act by reason that, before the payment or act, the donor
of the power had died or become lunatic, of unsound mind, or bankrupt, or insolvent, or
had revoked the power, if the fact of death, lunacy, unsoundness of mind, bankruptcy,
insolvency or revocation was not, at the time of the payment or act, known to the person
making or doing the same. But this section shall not affect any right against the payee of
any person interested in any money so paid; and that persons shall have the like remedy
against the payee as he would have had against the payer, if the payment had not been
65
made by him. This section applies only to payments and acts made or done after this Act
comes into force”.
Project Director, Lyari Expressway Resettlement Project (PD, LERP), Karachi
for F.Ys 2012-15, paid compensation amount of Rs19.965 million to Mr. Nand Kumar,
advocate to affectees, instead of paying directly to affectess, as per directives of Sindh
High Court (C.P No.D-1843/2013).
Audit is of the view that unauthorized payment to Advocate has made whole
transaction as doubtful.
Deviation from prescribed rules resulted into weak internal controls.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault, under
intimation to audit.
[AIR Para: 4]

1.2.3.48 Irregular Acceptance of Bid without Comparing the Rates with

Market Prices - Rs 19.800 Million
According to Rule 48 of SPPRA 2010, “Acceptance of Bids - Even when only
one bid is submitted, the bidding process may be considered valid, if the bid was
advertised in accordance with rules, and prices are comparable to the prices or rates of the
last awarded contract or the market prices”.
During audit of Senior Director, Municipal Services, KMC, it was revealed that
single bid submitted by FRC against the work “installation /modification/renovation of
40 feet high rise hydraulic units for 25 fire tenders amounting to Rs 19.800 million was
technically qualified and was accepted without comparing offered rates with the market
rates. It was also mentioned in the PC-1 that the estimate was prepared on market rates
but the market survey report was also not produced, in violation of above rule.
Audit is of the view that in absence of market survey, actual prices of the items
cannot be ascertained.
Non-observance of prescribed rules constituted weak internal control.

66
 The matter was reported to the management during September, 2015, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on officer(s) at fault, under
intimation to audit.
[AIR Para: 2]

1.2.3.49 Splitting of Various Works to Avoid Tender - Rs 18.144 Million

As per Rule 12 (1) of SPPR 2010, “Limitation on Splitting or Regrouping of
Proposed Procurement: Save as otherwise provided and subject to the regulations made
by the Authority, a procuring agency shall prepare, in accordance with Rule 11 above, all
proposed procurements for each financial year and shall proceed accordingly without any
splitting or regrouping of the procurements already grouped, allocated and scheduled in
the Procurement Plan (Rule – 11);”
Further, as per Rule-17(1) of SPPRA Rules 2010, “Procurements over one
hundred thousand rupees and up to one million rupees shall be advertised by timely
notifications on the Authority’s website and in print media in the manner and format
prescribed in these rules”.
Various offices of LGD, awarded works costing Rs 18.144 million by splitting
up works into parts to avoid open tender, in violation of above rules. Details are provided
at Annex-SLG13.
Audit is of the view that splitting of work of same nature in various components
deprived the Government from achieving best competitive rates.
Non-observance of prescribed rules and procedures was due to weak internal
control system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault on account of
splitting work into parts to avoid tender, under intimation to audit.
[AIR Paras: 11, 2]

67
1.2.3.50 Expenditure on POL Without Entitlement- Rs 17.326 Million
According to Finance Department, Government of Sindh, O.M No.FD-B
(15)/99-2000(POL) dated 12-01-2000, “the petrol ceiling for head of subordinates office
have been fixed at 180 litters per month”.
Various formations working under LGD, KMC & KW&SB, incurred
expenditure amounting to Rs 17.326 million on account of POL beyond prescribed
ceiling and without entitlement, in violation of the above rules. Details are provided at
Annex-SLG14.
Audit is of the view that managements allowed POL beyond prescribed limit,
without entitlement and even officers working in other departments, which resulted into
misappropriation of POL and weak administrative management.
Deviation from prescribed procedure rules was due to weak internal control
system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management (s) for un-authorized
expenditure on account of POL beyond prescribed ceiling as well as POL to officials
without entitlement/outside department. Besides, amount be recovered without further
delay, under intimation to audit.
[AIR Paras: 7, 3, 12, 8, 2, 8, 10, 7, 3, 9]

1.2.3.51 Irregular Procurement without Integrity Pact - Rs 16.920 Million

According to Rule-89 of SPPRA-2010, “Integrity Pact - Procurements
exceeding Rs 10 million for goods and works, and Rs 2.5 million for services shall be
subject to an integrity pact, as specified by regulations, between the procuring agency and
the suppliers or contractors or consultants.”
As per Sindh Local Councils (Accounts) Rules, 1983, Rule10(a), “same
vigilance should be exercised in respect of expenditure incurred from Local Fund as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.
Director General, Parks & Horticulture (KMC), awarded development scheme
worth Rs 16.920 million, during financial year 2012-13, and paid upto 2015-16 without

68
 executing Integrity Pact with contractor to safeguard Government interest, in violation of
rules. Detail is as under:
(Rupees in Million)
SPPRA Description of Work Amount of
Source NIT # Estimate Contractors
I.D Work Order Work
Supply of
556/2011 320
ADP- decorative plants M/S King ARP
07-02- Nil 19.999 05-01- 16.920
387 different types for Link
2011 12
different areas

Audit is of the view that department failed to safeguard departmental interests

by executing integrity pact with contractor resulted into undue favor and weak
administrative & financial management.
Non-observance of SPPRA Rules resulted into weak internal controls.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault and
procurement without executing integrity pact, under intimation to audit.
[AIR Para: 6]

1.2.3.52 Irregular withdrawal of Funds - Rs 12.850 Million

According to Addendum to joint venture agreement reached between SDA and
M/s Hussain (private) limited on 9th June 2013, “that it is mutually agreed that the SDA
will be entitled to withdraw from the funds of the said Mehran Dream City schemes an
amount of Rs 4.0 million per month for maximum period of 12 month adjustable to its
share towards the cost of land. The said arrangement was allowed because of financial
constraints by SDA. According to Clause 3 of Addendum to Joint Venture Agreement
executed on 09-01-2013, the SDA shall be bound to submit / reimburse the amount @
50% of recovery made from all other sources i.e. auction of commercial plots, disposal of
amenity plots etc. The said fund was established solely for clearing running bills on the
accounts of construction, management consultancy and internal development of Mehran
Dream City in accordance with Clause 2 of Addendum to Joint Venture Agreement”.
Director General, Sehwan Development Authority, withdrew an amount of
Rs 12.850 million which was over and above the permissible limit of Rs 4.00 million per
month during period November 2014 to June 2015 from amount collected from Mehran
69
Dream City Project. Moreover, no detail is provided to the audit team for clearance of
contingencies bills against the capital work in project. It is pertinent to mention that said
project is at a halt since the bills of contractors were not cleared. The authority had
neither reimbursed the said amount from its other recoveries nor provided the details of
expenditure, in violation of above agreement clause. Detail is as under:
[Rupees in Million]
Month Permissible Limit Amount Withdrawn Excess
November2014 4.00 7.45 3.45
December 2014 4.00 5.50 1.50
January 2015 4.00 4.30 0.30
April 2015 4.00 5.50 1.50
May 2015 4.00 6.40 1.40
June 2015 4.00 8.70 4.70
Total 12.850
Audit is of the view that the due to excess withdrawal of money from the
Mehran Dream City Project was due to weak financial management and as a result the
progress of work/scheme suffered badly and delay in completion shuttered confidence of
the general public over Government schemes.
Violation of agreement was due to weak internal control system.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for withdrawal
of excess amount from collection, under intimation to audit.
[AIR Para: 4]

1.2.3.53 Posting / Transfers of Staffs without Sanctioned Strength

Rs 12.491 Million
According to SFR, Rule 68, “When the entertainment of a new establishment or
a change, temporary or permanent, is proposed in an office, a letter fully explaining the
proposal and the conditions which have given rise to them, together with the proposition
statement, if necessary under Para . III, should be submitted to the competent authority.
In this letter should be set out inter alia:-
i. The present cost, either the section or sections effected of the total
establishment as the circumstances of the case may indicate to be necessary;

70
 ii. Details of the pay of the post or posts and the number of posts which it is
proposed to add or modify.”
Further, according to Government of Sindh Services and General Administration
Department letter No.SO-I(S&GAD)/92, dated: 26-05-1992, addressed to all
departments, the staff should be posted at the places for which the posts have been
sanctioned as in no case any officer / official be allowed to work on detailment basis to
place other than original place of posting otherwise the post will be abolished under the
orders of the Finance Department, Government of Sindh.
Various formations working under LGD, KMC & KW&SB, during financial
years 2013-16, posted various staff without sanctioned posts/strength, in violation of
above rules. Details are provided at Annex-SLG15.
Audit is of the view that management failed to observe Government rules and
regulations resulted into weak administrative & financial management.
Non-compliance of rules & regulations was due to weak internal controls
system.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management(s) on account of
unauthorized posting/adjustment of staff without sanctioned strength, under intimation to
audit.
[AIR Paras: 18, 8, 7, 12]

1.2.3.54 Payment of Salary to Staff Posted on Detailment

Rs 11.951 Million
According to Government of Sindh Services and General Administration
Department letter No.SO-I(S&GAD)/92, dated: 26-05-1992, addressed to all
departments, the staff should be posted at the places for which the posts have been
sanctioned as in no case any officer / official be allowed to work on detailment basis to
place other than original place of posting otherwise the post will be abolished under the
orders of the Finance Department, Government of Sindh.

71
 Medical Superintendent, Landhi Medical Complex, incurred expenditure of
Rs 11.951 million, during financial year 2015-16, on account of payment of salaries to 27
employees posted in other departments on detailment basis, in violation of the above
directives.
Audit is of the view that posting of staff on detailment resulted into violation of
prescribed rules.
Violation of prescribed procedure was due to weak internal controls.
The matter was reported to the management during October, 2016 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for illegal detailment of staff and
payment of salaries.
[AIR Para: 02]

1.2.3.55 Irregular Bidding- Rs 9.979 Million

According to Rule 47 of SPPRA 2010, “Conditions for Use of Various
Procedures (1) Single Stage One Envelope Bidding Procedure shall be used as the
standard bidding procedure for procurement of goods, works and services of simple and
routine nature and where no technical complexity or innovation is involved; (2) Single
Stage Two Envelope Bidding Procedure shall be used where the bids are to be evaluated
on technical and financial grounds and price is taken into account after technical
evaluation”.
Senior Director, Municipal Services, KMC during financial year 2015-16,
awarded work of “refurbishment of wheel loader model liegong-856” to J.Z associates
amounting to Rs 9.979 million. The work involved technical complexity and innovation
but single stage one envelope bidding procedure was used for procurement of goods,
works and services which involve simple and routine nature. Instead, the single stage two
envelope bidding procedure is usually adopted for technical works of similar nature, in
violation of above rule.
Audit is of the view that inappropriate bid procedure was selected for the award
of work involving technical complexity and innovation.
Deviation from prescribed rules constituted weak internal control.

72
 The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on officials at fault for irregular
award of work by using Single Stage One Envelope Bidding Procedure involving
technical complexity, under intimation to audit.
[AIR Para: 10]

1.2.3.56 Joint Venture Without Contract Agreement - Rs 9.970 Million

According to para 11.2 of standard biding documents for large works issued by
SPPRA, “Bids submitted by a joint venture of two (2) or more firms shall comply with
the following requirements: (a) one of the joint venture partners shall be nominated as
being in charge; and (11) this authorization shall be evidenced by submitting a power of
attorney signed by legally authorized signatories of all the joint venture partners; (b) the
bid, and in case of a successful bid, the Form of Contract Agreement shall be signed by
the authorized partner so as to be legally binding on all partners”.
Senior Director, Municipal Services, KMC, during financial year 2015-16,
awarded work namely “modification of grab crane increase of boom with hydraulically
operated” to joint venture of J.Z associate and FRC without executing contract
agreement. Furthermore authorization letter from signatory was also not obtained from
the joint venture of J.Z associate and FRC.
Audit is of the view that expenditure on said project without executing power of
attorney resulted in irregular expenditure which constituted weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on official(s) at fault, under
intimation to audit.
[AIR Para: 6]

73
1.2.3.57 Irregular Purchase of Items from 2nd Lowest Bidder
Rs 9.720 Million
As per Rule 46(2)(i) of SPPRA, “bid found to be the lowest evaluated or best
evaluated bid shall be accepted.”
Further, as per Section(I) of Appendix 18-A of SFR Vol-I, "Means should be
devised to ensure that every Government servant realizes fully and clearly that he will be
held personally responsible for any loss sustained by Government through fraud or
negligence on his part, and that he will also be held personally responsible for any loss
arising from fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his own action or
culpable negligence”.
Senior Director, Medical & Health Services, KMC, during financial year
2015-16, purchased 51,750 treatments “Dialyzer with Blood Tubing Line, AV Fistula
Needles & Dialysis Solution” from two suppliers i.e. (1) 31,750 from Jafco International
& (2) 20,000 from Meditrade General, 1st and 2nd lowest, respectively. It was observed
that the said office paid an excess amount Rs 9.720 million to 2nd lowest M/s Meditrade
General Traders despite the fact that the same items were also purchased on low price
from the 1st lowest, in violation of rules. Detail is as under:
[Amount in Rupees]
Item Description M/S Quoted Rate Remarks
Dialyzer with Blood Rs 1,513 per treatment (31,750 1st
Jafco International
Tubing Line, AV Fistula treatments purchased) lowest
Needles & Dialysis Rs 1,999 per treatment (20,000 2nd
Meditrade General Traders
Solution (A&B) treatments purchases) Lowest
Total Excess for 20,000 treatments@ Rs 486/- 9,720,000

Audit is of the view that the purchases from the second lowest bidder constituted
weak financial management.
Deviation from prescribed rules resulted into loss to public revenue which
constituted weak internal control.
The matter was reported to the management during November 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that responsibility be fixed against the person(s).
[AIR Para: 02]
74
1.2.3.58 Irregular Payment of Advances - Rs 7.953 Million
According to Para-10 (i) of GFR Vol-I, “every public officer is expected to
exercise the same vigilance in respect of expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.
As per Rule 668 of TR Vol-I, “Advances granted under special orders of
competent Authority to Government Officers for departmental or allied purposes may be
drawn on the responsibility and receipt of the officers for whom they are sanctioned,
subject to adjustment by submission of detailed accounts supported by vouchers or by
refund, as may be necessary”.
Director General, Hyderabad Development Authority, Main Secretariat,
Hyderabad, during financial year 2015-16, made different payments of advance salaries
amounting to Rs 7.953 million to various employees despite facing financial constraints.
Moreover, the adjustment of advances was not timely made from the salaries of
concerned employees, in violation of rules.
Moreover, Chief Medical Officer, KDA, paid an amount of Rs 4.065 million to
different hospitals as Advance Payments for Hospitalization of K.D.A employees during
financial years 2011-15, but this amount is still lying unadjusted, in violation of above
rules.
Audit is of the view that irregular advances were paid resulting into weak
financial management.
Payment of advance salaries to various employees constituted weak internal
control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of unauthorized advances
and the amount be recovered and adjusted, under intimation to audit.
[AIR Paras: 4, 10]

75
1.2.3.59 Award of Tender on Blank Estimates - Rs 6.725 Million
According to Para 11.2 of Guidelines / Regulations For Procurement of Works
issued by SPPRA, “The detailed estimate prepared by the executing agency keeping in
view its technical feasibility and provisions in the PC-I, is submitted to competent
authority for the sanction is known as the Technical Sanction (TS) to the estimate. The
competent authority while giving technical sanction to the detailed estimate shall give
proper consideration to various details worked out from the drawings and specifications
of the work, as well as stability and economy in the execution. Financial Review showing
the comparison between provisions in the RCE and amount of technical sanction of same
items is also attached also to check whether the excess is within allowable limit or not”.
Senior Director Municipal Services, KMC, during financial year 2015-16,
awarded tenders of Rs 6.725 million against estimates signed by Team leader (USAR)
MS, KMC, but column for rates was left blank. Detail is as under:

[Rupees in Million]
Sr. Name of Work Work order No & date Amount
No.C.E/(CM)/MS/KMC/30
Services of experienced search Dog’s trainers/Dog
1 6/15 2.964
handlers for USAR academy KMC.2015-16
Dated:28-10-2015
Provision of diet, medicines and medical treatment No.C.E/(CM)/MS/KMC/30
2 for Dogs/Pups of urban search and rescue (USAR) 7/15. 3.760
TEAM KMC. Dated:28-10-2015
Total 6.725
Audit is of the view that management extended undue favour to contractor
which constituted weak financial management.
Non-observance of prescribed rule constituted weak internal control system.
The matter was reported to the management during November 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on officers at fault for award of
tender on blank estimates, under intimation to audit.
[AIR Para:8]

76
1.2.3.60 Unauthorized Posting against out of Cadre Posts - Rs 6.140 Million
According to Para 2 of letter issued by LGD vide No. B&A(LG)4(21)/2014
dated: 16.3.2015, on the subject compliance of orders of Honorable Supreme Court of
Pakistan dated: 5.1.2015 passed in civil appeal No.404/2011 and civil review petition
No.193/2013, “It is therefore once again requested to kindly comply the above
instructions regarding relieving of officers/officials who were on OPS, posted against out
of cadre posts and still holding the post on out of turn promotion passed by Honorable
Supreme Court of Pakistan in letter and spirit and furnish implementation status/progress
report to this department immediately for onward transmission to the SG&CD and in case
of non-compliance, the heads of attached department/wing will be held responsible and
exposed to contempt of court”.
Medical Superintendent, Landhi Medical Complex, incurred expenditure
Rs 6.141 million against the payment of salaries, during financial year 2015-16, of
officer(s) posted against out of cadre posts in violation of orders of Honorable Supreme
Court of Pakistan and above orders.
Audit is of the view that management failed to comply with the orders of
Honorable Supreme Court of Pakistan and competent authority/administrative department
(LGD) concerned on the subject which indicated the absence of systematic internal
control which constituted weak financial and administrative management.
Non-observance of rules constituted weak internal control.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on persons responsible for
non-compliance of Supreme Court of Pakistan and action in the light of above referred
letter be taken, under intimation to audit.
[AIR Para: 1]

1.2.3.61 Un-authorized Expenditure on Non-Scheduled Items

Rs 5.223 Million
According to Serial No. 4 of the Schedule of Rate (Composite) for finished
items of works, 2004, the non-schedule item costing upto Rs 1000 should be got

77
sanctioned by the concerned Superintending Engineer and the items exceeding Rs1000
must be got approved and sanctioned by the Chief Engineer.
The Director General (Malir Development Authority) Karachi, incurred an
expenditure of Rs 5.223 million, during financial year 2015-16, on items (including
luxury cars) other than the items shown in the schedule-B for work, without approval
from competent authority. The rates of these items were required to be obtained from
market and to be analyzed after adding contractor’s profit. Further, payment on
non-scheduled items without preparation of rate analysis and approval of competent
authority occurred, in violation of above stated rule. Detail is as under:
[Amount in Rupees]
Sr. Description Rate Qty Payments
1 Providing and fixing the performed expansion joint filter 74 126 9,324
2 Drilling the holes in stone or brick 1035 150 155,250
3 Provided Brand new latest model Toyota Hiace Provisional Sum 4,818,000
4 Maintenance of Brand new latest model Toyota Hiace 6 40000 240,000
Total 5,222,574
Audit is of the view that the management did not observe the prescribed
procedure laid down for the financial discipline in the department that shows lack of
internal controls in the department, which constituted weak financial management.
Non-compliance of rules may lead to misuse of public funds and loss of
Government
The matter was reported to managements during October, 2016, but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit recommends that responsibility may be fixed upon the person(s) at fault
for work without rate analysis from market under intimation to audit.
[AIR Para: 7]

1.2.3.62 Un-Authorized Transfer from Receipts Accounts - Rs 5.000 Million

According to Rule 4.5.18.2 and 4.5.18.3 of APPM, issued by the department of
Auditor General of Pakistan The delegated officer in the Account Section of the
DAO/AG/AGPR office shall reconcile expenditure with each DDO on a monthly basis,
based on the cheque register. The Bank will send the “Bank Return” (along with paid
cheques) to the Account Section, where a delegated officer shall check the Bank Return

78
(and paid cheque) with the copy of the Daily Advice Note. The officer shall investigate
any item which is on Bank Return but not on Daily Advice Note and vice versa.
Further, as per Para-10 (iv) of GFR Volume-I, “public money should not be
utilized for the benefit of a particular person or section of community and also according
to rule all the claims must be supported with full detail & documents”.
Moreover, as per Treasury Orders and the Subsidiary Rules (T.O.7), “Except as
provided in order 8, all moneys received by Government servants in their official
capacity, other than moneys withdrawn from the public account under the provisions of
section VIII below, shall without undue delay be paid in full into a treasury or into the
Bank and shall be included in the general balances of Government. Departmental receipts
shall not be appropriated to meet departmental expenditure except with the sanction of
the Governor-General in Council”.
Regional Director Town Planning (SBCA), Hyderabad, has been illegally
operating bank account No.4002734907, NBP, Shahbaz Building, Hyderabad. It is
pertinent to mention that the Director Planning SBCA is receiving funds from the cost
center HD-480. All their bills are processed via AG Sindh. Despite budget allocation both
for salaries and contingencies, the management is illegally transferring millions of rupees
in the said account without any justification. Only in financial year 2015-16, an amount
of Rs 5.000 million were transferred from the receipt account without any approval or
authority.
Audit is of the view that transferring of funds from receipts accounts to another
account is unjustified and illegal.
Deviation from prescribed rules instruction resulted into weak internal control
system prevailing in the department.
The matter was reported to the management during December, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for operating illegal
bank account which may immediately be closed to avoid further discrepancies, under
intimation to audit.
(AIR Para: 11)

79
1.2.3.63 Payment of Interest Due to Late Payments - Rs 4.765 Million
According to Para 23 of GFR Volume-I, “Every Government officer should
realize fully and clearly that he will be held personally responsible for any loss sustained
by Government through fraud or negligence on his part and that he will be also be held
personally responsible for any loss arising from fraud or negligence on the part of any
other Government officer to the extent to which it may be shown that contribution to the
loss by his own action or negligence”.
Project Director, Lyari Expressway Resettlement Project (PD, LERP), Karachi,
for F.Ys 2012-15, paid an amount of Rs 4,764 million to the affectees of Lyari
Expressway on account of late payment of compensation charges. Due to Financial
mismanagement, Government sustained financial losses of Rs 4.765 million on account
of interest charges.
Deviation from prescribed rules resulted into weak internal controls.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault, under
intimation to audit.
[AIR Para: 7]

1.2.3.64 Irregular Procurement without Constitution of Procurement

Committee - Rs 3.093 Million
As per Rule 7 of SPPRA 2010, “The procuring agency shall, with approval of its
Head of the Department, Constitute as many procuring committees, as it deems fit, each
comprising odd number of persons and headed by the gazetted officer not below the rank
of BPS-18, or if not available, the officer of the highest grade, and shall ensure that at
least one third of the members of a procurement committee are from the agencies or
departments other than the procuring agency”.
DG, Larkana Development Authority, during financial year 2015-16, procured
various materials amounting to Rs 3.093 million without constitution of procurement
committee, in violation of above rule.

80
 Audit is of the view that violation of SPPRA rules resulted into non-
transparency in the award of contracts. Violation of laid down procedures of SPPRA was
due to weak internal controls.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on the management for procurement
without constitution of procurement committee, under intimation to audit.
[AIR Para: 7]

1.2.3.65 Irregular Expenditure on Treatment of Employees

Rs 2.009 Million
As per directives of City Nazim, CDGK mentioned in note sheet of the
department, “all angiographies and angioplasties will be carried out at Karachi Institute
of Heart Diseases”.
As per Rule 10 (iv) of GFR Vol-I, “Public money should not be utilized for the
benefit of a particular person or section of the community”.
Chief Medical Officer, Health, KDA Wing paid an amount of Rs 2.009 million,
during financial years 2011-15 to different non-panel hospitals on account treatment
facility provided to their employees by violating of above directives/rule. As a result
government interest was not safeguarded. Audit observed following discrepancies:
i. Agreements of hospitals were not provided.
ii. The circumstances on which payment was made without inclusion in the
panel, needs to be justified.
iii. Terms & conditions were also not provided.
iv. Approval / Permission of competent authority were not provided.
Audit is of the view that management did not observe the prescribed procedure
laid down for the financial discipline in the department that shows lack of internal
controls in the department.
Non-observance of prescribed procedure constituted weak financial
management.

81
 The matter was reported to managements during October, 2016, but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit recommends that the responsibility may be fixed upon the person (s) at
fault, under intimation to audit.
[AIR Para: 12]

1.2.3.66 Procurement of Laboratory Equipment’s without Provision in

PC-IRs 1.974 Million
According to Planning Commission Manual Part 'C' deals with "Project
Requirements", “It stipulates that the information sought in this part includes: (i)
manpower requirements during implementation, (ii) physical and other facilities required
and (iii) materials, supplies and equipment. Part 'D' deals with environmental aspects. It
includes information required in respect of (i) impact assessment undertaken separately in
case of water, sewerage and solid waste and (ii) recommendations along-with the
measures to be taken to control environmental pollution”.
Executive Engineer, Canal Maintenance Division (Civil), during financial year
2015-16, incurred an amount of Rs 1.974 million for Procurement of Laboratory
Equipments when there was no provision of the same in PC-I, in violation of above rule.
Detail is as under:
[Amount in Rupees]
Name of PC-I Vehicle
Name of Work Work Order No.
Contractor Cost Cost
Establishment/Construction of M/s Malik & No.EE/CMD/KW&SB/2015/183 30.740
1,974,000
water testing Laboratory at Chillya. Company dated 27/04/2015. Million

Audit is of the view that misappropriation of funds reflects the absence of

systematic control and financial discipline in the department.
Deviation from PC-I was due to weak internal controls.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for incurring expenditure without
inclusion in PC-I, under intimation to audit.
[AIR Para: 3]
82
1.2.3.67 Unauthorized Retention of Government Vehicles
Rs 1.029 Million
As per Section(I) of Appendix 18-A of SFR Vol-I, "Means should be devised to
ensure that every Government servant realizes fully and clearly that he will be held
personally responsible for any loss sustained by Government through fraud or negligence
on his part, and that he will also be held personally responsible for any loss arising from
fraud or negligence on the part of any other Government servant to the extent to which it
may be shown that he contributed to the loss by his own action or culpable negligence”.
Further, as per Rule II (I) of Appendix 18, ibid, “all losses must be reported
forthwith by the officer concerned, not only to the Audit Officer, but also to his own
immediate official superior. Reports must be submitted as soon as reasonable ground
exists for believing that a loss has occurred; they must not be delayed while detailed
enquiries are made”.
Various formations under LGD, during financial year 2015-16, did not recover
official vehicles retained un-authorizedely by transferred officers and un-entitled persons,
in violation of above rule. Details are provided at Annex-SLG16.
Audit is of the view that unauthorized retention of official vehicles by
transferred officers and unauthorized persons resulted into misuse of official vehicles at
the cost of public exchequer. Violation from prescribed rule was due to weak internal
controls and lack of accountability.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for not recovering
official vehicles against un-authorized retention by ex-officers. Moreover, all out efforts
may be made to recover vehicles without further delay, under intimation to audit.
[AIR Paras: 8, 9, 8, 23, 24, 13, 8, 4, 10, 23]

1.2.3.68 Non-Installation of Meters at KW&SB Hydrants

According to work component WSS-15 of revised PC-I of K-III, 80 No. flow
meters were to be installed to measure output from treatment works and reservoir at key
points in the system.

83
 Incharge, Hydrant Services/Tankers Operation working under KW&SB, during
financial year 2015-16, it was observed that 24 hydrants are being operated under
KW&SB, but flow meters have not been installed at 15 hydrants, in violation of above
rule.
Audit is of the view that due to non-installation of meters, chances of revenue
loss in terms of quantity of water distributed and charges collected and same cannot be
reconciled / authenticated, which constituted weak financial management and lack of
interest of department.
Non installation of meters at hydrants constituted weak internal controls.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that meters be installed at all hydrants, under intimation to
audit.
[AIR Para: 6]

1.2.3.69 Non-Setting up of Performance Benchmarks to Judge Quality /

Quantity of Water Supplied
According to Para No. 09 of the Summary for Chief Minister, Sindh on subject
“Completion of Operation & Maintenance Period” September 2013, “The contract shall
be for one year initially and may be extended on the terms based on SPPRA Rules
provision and performance of the contractor/company. The cost for one year shall be
worked out by the Administrative Department based on some comparable benchmarks
and the payments during this one year period shall be linked with some performance
indicators like amount of water supplied per unit per day and some benchmarks to judge
the quality of water supplied”.
During audit of Reverse Osmosis Water Desalination Plants, Lyari & Keamari
working under KW&SB, during financial year 2015-16, it was revealed that Additional
Chief Secretary, P&D desired during the approval of summary to set benchmarks and
performance indicators to judge the quality/quantity of water supplied to public. But
management took no step in this regard.

84
 The management did not observe the prescribed procedure laid down for the
financial discipline in the department that shows lack of internal controls in the
department.
Non-observance of prescribed procedure constituted weak financial
management.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that position may be justified and setting up of benchmarks
and performance indicators to judge the quality/quantity of water supplied to public,
under intimation to audit.
[AIR Para: 9]

1.2.3.70 Un-authorized Promotion of Staff on Detailment

As per Rule 6-A of the Sindh Civil Servants (Appointment, Promotion &
Transfer) Rules, 1974, “Pay Scale fixed by the Government for Drivers is BPS-04 and
they are to be promoted to BPS-05 after 07 years, BPS-06 after 10 years and BPS-07
after 15 years of service vide Finance Department Circular No. FD (SR-IV) 2-
102/79(Part-III) dated 13-09-1981 and even No. dated 13-06-1981 and the advice issued
vide No.DF (SR-IV) 2-102/79 (Part-II) dated 10-02-1993”.
Director General, SBCA and KMC, during financial years 2009-10 to 2015-16,
promoted various officials including drivers and engineers etc. on detailment, without
recalling them for consideration for promotion. The pay was fixed in higher scale without
recommendation of DPC, availability of sanctioned post and without completion of
prescribed length of service, in violation of above rule.
Audit is of the view that staff was promoted in higher scale without fulfillment
of prescribed codal formalities which resulted into weak financial management.
Deviation from the rule constituted weak internal control.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.

85
 Audit recommends fixing of responsibility on management for un-authorized
promotion of staff without fulfillment of prescribed codal formalities, under intimation to
audit.
[AIR Paras: 29, 16]

1.2.3.71 Failure to Take Punitive Action against Illegal Housing Schemes

According to Regulation No.2-105 of the Karachi Building and Town Planning
Regulations 2002, “Public Sale Project means a project designed with the intention of
transferring to the public on ownership basis by way of Pubic Sale and for which sale
NOC is obtained from the Authority”.
Director General, SBCA, Karachi, during financial years 2009-16, failed to take
action against illegal Sale of different housing schemes, which were launched by the
different Builders & Developers in Karachi without obtaining NOC from the Authority.
Detail is as under:
Sr. Name of Scheme Location
1 Qadri River View Near NADRA Office, Rohri
2 Al- Naik Bungalows Atta Hussain College , Rohri
3 Qadri Housing Scheme Near Engro Food, Rohri
4 Sachal Model Town Housing Scheme Sukkur Bypass
5 Crystal Bungalows Sukkur Bypass
6 King Crystal Model Town, Phase-II Sukkur Bypass
7 King Crystal Model Town, Phase-I Sukkur Bypass
8 Doctor Villas, Housing Scheme Sukkur Bypass
9 Green Sukkur Model Town Sukkur Bypass
10 Bismillah Township Lal Mashaikh near Sabzi Mandi
11 Hafizabad Town Scheme Sarhad District Ghotki

Audit is of the view that Authority failed to stop the Illegal Projects/schemes,
which constituted weak financial management.
Deviation from prescribed rules resulted into weak internal control.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for not taking any
action against illegal Public Sale Projects, under intimation to audit.
[AIR Para: 13]

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1.2.3.72 Non-Implementation of Seismic Provisions by Authority on
Constructions in Seismic Zones
As per Para No.1.2.1 of the Building Code (Seismic Provisions-2007),
“Requirements of these provisions shall be applicable to reinforced concrete, steel and
masonry buildings and building-like structures”, read with Para No.7.3.1.3 of ibid, “In
regions of moderate seismic risk (Seismic Zones 2A, 2B) or for structures assigned to
intermediate seismic performance or design categories, intermediate or special moment
frames, or ordinary, intermediate, or special structural walls, shall be used to resist forces
induced by earthquake motions. Where the design seismic loads are computed using
provisions for special concrete system, the requirements of Chapter-7 for special system
shall be satisfied”.
Further, as per Regulation No.11-2 of Karachi Building and Town Planning
Regulations 2002, “Seismic Risk Zone for Karachi will be zone-2B (with reference to
UBC-97) which is equivalent to Peak Ground Acceleration (PGA) of 16% g to 24% g.,
read with Regulation No.11-3 “In view of the structural design in Seismic hazard zone,
type of Sub-Soil for foundation should be thoroughly ascertained by geo-technical
investigation under the direct supervision of qualified and experienced geo-technical
engineers The Soil Report should correlate the sub-soil type with UBC- 97 (or current)
Sub-Soil list”.
Director General, SBCA, Karachi, during financial years 2009-16, issued 538
NOCs for Public Sale Projects in Seismic Zones of Karachi but failed to implement
Seismic Provisions on construction work in these areas which threatened the lives of
public, in violation of the above rules. Detail is as under:
Name of Area Mentioned in
Seismic Zone under Table 2.1 Total NOCs
Sr. Table 2.2 of Seismic Provisions-
of Seismic Provisions-2007 issued after 2007
2007
01 Karachi Central 2B
02 Karachi East 2B
03 Karachi South 2B 538
04 Karachi West 2B
05 Karachi Malir 2B

Audit is of the view that Authority failed to implement Seismic Provisions-2007

on construction in Seismic Zones of Karachi which resulted lives of public residing in
these areas into danger.

87
 Deviation from prescribed rules resulted into unauthorized construction work in
Seismic Zones of Karachi and was due to weak internal control system.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for unauthorized
construction work in Seismic Zones of Karachi, under intimation to audit.
[AIR Para: 15]

1.2.3.73 Non-Demolition of Dangerous Buildings in Sukkur City and

Karachi
Supreme Court had ordered SBCA, in Suo moto case No. 08/2011 and HRC no
22896-S/ 2010 dated 21/12/2011, for legal proceeding against builder mafia in Sukkur
city, that have constructed high rise building in seismic zone 2 A. The court has directed
to demolish the 59 buildings.
As per Section 7A of Sindh Building Control Ordinance, 1979, “[7-A. Violation
of certain provisions.- Where the provisions of sub-section (1) of Section 6 are violated
the building may without prejudice to any other action including sealing of the building
or ejectment of the occupants be ordered by the Authority or any officer of the Authority
authorized in this behalf to be demolished, at the cost of the builder in the case of
public buildings and the owner in other cases”.
Further, as per Section 14 (1) of The Sind Building Control Ordinance, 1979, “If
it comes to the notice of the authority that a building is likely to collapse, the authority
may, after such enquiry as it deems fit order for carrying out the specific repairs or
demolition of the whole or part of the building. Provided that no action shall be taken
under this section unless the Person who is likely to be effected thereby is given an
opportunity of being heard”.
The Regional Director, Town Planning (SBCA, Hyderabad Region) has not
taken necessary proceeding after Supreme Court direction. The management has neither
contacted the Law Enforcing Agencies, nor informed the Supreme Court either to have an
excuse or rational for not demolishing these 59 high-rise buildings, even if the plea of
Law and Order situation would be considered.

88
 Similarly, Director General, SBCA, Karachi during financial years 2009-2016,
failed to demolish 416 dangerous buildings declared by the Technical Committee as
Hazardous for living, out of which 296 schemes are located in Seismic Zones, in
violation of the above rules.
Deviation from prescribed rules instruction resulted into weak internal control
system prevailing in the department.
The matter was reported to managements during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management on their in-action,
under intimation to audit.
[AIR Paras: 16, 15]

1.2.3.74 Irregular Allotment of Plots to Affectees of Lyari Expressway

According to allotment order issued by Lyari Expressway Resettlement Project,
“The allottee will enter into lease agreement with LERP for 99 years subsequently at later
stage, which will be executed entirely at the expenses of the allottee”.
Further, according to allotment order issued by Lyari Expressway Resettlement
Project:

i) The Allotment Order is non-transferable for 5 years

ii) If possession of the plot is not taken within 15 days of the receipt of this
allotment order, the above order will be cancelled
iii) The allottee is bound to start construction of the allotted plot within 4 weeks’
time from the date of issuance of allotment order upon completion of
requisite formalities of handing / taking over of physical possession of the
plot. If the allottee fails to comply with the above mentioned condition, his /
her plot will be transferred to another area that is / may not yet developed.
iv) The plot allotted will not be used for commercial or any other purpose in any
way except for the specific residential purposes for which it has been allotted
as mentioned in the allotment order.
v) The officials of LERP will have free access to the allotted plot premises for
inspection upon prior intimation to the allottee.

During annual audit of Project Director, Lyari Expressway Resettlement Project

(PD, LERP), Karachi for financial years 2012-15, it was noticed that the allotment of
89
plots to the affectees was made without observance of aforesaid conditions and signing of
lease agreement.
Due to non-observance of the above, the department failed to comply the
instructions / conditions as laid down for allotment of plots.
Deviation from prescribed rules resulted into weak internal controls.
The matter was reported to the management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault. Besides,
supporting documents be produced to audit for verification.
[AIR Paras: 1, 3]

1.2.3.75 Non-Compliance of Master Plan

According to Section 7-B and 7-C of Sindh Building Control (Amendment)
ACT, 2014, dated 20th March, 2015, “7-B. Town Planning. The Authority shall draw up a
Master plan for all Districts of the Province which shall, among other matters
provide for – (a) a survey of the District including its history, statistics, public services
and other prescribed particulars; (b) development, expansion and improvement of any
part of the District; (c) restrictions, regulations and prohibitions to be imposed with
regard to the development of sites, and erection and re-erection of buildings within the
district; (d) Earmarking of land for mosques where necessary: Provided that the Master
Plan shall be presented to Government for its consideration and shall be given effect after
approval by Government: 7-C. -Site Development Scheme. (1) Where a master plan has
been drawn up and has been approved by Government with or without any modifications,
no owner of land exceeding such areas as may be specified in this behalf in the master
plan shall develop the site or erect or re-erect a building on any plot or land covered by
the master plan, except in conformity with the provisions of a site development scheme
sanctioned for the area in the prescribed manner.

Regional Director Town Planning (SBCA) Hyderabad, during financial year

2015-16, have approved layouts of housing schemes in 12 districts of Sindh without
following the drawn up Master Plans made by Town Planning Department of SBCA,
Hyderabad.

90
 Audit is of the view that the process of approving layout plan without following
drawn up master plan is violation of mandate of SBCA.
Deviation from prescribed rules instruction resulted into weak internal
control system prevailing in the department.
Audit recommends fixing of responsibility on management, under intimation to
audit.

[AIR Para: 3]

91
 CHAPTER-II

SECRETARY
PUBLIC HEALTH ENGINEERING & RURAL
DEVELOPMENT

92
 2.1 INTRODUCTION/PROFILE OF THE ENTITY

SECRETARY PUBLIC HEALTH ENGINEERING & RURAL

DEVELOPMENT
Public Health Engineering Department has been designing, planning & executing
water supply & drainage schemes in urban & rural areas; excluding Karachi and
Hyderabad cities.
Scope & Function:
Over the years, O&M function of rural based schemes kept on shifting from one
agency to another and finally SLGO 2001 stipulated O&M of all schemes to respective
TMA. Presently urban based schemes are operated and maintained by concerned Local
Councils whereas completed Rural Water Supply and Draining schemes are being
looked-after by PHED. PHED had been a part of Local Government Department and was
given an independent status, having its own Minister and a Secretariat in 2008; but in
2013, the department was again merged in Local Government Department. As of recent,
PHED and RDD have been separated from Local Government under a separate Ministry.

2.2 Comments on Budget and Accounts (Variance Analysis)

i. Budget of 2015-16 of Entities of Secretary Public Health Engineering & Rural

Development Department

[Rupees in Million]

Excess (+)
Formation Particulars Budget Expenditure
Savings (-)
/ Revenue
Salary 1,174.843 1,064.318 (110.525)
Public Health Non-Salary 489.518 443.466 (46.052)
Engineering & Rural
Development Development 293.711 266.079 (27.631)
Total 1,958.071 1,773.863 (184.208)

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 Expenditure 2015-16

The original budget of Secretary, Public Health Engineering & Rural

Development Department, during financial year 2015-16, was Rs 1,958.071 million,
against which the total expenditure incurred was Rs 1,773.863 million, resulting in
overall savings of Rs 184.208 million, which was 9.048% of total budget.

94
2.3 AUDIT PARAS
2.3.1 Fraud/Embezzlement/Misappropriation
2.3.1.1 Doubtful Payment on Various Works - Rs 8.723 Million
According to Rule 2(q)(iv) of SPPRA Rules 2010, “Fraudulent Practice” means
any act or omission, including a misrepresentation, that knowingly or recklessly misleads,
or attempts to mislead, a party to obtain a financial or other benefit or to avoid an
obligation”.
Further, as per Government of Sindh Finance Department letter
No.FD(TR)1(4)/2016 (PT-I) dated 7th June 2016, “17th June, 2016, “fixed as cut-off date
for receipt of fresh bills, sanctions and for endorsement of Assignment Accounts cheques,
after which no fresh bill, claim or sanction will be entertained”.
The Public Health Engineering Department, District Tando Mohammad Khan
during financial year 2015-16 awarded 07 different works on 15-6-2016 amounting to
Rs 12.086 million and bills for Rs 8.723 million were passed on 17-06-2016. The MBs
were recorded without mentioning the date of measurement and maintenance of token
register.
Audit is of the view that management prepared bogus bills as it is impossible to
execute RCC work of drains, collecting tanks and screening chamber within one day after
the award of work.
Deviation from prescribed rules resulted into weak internal control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on officials at fault, under intimation
to audit.
[AIR Para: 1]

2.3.1.2 Doubtful Execution of Scheme - Rs 4.042 Million

As per clause 2 of General Rules and Directions for the Guidance of contractors,
“Form B-I of Public Works”, status that, ”the time allowed for caring out the work as
entered in the trend shall be strictly observed by the contractor and shall reckoned from

95
 the date on which the order to commence work is given to the contractor. And further to
ensure good progress during the execution of the work, the contractor shall be bound, in
all cases in which the time allowed for completion of any work exceed is one month to
complete and abide the programme of detailed progress laid down by the Executive
Engineer. The following proportions will usually be found suitable: In ¼ ½ ¾ of the time,
reasonable progress of earth work 1/6 ½ ¾ of the total value of work to be done.”
The Executive Engineer, Public Health Engineering Department, District
Matiari, during financial year 2015-16 incurred expenditure of Rs 4.042 million against a
scheme on RCC work. The scheme was completed in five days despite the fact that its
completion period was nine months, in violation of above rule. Detail is as under:
[Amount in Rupees]
Payment
Stipulat Actual
Name of Vr. No. Time made
Sr. Name of Work ed date date of
contractor & Date period during
of start start
2015-16
Construction of Collecting M/S
2/ 09
Tank 10” Dia Screening Muhammad
1 01-06-16 26-05-16 02-06- Month 2,303,381
Chamber (8’x5’) pump house Hanif
16 s
i/c pumping machinery 7.50 Rajput
BHP, Diesel engine 12.0 & 16 / 09
2 PVC Raising Main 6” Dia R/D -do- 01-06-16 26-05-16 19-06- Month 1,738,193
Scheme 16 s
Total 4,041,574

Audit is of the view that the execution of work in five days is impossible thus
casting serious doubts on the payment.
Deviation from prescribed rules resulted into weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility against person (s) at fault.
[AIR Para: 5]

96
2.3.2 Non-Production of Record
2.3.2.1 Non-Production of Record - Rs 394.049 Million
As per Section 14 (1) (b) of the Auditor General (Functions, Powers and Terms
and Conditions of Service) Ordinance, 2001, The Auditor-General shall, in connection
with the performance of his duties under this Ordinance, have authority to require that
any accounts, books, papers and other documents which deal with, or form, the basis of
or otherwise relevant to the transactions to which his duties in respect of audit extend,
shall be sent to such place as he may direct for his inspection.
Moreover, “Chief Secretary vide letter No.DO.NO.SO(C-II)/SGA&CD/1-
73/2012 dated 25th October, 2013 duly endorsed by Secretary of LGD vide letter No.
SOA/(LG)LG/4/(77)2013, dated 21.11.2013 was pleased to direct to all Municipal
organizations / Local Councils for immediately providing record to audit, so that,
financial discipline may be restored to respective organizations. In case of failure to
provide record to audit by auditee organizations, the cases may be taken up under
disciplinary proceedings against officers concerned that may include suspension of
officers”.
Various offices of PHEs, incurred an expenditure of Rs 394.049 million, during
financial year 2015-16, but failed to provide record to audit, in violation of the above rule
and instructions. Details are provided at Annex-PHE1.
Moreover, Various offices of PHED, incurred an expenditure amounting to
Rs 4.628 million, during financial year 2015-16, on purchase of POL for official vehicles
but failed to provide Log Books, History Sheets and Petrol account Registers to audit, in
violation of above rule. Details are provided at Annex-PHE1.
Audit is of the view that non-provision of record resulted into non-authenticity /
non-transparency in public spending and weak financial management.
Deviation from prescribed rules resulted into weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for
non-provision of record in accordance with rules and regulations.
[AIR Paras: 1, 1, 1, 1, 1, 1, 19, 1, 1, 1, 2, 4, 4, 5, 16, 19, 17, 13]

97
2.3.3 Irregularity / Non-Compliance
A. Recovery, Targeted receipts/Outstanding dues
2.3.3.1 Loss due to Non-Deposit of Receipts – Rs 148.935 Million
According to Rule 77 of CTR Vol-I, “All money received on behalf of
Government should be without undue delay be credited into Government account”.
Further, according to Rule 41 of SFR Vol-I, “The departmental Controlling
Officer should see that all sums due to Government are regularly received and checked
again demands and that they are paid into the treasury”.
Various offices of Public Health Engineering Department (PHED) collected an
amount of Rs 148.935 million, during financial year 2015-16, on account of various taxes
but failed to deposit the same into Government treasury, in violation of above rules.
Detail is as under:
[Amount in Rupees]
Sr. Name of Offices Amount
1 XEN, PHE, Dadu 51,497,923
2 XEN, PHE, Khairpur Div-II 5,175,522
3 XEN, PHE, Jamshoro 48,391,732
4 XEN, PHE, Karachi 11,194,810
5 XEN, PHE, Larkana 113,500
6 XEN, PHE, Tando Allahyar 3,709,000
7 XEN, PHE, Naushahro Feroze 28,853,000
Total 148,935,487
Audit is of the view that non-deposit of collected fee, taxes, and rates resulted
into loss of revenue, besides, chances of misappropriation of public revenue cannot be
ruled out.
Violation of prescribed rules was due to weak internal controls and resulted into
weak financial management.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault. Besides,
collected Government revenue be deposited into Government treasury, under intimation
to audit.
[AIR Paras: 10+12, 11, 10+15, 3, 5, 8, 2]

98
2.3.3.2 Non-Deduction of Taxes / Duty – Rs 42.617 Million
According to Sindh Sales Tax on Services Act, 2011 Amended upto 1st July,
2014, Section-3(1), “taxable services a services listed in Second Schedule to this Act,
which is provided (a) by a registered person from his registered office or place of
business in Sindh. Section-3(2) “ services that is not provided by a registered persons
shall be treated as a taxable service if the service is listed in the Second Schedule to this
Act (a) is provided to a resident person; (b). Section-8(1) Subject to the provisions of this
Act, there shall be charged, levied and collected a tax known as sales tax on the value of a
taxable service at the rate specified in the Schedule in which the taxable service is listed”.
Further, as per Income Tax Ordinance 2001- Section 160, “Payment of tax
collected or deducted.-Any tax that has been collected or purported to be collected under
Division II of this Part or deducted or purported to be deducted under Division III of this
Part 5[or deducted or collected, collected, or purported to be deducted or collected under
Chapter XII] shall be paid to the Commissioner by the person making the collection or
deduction within the time and in the manner as may be prescribed”.
Moreover, According to Para-22-A of Stamp Act, “it was the duty of the
competent authority to recover the stamp duty and affix the same, while execution of
agreement @ 0.35 paisa/100 rupees of the value of the agreement or against tender cost.”
Various offices of PHED, during financial year 2015-16, made payments to
various contractors/suppliers on the purchase of taxable articles but failed to deduct taxes
/ duty amounting to Rs 42.617 million, in violation of above rules. Details are provided at
Annex-PHE2.
Audit is of the view that due to non-deduction of income/sales tax from
payments resulting into loss to Government revenue and weak financial management.
Non-observance of prescribed procedure constituted weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for non-
deduction of taxes / duties. Besides, recovers the amount without further delay, under
intimation to audit.
[AIR Paras: 8, 9, 11, 7, 2, 2, 3, 14, 4, 2, 9, 3, 8, 4, 4, 3]

99
B. Violation of Rules

2.3.3.3 Irregular Award of Work to Unregistered Contractors

Rs 617.866 Million
As per Pakistan Engineering Council letter No. PEC/Consult/EF/1900017 dated
01-09-2005, “No engineering work shall be constructed except by a constructor or
operated except by an operator licensed as such by the Council (PEC). All consulting
engineering services in Pakistan shall be entrusted only to consulting engineering duly
registered as such with the Council (PEC)”. Further, as per Planning and Development
Department Government of Pakistan letter No. 1(693-A)/PP&H/PD/2005, dated 14th
September 2005, “all respective Provincial Departments, City/ District Governments,
Tehsil Municipal Administrations, Union Council Administrations, Housing, Water
Supply & Sanitation Agencies must ensure compliance of the instructions given in PEC
Bye-Laws 1986 and 1987 are fully implemented in all engineering contracts and
procurement of engineering services and works, in order to restrain from pre-qualifying
all such local and foreign firms, which do not abide by P.E.C. laws and rules.”
Furthermore, as per Sindh Government order, every Contractor is to be required to get
itself registered with Sindh Revenue Board, GoS”.
Various offices of PHED awarded different development schemes costing
Rs 617.866 million, during financial year 2015-16, to various contractors which were not
registered with PEC and Sindh Revenue Board. Details are provided as under:
[Rupees in Million]
Sr. Name of Offices Amount
1 XEN, Public Health Engineering, Division-II, Khairpur 69.439
2 XEN, Public Health Engineering, Division-I, Khairpur 217.741
3 XEN, Public Health Engineering, Naushahro Feroze 62.500
4 XEN, Public Health Engineering, Shaheed Benazirabad 268.186
Total 617.866

Audit is of the view that management ignored rules and procedures set forth by
the Government that constituted weak financial management.
Violation of laid down procedures was due to weak internal control system.
The matter was reported to managements during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.

100
 Audit recommends fixing of responsibility on persons at fault for award of
works to unregistered contractors.
[AIR Paras: 2, 3, 11, 10]

2.3.3.4 Irregular Award of Work Orders - Rs 373.395 Million

As per Notification No. E&A(LG)4(53)/2007/6579, dated.31.10.2007, issued
from Finance Department, Government of Sindh, Karachi that following
officers/Authorities are empowered to accord Technical Sanction up to limit as detailed
below:
 Administrative Department Works up to Rs 50,000,000
 Chief Engineer up to Rs 10,000,000
 Superintendent Engineer up to Rs 5,000,000
 Executive Engineer up to Rs 1,000,000
The Executive Engineer, Public Health Engineering Division, Ghotki @ Mirpur
Mathelo, during financial years 2014-16, awarded 33 development works costing
Rs 373.395 million, through transgression of financial powers beyond competency, in
violation of above rule.
Audit is of the view that unauthorized sanctions made through transgression of
delegated financial powers resulted into unauthorized payment and weak financial
management.
Deviation from prescribed rule resulted into weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility against the person(s) at fault.
Besides, approval of competent authority be produced to audit for verification.
[AIR Para: 3]

2.3.3.5 Irregular Award of Work without Integrity Pact

Rs 241.690 Million
According to Rule-89 of SPPRA-2010, “Integrity Pact - Procurements
exceeding Rs 10 million for goods & works, and Rs 2.5 million for services shall be
subject to an integrity pact, as specified by regulations, between the procuring agency and

101
the suppliers or contractors or consultants.”
Various offices of PHED awarded various development schemes amounting to
Rs 241.690 million, during financial year 2015-16, but Integrity Pact with contractors
was not executed to safeguard Government interest, in violation of above rules. Details
are as under:
[Rupees in Million]
Sr. Name of Offices No. of Works Amount
1 XEN, Public Health Engineering, Division-II, Khairpur 5 88.208
2 XEN, Public Health Engineering, Division-I, Khairpur 7 118.897
3 XEN, Public Health Engineering, Shikarpur 2 34.585
Total 241.690

Audit is of the view that department failed to safeguard Government interest by

not executing integrity pact with contractors resulting into weak financial management.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management for
non-execution of integrity pact with contractors.
[AIR Paras: 4, 7, 12]

2.3.3.6 Execution of Work without Approval – Rs 239.508 Million

As per Notification No. B.S.E.1/2(18)/75-95/Pt-VIII, dated.3.10.2007, issued
from Finance Department, Government of Sindh that following officers are empowered
to accord Technical Sanction up to limit as detailed below:
1. Chief Officers up to: Rs 10,000,000
2. Superintendent Engineer up to: Rs 5,000,000
3. Executive Engineer up to : Rs 1,000,000
Further, according to Paragraph 766 of Bombay Public Works Department
Manual Volume-I, “Technical Sanction” amounts to nothing more than a guarantee that
the proposals are structurally sound and meet the requirements of the indenting
department and that the estimates are accurately calculated and based on adequate data”.
Various offices of PHED executed works worth Rs 239.508 million, during
financial year 2015-16, without obtaining technical sanction from competent authority, in

102
violation of the above rules. Details are as under:
[Rupees in Million]
Sr. Name of Offices No. of Works Amount
1 XEN, Public Health Engineering, Division-II, Khairpur 4 13.412
2 XEN, Public Health Engineering, Division-I, Khairpur 6 37.196
3 XEN, Public Health Engineering, Sanghar - 30.731
4 XEN, PHE, Naushahro Feroze 17 94.220
5 XEN, PHE, Shaheed Benazirabad 14 63.949
Total 239.508

Audit is of the view that award of work without sanction of detailed design and
estimate from competent authority resulted into unauthorized expenditure.
Violation of laid down procedures was due to weak internal control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management for execution of
works without obtaining technical sanction from competent authority.
[AIR Paras: 1, 2, 2, 7, 5]

2.3.3.7 Unjustified Expenditure on Urban Drainage Scheme

Rs 202.000 Million
According to Para 11.1.3 (ii) of SPPRA Regulations of Procurement (works),
“when the expenditure on a work/scheme exceeds, or is found likely to exceed the
administratively approved amount by more than 15 percent. Timely submission of
revised rough cost estimate is required for revised administrative approval to maintain
un-interrupted continuity in execution, and same should be obtained from the authority,
competent to approve the enhanced cost. No excess can be allowed over the revised
cost”.
The Executive Engineer, Public Health Engineering Department, District Tando
Mohammad Khan approved PC-1 for scheme “improvement & extension of urban
drainage scheme Tando Mohammad Khan city” on an estimated cost of 202.00 million.
An amount of Rs 24.00 million reserved for operation and maintenance the scheme was
divided into five zones A, B, C, D and E comprising different areas of the city. The work

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on the scheme started in January 2012 and was scheduled to be complete in June 2015
but according to the progress report of 2015-16 work was carried out on two zones A and
B only with expenditure of 172.00 million which is 85% of estimated cost of the project
and the remaining three zones were neglected.
Audit is of the view that management incurred unjustified 80% expenditure on
only two out of five components. Moreover, the management also failed to submit
revised PC-1 for approval.
Due to non-completion of drainage scheme in Zone C, D and E population
living in these areas face sever drainage problems was due to weak internal control
system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility against person (s) at fault.
[AIR Para: 8]

2.3.3.8 Award of Work Without Fulfillment of Prequalification Criteria

Rs 186.930 Million
According to Regulation for Procurement of Works, SPPRA Notification
No.Dir(A&F)/SPPRA/Bod/12-13/9316 Dated: 22nd March, 2013, Para-2.15, “The basic
aim of the pre-qualification is to eliminate unrealistic, unqualified or disreputable
contractors that are not suitably qualified to perform the contract. Pre-qualification is
made on tender to tender basis and is valid for such project/scheme only”.
Further, According to Regulation for Procurement of Works, SPPRA
Notification No.Dir(A&F)/SPPRA/Bod/12-13/9316 Dated: 22nd March, 2013, Para-2.6
Eligibility (Rule 29), “The procuring agency shall carry out due diligence on the technical
and financial qualifications of bidders to be assured of their capabilities in relation to the
specific project which may include (i) General Experience, (ii) Similar Experience,(iii)
Personnel Capabilities, (iv) Equipment Capabilities. (v) Financial Position, (vi) Litigation
History and (vii) Any other information”.
The Executive Engineer, Public Health Engineering Department Hyderabad,
awarded schemes worth Rs 186.930 million, during financial year 2015-16, to contractors

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without valid PEC registration certificates and fulfillment of pre-qualification, in
violation of rules. Detail is as under:
[Rupees in Million]
Sr. Name of Work Contractor Est.Cost
Const. of Storage Tank , Sump Well, Inter connection &
M/s Meesam Const.
1 compound Wall for Ultra Filtration Water Supply Scheme, 98.880
Co.
Tando Jam
Providing Laying & Fixing P.E Pipe 18 “ dia, Pump House (
2 Nos) & Sump Well for Ultra Filtration Water Supply M/s Jawed Const.
2 88.050
Scheme, Tando Jam Taluka Hyderabad (Rural) District Co.
Hyderabad
Total 186.930

Audit is of the view that undue favor was extended towards contractors by not
following procedure of prequalification and eligibility which resulted into irregular award
of work and weak financial management.
Non-observance of prescribed procedure of SPPRA-2010 resulted into weak
internal controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for award of work without fulfillment
of pre-qualification criteria as in notice inviting tender, under intimation to audit.
[AIR Para: 1]

2.3.3.9 Non-Publication of Tender in Leading Newspapers

Rs 114.645 Million
According to Sindh Public Procurement Rules 2010, “Procurements over Rupees
one hundred thousand and up to Rupees one million shall be advertised by timely
notifications on the Authority’s website and may in print media in the manner and format
specified by regulations issued by the Authority from time to time, or If no such formats
have been specified by the authority, in the manner and format, which conforms most
closely to the principles of procurements i.e. openness of competition, fairness,
transparency etc. and to procedural requirements given in these rules and regulations,
issued in pursuance of these rules”.
(2) The advertisement in the newspapers shall appear in at least three widely
105
circulated leading dailies of English, Urdu and Sindhi languages.
The Executive Engineer, Public Health Engineering, Mirpurkhas, invited tender
for various development works amounting to Rs 114.645 million, during financial year
2015-16, but failed to publish it in three widely circulated leading dailies of English,
Urdu and Sindhi languages, in violation of above rules. Detail is as under:
[Rupees in Million]
Sr. NIT # Date Amount
1 205 31-03-2016 90.322
2 333 10-05-2016 24.323
Total 114.645

Audit is of the view that non-observance of the SPPRA rules resulted into non-
obtaining of competitive rates and non-transparency in public spending.
Non-observance of prescribed rules constituted weak internal control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault, under
intimation to audit.
[AIR Para: 13]

2.3.3.10 Non-Imposition of Penalty - Rs 100.001 Million

As per agreement made between contractor & Government that the time frame
given for the completion of work is required to be observed and in case of failure/ delay,
the penalty at the rate of 10% of sanctioned cost may be imposed & deducted from the
bill of contractor.
Various offices of PHED, during financial year 2015-16, executed belated
development works but the penalty @ 10% of total cost amounting to Rs 100.001 million
was not recovered from the contractors, in violation of above rule. Details are as under:
[Rupees in Million]
Sr. Head Cost of Works Penalty @ 10%
1 XEN, PHE, Shikarpur 51.519 5.152
2 XEN, PHE, Dadu 735.330 73.533
3 XEN, PHE, Jamshoro 27.560 2.756
4 XEN, PHE, Badin 60.030 6.003
5 XEN, PHE, Hyderabad 13.731 1.373

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 [Rupees in Million]
Sr. Head Cost of Works Penalty @ 10%
6 XEN, PHE, Tharparkar @ Mithi 50.397 5.040
7 XEN, PHE, Umerkot 6.931 0.693
8 XEN, PHE, Karachi 10.833 1.083
9 XEN, PHE, Larkana 22.860 2.286
10 XEN, PHE, Tando Allahyar 20.820 2.082
Total 100.001
Audit is of the view that undue favour was extended to contractors which
resulted into weak financial management.
Non-compliance of rules reflects absence of internal control system in the
department.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for non-recovery of penalty amount
from the contractors, under intimation to audit.
[AIR Paras: 17, 2+11, 7, 10, 5, 10, 6, 2, 8, 4]

2.3.3.11 Unauthorized Award of Contracts - Rs 74.115 Million

According to Rule 17(1) of Sindh Public Procurement Rules 2010,
“Procurements over one hundred thousand rupees and up to one million rupees shall be
advertised by timely notifications on the Authority’s website and in print media in the
manner and format prescribed in these rules”.
Various offices of PHED awarded various works to contractors amounting to
Rs 74.115 million, during financial year 2015-16, without inviting open tender, in
violation of above rule. Details are as under:
[Rupees in Million]
Sr. Name of Offices No. of Works Amount
1 XEN, PHE, Shikarpur 3 51.519
2 XEN, PHE, Badin 17 4.680
3 XEN, PHE, Badin 5 17.916
Total 74.115
Audit is of the view that management failed to invite open tenders resulting into
non-transparency in award of contracts which constituted weak financial management.
Non-inviting of open tenders by deviating SPPRA Rules resulted into weak

107
internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for not hoisting open tenders on the
Authority’s website to avoid wide publicity, under intimation to audit.
[AIR Paras: 10, 3, 5]

2.3.3.12 Irregular payment to Contractor without Check Measurement

Rs 65.907 Million
According to Rule-209 (d) of Central Public Works Accounts Code, “As all
payments for work or supplies are based on the quantities recorded in the measurement
book, it is incumbent upon the person taking the measurements to record the quantities
clearly and accurately”.
Various offices of PHED paid an amount of Rs 65.907 million, during 2015-16,
against various works / schemes without recording in the measurement book, in violation
of above rule. Details are provided as under:
[Rupees in Million]
Sr. Name of Offices Amount
1 XEN, Public Health Engineering, Division-II, Khairpur 9.254
2 XEN, Public Health Engineering, Dadu 34.836
3 XEN, Public Health Engineering, Jamshoro 21.817
Total 65.907

Audit is of the view that payment without checking/recording measurement

resulted into irregular payment.
Violation of laid down procedures was due to weak internal control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the person(s) at fault.
[AIR Paras: 3, 8, 5]

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2.3.3.13 Irregular Payment to Contractors on Supply without Obtaining
Invoices - Rs 54.720 Million
According to Sub-section (2) of Section 4 of Sindh Financial Management and
Accountability Act, 2011, “The rules shall be consistent with the following principles:-
(a) All financial transactions shall be duly authorized;
(b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
Further, according to Para-23 of General Financial Rules Volume-I, “every
Government officer should realize fully and clearly that he will be held personally
responsible for any loss sustained by Government through fraud or negligence on his part
and that he will also be held personally responsible for any loss arising from fraud or
negligence on the part of any other Government officer to the extent to which it may be
shown that he contributed to the loss by his own action or negligence”.
Executive Engineer, Public Health Engineering Division, Naushahro Feroze &
Shaheed Benazirabad, paid an amount of Rs 54.720 million, during financial year
2015-16, to contractors on various items without obtaining invoices from the contractors
for its useful life, guarantee, quantity certificates etc. Moreover, it was also noticed that
no any rate analysis for these material/items were attached in the bills/estimates and these
supplied items (e.g. machinery, Engines, Generator, Pipes etc.) were also found not
accounted for in monthly stock account of the department, in violation of above rules.
Details are as under:
[Rupees in Million]
Sr. Name of Offices Purchases Amount
Pumping Machinery, Diesel
1 XEN, PHE, Naushahro Feroze 23.430
Engine & Generators
Pumping Machineries, Diesel
2 XEN, PHE, Shaheed Benazirabad 31.290
Engines & Generators
Total 54.720

Audit is of the view that unauthorized payment was made without invoices and
other relevant documents resulting into department failed to safe guard Government
interest.
Non-observing of Government instruction constituted weak internal control
system.
The matter was reported to management during August to December, 2016, but

109
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that responsibility may be fixed upon person(s) at fault for
payment without obtaining invoice and other relevant documents, under intimation to
audit.
[AIR Paras: 12, 6]

2.3.3.14 Irregular Expenditure without Constitution of Procurement

Committee - Rs 51.300 Million
According to Rule 7 of SPPRA Rules, “the procuring agency shall, with
approval of its Head of the Department, constitute as many procuring committees, as it
deems fit, each comprising odd number of persons and headed by a gazetted officer not
below the rank of BS-18, or if not available, the officer of the highest grade, and shall
ensure that at least one third of the members of a procurement committee are from the
agencies or departments other than the procuring agency”.
The Executive Engineer, Public Health Engineering, Division–II, Khairpur
executed 08 schemes through NIT’s costing Rs 51.300 million, during financial year
2015-16, without constitution of procurement committee, in violation of above rule.
Audit is of the view that NITs without constitution of procurement committee
resulted into irregular expenditure, which constituted weak financial management.
Deviation from prescribed rules & procedures constituted weak internal
controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of irregular expenditure
on account of procurement of materials without constitution of procurement committee,
under intimation to audit.
[AIR Para: 5]

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2.3.3.15 Unauthorized Payments without Pre-Audit - Rs 50.554 Million
According to Sub Para (2) of Para-32 of Local Government Accounts Manual,
“Every bill shall be pre-audited by the Accounts Office. The pre-audit shall ensure that
the bill has been sanctioned and that funds are available to make payment. The pre-audit
shall also involve scrutinizing the bill to identify possible fraud and irregularities”.
Further according to Rule 111(4) &(5) of Sindh Local Government Act 2013,
"the Provincial Director, Local Fund Audit shall pre-audit all the payments from the
Local Funds of the Councils and a Council shall not with draw or disburse money from
the Local Fund unless it is pre-audited in the prescribed manner”.
The Executive Engineer, Public Health Engineering Division-I, Khairpur paid
an amount of Rs 50.554 million, during financial year 2015-16, to staff & contractors
without pre-audit from concerned Local Fund Audit office, in violation of above rules.
Audit is of the view that payments without pre-audited bills resulted into
unauthorized expenditure.
Non-observance of prescribed control procedures was due to weak internal
control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for making
payments without pre-audit.
[AIR Para: 5]

2.3.3.16 Irregular Expenditure on Execution of Schemes - Rs 49.824 Million

According to Para 28 of GFR Vol-I, “No amount due to Government should be
left outstanding without sufficient reason and where any dues appear to be irrecoverable
orders of the competent authority for their adjustment must be sought”.
Further, according to Para-23 of General Financial Rules Vol-I, “every
Government officer should realize fully and clearly that he will be held personally
responsible for any loss sustained by Government through fraud or negligence on his part
and that he will also be held personally responsible for any loss arising from fraud or
negligence on the part of any other Government officer to the extent to which it may be

111
shown that he contributed to the loss by his own action or negligence”.
The Executive Engineer, Public Health Engineering Division, Ghotki @ Mirpur
Mathelo, during financial year 2015-16, paid an amount of Rs 49.824 million, in excess
to the contractors on account of 36 different works.
Audit is of the view that undue favour was given to contractors resulting into
unauthorized payment and weak financial management.
Deviation from prescribed rule resulted into weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility against the person(s) at fault.
Besides, amount of excess payment be recovered, under intimation to audit.
[AIR Para: 1]

2.3.3.17 Non-Utilization of Services of Staff - Rs 48.993 Million

As per Para 10(1) of GFR Vol-I, “Every public officer is expected to exercise
same vigilance in respect of expenditure incurred from public moneys as a person of
ordinary prudence would exercise in respect of expenditure of his own money”.
Various Offices of Rural Development Department incurred expenditure of
Rs 48.993 million, during financial year 2015-16, on account of salaries of employees
whose services were not utilized due to their non-functioning since many years, in
violation of above rule.
[Rupees in Million]
Sr. Name of Offices Amount
1 XEN, PHE, Badin 14.183
2 XEN, PHE, Dadu 19.421
3 XEN, PHE, Thatta 15.389
Total 48.993

Audit is of the view that to non-utilization of services of employees resulted into

wastage of public funds.
Deviation of prescribed rules was due to weak internal controls.
The matter was reported to management during August to December, 2016, but

112
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility against management(s) for non-
utilization of human resource, under intimation to audit.
[AIR Paras: 2, 2, 2]

2.3.3.18 Irregular Payments on Reduced Rates - Rs 45.308 Million

According to Clause-17 of the agreement, if at any time before the security
deposit is refunded to the contractor, it shall appear to the Engineer-in-Charge or his sub-
ordinate in charge of the work, that any work executed with unsound, imperfect or un-
skillful workmanship or with materials of inferior quality or that any materials or articles
provided by him for the execution of work are unsound, or quality inferior to that
contracted for or are otherwise not in accordance with the contract, it shall be lawful for
the Engineer-in-charge to intimate this fact in writing to the contractor and then
notwithstanding ,the fact that the work materials or articles complained of, may have
been inadvertently passed, certified and paid for, the contractor shall bound forthwith to
rectify or remove and reconstruct the work so specified in, whole or part, as the case may
require.
Following Offices of PHED, during financial years 2014-16, paid an amount of
Rs 45.308 million, during 2014-16, to contractors on supply for various works, in
violation of above rule. Further, the payment was made by reducing the actual rates to
conceal the quality, usefulness & substandard of the equipment/material. Moreover, rate
analyses of the supplied items were also not found on the record. Audit is of the view that
execution of items on part/ reduced rate in a huge quantity implies that:
a) Either works were of inferior quality
b) Defective work was carried without rectification.
c) Execution of work was not as per specification.
d) Advance payment was made without completion of work.
[Rupees in Million]
Sr. Name of Offices Amount
1 XEN, PHE, Ghotki @ Mirpur Mathelo 1.601
2 XEN, PHE, Naushahro Ferzoe 1.639
3 XEN, PHE, Shaheed Benazirabad 7.059
4 XEN, PHE, Dadu 19.462
5 XEN, PHE, Jamshoro 15.547
Total 45.308

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 Audit is of the view that unauthorized payment on reduced rates was made
without justification. The chances of wastage of funds cannot be ruled out as payment
has been made on the defective work.
Deviation from prescribed rule was due to weak internal control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault for payment
against defective works, under intimation to audit.
[AIR Paras: 6, 2, 13, 18, 9]

2.3.3.19 Payment on Non-Schedule Items without Approval

Rs 44.223 Million
According to Sr # 4 of the Schedule of Rate (Composite) for finished items of
works, 2004, the non-schedule item costing upto Rs1000 should be got sanctioned by the
concerned Superintending Engineer and the items exceeding Rs1000 must be got
approved and sanctioned by the Chief Engineer.
Various offices of PHED incurred an expenditure of Rs 44.223 million, during
financial year 2015-16, on non-scheduled items without market rate analysis and
obtaining sanction of competent authority. The rate analysis duly sanctioned by the
competent authority in support of the above expenditure was not made available to audit.
Details are as under:
[Rupees in Million]
Sr. Name of Offices Amount
1 XEN, Public Health Engineering, Division-II, Khairpur 6.412
2 XEN, Public Health Engineering, Dadu 19.462
3 XEN, Public Health Engineering, Hyderabad 1.537
4 XEN, Public Health Engineering, Jamshoro 16.812
Total 44.223

Audit is of the view that expenditure was incurred on non-scheduled items

beyond delegation of financial powers resulted into unauthorized expenditure and weak
financial management.
Due to the weak internal controls Governmental rules and regulations were

114
violated.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that responsibility be fixed upon the person (s) at fault for
payment against non-schedule items without carrying out rate analysis and approval by
the Competent Authority, under intimation to audit.
[AIR Paras: 9, 3, 4, 12]

2.3.3.20 Refund of Security Deposit without Valid Proof-Rs 43.422 Million

According to General Financial Rules, “call deposits @ 2% of estimated cost &
Security Deposits @ 8% of gross amount should be deducted from the bills of contractors
/suppliers & same may be deposited in Government accounts without delay. Moreover,
same may be refunded after completion of satisfactory work & fulfillment of codal
formalities”.
The various offices of PHED, during financial years 2014-16, refunded security
deposits amounting to Rs 43.422 million, to the contractors/suppliers without fulfillment
of codal formalities. Neither date of completion of works was recorded nor were requests
of the contractors found available in the record, in violation of above rule. Thus the
authenticity of payment could not be verified by the audit. Details are as under:
[Amount in Rupees]
Sr. Name of Office No. of Works Amount
1 XEN, Public Health Engineering, Jamshoro, 10 2.478
2 XEN, Public Health Engineering, Ghotki @ Mirpur Mathelo 21 6.168
3 XEN, Public Health Engineering, Naushahro Feroze 45 21.365
4 XEN, Public Health Engineering, Shaheed Benazirabad 18 13.411
Total 43.422
Audit is of the view that refund of security deposit without fulfillment of codal
formalities resulted into unauthorized payment and weak financial management.
Non-observance of rules and procedures constituted weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
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 Audit recommends fixing of responsibility against the person(s) at fault for
refund of deposits without any supporting documents.
[AIR Paras: 3, 11, 13, 12]

2.3.3.21 Procurements in violation of SPPRA - Rs 37.744 Million

According to Rule 45 of SPPRA 2010, “Procuring agencies shall announce the
results of bid evaluation in the form of a report giving reasons for acceptance or rejection
of bids. The report shall be hoisted on website of the Authority and that of the procuring
agency if its website exists and intimated to all the bidders at least seven (07) days prior
to the award of contract”.
Further, according to Rule 10 of Sindh Public Procurement Rules 2010, “The
procuring agency shall, immediately upon award of contract, make the evaluation report
of the bid, and the contract agreement to public through hoisting on the Authority’s
website as well as on procuring agency’s website, if the procuring agency has such a
website.”
Moreover, as per Rule 41 (09) of SPPRA Rule 2010, “The procurement
committee shall issue the minutes of the opening of the tenders and shall also mention
over writing or cutting, if any”.
Executive Engineer, Public Health Engineering Division Tharparkar @ Mithi,
during financial year 2015-16, awarded development schemes amounting to Rs 25.758
million to contractors, but failed to hoist bid evaluation reports of on the SPPRA website,
in violation of above rules. Detail is as under:
[Amount in Rupees]
Work Amount of
Sr. NIT # Description of Work Estimate Contractors
Order Work
Replacement of Submersible Pump with
Motor and Diesel Generator Set for
197 M/S Nevat 325
1 operation and Maintenance of Rural 2,015,260 2,015,260
04-04-16 Mal 02-06-16
Water Supply Scheme Chachi & Ameen-
Ji-Dhani District Tharparkar
Providing , Lying Jointing & Testing
Extension of distribution system of Mithi
M/S Malani
222 for Construction of RCC underground 349
2 23,742,500 Construction 23,742,500
14-04-16 Reservoir for R.O Plant Imp: Ext: of 06-06-16
Co
Distribution Network for Mithi and
Islamkot Town District Tharparkar
Total 25,757,760

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 Moreover, The Executive Engineer, Public Health Engineering, Umerkot, during
financial year 2015-16 uploaded their tender on SPPRA website. Due to certain
deficiencies, the SPPRA withheld the ID in order to remove the deficiencies but the
management awarded the work for Rs 11.986 million, on withheld ID, in violation of
above rule.
Audit is of the view that violation of SPPRA rules resulted into non-
transparency in the award of contracts and weak financial management.
Deviation from prescribed rule resulted into weak internal control system prevail
in the department.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for award of work
on withheld ID and without issuance & hoisting minutes of opening of bids and non-
hoisting of bid evaluation report on SPPRA website, under intimation to audit.
[AIR Paras: 6, 7]

2.3.3.22 Splitting of works to avoid Approval from Competent Forum

Rs 35.389 Million
As per Rule 12 (1) of SPPR 2010, “Limitation on Splitting or Regrouping of
Proposed Procurement: Save as otherwise provided and subject to the regulations made
by the Authority, a procuring agency shall prepare, in accordance with Rule 11 above, all
proposed procurements for each financial year and shall proceed accordingly without any
splitting or regrouping of the procurements already grouped, allocated and scheduled in
the Procurement Plan (Rule-11);”
Further, competent forum to sanction schemes as per Planning Commission
Manual:
S No. Competent Forum Cost of Scheme up to
1 District Development Working Committee (DDWC) Rs. 20 million
2 Departmental Development Working Party (DDWP) Rs. 40 million
3 Provincial Development Working Party (PDWP) Rs. Five billion
4 Central Development Working Party (CDWP) Rs. One billion
Executive Committee of the National Economic Council (ECNEC). Above Rs. One billion
5
After clearance from CDWP

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 The Executive Engineer, Public Health Engineering Division, District Dadu,
during financial year 2015-16, awarded schemes amounting to Rs 35.389 million by
splitting in three parts to avoid approval from next higher authority, in violation of rules.
Audit is of the view that splitting of work of same nature in various components
deprived the Government from achieving best competitive rates and resulting into weak
financial management.
Deviated prescribed rules & guidelines of SPPRA purposely resulted into weak
internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for splitting of
work and award of work without approval of competent authority, under intimation to
audit.
[AIR Para: 7]

2.3.3.23 Non-Adjustment of Advances - Rs 35.234 Million

According to Para 360 of Central Public Works Account Code, “Items in the
Miscellaneous Public Works Advance accounts are cleared either by actual recovery or
by transfer, under proper sanction or authority to some other head of account items or
balances which may become irrecoverable should not be transferred until ordered to be
written off.”
The offices of PHE, Khairpur and Shikarpur paid Miscellaneous Public Works
Advances amounting to Rs 14.334 million, during financial year 2015-16, which were
not adjusted till the close of financial year. Details are as under:
[Rupees in Million]
Sr. Name of Offices Amount
1 XEN, Public Health Engineering, Division-I, Khairpur 12.598
2 Executive Engineer, Public Health Engineering, Shikarpur 1.736
Total 14.334

Moreover, the Executive Engineer, Public Health Engineering Department

Hyderabad, during financial year 2015-16, paid an amount of Rs 20.900 million, to
Assistant Commissioner/ Land Acquisition Officer Hyderabad on account of Land
Acquisition for “Ultra Filtration Water Supply Scheme Tando Jam” but Land Award
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Statement as well as registration certificate was not obtained, in violation of above rule.
Non-adjustment of Advances was due to weak financial discipline due to which
the chances of loss to Government cannot be ruled out.
The lapse on part of the department indicates improper watch and absence of
internal controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit requires adjustment of advances besides fixing of responsibility on the
person(s) at fault.
[AIR Paras: 8, 2, 11]

2.3.3.24 Un-authorized Execution of Work without Fresh Tendering

Rs 32.361 Million
As per Rule-17(1) of SPPRA Rules 2010, “Procurements over one hundred
thousand rupees and up to one million rupees shall be advertised by timely notifications
on the Authority’s website and in print media in the manner and format prescribed in
these rules”.
Further, as per Rules (16)(1)(e) of SPPRA 2010, “Repeat Orders means
procurement of additional quantities of the item(s) from the original contractor or
supplier, where, after the items originally envisaged for the project or scheme have been
procured through open competitive bidding, and such additional quantities of the same
item(s) of goods or works are needed to meet the requirements of the project or scheme;
Provided that: - (i) the cost of additional quantities of item(s) shall not exceed 15% of the
original contract amount”.
Executive Engineer, Public Health Engineering Division Badin, awarded works
costing Rs 16.627 million during financial year 2015-16 to different contractors. The
schemes were unauthorizedly revised upto Rs 32.361 million, 83% and 100% over and
above the original estimate, but the management allowed contractors to continue works
without fresh tender, in violation of above rules.
Audit is of the view that the revision of schemes beyond 15% permissible limit
constituted weak financial management.

119
 Deviation from prescribed rules was due to internal control system.
The matter was reported to managements during October, 2016, but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility for unauthorized revision of work
without fresh tender, under intimation to audit.
[AIR Para: 9]

2.3.3.25 Unauthorized Award of Work to Unqualified Contractors

Rs 26.584 Million
According to Serial 7.6 (B) (i) of SPPRA Regulations for Procurement (works),
“Substantial Responsiveness: Responsiveness of the bidder and bid is to be determined
by the Eligibility and the fact that bid has no Major deviations as mentioned below: (1)
Eligibility:
 The bidder is of valid license holder from the PEC and fall within the
category and discipline allowed to participate;
 The bidder is registered with tax authorities.
 The bidder is not black listed by any Procuring Agency.
 In case of electrical works, the bidder is in possession of electrical license
from the Electrical Inspector of Sindh.
The Executive Engineer, Public Health Engineering Department, District Tando
Mohammad Khan, during financial year 2015-16, awarded 03 different works to various
contractors amounting to Rs 26.584 million, and allowed the unqualified contractors to
participate in the tender process.
Moreover, the following discrepancies were also observed:
 Integrity Pact for specified work was not found in record.
 Improper bidding documents were issued to bidders
 Bids were not hoisted on authority’s website.
Audit is of the view that management accepted bids of unqualified bidders and
ignored eligibility criteria by giving undue favor.
Non-compliance of rules constituted weak internal controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
120
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault, under
intimation to audit.
[AIR Para: 4]

2.3.3.26 Irregular Payment of Land without Obtaining Ownership

Rs 19.701 Million
According to Rule 110(iii) of Sindh Financial Rules, Vol-I, “(land acquired by
negotiation) the Officer who settles the price should draw up Form-A in Appendix 5
Prescribed for use in the case of an award and this should be made the basis of
subsequent payment”.
Further, according to Sub Section (2) of Section 4 of the Sindh Financial
Management and Accountability Act, 2011, “The rules shall be consistent with the
following principles:-
(a) All financial transactions shall be duly authorized;
(b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
The Executive Engineer, Public Health Engineering Division, Ghotki @ Mirpur
Mathelo, paid and amount of Rs 19.701 million, during financial years 2014-16, to
Assistant Commissioner/ Land Acquisition Officers, Mirpur Mathelo & Daharki for
purchase of Land for “Disposal of various drainage schemes” but failed to obtain Land
ownership documents from the concerned department. Detail is provided at
Annex-PHE3.
Audit is of the view that management failed to safeguard its property resulting
into unjustified payment without obtaining ownership of land.
Non-observance of prescribed rules constituted weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that responsibility may be fixed on person(s) at fault.
Besides, ownership documents be obtained from concerned department, under intimation
to audit.
[AIR Para: 14]
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2.3.3.27 Unauthorized Subletting of Development Works
Rs 19.114 Million
According to Para-10 (i) of GFR Volume-I, “every public officer is expected to
exercise the same vigilance in respect of expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.
Further, according to Para-10 (iv) of GFR Volume-I, “public money should not
be utilized for the benefit of a particular person or section of community”.
The Executive Engineer, Public Health Engineering Division, Naushahro
Feroze, awarded development works/schemes of Rs 19.114 million, during financial
years 2012-15, but sub-letted to other contractors without any justification, in violation of
Rule.
Audit is of the view that management unauthorzedly sub-letting the
development works without any justification.
Non-observing of Government instruction constituted weak internal control
system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that responsibility may be fixed upon person(s) at, under
intimation to audit.
[AIR Para: 14]

2.3.3.28 Execution of Works without Revision - Rs 17.357 Million

According to Para 532 of PWD Manual Volume-I, duly adopted by GoS, “A
revised estimate must be submitted duly approved by the competent authority when a
sanctioned estimate is likely to exceed by more than 5% either due to rate being found
insufficient or for any other reason”.
Further, as per SPPRA guidelines 11.2.2 Revised Technical Sanction (RTS),
“Detailed Estimate needs revision when during execution it is anticipated that cost of
completion is to exceed beyond the permissible limit (5%). Revised detailed estimate is
timely prepared incorporating the work done and required to be done along with
deviation statement for submission to competent authority”.
122
 The various offices of PHED, during financial years 2014-16, incurred
expenditure of Rs 17.357 million, during 2015-16, on the execution of works in excess of
prescribed limit of 5% over the technical sanction without revising the estimates. Details
are as under:
[Rupees in Million]
Sr. Name of offices Name of Works Amount
1 XEN, PHE, Dadu 0.672
XEN, PHE, Ghotki @ Rehabilitation of Disposal Work for R/D/S Matar Kot
2 4.969
Mirpur Mathelo Ubauro
Construction of various disposal works comprising on
collecting Tanks, Screening chambers, pump houses,
3 XEN, PHE, Larkana 11.716
machinery rising mains and RCC nalas for extension and
improvement of existing sewerage system of Larkana city.
Total 17.357
Audit is of the view that unauthorized expenditure was incurred over and above
the estimates.
Deviation from prescribed rule resulted into weak internal controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault on account of
excess payment to contractor without the approval of revised estimate.
[AIR Paras: 5, 18, 4]

2.3.3.29 Irregular Award of Works after Expiry of Bid Validity

Rs 16.934 Million
As per Rule 38(1) of Sindh Public Procurement Rules, 2010, Bid Validity “A
procuring agency, keeping in view nature of procurement, shall subject the bid to a
validity period, which shall be specified in the bidding document and shall not be more
than 90 days in case of National Competitive Bidding”.
Further, as per Rule-10(a) of Sindh Local Councils (Accounts) Rules, 1983,
“same vigilance shall be exercised in respect of expenditure incurred from Local Fund as
a person of ordinary prudence would exercise in respect of expenditure of his own
money”.
The Executive Engineer, Public Health Engineering, Shikarpur, during financial

123
year 2015-16 awarded various works amounting to Rs 16.934 million, to contractors after
expiry of bid validity period instead of re-tendering, in violation of above rule. Detail is
as under:
[Amount in Rupees]
W.No. & Date of Actual date Estimate Exceed of
Name of Contractor
Date N.I.T of start Amount Period
634/07-05-
Mr. Waliullah Bhutto 17/09/2010 25/04/2012 16,934,382 496 days
2011

Audit is of the view that award of contracts after expiry of bid validity period
was a serious violation of laid down rules and procedures.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to managements during October, 2016, but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility on managements for irregular award
of work and violation of laid down rules and regulation.
[AIR Para: 7]

2.3.3.30 Unauthorized Clearance of Liabilities – Rs 15.387 Million

As per Para 289 of Treasury Rules (TR) Vol-I & II, “all charges incurred must
be paid and drawn at once and under no circumstances may be allowed to stand over to
be paid from grant of another financial year”.
Further, as per FD, GoS O.M No.FD/B&E –I/51/2007 dated 02-07-2007,
“liability of previous years shall not be allowed to be cleared unless concurrence is given
by Finance Department (FD)”.
The Executive Engineer, Public Health Engineering, Dadu incurred expenditure
amounting to Rs 15.387 million, during financial year 2015-16, on various accounts for
clearing liabilities of previous years from budget grant of current financial year without
concurrence of FD, in violation of above rules.
Audit is of the view that payment of liabilities of previous year from budget
grant of current financial year adversely effected budget availability of current year
resulted into weak financial management.
Deviation from prescribed rule resulted into weak internal controls.
124
 The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for payment of
previous year liabilities without concurrence of FD, under intimation to audit.
[AIR Para: 4]

2.3.3.31 Unjustified Detailment of Staff– Rs 14.336 Million

According to Government of Sindh Services and General Administration
Department letter No.SO-I(S&GAD)/92, dated: 26-05-1992, addressed to all
departments, “the staff should be posted at the places for which the posts have been
sanctioned as in no case any officer / official be allowed to work on detailment basis to
place other than original place of posting otherwise the post will be abolished under the
orders of the Finance Department, Government of Sindh”.
Various Offices of Rural Development department, Hyderabad, during financial
year 2015-16, paid salaries of Rs 14.336 million, to employees who were working on
detailment in other offices, in violation of rule. Details are as under:
[Rupees in Million]
Sr. Offices / Zones Expenditure
1 Assistant Director (Development) Rural Development department, Hyderabad 12.605
2 Director (Development) Rural Development department, Hyderabad 0.520
3 XEN, Public Health Engineering, Research Laboratory, Hyderabad 1.211
Total 14.336

Audit is of the view that salaries were being paid to staff on detailment resulted
into unjustified expenditure.
Deviation from prescribed directives was due to weak internal controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault, under
intimation to audit.
[AIR Paras: 1, 1, 1]

125
2.3.3.32 Irregular Execution of Scheme - Rs 11.830 Million
According to official website of Public Health Engineering Department,
Government of Sindh, where in an Introduction of PHED Sindh is given which, “Public
Health Engineering Department has been designing, planning & executing water supply
& drainage scheme in urban & rural areas, excluding Karachi & Hyderabad cities.
Further, Scope & Function, “O&M function of rural based schemes kept on shifting from
one agency to another finally SLGO 2001 stipulated O&M of all schemes to respective
TMA. Presently urban based schemes are operated and maintained by concerned Local
Councils whereas completed Rural W/S and Drainage Schemes are being looked-after by
PHED. PHED has been a part of Local Government Department and given an
independent status, having its own Minister and Secretariat in 2008; but in 2013, the
department was again merged in Local Government Department. As of recent, PHED and
RDD have been separated from Local Government under separate Ministry”.
The Executive Engineer, Public Health Engineering Division Tharparkar @
Mithi, during financial year 2015-16, executed work on account of “Construction of
Office Block Taluka Municipal Administration Islamkot District Tharparkar” amounting
to Rs 11.830 million, which was out of its purview. The agency responsible to execute
said work is Building & Works Department Mithi / Taluka Municipal Administration, in
violation of rules. Detail is as under:
[Amount in Rupees]
Scheme Work Amount of
Description of Work Estimate Contractors
# Order Work
Construction of Office Block Taluka M/S S-A
P-22 2506
Municipal Administration Islamkot 12,876,348 Construction 11,830,291
June-16 05-05-4014
District Tharparkar Company

Audit is of the view that undertaken of work outside the purview resulted into
misuse of authority and weak financial management.
Deviation from prescribed rules was due to weak internal controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management for irregular
execution of scheme, under intimation to audit.
[AIR Para: 3]

126
2.3.3.33 Belated execution of Schemes - Rs 8.447 Million
According to Rule 23 of GFR Vol-I, “Every Government officer should realize
fully and clearly that he will be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will also be held
personally responsible for any loss arising from fraud or negligence on the part of any
other Government officer to the extent to which it may be shown that he contributed to
the loss by his own action or negligence”.
The Executive Engineer, Public Health Engineering Department, District Tando
Mohammad Khan, during financial year 2015-16, paid an amount of Rs 8.447 million
against schemes which were started in 2012 with completion period of six months, in
violation of above rule. Detail is as under:
[Amount in Rupees]
Payment
Actual Stipulated Actual
Name of made
Sr. Name of Work date of date of date of
contractor during
start completion completion
2015-16
Construction of RCC
storm water drain for M/S
1 Hyderabad Badin Road Mohammad 07-10-2012 28-03-2013 WIP 5,050,432
disposal work soomro Bux
para
Construction of CC
Blocks in various streets M/S
2 of UC-03 for imp and Mohammad 14-09-2012 19-03-2012 WIP 2,340,244
extension of urban Bux
drainage scheme TMK
Construction of storm
water drain for Zone “A” M/S Saghar
3 10-12-12 07-06-2012 WIP 1,056,211
for urban Drainage Enterprises
Scheme TMK
Total 8,446,887
Audit is of the view that the payment against the incomplete schemes of 2012,
without justification resulted into weak financial management.
Deviation from prescribed rule was due to weak internal control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility against person (s) at fault.
[AIR Para: 6]

127
2.3.3.34 Execution of Extra Items of Work - Rs 8.066 Million
As per Para-711 of Public Works Department Manual, Volume-I, "The officer
competent to sanction tender can also accord sanction to the execution of extra items of
work not provided in the tender, subject to the condition that the amount of the extra
items together with the amount of the tender does not exceed amount of sanctioned
estimate plus such excess as the officers concerned is competent to sanction.”
Further, as per SPPRA guidelines 11.2.2 Revised Technical Sanction (RTS),
“Detailed Estimate needs revision when during execution it is anticipated that cost of
completion is to exceed beyond the permissible limit (5%). Revised detailed estimate is
timely prepared incorporating the work done and required to be done along with
deviation statement for submission to competent authority”.
The Executive Engineer (Public Health Engineering) Division Larkana, during
financial year 2015-16, paid an amount of Rs 8.066 million to contractors on account of
extra items of works without obtaining the sanction of competent authority, in violation
of above rule. Detail is provided as under:
[Amount in Rupees]
Name of work Items of work Total
Construction of various disposal works comprising
on collecting tanks, screening chambers, pump
houses, pumping machinery, rising main RCC 36’ dia /5144, Extra item 8,065,792
nalas for extension and improvement for existing
sewerage system of Larkana city.

Audit is of the view that the management did not observe the prescribed
procedure laid down for the financial discipline which constituted weak financial
management.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that responsibility may be fixed upon the person(s) at fault
for payment against extra items of work, under intimation to audit.
[AIR Para: 6]

128
2.3.3.35 Unauthorized Payment to Contractor - Rs 4.428 Million
According to Sub Section (2) of Section 4 of the Sindh Financial Management
and Accountability Act, 2011, “The rules shall be consistent with the following
principles:-
(a) All financial transactions shall be duly authorized;
(b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently”.
Moreover, according to Para-23 of General Financial Rules Volume-I, “every
Government officer should realize fully and clearly that he will be held personally
responsible for any loss sustained by Government through fraud or negligence on his part
and that he will also be held personally responsible for any loss arising from fraud or
negligence on the part of any other Government officer to the extent to which it may be
shown that he contributed to the loss by his own action or negligence”.
The Executive Engineer, Public Health Engineering Division, Naushahro
Feroze, during financial year 2015-16, paid an amount of Rs 4.428 million, to contractor
M/s Muhammad Aslam Rajput on execution of development work but the documents
revealed that the work was not started yet due to non-possession of land. Department
failed to justify the payment to contractor without execution of work. Detail is as under:

[Amount in Rupees]
Total
Work Order Name of
Scheme Expenditure Remarks
No & Dt Contractor
incurred
When Work/scheme was
Construction of
suspended, why payment
M/s Md. Surface Drains i/c CC
AB/TC/70 made to contractor & also
Aslam Rajput Topping for Rural 4,427,776
Dt.30.9.2013 Drains & CC Topping work
& Co. Drainage Scheme
not matched with such
Moosa Khan Rajper
Drainage Scheme etc.

Audit is of the view that the management did not observe the prescribed
procedure laid down for the financial discipline which constituted weak financial
management.
Unjustified payment was made to contractor which resulted weak financial
management.
The matter was reported to management during December, 2016, but they did
129
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that responsibility may be fixed upon the person(s) at fault
for payment without execution of work, under intimation to audit.
[AIR Para: 15]

2.3.3.36 Inefficiency in Execution of Works - Rs 4.012 Million

As per Rule-28 of GFR Vol-I, “No amount due to Government should be left
outstanding without sufficient reason, and where any dues appear to be irrecoverable the
orders of competent authority for their adjustment must be sought”.
The Executive Engineer, Public Health Engineering Department Hyderabad,
during financial year 2015-16 awarded different works to various contractors amounting
to Rs 4.012 million, but the works were started after seventeen months of the issuance of
work orders, in violation of above rule. Details are as under:
[Amount in Rupees]
CV No & W.O No. Date of Amount
Sr. Particular Contractor
Date & Date Start Paid
Const. of C.C
M/s
Road/Street from vill. 832/
1 D-1/08-01-16 M.Akram 28-11-14 1,349,090
Manthar toward Rev. 24-06-13
Qureshi
Colony Qasimabad
Const. of C.C Drain
C.C Road @ vill. M/s Royal 813/
2 D-2/12-02-16 28-11-14 929,105
Dasya Barg Mughal Entp. 19-06-13
U.C Hatri
Const. of C.C Street at 812/
3 D-7/25-01-16 M/s M.R Co. 22-11-14 914,859
Ali abad Colony 19-06-13
Const. of C.C
Road/Street #3, M/s Sarfaraz 829/
4 D-8/25-01-16 22-11-14 819,132
Citizen Colony Shah 20-06-13
Qasimabad
Total 4,012,186
Audit is of the view that undue favour was given to contractors by non-
imposition of penalty.
Non-observance of rules and procedures constituted weak internal control and
weak financial management.
The matter was reported to management during August to December, 2016, but

130
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault, under
intimation to audit.
[AIR Para: 3]

2.3.3.37 Irregular Expenditure by way of Splitting to Avoid Tender

Rs 3.503 Million
As per Rule 17(1) of SPPRA Rules 2010, “Procurements over one hundred
thousand rupees and up to one million rupees shall be advertised by timely notifications
on the Authority’s website and may in print media in the manner and format prescribed in
these rules”.
Moreover, according to Rule 146 of GFR, Vol-I, “Purchases orders should not
be split up to avoid the necessity for obtaining the sanction of higher authority required
with reference to the amount of the order.
Following offices of PHED Shikarpur and Hyderabad incurred an expenditure of
Rs 3.503 million, during financial year 2015-16, by way of splitting to avoid inviting
open tenders, in violation of above rules. Detail is as under:
[Rupees in Million]
Sr. Name of Offices Amount
1 XEN, Public Health Engineering, Shikarpur 0.994
2 XEN, Public Health Engineering, Hyderabad 2.509
Total 3.503

Audit is of the view that non-observance of the SPPRA rules resulted into
non-obtaining of competitive rates and non-transparency in public spending which
constituted weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to managements during October, 2016, but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility on managements on account of
expenditure by way of splitting and without tenders.
[AIR Paras: 4, 9]

131
2.3.3.38 Non-Obtaining of Performance Security - Rs 3.459 Million
According to Rule-39(1) of SPPRA-2010, “Procuring Agency shall, in all
procurement of goods, works and services, carried out through open competitive bidding,
require security in the form of pay order or demand draft or bank guarantee, an amount
sufficient to protect the procuring agency in case of breach of contract by the contractor
or supplier or consultant, provided that the amount shall not be more than 10% of
contract price”.
Executive Engineer, Public Health Engineering, Shikarpur, during financial year
2015-16, awarded various development schemes, at the cost of Rs 34.585 million, but no
bank guarantee was obtained from contractors as performance security Rs 3.459 million,
in violation of above rule. Detail is as under:
[Amount in Rupees]
Amount Bank
W.O No &
Sr. Description of Work M/S of Guarantee Remarks
Date
Contract @ 10%
Providing, Laying, Jointing &
Testing M.S Black steel pipe M/S Saleem
810/ W.I.P
1 16” Dia delivery Main for Iqbal & 17,851,860 1,785,186
19-04-2012 (7-06-2016)
water Supply scheme Lakhi, Brothers
District Shikarpur
Construction of 500000
Gallons RCC Clear water
Tank 100 ft Dia for Mr. Soomar 782/ W.I.P
2 16,733,210 1,673,321
Improvement & Extension of Khan Mahar 22-05-2013 (7-06-2016)
water supply scheme Lakhi,
District Shikarpur
Total 34,585,070 3,458,507

Audit is of the view that the management did not observe the laid down
procedures and violated Sindh Public Procurement Rules, 2010.
Deviation from prescribed rules of SPPRA resulted into weak internal control.
The matter was reported to managements during October, 2016, but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit recommends that responsibility be fixed on person(s) at fault, under
intimation to audit.
[AIR Para: 18]

132
2.3.3.39 Irregular Payment against Third Party Validation
Rs 3.360 Million
According to Sub Section (2) of Section 4 of the Sindh Financial Management
and Accountability Act, 2011, “The rules shall be consistent with the following
principles:-
(a) All financial transactions shall be duly authorized;
(b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
Further, according to Para-10 (iv) of GFR Vol-I, “public money should not be
utilized for the benefit of a particular person or section of community”.
The Executive Engineer, Public Health Engineering Division, Ghotki @ Mirpur
Mathelo, made payment of Rs 3.360 million, during financial years 2014-16, to Deputy
Director, Monitoring & Evaluation Cell, P&D Department, Government of Sindh,
Karachi without any proper justification & proper monitoring report on the schemes.
Detail is provided at Annex-PHE4.
Audit is of the view that payment was made without any justification resulting
into irregular expenditure and weak financial management.
Non-observance of prescribed rules constituted weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that responsibility may be fixed on person(s) at fault, under
intimation to audit.
[AIR Para: 16]

2.3.3.40 Award of Works to Higher Bidder - Rs 2.941 Million

According to section(I) of Appendix 18-A of SFR Vol-I, "Means should be
devised to ensure that every Government servant realizes fully and clearly that he will be
held personally responsible for any loss sustained by Government through fraud or
negligence on his part, and that he will also be held personally responsible for any loss
arising from fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his own action or

133
culpable negligence”.
Furthermore, as per SPPRA Rule 46(2)(i), “bid found to be the lowest evaluated
or best evaluated bid shall be accepted.”
Executive Engineer, Public Health Engineering, Shikarpur awarded two works
valuing Rs 2.941 million, during financial year 2015-16, to 3rd and 5th lowest bidders
instead of 1st and 4th lowest bidders respectively, by manipulating the qualifying NIT
eligibility criteria. Further, it was observed that the 1st and 4th lowest bidder rejected
earlier by the procurement committee were also awarded the other works on the same
criteria, in violation of above rules. Details are provided at Annex-PHE5.
Audit is of the view that management failed to award contracts to 1st and 4th
lowest bidders, respectively, resulting into fraudulent practice and loss to public
exchequer which constituted weak financial management.
Deviation from prescribed rules resulted into loss to public revenue which
constituted weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that responsibility be fixed against the person(s) at fault,
under intimation to audit.
[AIR Para: 3]

2.3.3.41 Irregular Allowing Premium on Scheduled Rate-Rs 2.837 Million

According to Para 532 of PWD Manual Volume-I, duly adopted by GoS, “A
revised estimate must be submitted duly approved by the competent authority when a
sanctioned estimate is likely to exceed by more than 5% either due to rate being found
insufficient or for any other reason”.
Further, as per SPPRA guidelines 11.2.2 Revised Technical Sanction (RTS),
“Detailed Estimate needs revision when during execution it is anticipated that cost of
completion is to exceed beyond the permissible limit (5%). Revised detailed estimate is
timely prepared incorporating the work done and required to be done along with
deviation statement for submission to competent authority”.
The Executive Engineer (Public Health Engineering) Division, during financial

134
year 2015-16, awarded development works amounting to Rs 4.859 million, to MS Jameel
Akhtar Junejo. The contractor was allowed 39.50% premium over and above the
scheduled rates amounting to Rs 2.837 million, in violation of above rule.
Audit is of the view that the management did not observe the prescribed
procedure laid down for the financial discipline which constituted weak financial
management.
Non-compliance of rules may lead to misuse of public funds and loss of
Government
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that responsibility may be fixed upon the person(s) at fault
for allowing premium over and above the schedule rates.
[AIR Para: 2]

2.3.3.42 Unjustified Payments to SEPCO & HESCO - Rs 2.690 Million

As per Rule-28 of GFR Vol-I, “No amount due to Government should be left
outstanding without sufficient reason, and where any dues appear to be irrecoverable the
orders of competent authority for their adjustment must be sought”.
Then Executive Engineer, Public Health Engineering Department Hyderabad,
made irregular payment of Rs 2.690 million, during financial year 2015-16, to Executive
Engineer, Operation Electrical Division, SEPCO, Jacobabad and Revenue Officer,
HESCO, Tando Allahyar, in cash. Moreover, no detail of such expenditure was provided,
in violation of above rule. Detail is as under.
[Amount in Rupees]
Sr. CV No & Date Particular Amount
Paid to XEN Operation SEPCO
1 D-69/26-05-16 2,453,866
Jacobabad through Hand Receipt
Paid to Revenue Officer HESCO Tando
2 D-23/11-05-16 211,264
Allahyar through Hand Receipt
3 D-4/22-06-16 -do- 24,543
Total 2,689,673
Audit is of the view that payments on hand receipts and without
135
details/justification resulted into weak financial management. Moreover, chances of
misappropriation of public funds cannot be ruled out.
Deviation from prescribed rule resulted into weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault. Besides,
relevant details be provided to audit for verification.
[AIR Para: 6]

2.3.3.43 Un-justified Release of Withheld Amount - Rs 2.500 Million

According to Sub Section (2) of Section 4 of the Sindh Financial Management
and Accountability Act, 2011, “The rules shall be consistent with the following
principles:-
(a) All financial transactions shall be duly authorized;
(b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
Further, according to Para-10 (iv) of GFR Vol-I, “that public money should not
be utilized for the benefit of a particular person or section of community”.
The Executive Engineer, Public Health Engineering Division, Ghotki @ Mirpur
Mathelo, released withheld amount of Rs 2.500 million, during financial years 2014-15,
to contractors without fulfillment of codal formalities.
Audit is of the view that release of withheld amount without justification
resulted into irregular expenditure and weak financial management.
Non-observance of prescribed rules constituted weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that responsibility may be fixed upon person(s) at fault for
payment without fulfilment of codal formalities, under intimation to audit.
[AIR Para: 17]

136
2.3.3.44 Non-Execution of Surface Drains Works - Rs 2.328 Million
According to contract agreement between the contractor & Government, “the
work will be furnished by the contractor as per PWD specification and no payment will
be made by the Government if the work remained incomplete”.
Further, according to Para-10 (iv) of GFR Vol-I, “public money should not be
utilized for the benefit of a particular person or section of community”.
The Executive Engineer, Public Health Engineering Division, Naushahro
Feroze, during financial year 2015-16, showed an expenditure of Rs 2.328 million
incurred, on surface drains work but no work was done in this regard, in violation of
above rule..
Audit is of the view that management failed to comply with the orders of the
Government, which indicate the absence of systematic internal control and lack of
financial discipline prevailing.
Non-observing of Government instruction constituted weak internal control
system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that responsibility may be fixed upon person(s) at, under
intimation to audit.
[AIR Para: 16]

2.3.3.45 Excess Payment of Schedule Items of Work - Rs 1.695 Million

According to Para 532 of PWD Manual Volume-I, duly adopted by GoS, “A
revised estimate must be submitted duly approved by the competent authority when a
sanctioned estimate is likely to exceed by more than 5% either due to rate being found
insufficient or for any other reason”.
Further, as per SPPRA guidelines 11.2.2 Revised Technical Sanction (RTS),
“detailed Estimate needs revision when during execution it is anticipated that cost of
completion is to exceed beyond the permissible limit (5%). Revised detailed estimate is
timely prepared incorporating the work done and required to be done along with

137
deviation statement for submission to competent authority”.
The Executive Engineer, Public Health Engineering, Karachi, during financial
year 2015-16, paid an amount of Rs 1.695 million, excess over the schedule of rate to
different contractors against various works. Neither the rate analysis nor specification
was provided to audit, in violation of the above rule. Detail is as under:
[Amount in Rupees]
Actual
Contractor Description Name of Work Rate applied Excess
Rate
Externally bitumen Providing laying
(asphalt) coating 3 layers jointing and testing
to black steel M.S pipe of 16’ dia M.S
4.8 mm, 5.6 mm, 6.4
4.8pipe for bulk 901* 4450 381*4450
mm, 7 .1 mm, 8.7 mm,
Jan & Co. water supply 520
9.5 mm, 10.3 mm, =4,009,450/- =1,695,450
11.1mm, 12.7 mm & scheme
14.3 mm thickness etc.
complete (SMI. No. 1P-
23)

Audit is of the view that unjustified excess rates were allowed to contractors
resulting into weak financial management.
Non-observing of Government instruction constituted weak internal control
system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault.
[AIR Para: 1]

2.3.3.46 Drawl of Funds through Blank / Fake Voucher - Rs 1.054 Million

According to Sub Section (2) of Section 4 of the Sindh Financial Management
and Accountability Act, 2011 “The rules shall be consistent with the following
principles:-
(a) All financial transactions shall be duly authorized;
(b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.

138
 Further, according to Para-10 (iv) of GFR Vol-I, “public money should not be
utilized for the benefit of a particular person or section of community”.
Moreover, according to Para-23 of General Financial Rules Vol-I, “every
Government officer should realize fully and clearly that he will be held personally
responsible for any loss sustained by Government through fraud or negligence on his part
and that he will also be held personally responsible for any loss arising from fraud or
negligence on the part of any other Government officer to the extent to which it may be
shown that he contributed to the loss by his own action or negligence”.
The Executive Engineer, Public Health Engineering Division, Naushahro
Feroze, during financial year 2015-16, paid and amount of Rs 1.054 million to the
contractor M/s Sadullah Kalhoro vide cheque No. 2281878 dated.4.5.2016 against a
blank voucher No. D-1 dated 4.5.2016. The same voucher was pre-audited & passed by
the DAO. Detail is as under:
[Amount in Rupees]
Cheq.
VR. NO Bill Wo No & Current
No & Scheme Contractor Remarks
& Date No Date Bill
Date
Construction of Current Bill was
Covered Open Drain paid without
Nala From Dadu measurement of
Laliya Chowk to M/s quantity executed,
D-1 2281878 12th AB/TC/547
Sehar Disposal(From Sadullah 1,054,010 rate & gross
Dt.4.5.16 Dt.4.5.16 RA Dt.29.5.12
Sethal Khad to Kalhoro amount paid,
Kalhora School Blank voucher
Building) for Drainage passed & paid, No
Scheme Noro MB was Provided

Audit is of the view that the management did not observe the prescribed
procedure laid down for the financial discipline which constituted weak financial
management.
Unauthorized payment was made on blank voucher resulted into weak financial
management
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that matter be investigated regarding payment on blank
vouchers and responsibility be fixed upon person (s) at fault, under intimation to audit.
[AIR Para: 5]

139
2.3.3.47 Non-Functional Water Supply Schemes
According to Rule 10 (iv) of GFR Vol-I, “Every officer incurring or authorizing
expenditure from public funds should be guided by high standards of financial propriety
among the principles on which emphasis is generally laid are the following:
Public moneys should not be utilized for the benefit of a particular person or
section of the community”.
The Executive Engineer, Public Health Engineering Department, Matiari, during
financial year 2015-16, completed twenty five (25) water supply schemes, but schemes
still remain non-functional, in violation of above rule. Detail is as under:

Total Water Supply

Sr. Sub-division Functional Non-functional
Schemes
1. Hala 17 0 17
2. Matiari 08 0 08
Total 25 25 25
Audit is of the view that the non-functioning of these schemes constitute weak
financial management.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that then water supply schemes may be made functional,
under intimation to audit.
[AIR Para: 4]

140
 CHAPTER-III
DISTRICT MUNICIPAL CORPORATIONS
KARACHI DIVISION

141
3.1 KARACHI DIVISION
3.1.1 INTRODUCTION
Karachi Division has been divided into 6 District Municipal Corporations,
namely, Karachi East, West, South, Central, Malir and Korangi. Business of Municipal
Corporation is run through the Administrator / Municipal Commissioner, Director,
Deputy Director and officers namely TO (I&S), TO (Finance), TO (P&C) and TO
(Regulations) under Sindh Local Government Ordinance, 1979. The functions of
Municipal Corporation are as following:

1. Prepare spatial plans for the Town including plans for land use, zoning and
functions for which Municipal Corporation is responsible.
2. Exercise control over land-use, land-subdivision, land development and
zoning by public and private sectors for any purpose, including agriculture,
industry, commerce markets, shopping and other employment centers,
residential, recreation, parks, entertainment, passenger and transport freight
and transit stations.
3. Enforce all municipal laws, rules and bye-laws governing Municipal
Corporations functioning.
4. Prepare budget, long term and annual municipal development programmes in
collaboration with the Union Councils.
5. Collect approved taxes, cesses, user fees, rates, rents, tolls, charges, fines and
penalties.
6. Manage properties, assets and funds vested in the Municipal Corporations.
7. Develop and manage schemes, including site development in collaboration
with Union Administration.
8. Issue notice for committing any municipal offence by any person and initiate
legal proceedings for commission of such offence or failure to comply with
the directions contained in such notice.
9. Prosecute, sue and follow up criminal, civil and recovery proceedings against
violators of Municipal Laws in the courts of competent jurisdiction.
10. Maintain municipal records and archives.

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3.1.2 Comments on Budget and Accounts (Variance Analysis)

(Rupees in Million)
Expenditure / Excess (+)
Sr. Formation Particulars Budget
Revenue Savings/Shortfall (-)
Karachi Division
Salary 2,174.342 1,811.952 (362.390)
DMC
Non-Salary 757.940 541.386 (216.554)
1 Central
Development 524.076 349.384 (174.692)
Karachi
Revenue 3,525.533 2,820.426 (705.107)
Salary 1,519.724 1,380.803 (138.921)
DMC South Non-Salary 761.581 471.147 (290.434)
2
Karachi Development 301.700 19.013 (282.687)
Revenue 2,694.157 1,901.232 (792.925)
Salary 2,765.982 1,031.337 (243.431)
DMC West Non-Salary 1,152.493 429.724 (117.488)
3
Karachi Development 691.496 257.834 (1,044.769)
Revenue 4,611.204 2,062.212 (1,493.091)
Salary 1,067.980 1,133.236 65.256
DMC East Non-Salary 377.269 335.470 (41.799)
4
Karachi Development 1,181.150 726.300 (454.850)
Revenue 876.700 406.400 (470.300)
Salary 699.964 860.896 160.932
DMC Malir Non-Salary 326.370 410.710 84.340
5
Karachi Development 969.200 646.200 (323.000)
Revenue 2,757.664 2,280.214 (477.450)
Salary 1,181.304 851.640 (329.664)
DMC
Non-Salary 661.264 543.176 (118.088)
6 Korangi
Development 693.350 312.007 (381.342)
Karachi
Revenue 1,896.510 853.430 (1,043.081)
Salary 9,409.297 7,069.864 (2,339.433)
Non-Salary 4,036.917 2,731.613 (1,305.304)
Development 4,360.971 2,310.739 (2,050.233)
Grand Total 17,807.185 12,112.215 (5,694.969)
Revenue 16,361.768 10,323.914 (6,037.854)

143
 Expenditure 2015-16

Original budget of Rs 17,807.185 million was allocated to Municipal

Corporations of Karachi Division under various grants. Variance Analysis of the
Revised/Final Grant and Actual Expenditure for the Financial Year 2015-16 for the
audited entities depicted that there was a savings of Rs 5,694.969 million.

3.1.3 Brief Comments on the Status of Compliance with PAC Directives

The audit reports pertaining to following years have been submitted to Governor
of Sindh. Detail of PAC meetings is given below:

Audit Year No. of Paras Status of PAC Meetings

2012-13 08 Nil
2013-14 07 Nil
2014-15 70 Nil
2015-16 33 Nil

As indicated in the above table, no PAC meeting was convened to discuss the audit
reports of DMCs Karachi.

144
3.2 AUDIT PARAS
3.2.1 Fraud / Misappropriation
3.2.1.1 Doubtful Expenditure on account of Overtime Allowance
Rs 27.833 Million
According to Rule 5 of Chapter 1 of SFR Vol-I, “the amount of allowance
granted to meet expenditure of particular type should be so regulated that allowances are
not on the whole source of profit of the recipient.
Further, according to Finance Department, GoS Letter No. FD(SR-
III)5/21/85/Part file/482 dated 01.04.2013 “Government of Sindh, Finance Department
has decided to enhance the overtime allowance admissible to staff car drivers and
dispatch riders working in Sindh Government from @ Rs. 20/- per hour to Rs. 25/- per
hour subject to maximum limit of Rs 150/ per day w.e.f. 01.08.2012. It is further clarified
that the existing condition of the overtime allowance to staff car drivers/dispatch rider
regarding verification by the concerned officer will continue to apply.
Administrators, DMCs, West (Keamari Zone), (Baldia Zone) and (Orangi
Zone), incurred expenditure amounting to Rs 27.833 million, during financial year 2015-
16, on account of overtime allowance paid to employees but no record/details found in
relevant files to justify the expenditure, in violation of above rule. Detail is as under.

[Rupees in Million]
Overtime
Sr. DMCs Offices / Zones
Expenditure
1. Keamari Zone 12.912
2. West Baldia Zone 14.630
3. Orangi Zone 0.291
Total 27.833
Audit is of the view that expenditure on account of overtime allowance without
maintaining related record/details resulted into doubtful expenditure which constituted
weak financial management.
Non-observance of prescribed rules constituted weak internal control system.

145
 The matter was reported to management during November, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for unjustified expenditure on
account of overtime allowance, under intimation to audit.
[AIR Paras: 10, 29, 40]

146
3.2.2 Non-Production of Record

3.2.2.1 Non-Production of Record - Rs 1,174.955 Million

As per Section 14 (1) (b) of the Auditor General (Functions, Powers & Terms
and Conditions of Service) Ordinance, 2001, The Auditor-General shall, in connection
with the performance of his duties under this Ordinance, have authority to require that
any accounts, books, papers and other documents which deal with, or form, the basis of
or otherwise relevant to the transactions to which his duties in respect of audit extend,
shall be sent to such place as he may direct for his inspection.
Moreover, “Chief Secretary vide letter No.DO.NO.SO(C-II)/SGA&CD/1-
73/2012 dated 25th October, 2013 duly endorsed by Secretary of LGD vide letter No.
SOA/(LG)LG/4/(77)2013, dated 21.11.2013 was pleased to direct to all Municipal
organizations / Local Councils for immediately providing record to audit, so that,
financial discipline may be restored to respective organizations. In case of failure to
provide record to audit by auditee organizations, the cases may be taken up under
disciplinary proceedings against officers concerned that may include suspension of
officers”.
Various DMCs of Karachi incurred an expenditure of Rs 392.734 million,
during financial year 2015-16, from different heads of accounts, but failed to produce
auditable record to audit parties deputed for the purpose, in violation of the above rule.
Detail is as under:
[Rupees in Million]
Sr. Name of Office Amount
1. Keamari Zone, DMC West 0
2. SITE Zone, DMC West 0
3. Baldia Zone, DMC West 0
4. Orangi Zone, DMC West 0
5. DMC Central 2.387
6. DMC, Korangi 0
7. DMC, East 330.200
8. DMC, South 59.009
9. DMC, Malir 1.138
Total 392.734
Further, Administrators, DMCs, West, Central, Korangi, East, South and Malir
incurred an expenditure amounting to Rs 782.221 million, during financial year 2015-16,

147
on purchase of POL for official vehicles but failed to produce Log Books, History Sheets
and Petrol account Registers, in violation of above rule. Detail is as under:
[Rupees in Million]
Sr. Offices POL Expenditure
1. DMC, West 235.699
2. DMC Central 11.376
3. DMC East 184.536
4. DMC, Korangi 11.418
5. DMC, South 133.352
6. DMC, Malir 205.840
Total 782.221
Audit is of the view that non-provision of record resulted into non-authenticity /
non-transparency in public spending and weak financial management.
Deviation from prescribed rules resulted into weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for non-provision
of record and take action in accordance with clear instructions of Chief Secretary, GoS, in
this regard.
[AIR Paras: 1, 15, 27, 38, 17, 1, 1, 1, 1, 2, 9, 16, 28, 39, 4, 15, 1+17, 8, 13]

148
3.2.3 Irregularity / Non-Compliance
A. Recovery, Targeted receipts/Outstanding dues
3.2.3.1 Non-Achievement of Targeted Receipts – Rs 3,028.844 Million

As per Section 96 (1) of Sindh Local Government Act 2013, “A council may
levy, in the prescribed manner all or any taxes, rates, tolls, and fees mentioned in
Schedule V”.
Further, as per Rule 41 (a) of SFR Vol-I, “The departmental controlling officer
should see that all sums due to Government are regularly received and checked against
demands and that they are paid into treasury claiming credit for so much paid into the
treasury and compare with the figures in the statements supplied by the comptroller”.
Administrators, DMC East, West, South and Malir estimated revenue receipts
amounting to Rs 6,306.55 million, during financial year 2015-16, in the budget, but failed
to realize estimated revenue targets resulting into short recovery of Rs 3,028.84 million,
in violation of above rules. Details are as under:
(Amount in Rupees)
Short
S. No. DMC Description Targeted Achieved
Realization
1 West 4,584,153,000 2,062,214,023 2,521,938,977
2 East Revenue for 474,550,000 361,900,000 112,650,000
3 South own resources 272,800,000 105,494,541 167,305,459
4 Malir 975,046,800 748,096,800 226,950,000
Total 6,306,549,800 3,277,705,364 3,028,844,436
Audit is of the view that management failed to take all out measures to realize
huge amount of targeted receipts that has resulted into weak financial management.
Lack of vigilance and deviation from prescribed rule resulted into less collection
of revenue and weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for laxity to realize
targeted revenues, under intimation to audit.
[AIR Paras: 5, 18, 30, 43, 3, 18, 18]

149
3.2.3.2 Non-Deduction / Deposit of Taxes – Rs 72.294 Million

According to Section 2 and 3 of the Sindh Sales Tax Special Procedure

(Withholding) Rules, 2011, “Federal and Provincial Government including local and
district Government, department and offices have been prescribed as withholding agent
for the purpose of deduction and deposit of Sales Tax at applicable rate from
un-registered persons and one fifth of applicable rate from registered persons”.
Further, as per Part-B of second schedule annexed to Sindh Sales Tax on
services Act 2011, “Prescribed applicable rate of sales tax at 16% against services
provided or rendered by persons engaged in contractual execution of work or furnishing
supplies”.
Moreover, as per Sindh Finance Bill, 2014, “the rate of Sindh Sales Tax on
service reduced from 16% to 15%, w.e.f. 01-07-2014”.
Administrators of different District Municipal Corporations, during financial
years 2015-16, failed to deduct/deposit deducted taxes including sales tax and income tax
amounting to Rs 72.294 million, in violation of above rules. Details are provided at
Annex-DMC1.
Audit is of the view that non-deduction/non-deposit of deducted taxes resulted
into loss to Government exchequer and weak financial management.
Deviation from prescribed rules resulted into weak internal control.
The matter was reported to managements during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for non-deduction/
non-deposit of taxes. Besides, same be recovered/deposited, under intimation to audit.
[AIR Paras: 7, 3, 8, 10, 15, 8, 1, 4, 16, 16, 17, 5]

3.2.3.3 Non-Recovery of Outstanding Dues - Rs 30.728 Million

As per Rule 39(1) of the Sindh Local Council (Accounts) Rules, 1983, “A
demand and collection register in form 28 shall be maintained for every tax separately for

150
every year in conformity with and the order of the assessment indicated in the Tax
register, and the arrears of the tax shall be brought forward from the previous year.”
Further, as per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer
should see that all sums due to Government are regularly received and checked against
demands and that they are paid into treasury claiming credit for so much paid into the
treasury and compare with the figures in the statements supplied by the comptroller”.
Administrator, District Municipal Corporation, East, during financial year
2015-16, failed to recover outstanding Government dues amounting to Rs 30.728 million,
from 194 defaulters on account of Advertisement, in violation of above rules. Details are
provided at Annex-DMC2.
Audit is of the view that due to non-recovery of outstanding govt dues resulting
into loss to public exchequer which constituted weak financial management.
Non-recovery of Government revenue constituted weak internal control system.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault on account of
non-recovery of outstanding Government dues. Besides, same be recovered and deposited
into Government treasury under intimation to audit.
[AIR Para: 24]

3.2.3.4 Non-Recovery of Water Charges - Rs 6.360 Million

As per Clause 6 of Additional Terms and Conditions of Agreement made
between Works and Services Department and Contractors, “Water supply will be allowed
by the department to the contractors. The contractors shall pay the cost of water to the
department @ 1% of the total cost of work”.
Administrator, DMC Malir, during financial year 2015-16, executed
development schemes amounting to Rs 636.00 million but failed to deduct water charges
Rs 6.360 million @ 1 % from the different contractors, in violation of the above rule.
Details are as under:

151
 [Amount in Rupees]
Sr. Head Description Expenditure Water Charges
1 DED(i) On-going schemes 164,000,000 1,640,000
2 DED(ii) Water Supply schemes 96,000,000 960,000
3 DED(iii) Communication 145,000,000 1,450,000
4 DED(iv) Sewerage system and drains 195,000,000 1,950,000
5 DED(v) Building Engineering Dept. 11,000,000 110,000
6 DED(vi) B and R Dept. 25,000,000 250,000
Total 636,000,000 6,360,000
Audit is of the view that due to lack of seriousness on part of management huge
amount of water charges was not deducted from the contractors resulting into short
receipt of revenue which constituted weak financial management.
Deviation from prescribed rules constituted weak internal control system.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on account of laxity of management
and recovery of water charges be effected without delay, under intimation to audit.
[AIR Para: 14]

B. Violation of Rules
3.2.3.5 Procurement in Violation of SPPRA Rules - Rs 186.517 Million
As per Para 17 sub section (1) of Sindh Public Procurement Rules 2010,
“Procurements over one hundred thousand rupees and up to one million rupees shall be
advertised by timely notifications on the Authority’s website and may in print media in
the manner and format prescribed in these rules. (2) The advertisement in the newspapers
shall appear in at least three widely circulated leading dailies of English, Urdu and Sindhi
languages”.
Further, as per Rule 10 of the Sindh Public Procurement Rules, 2010, “The
procuring agency shall, immediately upon award of contract, make the evaluation report

152
of the bid, and the contract agreement public through hoisting on the Authority’s website
as well as on procuring agency’s website, if the procuring agency has such a website”.
Administrators, DMCs, Central, East and South, during financial year 2015-16,
awarded various development works amounting to Rs 114.403 million, to different
contractors but failed to hoist bid evaluation reports on authority’s website, in violation of
the above rule.
Further, Administrators, DMCs, West (Keamari Zone), (SITE Zone) and
(Orangi Zone), awarded work Rs 72.114 million, during financial year 2015-16, on
withheld NITs/IDs, in violation of the above rules. Details are as under:
(Rupees in Million)
Sr. DMCs Offices / Zones SPPRA IDs Amount
27159, 25029, 29168, 28841,
1. Keamari Zone 15.184
27161, 25169
West
ID-1575220542 and
2. SITE Zone 14.000
1575220543
3. Orangi Zone ID-2147483647 42.930
Total 72.114
Audit is of the view that violation of SPPRA rule resulted into non-transparency
in the award of contracts and weak financial management.
Deviation from prescribed rule resulted into weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for procurements in
violation of SPPRA Rules, under intimation to audit.
[AIR Paras: 19, 11, 7, 8, 17, 41]

3.2.3.6 Award of Contracts without Approval from Competent Authority

Rs 156.435 Million
According to section 2.22 of SPPRA Procurement Regulation (Works), “PC-
I/PC-II of schemes/projects prepared by the administrative department is required to be
placed before the Development Working Party/Committee according to the
cost/competency of the forum as enumerated below:-
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 Sr. Competent Forum Cost of Scheme up to
1 District Development Working Committee (DDWC) Rs. 20 million
2 Departmental Development Working Party (DDWP) Rs. 40 million
3 Provincial Development Working Party (PDWP) Rs. Five billion
4 Central Development Working Party (CDWP) Rs. One billion
Executive Committee of the National Economic
5 Above Rs. One billion
Council (ECNEC). After clearance from CDWP

Further, as per to Section- 3(2) of Sind Councils (Contract) Rules, 1980 states
“No contract exceeding the value specified in column 2 of the First Schedule against the
Council specified in column-1 there of shall be made without the prior approval of the
Council”.

“Value of amount of contract which can be entered into by Mayor or Chairman on his
own authority” First Schedule [See rule 3(2)]
II Class of Council (1) Amount of contract 2)
Hyderabad and Sukkur Municipal Corporation and
(1) 250,000
Zonal Municipal Committee

Municipal Commissioner, DMC East, during financial years 2014-16, awarded

various contracts amounting to Rs 156.435 million, without approval from competent
forum DDWP/PDWP, in violation of the above rules. Detail is as under;
[Amount in Rupees]
Date of W.O No. Amount of
Sr. Name of Work M/S
Agreement and Date Contract
Lifting/Transportation of solid waste
through Mechanical Transport from
M/S Sanco
1 Gulshan-e-Iqbal Zone Garbage 01/12/2014 826/2014 87,250,000
Technologies
Transfer Station to Landfill site Jam Dated 1-
Chakro 12-2014
385/2015
Hiring of Sweeping Labours UC-09 Astrotech
2 15/10/2015 dated 15- 8,465,400
Gulshan-e-Iqbal Zone, DMC(East) International
10-2015
Lifting of Garbage from GTS,
Task
3 Jamsheed Zone and dispose off at 30/11/2015 32/02- 60,720,000
Associates
Landfill area Jam Chakro 12-2015
Total 156,435,400

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 Audit is of the view that award of contracts without delegated financial powers
resulted into transgression of financial powers which constituted weak financial
management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for exercising powers beyond
delegated financial powers and approval from competent forum.
[AIR Para: 5]

3.2.3.7 Award of work to Unregistered Contractors - Rs 122.514 Million

According to the Section 24 of Sindh Sales Tax on Services Act 2011,
“Registrations, (1) Registration will be required for all persons who: (a) are residents; (b)
provide any of the services listed in the Second Schedule from their registered office or
place of business in Sindh; and (c) fulfil any other criteria or requirements which the
Board may prescribe under sub-section (2)”.
Administrators, DMCs Central and South, awarded different contracts valuing
Rs 122.514 million, during financial year 2015-16, to various contractors, who were not
registered with Sindh Revenue Board, in violation of above rule.
Audit is of the view that award of contract to unregistered contractors
constituted weak financial management.
Deviation from prescribed rule resulted into weak internal controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of award of work to
unqualified contractor, under intimation to audit.
[AIR Paras: 10, 14]

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 3.2.3.8 Irregular Award of Contract - Rs 109.500 Million
According to the Notification No. SRO/5681/1/87 dated. 8-7-1987, issued by the
Federal Government of Pakistan, “Pakistan Engineering Council is authority to issue
certificate to contractor Government who execute the work of exceeding cost of Rs 4
million and each year it is renewed”.
Further, according to Pakistan Engineering Council letter No.
PEC/Consult/EF/1900017 dated 01-09-2005 Council (PEC), “All consulting engineering
services in Pakistan shall be entrusted only to consulting engineering duly registered”.
Administrator, District Municipal Corporation, East, during financial year
2014-16, awarded the contract amounting to Rs 87.250 million and extended contract
upto Rs 174.500 million for “Lifting/ Transportation of Solid Waste through Mechanical
Transport from Gulshan-e-Iqbal, Transfer station to land fill site Jam Chakro” to M/s
Sanco Technologies with a maximum license limit of Rs 65.000 million made over and
above the prescribed limit approved by PEC. Details are as under:
[Rupees in Million]
Category of Amount of Amount
W.O no
Name of Work M/S PEC license work exceeding
/ Limit and Date awarded license limit
Lifting/ Transportation of Solid Waste 826/1-12-
through Mechanical Transport from Sanco C-5/ 2014 Revised
174.500 109.500
Gulshan-e-Iqbal Transfer station to Technologies 65 million vide dated 18-
land fill site Jam Chakro 11-15

Audit is of the view that work was award to contractor made over and above the
prescribed limit approved by PEC that constituted violation of laid down rules and
procedures.
Violation from prescribed rule was due to weak internal controls.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for irregular award
of work to unqualified contractor, under intimation to audit.
[AIR Para: 09]

156
3.2.3.9 Unauthorized Clearance of Liabilities - Rs 80.823 Million
As per Para 289 of Treasury Rules (TR) Vol-I and II, “all charges incurred must
be paid and drawn at once and under no circumstances may be allowed to stand over to
be paid from grant of another financial year”.
Further, as per FD, GoS O.M No.FD/BandE –I/51/2007 dated 02-07-2007,
“liability of previous years shall not be allowed to be cleared unless concurrence is given
by Finance Department (FD)”.
Administrator, DMC, Central, incurred expenditure amounting to Rs 80.823
million, during 2015-16, on various accounts for clearing liabilities of previous years
from budget grant of current financial year without concurrence of FD, in violation of
above rules. Details are as under:
[Rupees in Million]
Sr. Name of office Amount
1 DMC, Central 56.754
2 DMC, South 24.069
Total 80.823
Audit is of the view that payment of liabilities of previous year from budget
grant of current financial year adversely effected budget availability of current year and
resulted into weak financial management.
Deviation from prescribed rule resulted into weak internal controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for payment of
previous year liabilities without concurrence of FD, under intimation to audit.
[AIR Paras: 12, 10]

3.2.3.10 Splitting of Work Orders to Avoid Tender – Rs 32.457 Million

As per Rule-17(1) of SPPRA Rules 2010, “Procurements over one hundred
thousand rupees and up to one million rupees shall be advertised by timely notifications

157
on the Authority’s website and in print media in the manner and format prescribed in
these rules”.
Further, as per Rules (11)(1), ibid, “All procuring agencies shall devise a
mechanism for planning in detail for all proposed procurements, determining the
requirement of the procuring agency, within its available resources, and prepare an
annual or a longer term rolling plan, detailing the procurement methods applicable for
specific procurements (12)(1) all proposed procurements for each financial year and shall
proceed accordingly without any splitting or regrouping”.
Administrators, DMCs Central and South, incurred an expenditure of Rs 32.457
million, during financial year 2015-16, by way of splitting up different works into 334
parts on the same date to avoid tender and approval from competent authority, in
violation of above rules. Details are as under:
(Amount in Rupees)
S. No. DMC Splitted Parts Amount
1 Central 235 22,921,528
2 South 99 9,535,749
Total 32,457,277
Audit is of the view that managements failed to invite tenders and splitted work
orders resulting into non-achievement of competitive rates and weak financial
management.
Deviation from prescribed rules resulted into unauthorized expenditure and
weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements on account of
execution of works by way of splitting to avoid tender, under intimation to audit.
[AIR Paras: 6, 3]

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3.2.3.11 Execution of Works without Recording Measurement Books
Rs 29.148 Million
As per Government of Sindh, Communication and Works Department
notification No. C/9-60/77 dated 26th May 1977, “it is the responsibility of the DO to
check 10% measurements before making payment of the bills for the works done by the
contractors”.
Further, as per Rule 113(1) of the Sindh Local Council (Accounts) Rules, 1983,
“The measurement book must be looked upon as a most important record since it is the
basis of all accounts of quantities, whether of work done by labour or piece or by contract
or of materials received which have to be counted or measured. The description of the
work must be lucid, so as to admit easy identification and check. Details of every work
executed departmentally shall be entered in the Measurement Book”.
Administrator, DMC Central, during 2015-16, executed 10 different
development schemes amounting to Rs 29.148 million, without recording in
measurement book, in violation of the above rules.
Audit is of the view that execution of work without recording Measurement
Book (MBs) resulted into irregular execution of work which constituted weak financial
management.
Deviation from prescribed rule resulted into weak internal controls.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for execution of
work without recording Measurement Book (MBs), under intimation to audit.
[AIR Para: 18]

3.2.3.12 Unauthorized Technical Sanction - Rs 27.348 Million

In pursuance of the provisions contained in Article 119 of the constitution of the
Islamic Republic of Pakistan , the Governor of Sindh is pleased to make following
amendments in the Sindh Delegation of Powers under the Financial Rules and the Powers

159
of Re-appropriation Rules, 1962, vide Notification No.B&E-I/2(18)/75-94/Pt-IX Dated
5th January, 2009, that:-

S.No. Nature of Power To whom delegated Extent

In Roads Department Works
(iv) Superintending Engineer
“Technical Sanction: upto Rs.20,000,000/-
01
In the case of original works In Roads Department Works
(v) Executive Engineers
upto Rs.2,500,000/-
“Technical Sanction: (ii) Superintending Engineer Upto Rs.1,000,000/-
02 (iv) In the case of Ordinary
(iii) Executive Engineers Upto Rs.200,000/-
and special repairs to roads

Administrator, District Municipal Corporation, East, during financial year

2015-16, awarded repair works worth Rs 27.348 million, without obtaining technical
sanction by authorized officer i.e. Chief Engineer, in violation of rules. Detail is as under;
[Amount in Rupees]
W.O No and T.S Given
Name of Work M/S Amount
Date by
Rehabilitation Maintenance of Road at
Lal Shahbaz Qalandar Road, 09/ 29- XEN
K.Khan and Co. 15,122,057
Mehmoodabad Gate and Surrounding 09-2015 (Design)
Areas in Jamsheed Zone, DMC (East)
Repair / Maintenance and Improvement M/s. PLG 731/2014
of Electrical Accessories in various Parks Investment Dated 12,226,009 XEN
in Gulshan-e-Iqbal Zone, D.M.C. (East) (SMC Pvt. Ltd) 02/07/2014
Total 27,348,066 -

Audit is of the view that award of work against unauthorized technical sanction
of rates resulted into unauthorized award of work and weak financial management.
Deviation from delegated financial powers resulted into weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that award of works by transgressing financial power of
technical sanction be justified and responsibility be fixed on person(s) at fault, under
intimation to audit.
[AIR Paras: 16+21]

160
3.2.3.13 Irregular Execution of Work without PC-I - Rs 19.527 Million
According to SPPRA’s Guidelines Section 2.21 Pre-requisite conditions:
Procuring Agency/ Committee shall not invite bids for development works, unless
following conditions are fulfilled:
i. Approval of PC-I/PC-II from Competent Forum;
ii. Issuance of Administrative Approval (A.A) for development schemes;
iii. Technical Sanction (TS) of a detailed estimate is obtained;
iv. Funds are either released or anticipated to be released before award of
contract.
Administrator, DMC Central, during financial year 2015-16, executed 10
development works / schemes amounting to Rs 19.527 million, without preparation and
approval of PC-1 from CDWP, in violation of the above rules.
Audit is of the view that award of development work without preparation and
approval of PC-I resulted into irregular execution of work which constituted weak
financial management.
Deviation from prescribed rule constituted weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for irregular
execution of works without PC-I, under intimation to audit.
[AIR Para: 7]

3.2.3.14 Unauthorized Change in NIT/Scope of Work - Rs 14.192 Million

According to Rule 17(1) of Sindh Public Procurement Rules 2010,
“Procurements over one hundred thousand rupees and up to one million rupees shall be
advertised by timely notifications on the Authority’s website and in print media in the
manner and format prescribed in these rules”.
Further, as per Amendment Rule 18, “Provided that the Notice Inviting Tender
(NIT) shall be hoisted on Authority’s website in case of procurement upto rupees one
million and published in newspapers in case of over rupees one million on or before the

161
 date of issuance of bidding documents” vide SORI(SGA&CD)2-30/2010 Dated: 8th
October, 2013.
Administrator, District Municipal Corporation, East, during financial year
2015-16, executed two development schemes worth Rs 14.192 million, at different
locations against the schemes advertised on SPPRA Website (I.D-24914) as well as in
Newspapers. Work Orders were issued for original locations but works were executed on
another site without calling fresh tender and intimation to SPPRA, in violation of above
rules. Detail is as under:
[Amount in Rupees]
Site of work advertised and W.O No Amount After Change of Site
Sr. Contractor
awarded work order and Date paid location
Repairing of Roads from
Mehmoodabad Police Station
towards KMC flats, from Repair of roads in the area
M/S K. 07/2015
Alfalah Masjid towards of UC-10 and UC-12,
1 Khan and Dated 29- 4,193,841
corporation gates and from Jamsheed Zone, DMC,
Co. 09-2015
Quetta Rangeen Hotel Toward East
Marwat Park, Jamsheed Zone,
DMC (East)
Rehabilitation / Maintenance of Rehabilitation /
Road at Workshop, Parsi Gate, 10/2015 Maintenance of Roads in
M/S Deen
2 Chanesar Goth and Surrounding Dated 29- 9,998,462 different areas of UC-1, 2,
Mohammad
Areas in Jamsheed Zone, DMC 09-2015 3, 4, and UC-5, Jamsheed
(East) Zone, DMC, East.
Total 14,192,303
Audit is of the view that execution of development schemes without calling
fresh tender by timely notifications on the Authority’s website and in print media resulted
into collusive and fraudulent practices and weak financial management.
Deviation of SPPRA Rules resulted into weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that irregularities in award of works may be justified and
responsibility be fixed on person(s) at fault, under intimation to audit.
[AIR Para: 06]

162
3.2.3.15 Execution of Work without Technical Sanction - Rs 13.406 Million
As per Para 56 of CPW departmental code, “For each individual work proposed
to be carried out, except petty works petty repairs and repairs for which a lump sum
provision has been sanctioned under paragraph 106, a properly detailed estimate must be
prepared for sanction of competent authority this sanction is known as the technical
sanction to the estimate”.
Further, as per Para-527 of PWD Manual, Vol-I, “no work shall begin unless
proper detailed design and estimate have been sanctioned, allotment of funds made and
order for its commencement issued by the competent authority”.
Administrator, DMC Central, executed 08 schemes / works through various
contractors amounting to Rs 13.406 million, during financial year 2015-16, without
obtaining technical sanction from competent authority, in violation of the above rules.
Audit is of the view that award of work without sanction of detailed design and
estimate from competent authority resulted into unauthorized expenditure and weak
financial management.
Deviation from prescribed rules resulted into unauthorized expenditure and
weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on the department for execution of
works without obtaining technical sanction from competent authority, under intimation to
audit.
[AIR Para: 8]

3.2.3.16 Unauthorized Operation of Government Account in Commercial

Banks - Rs 10.380 Million
According to Finance Department, Government of Sindh letter
No.FD/PS/85/2010-11 dated 18th May, 2011 and followed by other letters
No.FD(RES.IV)/Misc/2011-12 dated 30th March, 2012, No.FD-

163
SO(RES.IV)/2(72)/2011(Prov) dated 5th December, 2013, 21st May, 2014, “it has been
desired by the Honourable Chief Minister that different Departments/Projects/ Programs /
Companies/ Endowment funds/Employees’ benefits and Charitable funds/ Autonomous
and Semi-autonomous Bodies are directed that all bank Accounts dealing with the public
money, other than Assignment Accounts, would be maintained in Sindh Bank Limited
instead of other Commercial banks”.
Administrator, District Municipal Corporation, East, during financial year
2015-16, operated 04 bank accounts in Commercial Banks instead of maintaining the
same with Sindh Bank Limited, in violation of above direction. Details are as under;
(Amount in Rupees)
S.No. Name of Bank A/c No. Balance Remarks
1 HBL, KDA Branch 0014-00364587-01 609,502 30/06/2016
2 HBL, KDA Branch 0014-00368025-01 5,530,960 31/05/2016
3 Firs Women Bank, PECHS Branch 0028-00347722-0001 2,097,325 30/06/2016
4 Firs Women Bank, PECHS Branch 0028-00339432-0001 2,142,659 27/05/2016
Total 10,380,446

Audit is of the view that management failed to deposit the Government funds in
designated Branch of Sindh Bank, which constituted weak financial management.
Deviation from prescribed rule constituted weak internal control system.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for maintaining the Government
accounts with private banks instead of Sindh Bank Limited, under intimation to audit.
[AIR Para: 22]

3.2.3.17 Irregular Award of Works without Availability of Funds

Rs 9.901 Million
According to SPPRA’s Guidelines Section 2.21 Pre-requisite conditions:
Procuring Agency/ Committee shall not invite bids for development works, unless
following conditions are fulfilled:
(i) Approval of PC-I/PC-II from Competent Forum;

164
 (ii) Issuance of Administrative Approval (A.A) for development schemes;
(iii) Technical Sanction (TS) of a detailed estimate is obtained;
(iv) Funds are either released or anticipated to be released before award of
contract.
Further, according to para-527 of PWD Manual, Vol-I, “no work shall begin
unless proper detailed design and estimate have been sanctioned, allotment of funds made
and order for its commencement issued by the competent authority”.
Administrator, District Municipal Corporation, South (Saddar and Lyari Zone),
during financial year 2015-16, awarded 10 works amounting to Rs 9.901 million, to
different contractors but the payment was not made to contractors due to non-availability
of funds, in violation of above rules.
Audit is of the view that execution of works without funds and creation of
liabilities resulted into weak financial management.
Violation of prescribed procedures was due to weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault.
[AIR Para: 6]

3.2.3.18 Award of Contracts without Tender - Rs 9.453 Million

As per Rule-17(1) of SPPRA Rules 2010, “Procurements over one hundred
thousand rupees and up to one million rupees shall be advertised by timely notifications
on the Authority’s website and in print media in the manner and format prescribed in
these rules”.
Further, as per Rules (11)(1), ibid, “All procuring agencies shall devise a
mechanism for planning in detail for all proposed procurements, determining the
requirement of the procuring agency, within its available resources, and prepare an
annual or a longer term rolling plan, detailing the procurement methods applicable for
specific procurements (12)(1) all proposed procurements for each financial year and shall
proceed accordingly without any splitting or regrouping”.

165
 Administrator, District Municipal Corporation, South (Saddar and Lyari Zone)
and Malir, during financial year 2015-16, incurred expenditure Rs 9.453 million, without
calling open tender, in violation of above rules. Detail is as under:

[Amount in Rupees]
Sr. Name of office Amount
1 DMC, Malir 8,311,550
2 DMC, South 1,141,940
Total 9,453,490
Audit is of the view that managements did not invite tenders which resulted in
award of contracts in a non-transparent manner.
Violation from prescribed rules was due to weak internal controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements on account of
procurements/execution of works without tenders.
[AIR Paras: 2, 15]

3.2.3.19 Irregular Payment of POL without Entitlement - Rs 9.418 Million

As per GFR 10 Every officer incurring or authorizing expenditure from public
funds should be guided by high standards of financial propriety among the principles on
which emphasis is generally laid are the following.
(i) Every public officer is expected to exercise the same vigilance in respect of
expenditure incurred from public moneys as a person of ordinary prudence would
exercise in respect of expenditure of his own money.
Administrator, DMC, Malir, incurred expenditure amounting to Rs 9.418
million, during 2015-16, on account of POL without entitlement in contravention to the
POL ceiling allowed/fixed by Sindh Government. Further, POL was allowed on private
vehicles, in violation of above rules.

166
 Audit is of the view that expenditure on account of POL to officials without
entitlement resulted into un-authorized expenditure which constituted weak financial
management.
Deviation from prescribed rules constituted weak internal controls.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on official(s) for un-authorized POL
allowed to officials without entitlement. Besides, recovery of amount paid to date be
effected from concerned officials, under intimation to audit.
[AIR Paras: 11,12]

3.2.3.20 Irregular Refund of Security Deposit - Rs 5.660 Million

According to Section(I) of Appendix 18-A of SFR Vol-I, "Means should be
devised to ensure that every Government servant realizes fully and clearly that he will be
held personally responsible for any loss sustained by Government through fraud or
negligence on his part, and that he will also be held personally responsible for any loss
arising from fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his own action or
culpable negligence”.
Administrator, DMC Korangi, paid an amount of Rs 5.660 million, during
financial year 2015-16, on account of refund of security deposit to contractor without
completion report/ impact and effect report, in violation of above rule.
[Amount in Rupees]
Particulars Name of Contractor Voucher No/Date Amount
Refund of security deposit for waste
management w.e.f June, 2013 to May, M/S Al-Khalil Agencies 163 / 24.08.2015 5,659,698
2014

Audit is of the view that payment of security deposit without non-availability of

necessary documents/reports resulted into irregular payment which constituted weak
financial management.
Non-observance of prescribed rules was due to weak internal control.

167
 The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for irregular
refund of security deposit, under intimation to audit.
[AIR Para: 14]

3.2.3.21 Un-authorized Procurement - Rs 1.990 Million

As per Rule 13 (1) of the Sindh Public Procurement Rules, 2010, “Specifications
shall allow the widest possible competition and shall not favour any single contractor or
supplier nor put others at a disadvantage. Specifications shall be generic and shall not
include references to brand names, model numbers, catalogue numbers or similar
classifications. However, if the procuring agency is convinced that the use of a reference
to a brand name or a catalogue number is essential to complete an otherwise incomplete
specification, such use or reference shall be qualified with the words “or equivalent”.
Administrator, DMC South, during financial year 2015-16, procured goods of
Rs 1.990 million, with specific brand name, in violation of above rule. Details are
provided as under:
[Amount in Rupees]
Voucher Work
Bill Cheque # Payee/ Name of Gross
Sr. Zone # and Order #
# Dated Contractor Scheme/Work Amount
Date Date
204/ 16842333/
1 Saddar 1 102 Samsui Supply of Street 990,000
11-12-15 1-6-16
International lights Samsui
205/ 16842333/
2 Saddar 2 101 Co. brand 1,000,000
11-12-15 1-6-16
Total 1,990,000
Audit is of the view that procurement without open competition resulted into
unauthorized award of contract thus depriving the Government of competitive rates.
Deviation from prescribed rules was due to weak internal controls.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.

168
 Audit recommends fixing of responsibility for procurements without open
competition, under intimation to audit.
[AIR Para: 11]

3.2.3.22 Non-Disposal of Unserviceable/Condemned Vehicles, Machinery

and Old Parts - Rs 1.050 Million
As per Para 167 of General Financial Rules Vol-I, “Stores which are reported to
be obsolete, surplus or unserviceable may be disposed-off by sale or otherwise under the
orders of competent authority to sanction the writing off of a loss caused by deficiencies
and depreciation equivalent to their value”.
Administrator DMC (Central), during financial year 2015-16, failed to dispose
off 06 unserviceable vehicles worth Rs 1.050 million. Vehicles of various models
dumped in the workshop/store, in violation of above rule.
Audit is of the view that non-disposed-off unserviceable vehicles resulted into
loss to Government and weak financial management.
Deviation from prescribed rule resulted into weak internal controls.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends for fixing of responsibility on person (s) at fault for non-
auction of unserviceable vehicles.
[AIR Para: 11]

3.2.3.23 Irregular Payment to Legal Advisor - Rs 0.772 Million

According to Section(I) of Appendix 18-A of SFR Vol-I, "Means should be
devised to ensure that every Government servant realizes fully and clearly that he will be
held personally responsible for any loss sustained by Government through fraud or
negligence on his part, and that he will also be held personally responsible for any loss
arising from fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his own action or
culpable negligence”.
169
 Administrator, DMC Korangi, during financial year 2015-16, incurred
expenditure amounting to Rs 0.772 million, on account of payment made to legal advisor
without observing codal formalities, in violation of above rule. Detail is as under:
i. Details of cases
ii. Contracts Agreements
iii. Receipt Acknowledgment
Audit is of the view that payment made to legal advisor without observing codal
formalities resulted into irregular expenditure which constituted weak financial
management
Non-observance of prescribed rules was due to weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for irregular
expenditure, under intimation to audit.
[AIR Para: 8]

3.2.3.24 Improper System for Functioning and Issuance of Trade License

According to Section 60 (1) of Sindh Local Government Ordinance (SLGO
1979) as amended Section 96 (1) of Sindh Local Government Act 2013, “A council may
levy, in the prescribed manner all or any taxes, rates, tolls, and fees mentioned in
Schedule V”.
Further, as per Rule 23 of GFR Vol, “Every Government officer should realize
fully and clearly that he would be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will also be held
personally responsible for any loss arising from fraud or negligence on the part of any
other Government ornament officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
Administrators, DMCs West (Keamari Zone), (SITE Zone), (Baldia Zone) and
(Orangi Zone), during financial year 2015-16, issued trade licenses without maintaining
proper check, control and standard operating procedure, in violation of above rules.

170
 The following discrepancies were witnessed by audit:
i. Trade Licenses were issued without proper planning and standard operating
procedures.
ii. Trade Licenses were issued without proper survey, physical verification of
trade location
iii. Trade Licenses were issued without obtaining proper documentation from
traders and verification of documents. i.e. Trade Licenses were issued only
on payment of fees of trade licensee.
iv. Trade Licensees were issued without obtaining details of trades, business
from traders.
v. No polices were adopted to regulate the business of trade license.
vi. No polices were adopted for renewal of already issued trade license

Audit is of the view that trade licenses were issued without maintaining proper
check, control and standard operating procedure resulted into non-transparency in
functioning and issuance of trade license which constituted weak financial management.
Deviation from prescribed procedures and rules constituted weak internal
control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on officers/officials responsible for
issuance of trade license without maintaining proper check, control and standard
operating procedure, under intimation to audit.
[AIR Paras: 14, 23, 34, 45]

3.2.3.25 Non-Maintenance of Cash Book

According to Rule-65(1) of Local Government Accounts Manual, “After the
several subsidiary registers have been written up and completed in respect cash and
transfer items, the daily total of each register shall be carried out into the cash book”.
As per Rule 34 (b) of SFR Vol-I, “The cash book should be closed and balanced
each day and the balance of each column at the end of the month, should be verified with

171
balance of cash in hand and a certificate to that effect recorded in the cash book under the
signature of the Government servant responsible for the money”.
Administrator, DMC Korangi, failed to maintain Cash Book during financial
year 2015-16, in violation of above rules.
Audit is of the view that due to non-maintenance of cash book the authenticity
of expenditure cannot be verified which reflects weak financial management.
Deviation from prescribed rule was due to weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing responsibility for incurring expenditure without
maintenance of cash book. Besides, cash book be prepared and produced to audit for
verification.
[AIR Para: 2]

3.2.3.26 Unauthorized Appointment of 170 Contract Employees

According to Government of Sindh, Appointment, Promotion and Transfer
Rules 1974 (11), “Initial appointment to the post in BPS-3to 15 shall be made on the
recommendation of the Departmental Selection Committee after the vacancies in these
BPSs have been advertised in the newspaper. (16) Posts in BPS-1and 2 shall ordinarily be
filled on local basis”.
Further, according to Local Government Department letter vide No.
SOA/(LG)1(27)/2011 Dated: 6.6.2011, by SO Admn, In continuation to this department’s
letter of even number dated: 27.5.2011 and 28.5.2011, “I am directed to convey that no
appointment in any grade shall be made henceforth without consolidated advertisement
and fresh approval of Government. Approval, if any, earlier issued in this regard may be
treated cancelled/withdrawn. In view of the above, you are directed to strictly adhere to
the above instructions of competent authority. Any deviation from above will render the
defaulter(s) liable for disciplinary action”.

172
 Administrator, District Municipal Corporation, East, appointed 170 contract
employees in sanitation department, during financial year 2015-16, without going
through prescribed procedure/codal formalities, in violation of the above rules.
Audit is of the view that appointments made without going through prescribed
procedure constituted non-transparency in recruitment process and weak financial
management.
Deviation from prescribed rules on recruitments constituted weak internal
control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on unauthorized appointments
without following prescribed procedure, under intimation to audit.
[AIR Para: 12]

3.2.3.27 Un-authorized Use of Government Vehicles beyond Entitlement

According to GOS, S&GAD, Karachi, No.CTC(S&GAD)5(238)/97 Dated: 05-
04-1997, All officers in BPS 19 ad 20 like head of attached dept / Regional Head or
equivalent in autonomous bodies / corporations and Deputy Commissioners to use
1000cc locally manufactured car”.
Further, according to GOS, S&GAD, Karachi, No.CTC(S&GAD)5(238)/97
Dated: 05-04-1997, “All officers performing field duties in BPS:17 and 18 are entitled to
Government vehicles to use 800cc cars / Suzuki jeeps”.
Administrator, DMC Malir, during financial year 2015-16, allotted Government
Vehicles to officers beyond their entitlement, in violation of above rules. Detail is as
under:

Name of Engine
Sr # Designation BPS Reg # Vehicle Make Remarks
officer capacity
Not Municipal Toyota Corolla Beyond
1 19 GL6390 1300 cc
provided Commissioner XLI entitlement.
Not Director Do not have field
2 17 GL-5462 Suzuki Pickup 800 cc
provided Information duties.

173
 Audit is of the view that allotment of vehicles beyond/without entitlement
resulted into mis-utilization of Government vehicles and weak financial management.
Deviation from prescribed rule resulted into weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing responsibility on management on account of allotment
of vehicles beyond entitlement, under intimation to audit.
[AIR Para: 4]

174
 ISSUANCE OF TRADE LICENSE IN
DISTRICT MUNICIPAL CORPORATIONS,
KARACHI

175
1. KEY FINDINGS DURING STUDY

1.1 Non-Production of Record / Limitation of Scope

As per Article 170(2) of the Constitution of the Islamic Republic of Pakistan,
inserted vide Constitutional (Eighteenth Amendment) Act, 2010 w.e.f. April 20, 2010,
“The audit of accounts of the Federal and of the Provincial Government and the accounts
of any authority or body established by, or under the control of, the Federal or Provincial
Government shall be conducted by the Auditor General, who shall determine the nature
and extent of such audit”.

During course of special study, managements of concerned District Municipal

Corporations (DMCs) failed to provide complete requisite record/details to audit team.
Detail is as under:
Sr. Particulars of record/Details not Produced to Audit Remarks
DMC west ,
01 Complete Non-Production of record. central , Malir,
Korangi
Requisite record and details including Standard Operating Procedure
(SOP) for issuance and regulation of trade license, total number of trade Requisite
license issued, renewed, rejected, total targeted amount of recovery being Record/ Details
02 realized from issuance/renewal/fines, reasons for non-achievement of not Provided
targeted recoveries, Bank accounts including financial statements, areas (DMC East ,
of trade likeness included and areas not included with reasons, South)
expenditure incurred for issuance and function of trade license etc.

Only DMCs South and East had provided some record, while the remaining four
DMCs refused.

The non-production of record limited the scope of audit and curtailed / hampered
audit findings. Moreover, non-production of record despite pursuance by audit, raised
suspicion over transparency in functioning/issuance of trade license by District Municipal
Corporations (DMCs).
Non-Provision of record to statutory audit constituted serious act of commission
on the part of managements.

176
 Audit recommends fixing of responsibility on officers/official(s) at fault and
disciplinary action against concerned officers/official(s) may be initiated under intimation
to audit.

1.2 Improper System for Functioning and issuance of Trade License

As per GFR 10 Every officer incurring or authorizing expenditure from public

funds should be guided by high standards of financial propriety among the principles on
which emphasis is generally laid are the following.

(i) Every public officer is expected to exercise the same vigilance in respect of
expenditure incurred from public moneys as a person of ordinary prudence would
exercise in respect of expenditure of his own money.

Trade licenses were issued without ensuring the safety of citizens and businesses
like selling of chemicals, explosives or even eateries were operating without regulation /
inspection by concerned DMCs officials. The general state of affairs was appalling. The
DMCs staffs failed to regulate traders without the pre-requisite safety requirements as
prescribed by law.

The trade licenses were issued without proper survey and physical verification /
inspection of trade establishment. The DMCs issued trade license without even obtaining
the detail and nature of businesses. No site plans of business premises, medical
certificates of business staff and NOC from Chief Fire Officer for
dangerous/offensive/article trade were in existence on record.
Deviation from prescribed rules resulted into weak internal control.
Non-observance of prescribed procedure resulted into weak internal control
system prevails in the department.

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1.3 Variation in Fees / Rates / Fines in Issuance and Renewal of Trade
Licenses

As per GFR 10 Every officer incurring or authorizing expenditure from public

funds should be guided by high standards of financial propriety among the principles on
which emphasis is generally laid are the following.
(i) Every public officer is expected to exercise the same vigilance in respect of
expenditure incurred from public moneys as a person of ordinary prudence would
exercise in respect of expenditure of his own money.

The DMCs failed to collect trade license fee in accordance with the scheduled
rates.
Trade license were issued by payment of a paltry trade license fee. The renewal of
trade licenses was also done without following the standard operating procedure.

Further, it was also observed that even rates charged from a particular trade also
varied within District Municipal Corporation, East (Between two Zones i.e. Jamsheed
Town and Gulshan-e-Iqbal Town).
Deviation from prescribed rules resulted into weak internal control.
Non-observance of prescribed procedure resulted into weak internal control
system prevails in the department.

1.4 Non-conducting of Survey for Issuance and Functioning of Trade

Licenses
As per GFR 10 Every officer incurring or authorizing expenditure from public
funds should be guided by high standards of financial propriety among the principles on
which emphasis is generally laid are the following.
(i) Every public officer is expected to exercise the same vigilance in respect of
expenditure incurred from public moneys as a person of ordinary prudence would
exercise in respect of expenditure of his own money.

178
 The management of concerned DMCs had no data / record of traders operating in
their jurisdiction. District Municipal Corporations (DMCs) failed to conduct survey of
area to work out total number of traders operating in jurisdiction of each District
Municipal Corporation. The managements of DMC were even unaware of existence of
mega shopping plazas functioning in their jurisdiction.

The lackadaisical attitude of DMCs towards the registering and issuance of

licenses to existing and new business, traders was causing the expansion of informal
economy with mushroom growth of lucrative but unneeded clustering of business
activities e.g., general provision stores, puncher shops, barber shops, tea kiosks, pan stalls
etc. Moreover, the avoidance of registration was also causing the loss of huge revenues to
the Government.
Deviation from prescribed rules resulted into weak internal control.
Non-observance of prescribed procedure resulted into weak internal control
system prevails in the department.

1.5 Non-Reconciliation of Challans

As per section 100 of the Sindh Budget Manual, “The consolidated accounts of
the controlling officer have as pointed out in the paragraph 98, to be reconciled monthly
with the accounts of comptroller. The object of this procedure is to ensure the accuracy of
departmental control really effective and to prevent classification or other errors in
account”.

According to Rule-83 of Part-XIII of the Sindh District Government & Taluka

Town Municipal Administration (Budget) Rules 2002, (1) The controlling officers shall
reconcile his figures with the record maintained by the Accounts officer by the 10TH day
of the month following the month to which the statement relates. (2)In order to enable the
Head of offices concerned to verify whether the amounts shown as realized in the
statements have actually been realized and credited to the proper head of account, the
Accounts Officer concerned shall provide the Head of Offices with statements
confirming the actual amounts credited under the relevant receipt heads.

179
 Management also failed to produce the bank reconciliation statement in regard to
the revenue collected and deposited into the banks.

Audit is of view that due to non-reconciliation of collection/receipts resulted into

non-authentication of collection figure and weak financial management.

Non-observance of prescribed procedure resulted into weak internal control

system prevails in the department.

Audit recommends that collection may be reconciled the same with Treasury /
Finance Department and Local Fund Department, GoS, under intimation to audit.

180
 CHAPTER-IV
HYDERABAD DIVISION

181
4.1 HYDERABAD DIVISION
4.1.1 INTRODUCTION
Hyderabad Division consists of 09 Districts namely Hyderabad, Badin, Dadu,
Thatta, Matiari, Jamshoro, Sujawal, Tando Allah Yar and Tando Muhammad Khan. Each
Corporation / District Council / Municipal Committee / Town Committee in Hyderabad
Division is headed by an Administrator/ Municipal Commissioner /Chief Officer / Chief
Municipal Officer/ Town officer who carries out operations as per Sindh Local
Government Ordinance, 1979.
The functions of Municipal Corporation/Committees are as following:
1. Prepare spatial plans for the Town including plans for land use, zoning and
functions for which Municipal Corporation/Committeesis responsible.
2. Exercise control over land-use, land-subdivision, land development and zoning by
public and private sectors for any purpose, including agriculture, industry,
commerce markets, shopping and other employment centers, residential, recreation,
parks, entertainment, passenger and transport freight and transit stations.
3. Enforce all municipal laws, rules and bye-laws governing Municipal
Corporation/Committeesfunctioning.
4. Prepare budget, long term and annual municipal development programmes in
collaboration with the Union Councils.
5. Collect approved taxes, cesses, user fees, rates, rents, tolls, charges, fines and
penalties.
6. Manage properties, assets and funds vested in the Municipal
Corporation/Committees.
7. Develop and manage schemes, including site development in collaboration with
Union Administration.
8. Issue notice for committing any municipal offence by any person and initiate legal
proceedings for commission of such offence or failure to comply with the
directions contained in such notice.
9. Prosecute, sue and follow up criminal, civil and recovery proceedings against
violators of Municipal Laws in the courts of competent jurisdiction.
10. Maintain municipal records and archives.

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4.1.2 Comments on Budget and Accounts (Variance Analysis)
(Rupees in Million)
Excess (+)
S. No. Formation Particulars Budget Expenditure
Savings (-)
/ Revenue
Salary 1,723.336 1,464.836 (258.500)
Non-Salary 529.552 370.686 (158.866)
1 Hyderabad
Development 990.586 643.881 (346.705)
Revenue 1,997.527 799.011 (1,198.516)
Salary 587.951 499.758 (88.193)
Non-Salary 154.218 107.952 (46.265)
2 Badin
Development 584.289 379.788 (204.501)
Revenue 969.003 387.601 (581.402)
Salary 741.585 630.347 (111.238)
Non-Salary 150.090 105.063 (45.027)
3 Dadu
Development 494.302 321.296 (173.006)
Revenue 1,148.992 459.597 (689.395)
Salary 625.812 531.940 (93.872)
Non-Salary 104.302 73.011 (31.291)
4 Thatta
Development 312.906 203.389 (109.517)
Revenue 906.956 362.782 (544.173)
Salary 478.306 406.560 (71.746)
Non-Salary 92.015 64.411 (27.605)
5 Matiari
Development 353.557 229.812 (123.745)
Revenue 757.771 303.109 (454.663)
Salary 956.117 812.699 (143.418)
Non-Salary 158.406 110.884 (47.522)
6 Jamshoro
Development 577.804 375.572 (202.231)
Revenue 1,056.308 422.523 (633.785)
Salary 24.875 21.144 (3.731)
Non-Salary 4.146 2.902 (1.244)
7 Sujawal
Development 12.438 8.085 (4.353)
Revenue 452.678 181.071 (271.607)
Salary 569.721 484.263 (85.458)
Tando Non-Salary 94.953 66.467 (28.486)
8
Allahyar Development 284.860 185.159 (99.701)
Revenue 668.898 267.559 (401.339)
Salary 367.065 312.005 (55.060)
Tando
Non-Salary 61.178 42.824 (18.353)
9 Muhammad
Development 183.533 119.296 (64.236)
Khan
Revenue 1,223.096 489.238 (733.857)
Salary 6,074.768 5,163.552 (911.215)
Non-Salary 1,348.859 944.201 (404.658)
Development 3,794.274 2,466.278 (1,327.996)
Grand Total 10,198.089 6,895.382 (3,302.707)
Revenue 9,181.228 3,672.491 (5,508.737)

183
 Expenditure 2015-16

Original budget of Rs 10,198.089 million was allocated to District Councils,

Municipal Corporations and Town Committees of Hyderabad Division under various
grants. Variance analysis of the revised/final grant and actual expenditure for the
financial year 2015-16 for the audited entities depicted that there was non-utilization /
savings of Rs 3,302.707 million. This budget and expenditure exclude the figures of
entities not provided record for audit.

4.1.3 Brief Comments on the Status of Compliance with PAC

Directives
The audit reports pertaining to following years have been submitted to Governor
of Sindh. Detail of PAC meetings is given below:

Audit Year No. of Paras Status of PAC Meetings

2012-13 81 Nil
2013-14 39 Nil
2014-15 80 Nil
2015-16 47 Nil

As indicated in the above table, no PAC meeting was convened to discuss the
audit report of TMAs of Hyderabad Division.

184
4.2 AUDIT PARAS
4.2.1 Fraud/Embezzlement/Misappropriation
4.2.1.1 Doubtful Payments from Public Money - Rs 91.643 Million
According to Para-10 (iv) of GFR Volume–I, “public money should not be
utilized for the benefit of a particular person or section of community and also according
to rule all the claims must be supported with full detail and documents”.
Further, as per Section (I) of Appendix 18-A of SFR Vol-I, "Means should be
devised to ensure that every Government servant realizes fully and clearly that he will be
held personally responsible for any loss sustained by Government through fraud or
negligence on his part, and that he will also be held personally responsible for any loss
arising from fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his own action or
culpable negligence”.
Various formations of Hyderabad Division made payments of Rs 91.643
million, during financial years 2014-16, without proper details to authenticate the
veracity of the expenditure i.e. valid supporting vouchers, valid invoices, delivery
challans and entry in stock register/measurement books, in violation of above rules.
Details are provided at Annex-Hyd1.
Audit is of the view that dubious withdrawal of huge amount by management
resulted into illegal withdrawal of public funds.
Violation of laid down procedures was due to weak internal control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for illegal withdrawal of public
money besides, recovering the amount from person(s) at fault.
[AIR Paras: 3, 8, 8, 13, 6, 11, 8, 4, 16, 3+6+7, 7, 5, 6+9, 12, 14, 8, 14]

4.2.1.2 Embezzlement of Funds in Development Scheme - Rs 4.484 Million

According to Rule 2 (1) (q) (3) of SPPR 2010, “Fraudulent Practice: means any
act or omission, including a misrepresentation, that knowingly or recklessly misleads, or

185
attempts to mislead, a party to obtain a financial or other benefit or to avoid an
obligation;”
Further, according to Rule 2 (1) (d) of SPPR 2010, “Bid: means a tender, or
an offer by a person, consultant, firm, company or an organization expressing willingness
to undertake a specified task at a price, in response to an invitation by a Procuring
Agency;”
Further, according to Rule 45 of SPPR 2010, “Announcement of evaluation
reports - Procuring agencies shall announce the results of bid evaluation in the form of a
report giving reasons for acceptance or rejection of bids. The report shall be hoisted on
website of the Authority and that of the procuring agency if its website exists and
intimated to all the bidders at least seven (07) days prior to the award of contract.”
Administrator/Municipal Commissioner, Hyderabad Municipal Corporation,
during financial year 2015-16, incurred an expenditure amounting Rs 4,484 million,
against execution of schemes at Hazrat Ayesha Park at Latifabad No. 8, Hyderabad.
However, on physical verification of the site no signs of execution of development
scheme were noticed.
Audit is of the view that management made suspicious payments against
execution of said schemes.
Non-observance of prescribed rules and procedures was due to weak internal
control.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO failed to convene DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility on account of doubtful execution of
scheme, under intimation to audit.
[AIR Para: 15]

4.2.1.3 Doubtful Expenditure on POL - Rs 4.062 Million

According to Rule 2 (1) (q) (3) SPPR 2010, “Fraudulent Practice: means any act
or omission, including a misrepresentation, that knowingly or recklessly misleads, or
attempts to mislead, a party to obtain a financial or other benefit or to avoid an
obligation.”

186
 Following Offices of District Dadu, during financial year 2014-15, incurred an
expenditure on POL of Fire Brigade vehicles amounting to Rs 4.062 million but failed to
justify the expenditure by providing record of reported fire and emergency cases, in
violation of rules.
[Rupees in Million]
Sr. Name of formations Particulars Amount
1 CMO, Municipal Committee, Dadu Doubtful expenditure on POL of fire 0.973
brigade without reported fire/emergency
2 Municipal Committee Mehar, Dadu 3.089
cases
Total 4.062
Audit is of the view that expenditure on POL of Fire Brigade without reported
emergency cases resulted into misappropriation of public funds and weak financial
management.
Non-observance of diligence resulted into non-transparency in spending from
public account and weak internal control.
The matter was reported to the management during November, 2015 but they
did not respond to audit observation. The PAO failed to convene DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility on person(s) on account of
unjustified and doubtful expenditure on POL for fire brigade without reported
fire/emergency cases, under intimation to audit.
[AIR Paras: 19, 17]

4.2.1.4 Doubtful Works of Repair and Maintenance - Rs 3.168 Million

According to Rule 2 (1) (d) of SPPR 2010, “Bid: means a tender, or an offer by
a person, consultant, firm, company or an organization expressing willingness to
undertake a specified task at a price, in response to an invitation by a Procuring Agency;”
Further, according to Rule 45 of SPPR 2010, “Announcement of evaluation
reports - Procuring agencies shall announce the results of bid evaluation in the form of a
report giving reasons for acceptance or rejection of bids. The report shall be hoisted on
website of the Authority and that of the procuring agency if its website exists and
intimated to all the bidders at least seven (07) days prior to the award of contract.”

187
 HMC, Hyderabad, during financial year 2015-2016, incurred expenditure
amounting to Rs 3.168 million on Repair & Maintenance of vehicles on blank and
unsigned tender forms, with no comparative statements. Details are as under:
(Amount in Rupees)
Name of W.O No. Est.
Sr. Name of Work Bill Date Amount
Contractor and Date Amount
Repair and overhauling 10-09-15 260,925
M/S Kamran 67/
01. Master Green with back 448,350
Engineering 27-08-15 13-10-15 187,425
dalla/lift repair
Repair and overhauling - 404,395
M/S Anwar 64/
02. Vehicle No. Old Hino – 802,645
Engineering 27-08-15 13-10-15 398,250
1
Repair / maintenance
and overhauling of
M/S SBH 55/
03. engine Balarus Tractor 620,445 20-10-15 605,115
Enterprises 29-05-15
GS – 7449 with
complete accessories
Repair and Overhauling
M/S Sand 66/
04. Massy 290 Tractor No 662,600 03-09-15 662,600
Corporation 27-08-15
46
Repair and Overhauling M/S
65/
05. Vehicle No. NL – 02 Muhammad 649,702 - 649,702
27-08-15
Bellarus Tractor Adnan
TOTAL 3,168,412

Audit is of the view that management executed repair and maintenance of

vehicles unauthorizedly resulted into unauthorized payments.
Non-observance of prescribed rules and procedures was due to weak internal
control.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO failed to convene DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility on account of doubtful execution of
repair and maintenance without following proper procedures.
[AIR Para: 17]

188
4.2.2 Non-Production of Record
4.2.2.1 Non-Production of Record – Rs 605.472 Million
As per Section 14 (1) (b) of the Auditor General (Functions, Powers and Terms
and Conditions of Service) Ordinance, 2001, The Auditor-General shall, in connection
with the performance of his duties under this Ordinance, have authority to require that
any accounts, books, papers and other documents which deal with, or form, the basis of
or otherwise relevant to the transactions to which his duties in respect of audit extend,
shall be sent to such place as he may direct for his inspection.
Further, “Chief Secretary vide letter No.DO.NO.SO(C-II)/SGA&CD/1-73/2012
dated 25th October, 2013 duly endorsed by Secretary of LGD vide letter No.
SOA/(LG)LG/4/(77)2013, dated 21.11.2013 was pleased to direct to all Municipal
organizations / Local Councils for immediately providing record to audit, so that,
financial discipline may be restored to respective organizations. In case of failure to
provide record to audit by auditee organizations, the cases may be taken up under
disciplinary proceedings against officers concerned that may include suspension of
officers”.
Different formations of Hyderabad Division incurred an expenditure of
Rs 428.136 million but failed to provide record to audit, during financial years 2014-16,
in violation of the above rule and instructions. Details are provided at Annex-Hyd2.
Further, various formations of Hyderabad Division incurred expenditure
amounting to Rs 177.336 million, during financial years 2013-15, on purchase of POL for
official vehicles but did not produce Log Books, Vehicle Maintenance Record, History
Sheets and Petrol Account Registers, in violation of above rule. Details are provided at
Annex-Hyd2.
Audit is of the view that non-provision of record the authenticity of expenditure
cannot be ascertained by audit.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for non-
provision of record in accordance with rules and regulations.
[AIR Paras:1,19,1,1,1,1,1,1,1,9,1,1,1,5,30,1,1, 2,1,1,1, 40, 14, 18, 11, 08, 12, 13, 18, 17, 15, 11, 04, 9, 21,
04, 12, 05, 12, 16, 14, 10, 14, 09, 15, 2, 3, 8, 14]

189
4.2.3 Irregularity / Non-Compliance
A. Recovery, Targeted receipts/Outstanding dues
4.2.3.1 Non-Achievement of Targeted Receipts - Rs 151.919 Million
As per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer should
see that all sums due to Government are regularly received and checked against demands
and that they are paid into treasury claiming credit for so much paid into the treasury and
compare with the figures in the statements supplied by the comptroller”.
Further, as per Section 96 (1) of Sindh Local Government Act 2013, “A council
may levy, in the prescribed manner all or any taxes, rates, tolls, and fees mentioned in
Schedule V”.
Various formations of Hyderabad Division, during financial years 2015-16,
failed to recover the targeted receipts amounting to Rs 151.919 million, in violation of the
above rules. Details are provided at Annex-Hyd3.
Audit is of the view that management failed to take necessary steps and enforce
the prescribed procedures for achievement of targeted revenue.
Violation of prescribed rules and procedures was due to weak internal control.
The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the official(s) at fault.
[AIR Paras: 47,19,20,6,7,12,3,3,19,27,05,25,27,16,3,5,3,13, 3, 4, 15, 31, 24, 26]

4.2.3.2 Irregular Payment of Income Tax - Rs 96.248 Million

According to Section 165 (1) of the Income Tax Ordinance, 2001, “Statements. -
Every person collecting tax under Division II of this Part 9[or Chapter XII] or deducting
tax from a payment under Division III of this Part 10[or Chapter XII] shall, 11[ ] furnish
to the Commissioner a statement in the prescribed form setting out–”.
(a) the name and address of each person from whom tax has been collected
under Division II of this Part 1[or Chapter XII] or to whom payments have been made
from which tax has been deducted under Division III of this Part 2[or Chapter XII] in in
3[each quarter];

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 (b) the total amount of payments made to a person from which tax has been
deducted under Division III of this Part 4[or Chapter XII] in 5[each quarter];
(c) the total amount of tax collected from a person under Division II of this Part
6[or Chapter XII] or deducted from payments made to a person under Division III of this
Part 7[or Chapter XII] in 8[each quarter].
Various formations of Hyderabad Division, during financial years 2014-16,
made payment of Rs 96.248 million on account of income tax without preparation of
statement of deducted amount, in violation of above rule. Detail is as under:
[Amount in Rupees]
Sr. Name of Offices Para Amount
1 MC, K.N.Shah, District Dadu 2014-15 21 5,687,102
2 MC, Mehar, District Dadu 2014-15 23 1,000,000
3 MC, Thatta, District Thatta 2015-16 8 64,453,346
4 TC, Ghora Bari, District Thatta 2015-16 11 20,248,339
5 MC, Hala, District Matiari 2014-15 2 4,859,000
Total 96,247,787
Audit is of the view that management failed to observe the Government rules
and procedures, which reflects the absence of systematic control and financial in-
discipline.
Violation of prescribed rules and procedures was due to weak internal control
system.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends justification of payments and reconciliation with FBR, under
intimation to audit.
[AIR Paras: 21, 23, 8, 11, 2]

4.2.3.3 Non-Deduction of Sales Tax - Rs 64.869 Million

As per Rule 2 (3) of the Sales Tax Special Procedure (Withholding) Rules,
2007, “a withholding agent having free tax number (FTN) and falling under clause (a) (b)
and (c) of sub-rule (2) of Rule-1, shall on purchase of taxable goods from unregistered
persons, deduct sales tax at the applicable rate (17%) of the value of taxable supplies
made to him from the payment due to the supplier and unless otherwise specified in the

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contract between the buyer and the supplier, the amount of sales tax for the purpose of
this rule shall be worked out on the basis of gross value of taxable supply”.
Further, as per Part-B of second schedule annexed to Sindh Sales Tax on
services Act 2011, “Prescribed applicable rate of sales tax at 16% against services
provided or rendered by persons engaged in contractual execution of work or furnishing
supplies”.
Moreover, according to Sindh Finance Bill, 2014, “the rate of Sindh sales tax on
service reduced from 16% to 15%, w.e.f. 01-07-2014”.
Various formations of Hyderabad Division, during financial year 2015-16, paid
Rs 424.711 million, to different suppliers and contractors but failed to deduct sales tax
amounting to Rs 64.869 million, in violation of above rules. Detail is provided in
Annex-Hyd4.
Audit is of the view that Government sustained loss due to non-deduction of
sales tax resulting into weak financial management.
Non-observance of prescribed rules was due to weak internal control.
The matter was reported to the management during November-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for non-
deduction of sales tax, under intimation to audit.
[AIR Paras: 30, 22, 7, 7, 8, 10, 13, 14, 1, 2, 2, 9, 4, 2, 3, 15, 10, 6, 7, 2, 1, 3, 27, 2, 21, 6]

4.2.3.4 Non-Deposits of Income Tax into Treasury – Rs 46.862 Million

According to section 160 (chapter X, part V) of the Income Tax Ordinance
2001, “Any tax that has been collected or purported to be collected under division II of
this part or deducted or collected or purported to be deducted or collected under chapter
XII, shall be paid to the Commissioner by the person making the collection or deduction
within the time and manner as may be prescribed (i.e. within 7 days of deduction or
collection)”.
According to Rule 205 (3) of Income Tax Ordinance 2001, “A person who fails
to pay an amount of tax collected or deducted as required under section 160 on or before
the due date for payment shall be liable for additional tax at a rate equal to 9[KIBOR plus

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three per cent per quarter] on the amount unpaid computed for the period commencing on
the date the amount was required to be collected or deducted and ending on the date on
which it was paid to the Commissioner”.
Various formations of Hyderabad Division, during financial year 2015-16,
incurred expenditure on account of payment of salary, POL / Utilities Bills, and
deducted/collected income tax amounting to Rs 46.862 million but failed to deposit the
same into Regional Tax Office (Inland Revenue, FBR), in violation of above rules. Detail
is provided at Annex-Hyd5.
Audit is of the view that management failed to deposit income tax and
subsequent default surcharge into Government exchequer in due time which constituted
weak financial management.
Violation of prescribed rules was due to weak internal controls.
The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing responsibility on person(s) at fault. Besides, income
tax may be deposited into Government account, under intimation to audit.
[AIR Paras: 28, 4, 4, 3, 9]

4.2.3.5 Non-Recovery of Outstanding Dues - Rs 12.047 Million

As per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer
should see that all sums due to Government are regularly received and checked against
demands and that they are paid into treasury claiming credit for so much paid into the
treasury and compare with the figures in the statements supplied by the comptroller”.
Various formations of Hyderabad Division, during financial year 2014-15, failed
to recover outstanding rent of shops and fees amounting to Rs 12.047 million from
defaulters, in violation of above rules. Details are provided at Annex-Hyd6.
Audit is of the view that due to inaction by the management, they could not
recover the outstanding revenue that also contributed towards poor financial health of
these entities.
Failure to implement prescribed rules resulted into non-recovery of Government
Revenue that is a reflection of weak internal control.

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 The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for non-
recovery of longstanding dues. Besides, amount be recovered without further delay,
under intimation to audit.
[AIR Paras: 33, 17, 17, 5, 11, 14, 3, 28, 21]

4.2.3.6 Loss Due to Non-Revision of Rent - Rs 5.355 Million

As per Rule 9(1) of Sindh Rental Premises Ordinance 1979, “where the fair rent
of any premises has been fixed, no further increase thereof shall be effected unless a
period of three years has elapsed from the date of such fixation or commencement of this
ordinance whichever is later”.
Further, as per Rule 9(2) ibid, “the increase is allowed @ 10% per annum on the
existing rent”.
Various formations of Hyderabad Division, failed to revise rent of shops allotted
to tenants since 2000-2001, in violation of the above rules, resulting into loss to public
revenue of Rs 5.355 million till 2015-16. Details are as under:
(Rupees in Million)
Sr. Name of Offices AIR Para Amount
1 Chief Municipal Officer, Matili, District Badin 14 3.067
2 Town Committee, Shaheed Fazil Rahu (Golarchi) District Badin 6 1.328
3 Administrator/CMO, Municipal Committee Tando Allahyar 2 0.96
Total 5.355
Audit is of the view that non-revision of rent as per provisions of rental act, has
resulted into loss to public revenue.
Non-compliance of prescribed rules resulted into less realization of public
revenue and due to weak internal controls.
The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for
non-enhancement of rent, besides, same be revised as per provisions of rental act.
[AIR Paras: 14, 6, 2]

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4.2.3.7 Non-Deduction of Income Tax – Rs 4.015 Million
As per Section of 153 (1) of the Income Tax Ordinance, 2001, “Every
prescribed person making a payment in full or part including a payment by way of
advance to a resident person, for the sale of goods, for the rendering of or providing of
services, on the execution of a contract, other than a contract for the sale of goods or the
rendering of or providing services, shall, at the time of making the payment”.
Further, as per Clause-3 of Contractual Agreement for “various auctions”
executed on between Municipal Committee Qasimabad and Auctioneer/ Contractors,
“that is under Section 236A of Income Tax @ 10% of contractual amount shall be paid
by the contractor before the work order to the Income Tax Authorities.”
Following Offices of Hyderabad Division, during financial years 2014-16,
incurred expenditure of Rs 39.760 million, but failed to deduct income tax of Rs 4.015
million, in violation of above rules.
[Amount in Rupees]
Sr. Name of Offices Amount
1 CMO, MC, Qasimabad 2,387,410
2 CMO, MC, Kotri, District Jamshoro 30,000
3 CMO, MC, Kotri, District Jamshoro 215,202
4 TO, TC, Tando Ghulam Hyder, District TMK 181,991
5 CMO, MC, Dadu, District Dadu 32,358
6 CODC, District Dadu 53,165
7 CODC, District Dadu 104,318
8 CMO, MC, K.N.S, District Dadu 219,746
9 CMO, MC, K.N.S, District Dadu 13,588
10 CMO, MC, Mehar, , District Dadu 22,101
11 CMO, MC, Mehar, District Dadu 35,975
12 TO, TC, Johi, District Dadu 15,372
13 CMO, MC, Hala, District Matiari 66,758
14 TO, TC, New Saeedabad, District Matiari 74,004
15 CMO, MC, Hala, District Matiari 161,780
16 CMO, MC, Hala, District Matiari 401,060
Total 4,014,828

Audit is of the view that due to non-deduction of income tax Government

sustained loss of revenue.
Non-observance of prescribed rules and procedures was due to weak internal
controls.

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 The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends recovery of income tax and surcharge from defaulters and
same be deposited into Government treasury, under intimation to audit.
[AIR Paras: 8, 2, 3, 16, 24, 1, 4, 14, 23, 14, 22, 12, 11, 19]

4.2.3.8 Non-Deductions from Pay of Staff – Rs 2.198 Million

As per Government of Pakistan Finance Division (Regulations Wing) Office
Memorandum No.F.1(5)-Reg.7/87-482 dated 12th August, 2008 of Uniform rates of
subscription towards General Provident Fund, “There shall be no option to postpone the
subscription to above fund”.
Further, as per Rule 82 of the Sindh Local Councils (Accounts) Rules, 1983,
“Only the following classes of recoveries shall be made by deduction from pay bills: -
iv. Recoveries on account of Provident Fund subscriptions;
vi. Income tax;
vii. Benevolent Fund and
ix. Pension Contribution”.
Different offices of Hyderabad Division, during financial year 2015-16, failed to
recover an amount of Rs 2.198 million on account of Benevolent Fund, General
Provident Fund and Group Insurance from staff, in violation of the above rules. Detail is
as under:
(Amount in Rupees)
Benevolent Provident
Sr. Formation Para Months G .I Amount
Fund Fund
1. MC, Kotri 13 2015-16 4,206 20,876 5,808 370,680
2. TC, Manjhand 6 2015-16 8,294 48,980 16,470 884,928
3. TC, Sehwan Sharif 14 2015-16 3,028 12,467 3,669 233,280
4. TC, Thana Bula Khan 12 2015-16 9,669 39,028 10,428 709,500
Total 25,197 121,351 36,375 2,198,388
Audit is of the view that non-deduction of Benevolent Fund, General Provident
Fund and Group Insurance from pay of Staff resulted into weak financial management.
Violation of prescribed rules was due to weak internal control system.

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 The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for non-deduction of
Benevolent Fund, General Provident Fund and Group Insurance from pay of staff.
Besides, initiate recoveries of the same from staff, under intimation to audit.
[AIR Paras: 13, 6, 14, 12]

4.2.3.9 Overpayment On Account of LPR and Daily Wages

Rs 1.816 Million
According to Rule-16 of Revised Leave Rules 1980, “Leave preparatory to
retirement. (1) The maximum period up to which a civil servant may be granted leave
preparatory to retirement shall be three hundred and sixty-five days. (2) Such leave may
be taken, subject to availability, either on full pay, or partly on full pay and partly on half
pay, or entirely on half pay, at the discretion of the civil servant”.
According to SRO.11(KE)/2013 Dated: 18th February, 2013, amendment shall
be made in the Revised Rules, 1980 and shall be deemed to have been so made from first
day of July, 2012 namely in the said Rules, in Rule 19, Sub-Rule (1),, “for the words
“one hundred and eighty”, the words “three hundred and sixty-five” shall be substituted”.
Administrator, Town Committee, Bulri Shah Karim and Matiari, during
financial year 2015-16, incurred an excess expenditure of Rs 1.816 million on account of
LPR and daily wages of various officials, in violation of rules. Detail is as under:
(Rupees in Million)
Sr. Formation Particulars Amount
TO, TC, Bulri Shah Karim, District Encashment of leave preparatory to
1 0.307
T.M. Khan retirement
Overpayment of salaries to daily wage
2 TO, TC, Matiari District Matiari 1.590
staff
Total 1.897
Audit is of the view that excess payment of leave preparatory to retirement and
wages resulted into irregular payments and weak financial management.
Non-observance of prescribed rules resulted into weak internal control system.

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 The matter was reported to the management during October-December, 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of overpayment(s).
Besides, same be recovered without further delay, under intimation to audit.
[AIR Paras: 16, 18]

4.2.3.10 Recovery of Special Conveyance Allowance from Chief Fire Officer

Rs 0.864 Million
According to Rule 13.5 of DDO handbook, “No conveyance allowance is
allowed to the employees, who are entitled to draw the same due to their posting in big
cities, while on leave of any kind, except casual leave.”
Further, according to letter No.F.1 (1) Imp/2008 dated 30-06-2008 (7) (b),
“Conveyance allowance shall be admissible to officers who are not sanctioned official
vehicle”.
Administrator, Hyderabad Municipal Corporation (HMC), Sub-division
Latifabad allowed “Special Conveyance Allowance” to Chief Fire Officer of Sub-
division Latifabad by office order ADM/TMA/(L)/82/2011 Dated 23-05-2011 with effect
from July 2010,. Detail is as under:
(Amount in Rupees)
Special CA Total Period
Name of Scheme Desig./BS Amount Remark
Amount Allowed
Since July 2010 to Special CA
Muhammad Younus Chief Fire
12,000 June 2016 864,000 allowed since
Qureshi Officer
(Total 72 months) July 2010

Audit is of the view that undue favour was granted to employee against
Government rules resulting into weak financial management.
Deviation from prescribed rules and procedures resulted into weak internal
control system.
The matter was reported to the management during November, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on account of unjustified payment.
Besides, same be recovered under intimation to audit.
[AIR Para: 34]

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B. Violation of Rules

4.2.3.11 Non-Reconciliation of Electricity Dues - Rs 5,687.176 Million

As per Notification No. DLG/93/2013 Dated: 5-9-2013 issued from Directorate
of Local Government Department vide Para Nos.:-
 Electricity may not be consumed without meters;
 The reading of meters may be compared with bills being issued from electric
company, in case of any difference correspondence may be carried out with
Electric Company;
 Reading of all Connections may be noted on daily basis;
 A cell may be established in every council especially in Engineering wing;
and
 No Reconciliation form may be signed without proper verification by
Assistant Engineer / Engineer and Municipal Commissioner, Chief Officer,
Town Officer etc. as the case may be”.
Further, According to Finance Department, GoS letter No. FD/CW&M-I)(26)
91-92(P.T.II) dated24-6-1993, “all charges incurred must be paid at once and under no
circumstances may be allowed to stand over to be paid from the grant of subsequent
year”.
Different formations of Hyderabad Division, during financial year 2015-16,
failed to reconcile electricity dues of Rs 5,687.176 million with HESCO and created huge
liabilities, in violation of above rules. Detail is provided at Annex-Hyd7.
Audit is of the view that non-reconciliation of electricity dues created huge
liabilities, besides loss of public revenue which constituted weak financial management.
Deviation from prescribed rule was due to weak internal controls.
The matter was reported to the management during October-December, 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for non-
reconciliation of electricity dues with HESCO and creation of liabilities, under intimation
to audit.
[AIR Paras: 8, 10, 6, 4, 3]

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4.2.3.12 Unauthorized Award of Works - Rs 1,306.492 Million
As per SPPRA Notification No.Dir (A&F)/SPPRA/1-3(GEN)/13-14/087 dated
03-07-2013 “IDs of the NIT/EOI are released after receipt of the Bid Evaluation Report
in terms of Rule-45 of SPP Rules, 2010.
2. SPPRA will release ‘SPPRA-ID’ to the Procuring Agencies (PAs), once PAs
submit the following documents, complete in all respect, as required under the rules: -
i. Annual Procurement Plan as required under Rule-11 of SPPRA Rules, 2010;
ii. Notice Inviting Tender, Expression of Interest (EOI) and Pre-Qualification
Notice (Requirement of Rule 17);
iii. Bid Evaluation Reports (Prescribed by Rule 45);
iv. Contract Evaluation Form along with Letter of Award, Form of Contract
(Agreement) and Bill of Quantities (Requirement of Rule 50); and
v. Integrity Pact (where applicable) (Requirement of Rule 89).
Further, as per Rule 10 of SPPRA 2010, “The procuring agency shall,
immediately upon award of contract, make the evaluation report of the bid, and the
contract agreement to public through hoisting on the Authority’s website as well as on
procuring agency’s website, if the procuring agency has such a website.”
Following Offices of Hyderabad Division, during financial years 2014-16,
uploaded/posted their tenders on SPPRA website. Due to certain deficiencies the SPPRA
withheld the IDs of each such tender. The managements were required to remove the
deficiencies and to get ID release in each case before proceeding further. However, the
managements awarded the works for Rs 1,306.492 million, in respect of the tenders
against which SPPRA did not release the IDs. Further, bid evaluation reports and NITs on
the SPPRA website did not hoist, in violation of above rules.
[Amount in Rupees]
Sr. Name of offices Para Amount
1 TO, Town Committee, Sehwan Sharif 4 324,000,000
2 Municipal Committee Badin, District Badin 10 158,200,000
3 TO, Town Committee, Talhar, Badin 4 193,394,600
4 TO, Town Committee, Tando Bago, Badin 1 29,886,400
5 Town Officer, Town Committee, Bulri Shah Karim 3 5,800,000
6 Town Officer, Town Committee, Tando Ghulam Hyder 2 2,530,581
7 Town Officer, Town Committee, Juhi 6 12,100,000
8 CMO, Municipal Committee, Badin 17 44,900,000
9 Town Officer, Town Committee, Talhar 8 193,394,600
10 Town Office, Town Committee, Jati - 65,030,000

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 [Amount in Rupees]
Sr. Name of offices Para Amount
11 Town Committee, Sehwan Sharif, District Jamshoro 8 180,000,000
Town Committee Bulri Shah Karim, District Tando
12 5 78,757,000
Muhammad Khan
13 Town Committee Jhando Mari, District Tando Allahyar 19 18,499,195
Total 1,306,492,376
Audit is of the view that work was awarded without release of withheld tender
IDs, without uploading/hoisting of minutes of bids, on the SPPRA website. The violation
of prescribed rules has rendered unauthorized award of contract.
Violation from prescribed rule was due to weak internal controls and financial
management.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for award of work
in withheld NIT and without issuing and hoisting minutes of opening of bids on SPPRA.
[AIR Paras: 04, 10, 07, 01, 3, 2, 6, 17, 8, 2, 8, 5, 19]

4.2.3.13 Irregular Execution of Work without PC-I and Technical Sanction

Rs 165.685 Million
According to Planning Commission Manual Para 1.52, “A separate PC-I form
for the small development projects costing upto Rs 1.00 million (non-recurring) should
be used in respect of all the sectors, instead of comprehensive PC-I form for each sector.”
Further, According to SPPRA’s Guidelines Section 2.21 Pre-requisite
conditions: Procuring Agency/ Committee shall not invite bids for development works, in
violation of above. Audit observed that following conditions are fulfilled:
(i) Approval of PC-I/PC-II from Competent Forum;
(ii) Issuance of Administrative Approval (A.A) for development schemes;
(iii) Technical Sanction (TS) of a detailed estimate is obtained;
(iv) Funds are either released or anticipated to be released before award of contract.
Different formations of Hyderabad Division, during financial years 2014-16,
executed development schemes costing Rs 165.685 million without the following
conditions:

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 1. Preparation of PC-I
2. Obtaining approval from CDWP being the competent forum
3. Acquiring Technical Sanction, in violation of the above rules.
[Amount in Rupees]
Sr. Name of Offices Amount
1. Administrator/CMO, Municipal Committee Qasimabad[AIR Para: 4] 99,965,174
2. Administrator/CMO, Municipal Committee Tando Jam[AIR Para: 2] 56,460,000
3. Administrator/TO, Thana Bula Khan [AIR Para: 4] 3,234,215
4. Administrator/CMO, Municipal Committee Tando Allahyar [AIR Para: 10] 2,459,000
5. Administrator/TO, Jhando Mari [AIR Para: 13] 3,566,218
Total 165,684,607
Audit is of the view that award of development work without preparation and
approval of PC-I constituted flagrant violation of rules and procedures.
Violation from prescribed rule was due to weak internal controls and defective
oversight mechanism being practiced by Planning & Development Department.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for irregular award
and execution of works without PC-I.
[AIR Paras: 4, 2, 4, 10, 13]

4.2.3.14 Unauthorized Execution of Work without Administrative Approval

Rs 91.577 Million
According to Para 26(i) of SLG (Local Fund Budget) Rules 2001, “No original
work shall be included in the estimate unless such work has been administratively
approved by the competent authority.”
Further, as per Serial 2.22 of SPPRA Guidelines / Regulations for Procurement
of Works 2010, “PC-I/II of schemes/projects prepared by the administrative department
is required to be placed before the Development Working Party /committee according to
the cost /competency of the forum as enumerate below:
Sr. Competent Forum Cost of Scheme Up to
1 District Development Working Committee (DDWC) 20 million
2 Departmental Development Working Party (DDWP) 40 million
3 Provincial Development Working Party (PDWP) 50 million
4 Central Development Working Party (CDWP) One Billion
Executive Committee of the National Economic Council (ECNEC) after
5 Above One Billion
Clearance from CDWP

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 Administrators, Town Committee, New Saeedabad and Jati, during financial
years 2014-16, executed development schemes costing Rs 91.577 million without
obtaining administrative approval from competent forum, in violation of the above rules.
Detail is as under:
[Rupees in Million]
Estimated AA
Sr. Name of Offices Para Year
Amount Amount
1. Town Committee, New Saeedabad, District Matiari, 29 2014-15 22.547 22.547
2. Town Committee, Jati, District Sujawal 01 2014-15 69.030 64.500
Total 91.577 87.047

Audit is of the view that management failed to obtain Administrative Approval

of schemes resulting into unauthorized execution of schemes.
Violation of mechanism set forth by the Government resulting into weak
internal controls.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault.
[AIR Paras: 29, 1]

4.2.3.15 Unjustified Payment to Contractor without Check measurement

Rs 65.134 Million
According to the Article 5 of Agreement made of 31st day of October 2013
between HMC and M/S Al-Khalid Agencies for waste management, “the first party shall
make payments to the second party as per the following approved rates:
Garbage @ Rs. 690 per ton
Debris/Construction Material @ Rs. 400 per ton
Consumption of Diesel @ 3 Ltr per ton
Distance of landfill site from sub-division Latifabad - 23Kms
According to the Clause 2.1 of Agreement made of 14th day of January 2015
between HMC and M/S Al-Khalid Agencies for waste management, “Contract Sum”
Monthly Rs. 5,400,000
Yearly Rs. 64,800,000 (Sixty four million and eight hundred thousand only)
Yearly Increment 10%

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 Hyderabad Municipal Corporation (HMC), Sub-division Latifabad, during
financial year 2015-16, awarded contract for Lifting and Transportation of Solid waste to
M/S Al-Khalid Agencies in November 2013. It was agreed that management will pay
Rs 690/- per ton (Article 5) for lifting the garbage from the sub division Latifabad. The
agreement was renewed in February 2015 and the condition of payment method was
altered to lump sum monthly payments without measuring the quantum of services
rendered. Furthermore, it was revealed from payment bills that the number of trips varied
on monthly basis but there was no change in the payment and fixed monthly amount of
Rs 5,400,000 paid throughout the year.
Audit is of the view that alteration in condition of payment of contract without
inviting fresh tender was unjustified, which made ambiguity in fairness.
Deviation from prescribed procedures resulted into non-transparency in
expenditure from public funds and weak internal control.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault and initiating
inquiry to unveil factual position, under intimation to audit.
[AIR Para: 03]

4.2.3.16 Tenders Called before Approval of Estimates - Rs 59.552 Million

According to Section 2.10 (1) and (3) of SPPRA Guidelines, “Commencement
of work in anticipation of detailed estimates of the complete project: For each such work
or component part there must be a fully prepared detailed estimate and, in the
administrative approval as a whole, there must be a clear and specific amount
corresponding to the work or component part in question. The sanctioning authority must
be satisfied, before according sanction, that the amount of technical sanction for the
whole project is not likely to exceed the amount of the administrative approval and then
work or component part in the question can be appropriately commenced without
affecting, or being affected by, any other part of the project, financially or otherwise.
Further, according to Rule 2 (1) (q) (3) of SPPR 2010, “Fraudulent Practice:
means any act or omission, including a misrepresentation, that knowingly or recklessly
misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid
an obligation;”

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 Various formations of Hyderabad Division, during financial years 2014-16,
incurred expenditure on development schemes amounting to Rs 59.552 million, however,
the estimates were found without names of schemes and other details as per schedule of
items. Subsequently on these incomplete estimates, technical sanctions were endorsed by
the Director General Rural Development Sindh, in violation of above rule. Detail is as
under:
[Amount in Rupees]
Sr. Formation Para Amount
1. HMC, Hyderabad 8 16,900,000
2. Town Committee, Mirpur Bathoro, District Sujawal 3 22,117,500
3. Town Committee, Sujawal, District Sujawal 2 20,534,000
Total 59,551,500

Violation of the prescribed rules resulted in non-transparent utilization of public

money and weak financial management.
Deviation from prescribed procedures resulted into non-transparency in
expenditure from public funds and weak internal control.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault, under
intimation to audit.
[AIR Para: 3]

4.2.3.17 Unauthorized Payments made During Ban Period

Rs 56.748 Million
According to letter issued by LGD vide No.SOI/LG/MISC/10-7/2013 dated:
30-01-2014 on the subject Ban on payment(s) of Development works on quotation basis,
state that, “I am directed to refer to the subject noted above and to inform that the
honorable Minister to LGD has been pleased to impose ban on payments of all types of
expenditure excluding salary and pension components in all local councils and other sub
ordinate offices of LGD. No other payment shall be made till issuance of such orders/
instructions by the competent authority.”
Further, according to Letter No.SOA/LG/4(820)/2013 Dated 29-04-2013, Local
Government Department, GoS, “It has been observed that in past, the sanctity of the

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works carried out on quotation basis has not been reliable. Therefore, for the maintenance
of financial discipline, you are advised to avoid from carrying out the works through
quotations except it is unavoidable”.
Following offices of Hyderabad Division incurred an expenditure of Rs 56.748
million, during financial years 2014-16, on account of development works through
Quotations during ban on such payments, in violation of above rules.
[Amount in Rupees]
Sr. Name of Offices Amount
1. Administrator, HMC, Hyderabad 13,817,301
2. Administrator, Municipal Committee, Tando Jam 4,591,198
3. Administrator, Municipal Committee, Matiari 6,668,811
4. Administrator, Town Committee, New Saeedabad 3,735,970
5. Chief Officer, District Council, Sujawal 3,337,999
6. Administrator, Town Committee, Jati, District Sujawal 24,596,554
7. Total 56,747,833
Audit is of the view that development expenditure through quotations during the
ban period resulted into failure of management to abide by instructions/orders issued by
the competent authority and weak administrative management.
Non-observance of prescribed rules was due to weak internal control.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing responsibility on account of failure of management to
abide by the instructions/orders of competent authority.
[AIR Paras: 6, 7, 3, 7, 5, 1, 3]

4.2.3.18 Award of Work without Approval of Bid Evaluation Committee

Rs 56.672 Million
According to Rule 7 of SPPRA 2010, “The procuring agency shall, with
approval of its Head of the Department, Constitute as many procuring committees, as it
deems fit, each comprising odd number of persons and headed by the gazetted officer not
below the rank of BPS-18, or if not available, the officer of the highest grade, and shall
ensure that at least one third of the members of a procurement committee are from the
agencies or departments other than the procuring agency”. Further, as per Rule-8 ibid,
“Procurement committee(s) shall be responsible for (1) Preparing bidding documents; (2)
Carrying out technical as well as financial evaluation of the bids; (3) Preparing evaluation
206
report as provided in Rule 45; (4) Making recommendations for the award of contract to
the competent authority; and (5) perform any other function ancillary and incidental to
the above.”
Following offices of Hyderabad Division, during financial years 2013-15
awarded development schemes costing Rs 56.672 million, without constitution and
approval of bid evaluating committee, in violation of above rule.
[Amount in Rupees]
Sr. Name of Offices Para Year Amount
1. Town Committee, Juhi 5 2014-15 30,125,406
2. Town Committee, New Saeedabad 1 2014-15 22,547,340
3. Town Committee, Jati District Sujawal 5 2014-15 4,000,000
Total 56,672,746

Audit is of the view that award of works without constitution bid evaluating
committee resulted into unauthorized and unjustified award of work and weak financial
management.
Non-observance of rules resulted into misuse of power and weak internal
control.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing responsibility on management for non-constitution of
bid evaluation committee, under intimation to audit.
[AIR Paras: 5, 1, 5]

4.2.3.19 Award of Works without Tender - Rs 54.671 Million

As per Rule-17(1) of SPPRA Rules 2010, “Procurements over one hundred
thousand rupees and up to one million rupees shall be advertised by timely notifications
on the Authority’s website and in print media in the manner and format prescribed in
these rules”.
Further, as per Rules (11)(1), ibid, “All procuring agencies shall devise a
mechanism for planning in detail for all proposed procurements, determining the
requirement of the procuring agency, within its available resources, and prepare an
annual or a longer term rolling plan, detailing the procurement methods applicable for

207
specific procurements (12)(1) all proposed procurements for each financial year and shall
proceed accordingly without any splitting or regrouping”.
Various formations of Hyderabad Division, during financial years 2014-16,
incurred Rs 54.671 million without calling tender and by splitting to avoid tender, in
violation of above rules. Details are provided at Annex-Hyd8.
Audit is of the view that managements did not invite tenders in award of
contracts and Government was deprived of most economical rates.
Violation from prescribed rules resulted into unauthorized expenditure and weak
internal controls.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements on account of
procurements/execution of works without tenders and by splitting.
[AIR Paras:5,9,12,5, 6+7,10,9,14,7+13,10+11,6,11,6+7,12,5,6,13]

4.2.3.20 Wasteful Expenditure on Outsourcing of Sanitation Work

Rs 43.142 Million
As per Rule No.10 (a) of the Sindh Local Councils (Accounts) Rules, 1983, “the
same vigilance shall be exercised in respect of expenditure from the Local Fund as a
person of ordinary prudence would exercise in respect of his own money”.
Further, according to Rule-88 of SFR Vol-I, “every Government Officer is
expected to exercise same vigilance in respect of expenditure incurred from public
money, as a person of ordinary prudence would exercise in respect of expenditure of his
own money”.
Following formations of Hyderabad Division, during financial years 2014-16,
incurred expenditure on the salaries of sanitation staff, during year, but failed to utilize
their services, as the sanitation work regarding “Lifting of Garbage, Desilting of Nallahs
etc.” was outsourced to contractors and payment of Rs 43.142 was made on this account
during the year. Detail is as under:

208
 (Amount in Rupees)
Sr. Formation Amount
1 Administrator, Municipal Committee, Tando Jam, District Hyderabad 16,360,000
2 Administrator, Municipal Committee, Mehar, District Dadu 16,170,947
3 Administrator, Town Committee, Shaheed Fazil Rahu, District Badin 2,936,396
4 Administrator, Town Committee, Tando Bago, District Badin 6,644,656
5 Administrator, Town Committee, Jhando Mari, District Tando Allahyar 1,029,860
Total 43,141,859
Audit is of the view that management failed to utilize services of sanitary
workers, resultantly public funds were wasted on outsourcing of sanitation work.
Non-observing of prescribed procedure was due to weak internal control system.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements on account of
non-utilization of services of staff and wastage of public funds through outsourcing.
[AIR Paras: 13, 6, 8, 5, 9]

4.2.3.21 Execution of Ten Schemes on Identical Estimate without Specifying

Exact Location – Rs 40.050 Million
According to serial 11.2.1 of Regulations for Procurement of Works issued by
SPPRA, “Documents and Data: - Detailed estimate to be sanctioned by competent
authority requires relevant information to be attached in form of data, documents,
detailed measurements worked out from drawings and cost abstract of items based on the
specifications and rates provided in CSR or rate analysis prepared on market rates.
Documents and data attached depend on the nature of project/scheme and comprise the
following: -
(i) Lay out/site and location plan/index map showing the alignment of
road/lines of main and distributary piping;
According to Para 23 of GFR Vol-I, “Every Government officer should realize
fully and clearly that he will be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will be also be held
personally responsible for any loss arising from fraud or negligence on the part of any
other Government officer to the extent to which it may be shown that contribution to the
loss by his own action or negligence”.

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 Administrator/CMO, Municipal Committee (Defunct Hyderabad Rural) Tando
Jam, during financial year 2015-16, prepared identical estimates for ten different schemes
with estimated cost of Rs 40.050 million, without relevant information in form of data,
documents, detailed measurements worked out from drawings and cost abstract of items
based on the specifications and rates provided in CSR or rate analysis prepared on market
rates, in violation of above rules.
Audit is of the view that management executed schemes without details and
exact location resulting into weak financial management. Moreover, chances of
misappropriation cannot be ruled out.
Deviation from prescribed rules was due to weak internal controls.
The matter was reported to the management during December, 2016 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing responsibility on person (s) at fault.
[AIR Para: 6]

4.2.3.22 Irregular Award of Work to Unregistered Contractors

Rs 37.329 Million
As per Section 24(1) of Sindh Sales Tax on Services Act 2011, “Registration
will be required for all persons who: (a) are residents; (b) provide any of the services
listed in the Second Schedule from their registered office or place of business in Sindh”.
Various formations of Hyderabad Division, during financial years 2014-16
awarded various works amounting to Rs 37.329 million, to contractors who were not
registered with Sindh Revenue Board, in violation of above rule.
[Amount in Rupees]
Sr. Name of Offices Amount
1. Town Committee, Ghora Bari, District Sujawal 22,246,206
2. Municipal Committee, Tando Allahyar, District Tando Allahyar 5,500,000
3. Town Committee, Jhando Mari, District Tando Allahyar 4,759,576
4. Municipal Committee, TBK District Jamshoro 4,824,000
Total 37,329,782
Audit is of the view that management awarded contracts to unregistered
contractors resulting into undue favour and weak financial management.
Violation of prescribed procedure was due to weak internal control.

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 The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for awarding work to
contractors not registered with SRB.
[AIR Paras: 4, 13, 16, 5, 4]

4.2.3.23 Non–Transparent Procurement in Violation of SPPRA Rules

Rs 35.888 Million
According Rule 4 of SPPRA 2010, “Principles of Procurements – While
procuring goods, works or services, procuring agencies shall ensure that procurements
are conducted in a fair and transparent manner and the object of procurement brings value
for money to the agency and the procurement process is efficient and economical.”
Town Officer, Town Committee, Mirpur Bathoro, District Sujawal, during
financial years 2014-16, invited NIT on 1st February 2015 for various development
schemes costing Rs 35.888 million without following SPPRA Rules. Detail is as under:
Following discrepancies were also observed:
i. Valid Procurement committee was not constituted (all members were
found of TC Officers)
ii. Procurement plan was not prepared (Locations were not identified in NIT)
iii. Bid Evaluation Reports were not prepared and submitted to the authority.
iv. Minutes of Bid opening were not found in record.
v. Integrity Pact was not executed for works exceeding 10 million.
vi. NIT was published in only one newspaper namely Jeejal (not found
widely circulated).
[Amount in Rupees]
Sr. Formation Para Amount
1. Town Officer, Town Committee, Mirpur Bathoro, District Sujawal 2 32,100,000
2. Town Officer, Town Committee, Mirpur Bathoro, District Sujawal 10 3,788,102
Total 35,888,102

Audit is of the view that management failed to comply SPPRA Rules thus
procurements were not made in fair and transparent manner and Government failed to
achieve most economical rates.
Violation of prescribed procedure was due to weak internal control system.

211
 The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault, under
intimation to audit.
[AIR Paras: 2, 10]

4.2.3.24 Hiring of Staff on Daily Wages without Approval-Rs 35.148 Million

As per GoS, Finance Department office letter No.SOA-II-55/62-1701/64 Dated
20th December 1964, “Powers of creation of temporary posts have been delegated to the
Administrative Department etc. under the West Pakistan Delegation of Powers under the
Financial Rules and the Powers of Re-appropriation Rules, 1962 subject to the conditions
already prescribed therein but there appears some confusion whether temporary posts
created in exercise of the Delegated Powers can be treated as continuous scheme in the
next financial year. The matter has now been examined and it is now clarified that the
post cannot be created spreading over to two different financial years and that creation of
post under the delegations should be restricted up to the end of the financial year and the
post so created, must not be considered as continuous scheme in the next financial year as
it has been treated by certain Departments”.
Various formations of Hyderabad Division, during financial year 2015-2016,
incurred an expenditure of Rs 35.148 million, on salaries of staff working on Daily
Wages without obtaining approval from the competent forum, in violation of the above
rules. Detail is as under:
[Amount in Rupees]
No. of Pay Months
Sr. Name of Offices Para Amount
employees P.M
Municipal Committee, Sehwan
1. 7 202 10,000 12 24,240,000
District Jamshoro 2014-15
Municipal Committee, Matiari District
2. 15 54 7,000 12 4,536,000
Matiari 2014-15
Municipal Committee, Tando
3. 4 59 9,000 12 6,372,000
Allahyar District Allahyar 2015-16
Total 35,148,000

Audit is of the view that staff on Daily Wages was hired without approval of
prescribed competent forum which resulted into unauthorized expenditure and weak
financial management.

212
 Deviation from prescribed rules resulted into unauthorized payment and weak
internal control.
Audit recommends fixing of responsibility for hiring of employees on daily
wages without approval, under intimation to audit.
[AIR Paras: 7, 15, 4]

4.2.3.25 Unauthorized Appointments – Rs 32.089 Million

As per Local Government Department letter No. SOA/(LG)1(27)/2011 Dated:
6.6.2011, in continuation of letters dated: 27.5.2011 and 28.5.2011, “no appointment in
any grade shall be made henceforth without consolidated advertisement and fresh
approval of Government. Approval, if any, earlier issued in this regard may be treated
cancelled/withdrawn”.
Further, as per Rule 2 of APT Rules 1974, “In these rules, unless there is any,
thing repugnant in the subject or context: (a) "Appointing authority", in relation to a
post, means the person authorized under rule 6 to make appointment to that post; 2[(aa)
“Basic Scale” means a basic scale of pay sanctioned by Government in which a post or
group of posts is placed”.
Various formations of Hyderabad Division, during financial year 2015-16,
made appointments without going through prescribed procedures for appointment, and
incurred expenditure of Rs 32.089 million on account of their salaries, in violation of the
above rules. Details are provided at Annex-Hyd9.
Audit is of the view that irregular appointments were made in violation of the
rules and in non-transparent manner.
Violation from prescribed rules was due to weak internal control.
The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for appointments
without following prescribed procedures.
[AIR Paras: 13, 18]

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4.2.3.26 Un-Authorized Payment of Mobilization Advance
Rs 26.988 Million
As per Para 9.3.2 (b) of the SPPRA, Procurement Regulations (Works),
“Mobilization advance is extended to the contractors, up to 10% of contract cost stated in
the letter of acceptance, usually for the projects worth Rs 2.5 million and above to enable
them to make initial arrangements for starting work. Mobilization advance is allowed on
the contracts where contract conditions provide for same, or the authority competent to
accepting tender can allow the mobilization advance on the works subject to following
conditions: (j) contractor has signed the contract, (ii) contractor has provided the
performance security; (iii) contractor has furnished the irrevocable bank guarantee of
amount equal to mobilization advance specified form from a scheduled bank in Pakistan
to the procuring agency (Annexure-J)”.
Administrator, Town Committee, Sehwan Sharif, District Jamshoro, during
financial year 2015-2016, paid mobilization advance of Rs 26.988 million to the
contractor without obtaining performance security, irrevocable bank guarantee of amount
equal to mobilization advance. Moreover, mobilization advance was paid @ 15% instead
of 10% of the contract cost, in violation of above rule. Detail is as under:
[Amount in Rupees]
Mobilization Advance
Name of Contract
Name of Work Admissible Allowed
Contractor Amount Difference
(10%) (15%)
Construction/ Rehabilitation of
M/s Ameen
Water Supply and Drainage of
Construction 179,918,511 17,991,851 26,987,700 8,995,849
Talty, Karampur, Murad Ali
and Co.
Shah and adjoining villages
Total 179,918,511 17,991,851 26,987,700 8,995,849

Audit is of the view that mobilization advance was allowed to the contractor
without safeguarding Government interest resulting into undue favour and weak financial
management.
Deviation from prescribed rule resulted into weak internal control.
The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing responsibility on management for un-authorized and
excess payment of mobilization advance, under intimation to audit.
[AIR Para: 6]

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4.2.3.27 Unauthorized Payments without Pre-Audit – Rs 24.250 Million
According to Sub Para (2) of Para-32 of the Local Government Accounts
Manual, “Every bill shall be pre-audited by the Accounts Office. The pre-audit shall
ensure that the bill has been sanctioned and that funds are available to make payment.
The pre-audit shall also involve scrutinizing the bill to identify possible fraud and
irregularities”.
Further, according to rule 111(4) and(5) of Sindh Local Government Act 2013,
"the Provincial Director, Local Fund Audit shall pre-audit all the payments from the
Local Funds of the Councils and a Council shall not with draw or disburse money from
the Local Fund unless it is pre-audited in the prescribed manner”.
Following Offices of Hyderabad Division, during financial years 2014-16, paid
an amount of Rs 24.250 million to staff and contractors without pre-audit from concerned
Local Fund Audit Departments, in violation of above rules.
(Amount in Rupees)
Sr. Formation Amount
1 Municipal Committee, Thatta, District Thatta 12,698,009
2 Town Committee Mirpur Bathoro, District Sujawal 8,253,013
3 Municipal Committee, Matiari, 3,298,573
Total 24,249,595
Audit is of the view that payments without pre-audit resulted into unauthorized
expenditure.
Non-observance of prescribed control procedures was due to weak internal
control system.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for making
payments without pre-audit.
[AIR Paras: 2, 6, 15]

4.2.3.28 Irregular Payment of Pension without Obtaining Life Certificate

Rs 24.002 Million
As per Rule 350 of Treasury Rules of the Federal Government Regarding
Pension Payments (Vol- I, Part-V, Chapter-VI), “A life certificate must a company every

215
claim which is not personally presented except in the cases specified in rules 345 and
346. When payment is made on life certificate it can be made only for periods completed
on or before the date of certificate. Life certificate must be signed by a person authorized
under these rules to sign such certificate”.
Following offices of Hyderabad Division, during financial year 2015-16 paid
Rs 24.002 million, to retired employees on account of pension without obtaining their
Life Certificates, in violation of above rule. Detail is as under:
[Amount in Rupees]
Sr. Name of Offices Para Amount
1. CMO, MC, Hyderabad Rural (F.Y 2015-2016) 17 3,088,769
2. CMO, MC, Qasimabad (F.Y 2015-2016) 12 20,913,492
Total 24,002,261

Audit is of the view that due to non-obtaining of life certificates, chances of

payment to deceased pensioners cannot be ruled out which constituted weak financial
management.
Non-observance of prescribed control procedures was due to weak internal
control system.
The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that fixing of responsibility on person (s) at fault.
[AIR Paras: 17, 12]

4.2.3.29 Unauthorized Revalidation of Scheme - Rs 20.000 Million

As per Clause 2 of the Contract Agreement, “Quantity of work is to be done
within the particular time as specified and within the proportionate time, such as 1/4th of
work in 1/4th of the time, and contractor will abide by the program of detailed progress
laid down by the executive engineer. In the event of the contractor failing to comply with
this condition, he shall be liable to pay as compensation not exceeding 10% of the
estimated cost of the work as shown in the tender”. Further, as per Chief Engineer,
Highways Sindh, Hyderabad’s circular No.PA/CE(R)/116 dated 21-02-1976, “The
Executive Engineer is not competent to grant extensions to the contractors for delay in
completion of works without imposing penalty”.

216
 Further, As per Serial 10.3 (b) (c) of SPPRA Guidelines/Regulations for
Procurement of Works 2010, “if the contractor fails to complete the work to the
satisfaction of the client even within the time extended free of the penalty, then he is
bound to pay liquidity damages for the delay; Liquidities damages shall be deducted from
the contract amount for every day or part of a day, which will elapse between the dates on
which the prescribed time expired and the date the work is completed at the rate specified
in the contract agreement. The amount of the liquidated damages for each day of delay in
completion of the whole of the works, or if applicable for any section thereof, shall be a
sum equal to 5 to10 % (it is to be mentioned in the agreement) of the estimated cost of
the works divided by one fourth of the number of days specified as completion time”.
HMC, Sub-division Latifabad, during financial year 2015-16, revalidated
scheme costing Rs 20.000 million, after more than 03 years of stipulated completion
period. The act tantamount to undue favour to contractor to avoid penalty @ 10%, in
violation of above rules. Detail is as under:
(Amount in Rupees)
Stipulated
Actual date Extension Amount
Description of Scheme N/Contractor date of
of start On of Scheme
completion
Construction of Park and
Jogging track including M/S M.M.M 6 months 157/B
08-07-2011 20,000,000
playground Food street @ Enterprises 07-01-2012 27/05/15
Plot No. 61 and 62

Audit is of the view that revision of completion time period resulted into undue
favor towards contractor and weak financial management.
Non-observance of prescribed rules and regulation resulted into weak internal
control.
The matter was reported to the management during November, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that fixing of responsibility on management for not
completing the scheme in five years and non-imposition of penalty as per rule, under
intimation to audit.
[AIR Para: 4]

217
4.2.3.30 Irregular Administrative Approval without Availability of Funds
Rs 20.357 Million
As per Para-527 of PWD Manual, Volume-I and Sindh Local Councils
(Accounts) Rule, 1983 Rule-109, “no work shall begin unless proper detailed design and
estimate have been sanctioned, allotment of funds made and order for its commencement
issued by the competent authority”.
Further, According to Finance Department, GoS letter No. FD/CW&M-I)(26)
91-92(P.T.II) dated 24-6-1993, “all charges incurred must be paid at once and under no
circumstances may be allowed to stand over to be paid from the grant of subsequent
year”.
Chief Municipal Officer, Municipal Committee Dadu and Mehar, District Dadu,
awarded irregular administrative approval of development schemes worth Rs 20.357
million without availability of funds. The schemes were executed during 2010-12 but
payment amounting to Rs 11.231 million still remained outstanding till 30-06-2015, in
violation of rules.
[Amount in Rupees]
Sr. Name of Offices Para Amount
1 Administrator, Municipal Committee, Dadu, District Dadu 7 9,126,300
2 Administrator, Municipal Committee, Mehar, District Dadu 13 11,231,098
Total 20,357,398
Audit is of the view that irregular administrative approval was accorded without
availability of funds resulting into weak financial management.
Deviation from prescribed rules resulted extra burden over subsequent year’s
budget resulted into weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for irregular and unjustified
Administrative Approval and execution without allotment of funds, under intimation to
audit.
[AIR Paras: 7, 13]

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4.2.3.31 Non–Reconciliation of Revenue Collected on Transfer of
Immovable Property – Rs 18.165 Million
According to Rule 3 of West Pakistan District Councils (Tax on Transfer of
Immovable Property) Rules, 1963, “(1) - A District Council may levy a tax on transfer of
immovable property situate within the local limits jurisdiction, except the urban areas. (2)
- The rate of tax shall not exceed one percent of the considerable of such transfer.
Further, according to Rule 89 (3) viii of GFR, “The head of the department and
the Accountant General will be jointly responsible for the reconciliation of the figures
given in the accounts maintained by head of the department with those that appear in the
Accountant Generals books. 2- That the main object of the reconciliation is to ensure that
the departmental accounts are sufficiently accurate to render possible an efficient
departmental control of expenditure”.
HMC, Hyderabad, during financial year 2015-16, received an amount of
Rs 11.166 million on account of property tax from Sub-Registrar, Revenue Department
Sindh on lump sum basis but no effort was made to obtain detail of property transferred
to reconcile it with actual collection transferred by revenue department. Detail of
payment is as under:
(Amount in Rupees)
Sr. Budget Head Amount Remarks
HMC, Hyderabad, 2015-16[AIR Para:42]
Transfer fee 1% for property on account of Figure taken from
1 5,457,173
mutation – Sub-division City expenditure statement
Transfer fee 1% for property on account of
2 5,558,583 -do-
mutation – Sub-division Latifabad
Sub-total 11,015,756
Municipal Committee, Qasimabad, 2015-16[AIR Para:15]
Transfer fee 1% for property on account of Figure taken from
1 7,149,835
mutation – Sub-division Qasimabad expenditure statement
Total 18,165,591 -

Audit is of the view that management failed to reconcile the collection of tax on
transfer of immovable property from the revenue department Sindh resulting into weak
financial management.
Deviation from prescribed rules resulted into weak internal control.

219
 The matter was reported to the management during October-December 2016 but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault, under
intimation to audit.
[AIR Paras: 6, 5]

4.2.3.32 Non-Provision of 10% Share for the Maintenance of Immovable

Property - Rs 17.180 Million
According to the Sub Rule (4) Rule 4 of the Sindh Local Government (Property)
Rules 2001, “A council shall provide at least 10% of its development budget for the
maintenance and repairs of its immovable property regularly”.
Administrator, Municipal Committee Mehar, District Dadu, allocated of
Rs 171.800 million, during financial year 2014-15, for development works/schemes
without reserving 10% share amounting to Rs 17.180 million for the repair and
maintenance of immovable property like Shops, Public Parks, Play Grounds, Graveyards,
Community Hall etc., in violation of above rule. Detail as under:
(Amount in Rupees)
Budget Share R/M Immovable
Particular Expenditure
2014-15 @ 10% Property
Development 171,800,000 17,180,000 45,272,848 Nil

Audit is of the view that due to non-provision of 10% share for the maintenance
of immovable property resulting into demolition of valuable Government property and
weak administrative management.
Deviation from prescribed rules resulted into weak internal control system.
The matter was reported to management during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing responsibility on the management for non-provision
and repair of immovable property to safeguard Government assets, under intimation to
audit.
[AIR Para: 03]

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4.2.3.33 Irregular Creation of Liabilities – Rs 14.962 Million
As per Para-527 of PWD Manual, Vol-I, “no work shall begin unless proper
detailed design and estimate have been sanctioned, allotment of funds made and order for
its commencement issued by the competent authority”.
Further, According to Finance Department, GoS letter No. FD/CW&M-I)(26)
91-92(P.T.II) dated24-6-1993, “all charges incurred must be paid at once and under no
circumstances may be allowed to stand over to be paid from the grant of subsequent
year”.
Moreover, According to FD, GoS letter No.FD/B&E –I/51/2007 dated 2-7-2007,
“liability of previous years shall not be allowed to be cleared unless concurrence is given
by FD”.
Administrator, Sub-division Latifabad, (HMC), failed to pay dues of year 2013
to 2016 and created liabilities amounting to Rs 14.962 million, in violation of above rule.
Audit is of the view that expenditure was incurred without availability of budget
resulted into creation of liabilities and weak financial management.
Deviation from prescribed rules was due to weak internal controls.
The matter was reported to the management during December, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for creation of liabilities, under
intimation to audit.
[AIR Para: 28]

4.2.3.34 Unauthorized Revision of Estimates without Calling Fresh Tenders

Rs 14.429 Million
According to Section 11.2.2 of SPPRA Guidelines, “Revised Technical Sanction
(RTS): - Detailed Estimate needs revision when during execution it is anticipated that
cost of completion is to exceed beyond the permissible limit (5%). Revised detailed
estimate is timely prepared incorporating the work done and required to be done along
with deviation statement for submission to competent authority to accord Revised
Technical Sanction (RTS), provided that overall cost of the scheme continues to be
within the permissible excess of 15% over the Administrative Approval Cost. No excess
is allowed over the cost of revised technical sanction”.
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 Further, according Rule 16(1)(e) of SPPRA 2010, “Repeat Orders – means
procurement of additional quantities of the item(s) from the original contractor or
supplier, where, after the items originally envisaged for the project or scheme have been
procured through open competitive bidding, and such additional quantities of the same
item(s) of goods or works are needed to meet the requirements of the project or scheme;
Provided that; (i) the cost of additional quantities of item(s) shall not exceed 15% of the
original contract amount”.
Town Officer, Town Committee, New Saeedabad and Sub-division Hyderabad
City (HMC), during financial year 2015-16 initiated different development schemes with
estimated cost of Rs 5.516 million which were revised to Rs 10.933 million resulting into
excess revision of Rs 5.417 million and made expenditure of (50% to 200%) over and
above the original estimate without calling fresh tenders, in violation of above rule.
Detail is provided in Annex-Hyd10.
Audit is of the view that unauthorized expenditure was incurred over and above
the original estimate without calling fresh tenders.
Violation of laid down procedures was due to weak internal control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that fixing of responsibility on person (s) at fault.
[AIR Paras: 2, 14, 2]

4.2.3.35 Expenditure Over and Above Budget Estimates - Rs 12.325 Million

According to Rule-88 of Sindh Financial Rule Vol-I, “it is the responsibility of
every Drawing and Disbursing officer to keep the expenditure within the available budget
grant of the year. In case the expenditure was likely to be exceeded additional funds
should have been obtained much earlier before the close of the financial year”. Moreover,
under Rule-89 of SFR it is the duty of controlling officer to see that appropriation has not
been exceeded”.
Various formations of Hyderabad Division, during financial year 2014-16,
incurred development expenditure over and above budgetary provision by Rs 12.325
million, in violation of above rule. Detail is as under:

222
 (Amount in Rupees)
F.Y Head of Account Contractor Budget Expenditure Excess
Administrator/CMO, Municipal Committee Tando Jam [AIR Para: 5]
New and Original Nil
2015-16 Schemes – ADP 2015- 40,000,000 44,038,297 4,034,297
16
Administrator/CMO, Municipal Committee Sujawal [AIR Para: 3]
“Paving Block Main M/s Agha
Bazar Park from Anwar
Mamoo Ladho Chowk Ayub
2014-15 to main bus stand 10,000,000 18,290,919 8,290,919
including CC in
different streets and
wards of Sujawal”
Total 50,000,000 62,329,216 12,325,216
Audit is of the view that management failed to watch the Government interest
and ignored rules and procedures set forth by the Government resulting into weak
financial management.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault.
[AIR Paras: 3, 5]

4.2.3.36 Payment of Salary through Cash – Rs 12.296 Million

As per Rule 157 of CTR, duly adopted by GOS, “The cheques for more than Rs
200/- drawn in favour of Corporate of Local Bodies, firms, private persons or
Government servants (in respect of their personal claims) shall always be crossed”
Following Offices of Hyderabad Division, during financial year 2014-15,
incurred expenditure of Rs 12.269 million, against wages of daily wages staff through
cash, in violation of above rule.
[Amount in Rupees]
Sr. Name of Offices Para Amount
1 Town Committee Mirpur Bathoro 17 3,517,000
2 Administrator/CMO, Municipal Committee Sujawal 7 3,600,000
3 Administrator/TO, Committee Jati District Sujawal 11 5,179,413
Total 12,296,413

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 Audit is of the view that cheques drawn in favor of staff members without
justification resulted in non-transparency in public spending, besides, chances of
misappropriation of public money cannot be ruled out.
Violation of prescribed rules was due to weak internal controls.
The matter was reported to management during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements on account of
unauthorized withdrawal of public funds through cash.
[AIR Paras: 17,7,11]

4.2.3.37 Unauthorized Payments through Open Cheques -Rs 14.288 Million

As per Rule 157 (1) and (2) of CTR, “The cheques for more than Rs 200/-
drawn in favor of Corporate or Local Bodies, firms, private persons or Government
servants (in respect of their personal claims) shall always be crossed”.
Following Officers of Hyderabad Division made payments of Rs 14.288 million,
during financial years 2014-16, to various suppliers through open cheques, in violation of
rule.
(Rupees in Million)
AIR Para Formation Amount
16 Administrator/CMO, Municipal Committee Tando Jam, District Hyderabad 1.754
13 Administrator/TO, Town Committee Sehwan, District Jamshoro 8.956
24 Administrator/TO, Town Committee Mehar, District Dadu 1.251
14 Administrator/TO, Town Committee Juhi, District Dadu 0.140
5 Administrator/TO, Town Committee Jhando Mari, District Tando Allahyar 0.612
10 Administrator/CMO, Municipal Committee Sujawal, District Sujawal 1.171
10 Town Officer, Town Committee Hala 0.404
Total 14.288
Audit is of the view that payments made through open cheques rendered the
transactions doubtful. Besides, chances of misappropriation cannot be ruled out.
Deviation from prescribed rule was due to weak internal controls.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.

224
 Audit recommends fixing of responsibility on official(s) at fault on account of
payments through open cheques.
[AIR Paras: 16, 13, 24, 14, 5, 10]

4.2.3.38 Non-Imposition of Penalty - Rs 11.029 Million

As per agreement made between contractor and Government, “the time frame
given for the completion of work is required to be observed and in case of failure/ delay,
the penalty at the rate of 10% of sanctioned cost may be imposed and deducted from the
bill of contractor”.
Following Offices of Hyderabad Division, during financial year 2015-16,
executed development works amounting Rs 110.290 million, but the contractors failed to
complete the same within stipulated time. The penalty @ 10% of total cost amounting to
Rs 11.029 million was not imposed / recovered from the contractors, in violation of
above rule.

(Rupees in Million)
Sr. Name of Formations Para Amount
1 Hyderabad Municipal Corporation 4 2.000
2 Hyderabad Municipal Corporation 19 6.970
3 Administrator, Municipal Committee, Tando Jam 12 0.909
4 Administrator, Municipal Committee, Matli 4 1.150
Total 11.029
Audit is of the view that undue favour was extended to contractors resulting into
weak financial management.
Deviation from prescribed rules was due to weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for non-imposing penalty on
contractors. Besides, the amount be recovered without further delay, under intimation to
audit.
[AIR Paras: 4, 19, 12, 4]

225
4.2.3.39 Unauthorized Payment Made on Blank Estimates
RS 10.671 Million
According to Section 2.10 (1) and (3) of SPPRA Guidelines, “Commencement
of work in anticipation of detailed estimates of the complete project: For each such work
or component part there must be a fully prepared detailed estimate and, in the
administrative approval as a whole, there must be a clear and specific amount
corresponding to the work or component part in question. The sanctioning authority must
be satisfied, before according sanction, that the amount of technical sanction for the
whole project is not likely to exceed the amount of the administrative approval and then
work or component part in the question can be appropriately commenced without
affecting, or being affected by, any other part of the project, financially or otherwise.
Further, according to Rule 2 (1) (q) (3) of SPPR 2010, “Fraudulent Practice: means any
act or omission, including a misrepresentation, that knowingly or recklessly misleads, or
attempts to mislead, a party to obtain a financial or other benefit or to avoid an
obligation;”
Following Offices of Hyderabad Division, during financial year 2014-15,
incurred expenditure on development schemes amounting to Rs 10.671 million, however,
the estimates were found without names of schemes and other details as per schedule of
items, in violation of above rule.
[Amount in Rupees]
Sr. Name of offices Para Amount
1 Town Officer, Town Committee Mirpur Bathoro 9 9,586,669
2 Town Officer, Town Committee Sujawal 5 1,084,146
Total 10,670,815
Audit is of the view that payments on blank estimates resulted into non-
transparent utilization of public money.
Deviation from prescribed rules was due to weak internal control.
The matter was reported to the management during October-December, 2015
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault, under
intimation to audit.
[AIR Paras: 9, 5]

226
4.2.3.40 Payment of Liabilities without Concurrence of Finance
Department - Rs 10.463 Million
According to instructions issued by the Finance Department Government of
Sindh vide letter No. FD-B12 (48)/1996-97 dated 21-10-1996, the expenditure of the
previous year’s cannot be met from the allocation of the current financial year. Moreover,
as per Para 6 (k) of the Finance Department, Government of Sindh, O.M No.FD(B&E-
I/4)-I/51/2009 dated 01-07-2009, “Liability of previous years may not be allowed to be
cleared unless concurrence is given by the Finance Department”.
Chief Municipal Officer, Municipal Committee, Kotri, during financial year
2015-16 paid an amount of Rs 10.463 million, against the liabilities of previous years
without concurrence of Finance Department, in violation of above rules. Detail is as
under:
(Amount in Rupees)
Sr. Head of Accounts Amount paid
1 Liabilities 6,324,618
2 Arrears of Pay 4,138,070
Total 10,462,688

Audit is of the view that management failed to observe procedures of financial

discipline.
Violation from prescribed rule was due to weak internal controls.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for payment of liabilities without
concurrence of Finance Department.
[AIR Para: 11]

4.2.3.41 Un-Authorized Payment to Staff Working Over and Above the

Sanctioned Strength – Rs 9.972 Million
According to Rule 68 of SFR Vol-I, “When the entertainment of a new
establishment or a change, temporary or permanent, is proposed in an office, a letter fully
explaining the proposal and the conditions which have given rise to them, together with

227
the proposition statement, if necessary under Para-III, should be submitted to the
competent authority. In this letter should be set out inter alia:-
i. the present cost, either the section or sections affected of the total
establishment as the circumstances of the case may indicate to be necessary;
ii. details of the pay of the post or posts and the number of posts which it is
proposed to add or modify.”
Town Committee Jati, District Sujawal, during financial year 2014-15, made
payment of Rs 9.972 million on account of salaries to (58) excess staff working over and
above the sanctioned strength, in violation of the above rule.
Audit is of the view that appointments over and above the sanctioned strength
resulting into weak financial management.
Non observance of prescribed procedure resulted into weak internal control.
The matter was reported to the management during December, 2015 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for unauthorized
appointments over and above the sanctioned strength.
[AIR Para: 8]

4.2.3.42 Unjustified Expenditure on Development Works

Rs 9.871 Million
According to Para 23 of GFR Vol-I, “Every Government officer should realize
fully and clearly that he will be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will be also be held
personally responsible for any loss arising from fraud or negligence on the part of any
other Government officer to the extent to which it may be shown that contribution to the
loss by his own action or negligence”.
Town Officer, Town Committee, New Saeedabad, during financial year2014-15
withdrew an amount of Rs 9.871 million in one stroke and expenditure was booked
against different development schemes. Furthermore, the following discrepancies were
also found:

228
 i. Measurements of various works were recorded in one day.
ii. Columns for outward numbers and dates were found blank.
iii. Some bills were prepared after payment date.
Audit is of the view that management made expenditure in hastily manner
without fulfilling codal formalities thus the chances of embezzlement of funds cannot be
ruled out.
Non observance of prescribed procedure resulted into weak internal control.
The matter was reported to management during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that fixing of responsibility on person(s) at fault.
[AIR Para: 3]

4.2.3.43 Irregular Award of Work – Rs 8.350 Million

According to Rule 38 of SPPRA 2010, “Bid Validity: (1) A procuring agency,
keeping in view nature of procurement, shall subject the bid to a validity period, which
shall be specified in the bidding document and shall not be more than 90 days in case of
National Competitive Bidding and 120 days in case of International Competitive
Bidding”.
Following formations of Hyderabad Division, during financial year 2015-16,
awarded various development works amounting to Rs 8.350 million to contractors after
expiry of bid validity period instead of re-tendering, in violation of above rule. Detail is
as under:
[Amount in Rupees]
Sr. Name of offices Para Amount
1 Administrator, Town Committee, Bulri Shah Karim, District T.M. Khan 6 900,000
2 Administrator, Municipal Committee, Matli, District Badin 5 7,450,000
Total 8,350,000
Audit is of the view that award of contracts after expiry of bid validity period was
a serious violation of laid down rules and procedures.
Violation of the prescribed rules was due to weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.

229
 Audit recommends fixing of responsibility on managements for irregular award of
work and violation of laid down rules and regulation.
[AIR Paras: 6, 5]

4.2.3.44 Illegal Expenditure from Public Fund – Rs 9.855 Million

According to Treasury Rules, T. O. 13, “Unless in any case the Governor with
the concurrence of the Auditor General, otherwise direct, moneys may not be withdrawn
from the public account without the written permission of the Treasury Officer or of a
Government servant of the Pakistan Audit Department authorized in this behalf by the
Auditor General.”
Further, as per Treasury Rules T.O. Section III, “Moneys standing in the public
account must be either retained in a treasury or deposited in the Bank. The conditions
under which they are deposited in the Bank are governed by the provisions of the State
Bank of Pakistan Act 1934.”
The management of Municipal Committee, Tando Jam and Town Committee
New Saeedabad, during financial year 2015-16, incurred unauthorized expenditure
Rs 9.855 million from realized deposits, in violation of above rules. Detail is as under:

(Amount in Rupees)
IT and SD Closing
Sr. Description collected Balance on Expenditure
during 2015-16 30-06-2016
Hyderabad Municipal Corporation [AIR Para:03]
1 HMC Cashbook Balances 7,421,165 2,265,738 5,155,427
Town Committee New Saeedabad [AIR Para:13]
Sr. Description Cheque No. Date Amount
1 Loan taken from deposit account 2863-4 93809 2/10/2014 500,000
Loan taken from deposit account 2863-4 to
2 93813 7/11/2014 1,600,000
general account 3327-2 NBP
Loan taken from deposit account 2863-4 to
3 93814 10/11/2014 2,600,000
general account 3327-2 NBP
Sub-total 4,700,000
Total 9,855,427
Audit is of the view that withdrawal of security deposit and deducted income tax
resulted into unauthorized spending of public funds and weak financial management.
Deviation from prescribed rules was due to weak internal controls.

230
 The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on incurrence of expenditure in
violation of rules, under intimation to audit.
[AIR Paras: 3, 13]

4.2.3.45 Undue Favour to Contractor by Revising Schemes (712%)

Rs 7.126 Million
As per Rules 2010 (16)(1)(e) of SPPRA, “Repeat Orders means procurement of
additional quantities of the item(s) from the original contractor or supplier, where, after
the items originally envisaged for the project or scheme have been procured through open
competitive bidding, and such additional quantities of the same item(s) of goods or works
are needed to meet the requirements of the project or scheme; Provided that: - (i) the cost
of additional quantities of item(s) shall not exceed 15% of the original contract amount”.
Chief Municipal Officer, Municipal Committee Dadu, District Dadu, revised
scheme of Original estimate of Rs 1.000 million to Rs 8.126 million (upto 712%) by
extending undue favour to contractor, in violation of rules. Detail is as under:
(Amount in Rupees)
A.A Estimate Original T.S Estimate Excess Excess
Description R.T.S By
Dated (Original) By (Revised) Amount (%)
EDO (Works EDO (Works
Construction Administrator
& Services) & Services)
of Cafeteria at (TMA Dadu)
1,000,000 Dadu 8,126,300 Dadu 7,126,300 712.63
District Resoultion-02
4238 4799
Courts, Dadu 24-05-11
18-06-11 29-10-11

Audit is of the view that cost of additional quantities/work exceeded 712% of

the original contract amount but tender was not re-invited resulting into unauthorized
extension in contract resulting into weak financial management.
Extending undue favour to contractor by deviating rules resulted into weak
internal control.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.

231
 Audit recommends fixing of responsibility on person(s) responsible for
unauthorized revision of work without retender, under intimation to audit.
[AIR Para: 06]

4.2.3.46 Execution of Work without Technical Sanction - Rs 7.009 Million

As per Para 56 of CPW departmental code, “For each individual work proposed
to be carried out, except petty works petty repairs and repairs for which a lump sum
provision has been sanctioned under paragraph 106, a properly detailed estimate must be
prepared for sanction of competent authority this sanction is known as the technical
sanction to the estimate”.
Further, as per Para-527 of PWD Manual, Vol-I, “no work shall begin unless
proper detailed design and estimate have been sanctioned, allotment of funds made and
order for its commencement issued by the competent authority”.
Various formations of Hyderabad Division, executed works worth Rs 7.009
million, during financial year 2015-16, without obtaining technical sanction from
competent authority, in violation of the above rules. Detail is as under:
[Amount in Rupees]
Sr. Name of Offices Para Amount
1 Municipal Committee Tando Allah Yar 2015-16 11 2,600,000
2 Town Committee (Jhando Mari) District Tando Allahyar 14 4,408,707
Total 7,008,707
Audit is of the view that award of work without sanction of detailed design and
estimate from competent authority resulted into unauthorized expenditure.
Violation of laid down procedures was due to weak internal control system.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management for execution of
works without obtaining technical sanction from competent authority.
[AIR Para: 11, 14]

232
4.2.3.47 Award of Work without Administrative and Technical Sanction
Rs 5.000 Million
As per Rule 02(1)(x) of the Sindh Public Procurement Rules, 2010, “Mis-
procurement means public procurement in contravention of any provision of Sindh Public
Procurement Act, 2010, any rule, regulation, order or instruction made there under or any
other law in respect thereof, or relating to, public procurement”.
CMO, Badin, during financial year 2015-16, awarded development work of
Rs 5.000 million to contractors but failed to obtain approval of procurement plan,
administrative approval and technical sanction from the competent authority, in violation
of above rule. Detail is as under:
(Amount in Rupees)
Sr. Detail No of works Amount Excess Amount
1 Procurement Plan 106 153,200,000
2 Administrative Approval 106 153,200,000
3 Technical Sanction 106 153,200,000
4 NIT 110 158,200,000
5,000,000
5 Progress Report 110 158,200,000
158,200,000
Difference 110-106 =4 -153,200,000
5,000,000

Audit is of the view that award of contracts without obtaining approval of

procurement plan, administrative approval and technical sanction from the competent
authority constituted weak internal control.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for irregular award
of works and violation of laid down rules and regulation.
[AIR Para: 9]

4.2.3.48 Irregular Payment without Check Measurement – Rs 4.771 Million

As per Communication and Works Department, Government of Sindh, O.M
No.C/9-60/77 dated 26th May 1977, “it is the responsibility of the DO to check 10%
measurements before making payment of the bills for the works done by the contractors”.

233
 Following offices of Hyderabad Division, during financial year 2015-16, paid an
amount of Rs 4.771 million to contractors against development works, without 10%
check of measurement by the concerned S.E, in violation of above rule.
[Amount in Rupees]
Sr. Name of Office Para Amount
1 CMO, MC, Tando Allahyar 15 2,200,000
2 TO, TC, Jhando Mari, District Tando Allahyar 18 2,570,526
Total 4,770,526
Audit is of the view that management failed to comply with the rules set forth by
the Government that reflects absence of systematic control in local office.
Non-compliance of prescribed rules resulted into weak internal controls.
The matter was reported to the management during September 2016 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for payment without 10% check
measurement.
[AIR Paras: 15, 18]

4.2.3.49 Unauthorized Execution of Development Works without Purview

Rs 3.776 Million
As per Section-72 Schedule-II (part-II) rule 1-16 of Sindh Local Government
Act.2013, “Compulsory functions to be performed by corporations, municipal
committees and town committees, council shall be responsible for water, sewerage,
drainage, sanitation, roads, other than Provincial and district roads, streets and street
lighting; firefighting, park services. 2. Sanitation, A Corporation, Municipal Committee
or Town Committee shall be responsible for the sanitation, and may for that purpose
cause such measures to be taken as are required by or under this Act. 3. Removal,
Collection and Disposal of Refuse: A Corporation, Municipal Committee or Town
Committee shall make adequate arrangements for the removal of refuse from all public
streets, public latrines, urinals, drains and all buildings and lands vested in the Council
concerned and for the collection and proper disposal of such refuse”.
Further, as per Para 23 of GFR Vol-I, “Every Government officer should realize
fully and clearly that he will be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will also be held

234
personally responsible for any loss arising from fraud on the part of any other
Government officer to the extent to which it may be shown that he contributed to the loss
by his own action or negligence”.
Town Officer, Town Committee, Ghorabari, District Thatta, during financial
year 2015-16, incurred expenditure of Rs 3.776 million on Repair/Stone Pitching of
Bachao Bund which comes within purview of “Irrigation Department, GoS”, in violation
of above rule.
Audit is of the view that execution of works out of purview of the office resulted
into unauthorized expenditure which constituted weak financial management.
Non-observance of prescribed rules and procedures was due to weak internal
controls.
The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for execution of works out of
purview of the local councils, under intimation to audit.
[AIR Para: 2]

4.2.3.50 Splitting of Works to Avoid Approval from Competent Forum

Rs 3.642 Million
As per Rule 12 (1) of SPPR 2010, “Limitation on Splitting or Regrouping of
Proposed Procurement: Save as otherwise provided and subject to the regulations made
by the Authority, a procuring agency shall prepare, in accordance with Rule 11 above, all
proposed procurements for each financial year and shall proceed accordingly without any
splitting or regrouping of the procurements already grouped, allocated and scheduled in
the Procurement Plan (Rule – 11).
Further, competent forum to sanction schemes as per Planning Commission Manual:
Sr. Competent Forum Cost of Scheme up to
1 District Development Working Committee (DDWC) Rs. 20 million
2 Departmental Development Working Party (DDWP) Rs. 40 million
3 Provincial Development Working Party (PDWP) Rs. Five billion
4 Central Development Working Party (CDWP) Rs. One billion
Executive Committee of the National Economic Council (ECNEC).
5 Above Rs. One billion
After clearance from CDWP

235
 Town Officer, Town Committee, Saeedabad, District Matiari, during financial
year 2014-15, splitted work of same nature costing Rs 3.642 million, to avoid approval
from higher competent forum, in violation of above rule.
Audit is of opinion that splitting of work of same nature in various components
deprived the Government from achieving best competitive rates.
Non-observance of prescribed rules and procedures was due to weak internal
control system.
The matter was reported to management during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault.
[AIR Para: 6]

4.2.3.51 Excess Payment of Overtime beyond Permissible Limit

Rs 3.158 Million
As per Rule 4 of Hyderabad Municipal Committee Fire Brigade overtime Rules
1974, “out of 12 hours duty eight hours shall be normal duty hours and the remaining 4
hours shall be treated as overtime duty for which overtime allowance at rate of 50% of
pay of the fire brigade shall be payable”.
Further, as per Rule 5 of SFR Vol-I, “the amount of allowance granted to meet
expenditure of particular type should be so regulated that allowances are not on the whole
source of profit of the recipient”
Furthermore, according to Para-10 (iv) of GFR Vol-I, “public money should not
be utilized for the benefit of a particular person or section of community and also
according to rule all the claims must be supported with full detail and documents”.
Municipal Commissioner, HMC, during financial year 2015-16 paid an amount
of Rs 6.316 million on account of overtime of firefighting department staff, hence paying
an excess amount of Rs 3.158 million, in violation of above rules. Detail is as under:
[Amount in Rupees]
Drawn Due Difference
6,316,072 3,158,036 3,158,036

Audit is of the view that excess payment was made beyond permissible limit on
account of overtime allowance.

236
 Violation of prescribed rules was due to weak internal controls.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for unjustified expenditure on
account of overtime allowance. Besides, excess payment of overtime be recovered, under
intimation to audit.
[AIR Para: 31]

4.2.3.52 Execution of Work through Un-Registered Contractors

Rs 3.095 Million
As per Rule 48 of the Electricity Rules 1973, “All Government and semi
Government departments are bound to award contracts of electric installation works to
electrical contractors holding valid Government Electrical contractor license”.
Further, as required under Rule 39 of Licensing Rules, “copy of work order
issued to the Government licensed Electrical contractor is to be endorsed to Government
of Sindh Electric Inspectorate Hyderabad”.
Municipal Commissioner, HMC, during financial year 2015-2016, executed
electrical work of Rs 3.095 million, without checking valid Electrical Contractor License
issued by the Electric Inspectorate Hyderabad, Government of Sindh, in violation of
rules.
Audit is of the view that award of work without valid electric contractor license
was irregular which reflects weak financial management.
Violation of prescribed rules was due to weak internal controls.
The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing responsibility on the management for irregular award
to un-registered contractors.
[AIR Para: 11]

237
4.2.3.53 Un-authorized Award of Auctions without Approval
Rs 2.768 Million
As per Para 3 of the Government of Sindh, Local Government, PHE, Rural
Development & HTP Department Notification No.SOA/LG/4(82)/2013 Dated 27th May,
2015, “The auction papers of the taxes, rates and fees etc. as provided in Schedule-V
(Part-I, Part-II and Part-III) appended to the Sindh Local Government Act, 2013, should
be submitted to this department for approval latest by 15th June, 2015, so that the menace
of litigation is avoided failing which the delinquent officers/officials will be held
responsible for loss inflicted to Government exchequer till confirmation of auction by
Government, possession shall not be handed over contractor”.
Every attempt should be made to let out contracts through open auction in case
of failure after three attempts the offer shall be forwarded to Local Government with for
consideration.
As soon as contract/offer is approved by Government necessary agreement shall
be executed on the lines/analogy of model agreement and possession shall be handed
over after completing all requirement/terms and conditions prescribed in auction notice.
All contracts shall be leased out for one year through public auction which will
be visualized under the supervision of auction committees”.
Administrator, MC, Kotri, District Jamshoro, during financial year 2015-2016,
awarded auctions of Rs 2.768 million, , but failed to obtain approval of the same from the
Local Government, PHE, Rural Development & HTP Department, Government of Sindh
within due course of time, in violation of the above rule. Detail is as under:
(Amount in Rupees)
Sr. Name of Auction Name of Contractor Date of Start Amount
1 Cattle Piri Fee M/s Ghulam Shah 01-07-2015 1,422,019
2 Sign Boards/Advertisements M/s Ashfaque Ahmed 01-07-2015 730,000
3 Katcha Piri - - 615,954
Total 2,767,973
Audit is of the view that award of Auctions without obtaining approval of the
same from the Government within due course of time constituted weak financial
management.
Violation of prescribed rules was due to weak internal controls.

238
 The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for award of
auctions without obtaining approval of the same from the Government, under intimation
to audit.
[AIR Para: 10]

4.2.3.54 Un-Justified Payment of Arrears without Supporting Vouchers -

Rs 2.142 Million
As per Rule 276 of Treasury Rules of Federal Government, “Arrears of pay,
fixed allowances or leave salary shall be drawn, not in ordinary monthly bill, but in a
separate bill, the amount claimed for each month being entered separately, with quotation
of the bill from which the charge was omitted or withheld, or on which it was refunded
by, deduction, or of any special order of competent authority granting a new allowance or
an increase in pay. A note of the arrear bill shall invariably be made in the office copy of
the bills for the period to which the claim pertains, over the dated initials of the drawer of
the arrear bill, in order to avoid the risk of arrears being claimed over again.”
TO, TC, Matiari, during financial year 2014-2015, paid amount of Rs 2.142
million, to staff on account of difference of salary bills without supporting vouchers, in
violation of above rule.
Audit is of the view that management paid arrears of salary to staff without
supporting vouchers of withheld salary period which constituted weak internal control
and financial management.
Violation of prescribed rules was due to weak internal control system.
The matter was reported to the management during December, 2015 but they did
not respond to audit observation. The PAO failed to convene DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility on management for payments
without supporting vouchers, besides same be produced to audit for verification.
[AIR Para: 16]

239
4.2.3.55 Un-authorized Payment on Completed Scheme – Rs 1.515 Million
As per Para 23 of GFR Volume-I, “Every Government officer should realize
fully and clearly that he will be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will also be held
personally responsible for any loss arising from fraud on the part of any other
Government officer to the extent to which it may be shown that he contributed to the loss
by his own action or negligence”.
Town Officer, Town Committee, New Saeedabad, District Matiari incurred
expenditure of Rs 1.515 million on a completed scheme namely “Const. of CC block
House of Asghar Shah to Yaqoob Channa, Newsaeedabad”, 01-07-2014 . However, four
running bills were paid to M/S Fayaz Muhammad Dahri against completed scheme
through overwriting in MB. The scheme was shown as work in progress and final bill as
running bill. Furthermore, the date of completion on bills (prepared in December) showed
01-07-2014 as the date of completion but date of completion in MB was 12-12-2014.
Audit is of the view that management made possible bogus payment against the
completed scheme (through four bills paid in a single day) resulting into weak financial
management.
Non-observance of prescribed rules resulted into weak internal control system.
The matter was reported to the management during December, 2016 but they did
not respond to audit observation. The PAO failed to convene DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault.
[AIR Para: 4]

4.2.3.56 Irregular Commencement of Work without Availability of Funds

Rs 1.472 Million
As per Para-527 of PWD Manual, Volume-I and Sindh Local Councils
(Accounts) Rule, 1983 Rule-109, “no work shall begin unless proper detailed design and
estimate have been sanctioned; allotment of funds made and order for its commencement
issued by the competent authority”.
Further, According to Finance Department, GoS letter no. FD/CW&M-I)(26)
91-92(P.T.II) dated24-6-1993, “all charges incurred must be paid at once and under no

240
circumstances may be allowed to stand over to be paid from the grant of subsequent
year”.
Moreover, According to FD, GoS letter No.FD/B&E –I/51/2007 dated 2-7-2007,
“liability of previous years shall not be allowed to be cleared unless concurrence is given
by FD”.
Town Officer, Town Committee, New Saeedabad, during financial year 2015-
16, awarded and executed scheme worth Rs 6.626 million without availability of enough
funds, in violation of above rules.
Audit is of the view that management failed to clear payment within budgetary
allocation of respective years resulted into irregular payment and weak financial
management.
Deviation from prescribed rules resulted extra burden over subsequent year’s
budget and weak internal controls.
The matter was reported to the management during December, 2016 but they did
not respond to audit observation. The PAO failed to convene DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility on account of irregular
commencement of work without availability of enough funds, under intimation to audit
[AIR Para: 2]

4.2.3.57 Unauthorized Payment of Excess Salary - Rs 1.325 Million

As letter No.SOIII(SGA&CD)POL-7-43/2013 Karachi dated the 20th August
2014, “issued by Government of Sindh transfer and posting of the officers vide Sr. No.7
Qamar-ud-din Shaikh was repatriated to HMC Hyderabad as Deputy Taluka Officer
BPS-18”.
Municipal Commissioner, HMC, during financial year 2015-2016, paid
unauthorized salary of Rs 1.325 million to Mr. Qamar-ud-din Shaikh, against the post of
Senior Director Land (BPS-19) but the officer is actually a grade 18 officer. Further,
management failed to produce personal file and service record of the employee
concerned, in violation of above rule.
Audit is of the view that payment of salary against the post of BPS-19 instead of
BPS-18 resulted into financial miss-management.

241
 Non-observance of prescribed rules resulted into weak internal control system.
The matter was reported to the management during December, 2016 but they did
not respond to audit observation. The PAO failed to convene DAC meeting despite
pursuance by audit.
Audit recommends that fixing of responsibility on person (s) at fault and
recovery be effected, under intimation to audit.
[AIR Para: 25]

4.2.3.58 Irregular Expenditure without Constitution of Valid Procurement

Committee - Rs 1.324 Million
As per Rule 7 of SPPRA Rules, 2010, “The procuring agency shall, with
approval of its Head of the Department, constitute as many procuring committees, as it
deems fit, each comprising odd number of persons and headed by a gazette officer not
below the rank of BS-18, or if not available, the officer of the highest grade, and shall
ensure that at least one third of the members of a procurement committee are from the
agencies or departments other than the procuring agency”.
Chief Municipal Officer, MC, Badin, during financial year 2015-16, incurred
expenditure of Rs 1.324 million, without constitution of valid procurement committee, in
violation of above rules. Detail is as under:
(Amount in Rupees)
Sr. Date H.O.E Name of Vender Particular Amount
Disaster Purchased 6 inch Dia
1 04.08.2015 Saim & Co 96,000
Management delivery pipe
Disaster Purchased of Diesel
2 04.08.2015 Saim & Co 80,000
Management Machine Material
Disaster Purchased of Diesel
3 04.08.2015 Saim & Co 80,000
Management Machine Material
Disaster Mughal Autos & Purchased new engines
4 29.06.2016 1067,953
Management Repair Center and pipe
Total 1,323,953
Audit is of the view that award of work without constitution of procurement
committee resulted into unauthorized and unjustified award of work.
Violation of the laid down rules and procedures was due to weak internal
controls.

242
 The matter was reported to the management during December 2016 but they did
not respond to audit observation. The PAO also failed to convene DAC meeting despite
pursuance by audit.
Audit recommends fixing responsibility on management for violation of rules
and procedures in award of works.
[AIR Para: 8]

4.2.3.59 Unauthorized Over Strength Union Council Staff

Appointed/Adjusted
As per Government of Sindh, Local Government Department, vide letter
No.E&A(LG)4(2)/2012(Misci) dated: 26th July, 2013, Para-01, “In compliance to of
Judgment dated 12-06-13passed by the Honorable Supreme Court of Pakistan in Criminal
Petition No.89/2011 etc., has cancelled and withdrawn all absorption, out of turn
promotion, OPS and deputations officers/officials. Further, Para-2 “You are, therefore,
requested to relieve all such officers and officials immediately and furnish compliance
report through special messenger/fax to this department otherwise, you personally will be
held responsible for contempt of Honorable Supreme Court of Pakistan”.
Further, according to Rule-15 of Sindh Civil Servants (APT) Rules, 1974, “Posts
in BS-3 to 15 in offices, which serve only a particular region or district shall be filled by
appointment of person domiciled in the region or district concerned”.
Moreover, according to Rule (4) of Sindh Councils Unified Grades Services
Rules 1982, “Member of one branch or sub branch shall not be eligible for transfer to a
post in another branch or sub branch”.
Administrator, Municipal Committee Mehar, District Dadu, appointed/absorbed
various staff in Union Council Office, over and above the sanctioned strength. Detail is as
under:
Sanctioned Posts in Budget Book
S.No. Branch Sanctioned Strength Working Strength
1 Naib Qasid 2 3
2 Chowkidar 2 3
3 Dispatch Rider 2 1
4 Malhi 2 1
5 Junior Clerk 0 2

Audit is of the view that appointment/adjustment of Union Council staff over

and above the sanctioned strength resulted into unauthorized expenditure on the salaries

243
and weak financial management. Besides, chances of bogus appointments/adjustment
cannot be ruled out.
Deviation from prescribed rules and sanctioned strength resulted into weak
internal control.
The matter was reported to the management during October, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault.
[AIR Para: 25]

4.2.3.60 Unauthorized Payment without Preparation of Estimate

Rs 1.169 Million
According to paragraph 54 Central Public Works Departmental code, “Subject
to the provisions of paragraph 102, for each individual work proposed to be carried out,
except petty works, petty repairs, and repairs for which a lump sum provision has been
sanctioned under paragraph 106, a properly detailed estimate must be prepared for the
sanction of competent authority”.
Further, according to Para 23 of GFR Volume-I, “Every Government officer
should realize fully and clearly that he will be held personally responsible for any loss
sustained by Government through fraud or negligence on his part and that he will also be
held personally responsible for any loss arising from fraud on the part of any other
Government officer to the extent to which it may be shown that he contributed to the loss
by his own action or negligence”.
Town Officer, Town Committee, during financial year 2014-15, Matiari paid
Rs 1.169 million to contractor on lump sum basis against De-silting and Earth work
without preparing detailed estimate on schedule rates.
Audit is of the view that management failed to safeguard Government interest
by using higher rates charged on account of desilting and earth work.
Violation of the laid down rules and procedures was due to weak internal
controls.

244
 The matter was reported to the management during December 2015 but they did
not respond to audit observation. The PAO also failed to convene DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility against person(s) at fault.
[AIR Para: 4]

4.2.3.61 Unauthorized Appointment and Provisional Payment Against

Non-Existing Post
According to Rule 2 of APT Rules 1974 “In these rules, unless there is any,
thing repugnant in the subject or context:
(a) "Appointing authority", in relation to a post, means the person authorized
under rule 6 to make appointment to that post;
2[(aa) “Basic Scale” means a basic scale of pay sanctioned by Government in
which a post or group of posts is placed;
As per Letter No.SOV(SGA&CD)X-15/2013 dated 4th June 2013 issued by
Services and General Administration and Coordination Department Government of
Sindh, “the Honourable Chief Minister, Sindh has been pleased to impose complete ban
on all kinds of recruitment henceforth. All Administrative Departments / Autonomous
Bodies are requested to adhere to the directives in letter and spirit.”
Town Officer, Town Committee, Matiari, during financial year 2014-15,
Mr. Abdul Hameed Shaikh was appointed as Town Officer (BPS-16) in the absence of
vacant, in violation of above rule.
Furthermore, the following discrepancies were also offered.
 Appointment was made during the ban period in violation of above mentioned
letter.
 Payment of arrears of salary of Rs 200,802 without proper LPC (Irrelevant LPC
attached with claim).
 Certificate of non-payment of arrear of salary from Town Committee Lakhi
District Shikarpur was not found.

245
 (Amount in Rupees)
Name of
Sr. Cheque no. Month Period Salary Amount
officer
Abdul
Hameed
1 Aug. 2013 24 Days 24 days 24,666 19,096
Shaikh, TO 3206960/13-
(BPS-16) 08-14
2 -DO- Sep'13 to May'14 9 months 24,666 221,994
3 -DO- June 2014 11 Days 11 days 24,666 9,044
TOTAL 250,134
Audit is of the view that unauthorized provisional payment was made to under
trainee town officer.
Deviation from prescribed rules and sanctioned strength resulted into weak
internal control.
The matter was reported to the management during October, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault.
[AIR Para: 3]

4.2.3.62 Un-authorized Use of Vehicles without Registration

“No person shall drive any motor vehicle and no owner of a motor vehicle shall
cause or permit the vehicle to be driven in any place unless the vehicle is registered in
accordance with this ordinance and the vehicle carries a registration mark displayed in
the prescribed manner” vide Section 23 of Provincial Motor Vehicle Ordinance, 1965
(West Pakistan Ordinance XIX of 1965. Further It any owner of a motor vehicle,
imported into the country or purchased from any authorized manufacturer in the country,
fails to register it within sixty days of its import, or purchase, as the case may be, he shall,
beside the registration fee prescribed under the rules, be liable to a penalty as per Tax
Receipt Rate 2010-11 with effect from 1st day of August 2009 at the following rates:

Where the default does not exceed six months 5,000

Where the default exceeds six months but does not exceed one year 10,000
Where the default exceeds one year but does not exceed two years 20,000
Where the default exceeds two years but does not exceed three years 30,000
Where the default exceeds three years but does not exceed four years 40,000
Where the default exceeds four years but does not exceed five years 50,000
Where the default exceeds more than five years 100,000

246
 Various formations of Hyderabad Division, during financial year 2015-2016,
failed to register vehicles with Excise and Taxation Department, GoS, within prescribed
time period, in violation of above rule. Detail is provided at Annex-Hyd11.
Audit is of the view that use of vehicles without Registration constituted weak
financial management.
Deviation from prescribed rule resulted into weak internal control.
The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for use of vehicles
without Registration, besides the same be registered, under intimation to audit.
[AIR Paras: 11, 14, 21, 19, 18, 16]

4.2.3.63 Non-Constitution of Enquiry Committee to Investigate the Matter

of Payment to Fake Employees
According to Rule 20(1) of GFR, “With the exceptions noted below, any loss of
public money, departmental revenue or receipts, stamps, opium, stores or other property
held by or on behalf of Government, caused by defalcation or otherwise, which is
discovered in a treasury or other office or department, should be immediately reported by
the officer concerned to his immediate official superior as well as to the Accountant
General, even when such loss; has been made good by the party responsible for it. Such
reports must be submitted as soon as a suspicion arises that there has been a loss; they
must not be delayed while detailed enquiries are made. When the matter has been fully
investigated a further and complete report should be submitted of the nature and extent of
the loss, showing the errors or neglect of rules by which such loss was rendered possible,
and the prospects of effecting a recovery”.
In Office of Municipal Committee Qasimabad, during financial year 2015-16, it
was observed that services of 135 employees were terminated after their appointment
orders were found fake. Moreover, these employees were getting the salary for the past
many years before the termination. No enquiry was conducted to ascertain the extent of
the loss, errors or neglect of rules, and the prospects of effecting a recovery.
Audit is of the view that non-conducting of enquiry resulting into undue favour
to person (s) involved in making payments to fake employees.

247
 Non-conducting of enquiry for fake appointments, constituted weak internal
controls.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility against person (s) at fault.
[AIR Para: 6]

4.2.3.64 Non-Maintenance of Record

According to Para-4 of Sindh Local Government (Property) Rules 2001, “All the
local Government shall take such steps as may be necessary to ensure that the property
vested in its managed and maintained in the best interest of the public.
Further, as per Para-6(a) and (b) of the Sindh Local Government (property)
Rules 2001, “Particular as the property vested in a council shall be in case of movable
property in the register in Form-I and in case of immovable form-III”.
Various formations of Hyderabad Division, during financial year 2015-16, failed
to maintain record of Government property, in violation of above rule. The audit has
found that in many formations, there are reports of Government property being
encroached.
Sr. Name of Formation AIR Para
1 HMC, Hyderabad 21
2 Administrator/CMO, Municipal Committee Qasimabad 23
3 Town Committee New Saeedabad 32
4 Town Committee, Mirpur Sakro 36

Similarly, Town Officer, Town Committee Mirpur Sakro, district Thatta, during
2015-16, incurred an expenditure of Rs 74.918 million, on account of salary and
non-salary heads but failed to maintain cash book properly, in violation of rules.
Audit is of the view that the absence of property record/cash book reflects poor
asset management and incomplete financial transactions. Further, encroachment cannot
be defended in court of law.
Violation of prescribed procedure was due to weak internal control system.

248
 The matter was reported to the management during October-December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for non-maintenance
of property record. Besides, same prepared without further delay and produced to audit
for verification.
[AIR Paras: 21, 23, 32, 36]

4.2.3.65 Irregular Out of Turn Promotions

According to Notification issued by SGA&CD vide No. SOIII(SGA&CD)POL-
7-43/2013 dated: 2.7.2013, “In pursuance of judgment dated: 12.6.2011 passed by the
Honorable Supreme Court of Pakistan in criminal original petition 89/2011 and other
cases and with the approval of competent authority, the absorption/appointments by
transfer of the following officers in the Local Government Department are here by
withdrawn ab-initio and they stand relieved to report to their parent
department/organizations”.
Further, according to Para 2 of letter issued by LGD vide No.
B&A(LG)4(21)/2014 dated: 16.3.2015, on the subject compliance of orders of Honorable
Supreme Court of Pakistan dated: 5.1.2015 passed in civil appeal No.404/2011 and civil
review petition No.193/2013, “ It is therefore once again requested to kindly comply the
above instructions regarding relieving of officers/officials who were on OPS, posted
against out of cadre posts and still holding the post on out of turn promotion passed by
Honorable Supreme Court of Pakistan in letter and spirit and furnish implementation
status/progress report to this department immediately for onward transmission to the
SG&CD and in case of non-compliance, the heads of attached department/wing will be
held responsible and exposed to contempt of court”.
Town Officer, Town Committee, Mirpur Sakro, District Thatta, during financial
year 2015-16, made out of turn and rapid promotions of an official in contravention to
above referred orders of Honorable Supreme Court of Pakistan. Further, personal file and
service book of the said official and details of promotions were not produced. Moreover,
during scrutiny of record an application addressed to Administrator Town Committee,
Mirpur Sakro by another staff member M. Saleem Katchi regarding such irregular out of
turn promotion was also found on record. Detail is as under:

249
 Name Details
Appointed as Junior Clerk BS-05
Mr. Abdullah Memon Promoted as Deputy Accountant BS-10 on 1.7.2007
Promoted as Deputy Accountant BS-15 on 30.6.2011
Promoted as Deputy Taluka Officer (Finance) BS-16 in February 2012

Audit is of the view that management failed to comply with the orders of
Honorable Supreme Court of Pakistan on the subject which indicate the absence of
systematic internal control and constituted weak financial and administrative
management.
Non-observance of rules constituted weak internal control.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) responsible for
non-compliance of Supreme Court of Pakistan and appropriate remedy/action be taken in
the light of decision of apex court and above referred letter(s), under intimation to audit.
[AIR Para: 04]

4.2.3.66 Non–Compliance of Honourable Supreme Court

According to the Notification issued by Local Government Department,
Government of Sindh vide No. SOA/LG/4(32)/2011 Karachi, dated the 3rd July 2013 on
subject matter; “Relieving of all absorbed and out of turn promotion officers and officials
in compliance of judgment of Honourable Supreme Court of Pakistan – Judgment (No.
89/2011 dated 12.06.2013) has cancelled and withdrawn all absorptions and out of turn
promotions of officers with effect from 1994” and relived all such officers and officials
immediately and furnish compliance report through special messenger to this department
otherwise you, personally will be held responsible for contempt of Hon’ble Supreme
Court of Pakistan.
According to the letter issued by Municipal Commissioner, HMC vide No.
G/69/2016 dated 09-02-2016, scrutiny committee is hereby constituted to check and
verify the cases of promotions, up-gradation and Absorption within 15 days.
Municipal Commissioner, HMC, Hyderabad, during financial year 2015-16,
failed to implement decision of Honorable Supreme Court and orders of SLGB, in
violation of above decision and orders. Details are as under
250
 Sr. AIR Para Particulars
Mr. Zahid Hussain Khamtio as Municipal Commissioner, Government of Sindh
1 2 issued a preliminary report on 27th April 2016 (No. G/115/2016) and failed to
complete scrutiny of cases since 1994
Scrutiny committee constituted by Municipal Commissioner HMC was given task
2 9 to scrutinized the case of promotions, up-gradation and Absorption and submit
report within fifteen (15) days but the committee failed to submit its report
Mr. Shabir Ali Khan, AEE (E&M) was mechanical Engineer and working against
3 26
the post of Civil Engineer (against non-cadre post).
Management failed to relieve Mr. Usman Khalid (BS-18/SCUG) (Accts Br.) and
4 27
violated the order of SLGB

Audit is of the view that HMC management violated Honorable Supreme Court
and SLGB Orders and allowed employees to work on their current positions.
Non-compliance honorable court and competent authority orders were due to
weak internal control system.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that prompt enquiry may be initiated and fixing of
responsibility on person (s) at fault.
[AIR Paras: 2, 9, 26, 27]

4.2.3.67 Unauthorized Retention of Council Accommodation

According to Rule-15 of Accommodation Allocation Rules, 2002, “Retention of
Accommodation. - (1) In case of death of allottee: (a) the family of the allottee shall be
entitled to retain the accommodation under their occupation for a period not exceeding
one year on payment of normal rent”.
Further, according to Rule-15(2) of Accommodation Allocation Rules, 2002,
“An allottee, on his retirement or expiry of contract period shall be entitled to retain the
accommodation under his occupation for a period not exceeding six months, on payment
of normal rent and this facility will be available to FGS once only”.
Moreover, according to Rule-15(6) of Accommodation Allocation Rules, 2002,
“An allottee or his family shall be served a notice of cancellation along with permission
of retention of the house in case of retirement from service or resignation etc., from the
date of occurrence of the event. This shall be treated as final notice and no further notice
shall be served upon him for vacation of the accommodation”.

251
 Administrator, HMC failed to vacate the Government residence from retired
employees who retired from 2011 to 2016 and still were occupying Government .Detail
of unauthorized retention of council accommodation beyond admissibility is as under:
HR Deduction/
Sr. Name of Allottee Possession by Retirement in Remarks
Recovered
Fire
01. Jameel Ahmed Zai Qaim Hussain Nil 2012
Brigade
02. Muhammad Ashraf Wife Nil - -
03. Rafiq Khan Rafiq Khan Nil April 2016 -
Yes but evidence
04. Iqbal Muhammad Ansar-ul-Aslam 2011 -
not provided
05. Mazhar Abbas Wife Nil 2012 -
Muhammad
06. Muhammad Akhtar Nil 2012 -
Akhtar

Audit is of the view that management failed to vacate the Government residence
and entitled employees are deprived. Retention of Government accommodation without
payment of rent resulted into financial loss.
Non-observance of rules constituted weak internal control.
The matter was reported to the management during November, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for vacation and
recovery, under intimation to audit.
[AIR Para: 52]

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 CHAPTER-V
MIRPURKHAS DIVISION

253
5.1 MIRPURKHAS DIVISION
5.1.1 INTRODUCTION
Mirpurkhas Division comprises of 03 Districts namely Mirpurkhas, Tharparkar
and Umerkot. Each Corporation / District Council / Municipal Committee / Town
Committee in Mirpurkhas Division is headed by an Administrator/ Municipal
Commissioner /Chief Officer / Chief Municipal Officer/ Town officer who carries out
operations as per Sindh Local Government Ordinance, 1979. The functions of Municipal
Committees are as following:
1. Prepare spatial plans for the Town including plans for land use, zoning and
functions for which Municipal Committees is responsible.
2. Exercise control over land-use, land-subdivision, land development and zoning by
public and private sectors for any purpose, including agriculture, industry,
commerce markets, shopping and other employment centers, residential, recreation,
parks, entertainment, passenger and transport freight and transit stations.
3. Enforce all municipal laws, rules and bye-laws governing Municipal Committees
functioning.
4. Prepare budget, long term and annual municipal development programs in
collaboration with the Union Councils.
5. Collect approved taxes, cesses, user fees, rates, rents, tolls, charges, fines and
penalties.
6. Manage properties, assets and funds vested in the Municipal
Corporation/Committees.
7. Develop and manage schemes, including site development in collaboration with
Union Administration.
8. Issue notice for committing any municipal offence by any person and initiate legal
proceedings for commission of such offence or failure to comply with the
directions contained in such notice.
9. Prosecute, sue and follow up criminal, civil and recovery proceedings against
violators of Municipal Laws in the courts of competent jurisdiction.
10. Maintain municipal records and archives.

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5.1.2 Comments on Budget and Accounts (Variance Analysis)

(Rupees in Million)

Excess (+)
Sr. Formation Particulars Budget Expenditure
Savings (-)
/ Revenue
Salary 721.907 613.621 (108.286)
Non-Salary 266.397 186.478 (79.919)
1 Mirpurkhas
Development 699.837 454.894 (244.943)
Revenue 1,715.684 686.274 (1,029.411)
Salary 735.071 624.810 (110.261)
Non-Salary 118.641 83.048 (35.592)
2 Tharparkar
Development 353.346 229.675 (123.671)
Revenue 1,079.696 431.878 (647.818)
Salary 406.626 345.632 (60.994)
Non-Salary 523.235 366.264 (156.970)
3 Umerkot
Development 846.927 550.503 (296.425)
Revenue 902.220 360.888 (541.332)
Salary 1,863.604 1,584.063 (279.541)
Non-Salary 908.272 635.791 (272.482)
Development 1,900.110 1,235.072 (665.039)
Grand Total 4,671.986 3,454.925 (1,217.061)
Revenue 3,697.601 1,479.040 (2,218.560)

Expenditure 2015-16

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 Original budget of Rs 4,671.986 million was allocated to District Councils,
Municipal Corporation and Town Committees of Mirpurkhas Division under various
grants. Variance Analysis of the Revised/Final Grant and Actual Expenditure for the
Financial Year 2015-16 for the audited entities depicted that there was a saving of
Rs 1,217.061 million.

5.1.3 Brief Comments on the Status of Compliance with PAC Directives

The audit reports pertaining to following years have been submitted to Governor
of Sindh. Detail of PAC meetings is given below:
Audit Year No. of Paras Status of PAC Meetings
2012-13 31 Nil
2013-14 11 Nil
2014-15 41 Nil
2015-16 34 Nil
As indicated in the above table, no PAC meeting was convened to discuss the
audit reports of Mirpurkhas Division.

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5.2 AUDIT PARAS
5.2.1 Misappropriation / Fraud
5.2.1.1 Doubtful Technical Sanction of Development Works
Rs 24.217 Million
According to Para 56 of CPW departmental code, “for each individual work
proposed to be carried out, except petty works petty repairs and repairs for which a lump
sum provision has been sanctioned under paragraph 106, a properly detailed estimate
must be prepared for sanction of competent authority this sanction is known as the
technical sanction to the estimate”.
Further, according to para-527 of PWD Manual, Vol-I, “no work shall begin
unless proper detailed design and estimate have been sanctioned; allotment of funds made
and order for its commencement issued by the competent authority”.
Town Officer, Town Committee, Kunri, District Umerkot, during financial year
2014-15, awarded several works of Rs 24.217 million. The technical sanction of the said
schemes was dubious since it was found without covering letter of the authority and
proper inward/outward number. The office couldn’t provide any proof to authenticate the
veracity of Technical sanction by competent authority, in violation of above rules. Detail
is provided at Annex-MPK1.
Audit is of the view that the doubtful technical sanction constituted doubtful
transaction which constituted weak financial management.
Non-observance of rules constituted weak internal control system.
The matter was reported to managements during September to December 2015,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends an inquiry on the subject matter to ascertain the facts, under
intimation to audit.
[AIR Para: 3]

5.2.1.2 Doubtful Payment Made on account of POL - Rs 5.711 Million

According to Para 23 of GFR Vol-I, “Every government officer should realize
fully and clearly that he will be held personally responsible for any loss sustained by

257
government through fraud or negligence on his part and that he will also be held
personally responsible for any loss arising from fraud on the part of any other
government officer to the extent to which it may be shown that he contributed to the loss
by his own action or negligence”.
Further, according to Rule-23 of SFR, Vol-I, “Every payment including
repayment of money previously lodged with Government for whatever purpose, must be
supported by a voucher setting forth full and clear particulars of the claim.”
Town Officer, Town Committee, Kunri, District Umerkot, during financial year
2014-15, incurred doubtful expenditure Rs 5.711 million on accounts of POL charges, in
violation of above rules. Detail is provided at Annex-MPK2. Audit has observed
following discrepancies in the expenditure:
 POL slips for daily consumption were not attached with voucher/bill.
 Same hand writing on POL bill and voucher raised suspicion on the
authenticity of claim.
 The bills were claimed without any details of POL consumed and lump sum
payments were paid.
 POL Bill didn’t showing details of consumption against vehicle no.
 No history sheet, logbooks of car and tour program was available to confirm
the authenticity of expenditure.
 The POL payment was made on cash
 Acknowledgement of POL dealer.
Audit is of the view that payment made without setting forth full details resulted
into doubtful expenditure which constituted weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to managements during December 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for doubtful payments made and
justify the expenditure to audit.
[AIR Para: 15]

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5.2.1.3 Doubtful Payment through First and Final Bill – Rs 4.887 Million
According to Clause-2 of the Contract Agreement, “the quantity of the work is
to be done within particular time as specified within the proportionate limit of time, such
as 1/4th work in 1/4th of the time”.
Further, according to Rule-88 of SFR Vol-I, “every government Administration
is expected to exercise same vigilance in respect of expenditure incurred from public
money, as a person of ordinary prudence would exercise in respect of expenditure of his
own money”.
Town Officer, Town Committee, Samaro, District Umerkot, during financial
years 2014-16, executed various development works and made payment to contractors
Rs 4.887 million in 1st RA bill, in violation of above rules. The payment was doubtful
since.
 The payments were made without proper measurement books and work register.
 The NTN and PEC category of contractor was not found
 10 percent check measurement by concerned XEN was not done.
[Amount in Rupees]
Sr. Name of office FY Amount
1 T.C Samaro 2014-15 1,932,032
2 -do- 2015-16 2,955,000
Total 4,887,032
Audit is of the view that management failed to observe Government rules and
procedures, which reflects extra ordinary favor was extended to contractors which
constituted weak financial management.
Non observance of rules constituted weak internal control.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault, under intimation
to this office.
[AIR Paras: 3, 3]

259
5.2.1.4 Doubtful expenditure on Pay of Temporary Employees and Labour
Charges -Rs 4.635 Million
According to Rule-88 of SFR Vol-I, “every government officer is expected to
exercise same vigilance in respect of expenditure incurred from public money, as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.
Town Committee Jhuddo, District Mirpurkhas, during financial year 2015-16,
made payment of Rs 4.635 million against the salary of temporary employees and labour
charges by transferring the funds into the accounts of Deputy Accountant and Incharge
Sanitation Jhudo and Naukot and then disbursed it in cash. No acknowledgement,
receiving as well as muster roll was available to authenticate the expenditure. Detail is
provided vide Annex-MPK3.
Audit is of the view that transferring of funds in to the accounts of employees
may lead to suspicious embezzlement of funds which constituted weak administrative
and financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to the management during September to December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends an enquiry in to the matter and fixing of responsibility at the
persons at fault, under intimation to audit.
[AIR Para: 2]

5.2.1.5 Fraudulent Payment of Liabilities - Rs 2.054 Million

As per FD, GoS O.M No.FD/B&E –I/51/2007 dated 02-07-2007, “liability of
previous years shall not be allowed to be cleared unless concurrence is given by Finance
Department (FD)”.
Further, as per Rule-88 of Sindh Financial Rules, Vol-I, “every government
officer is expected to exercise the same vigilance in respect of expenditure incurred from
public money as a person of ordinary prudence would exercise in respect of expenditure
of his own money and public money should not be utilized for the benefit of a particular
person or community”.

260
 Town Officer, Town Committee Kot Ghulam Muhammad, District Mirpurkhas,
during financial year 2015-16, paid an amount of Rs 2.054 million, without any record of
previous year’s bills of suppliers / contractors. Audit also observed that in majority of the
claims the signatures of erst-while Administrator was not matching. Besides, the
payments were made without approval of Finance Department. Details are provided at
Annex-MPK4.
Audit is of the view that payments of previous year bills without supporting
documents and approved of FD constituted weak financial management.
Non-observance of prescribed procedure constituted weak internal control.
The matter was reported to the management during September to December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account payments without
supporting vouchers and approval of FD, under intimation to audit.
[AIR Para: 17]

5.2.1.6 Unjustified Expenditure - Rs 1.545 Million

According to Rule-88 of SFR Volume-I, “every government officer is expected
to exercise same vigilance in respect of expenditure incurred from public money, as a
person of ordinary prudence would exercise in respect of expenditure of his own money”
Town Officer, Town Committee Jhuddo, District Mirpurkhas, during financial
year 2015-16, made payment of Rs 1.545 million against two development works. Audit
could not find any supporting record against the authenticity of work i.e. MBs, Work
Registers, STRN/NTN of contractors, PEC licenses and acknowledgment of general
public of locality etc. During the physical verification, the PVC pipes were found lying in
a hall situated near the chairman office town committee Jhudo. Management failed to
justify the expenditure without any use. Detail is as under:
[Amount in Rupees]
Estimate Name of Fund Due
NIT Name of Schemes
Cost Contractor Utilized payment
P.V.C pipe 3"4" pipe line Ward
46 1,050,000 Mr.Shehbaz 1,050,000 -
No.01 to 07 city Jhuddo
P.V.C pipe 3” 4" and 6" Dia Piyala
Mr.M.S
50 Hotel to Ghulam Hussain Colony 1,000,000 495,000
Anas 505,000
and Ward No.01 to 07 Jhuddo
Total 2,050,000 1,545,000 505,000

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 Audit is of the view that expenditure without any use resulting into unjustified
expenditure and weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to the management during November, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility against the person (s) at fault.
[AIR Para: 30]

5.2.1.7 Suspected Embezzlement through Fake Vouchers - Rs 1.271 Million

As per Rule 134 of SFR, “No detailed bills need be submitted to a higher
authority for contingent charges, which are not classed as countersigned contingencies,
each bill presented at a treasury should, therefore, contain full details of the expenditure,
supported by necessary sub-vouchers for individual payments included in the bill.”
As per Section(I) of Appendix 18-A of SFR Vol-I, "Means should be devised to
ensure that every government servant realizes fully and clearly that he will be held
personally responsible for any loss sustained by Government through fraud or negligence
on his part, and that he will also be held personally responsible for any loss arising from
fraud or negligence on the part of any other Government servant to the extent to which it
may be shown that he contributed to the loss by his own action or culpable negligence”.
M.C, Tharparkar Division, during financial year 2014-15, paid Rs 1.271 million
on various accounts. Audit observed following deficiencies were also found:
i. Payments were made on computer generated bills without invoice Nos.
ii. Contractor Address was not available on bills.
iii. Contact Nos and S.Tax/I.Tax Nos were not mentioned on bills.
iv. Measurement books and relevant stock entry was not made.
Audit is of the view that huge amount was withdrawn and misappropriated by
management resulting into loss to government and weak financial management.
Violation of prescribed rules resulted into embezzlement of public funds and
was due to weak internal control system.

262
 The matter was reported to the management during December, 2015, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for embezzlement of public money,
besides, recovering the amount from official(s) / person(s) under intimation to audit.
[AIR Para: 29]

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5.2.2 Non-Production of Record
5.2.2.1 Non-Production of Record - Rs 535.505 Million
As per Section 14 (1) (b) of the Auditor General (Functions, Powers & Terms
and Conditions of Service) Ordinance, 2001, The Auditor-General shall, in connection
with the performance of his duties under this Ordinance, have authority to require that
any accounts, books, papers and other documents which deal with, or form, the basis of
or otherwise relevant to the transactions to which his duties in respect of audit extend,
shall be sent to such place as he may direct for his inspection.
Moreover, “Chief Secretary vide letter No.DO.NO.SO(C-II)/SGA&CD/1-
73/2012 dated 25th October, 2013 duly endorsed by Secretary of LGD vide letter No.
SOA/(LG)LG/4/(77)2013, dated 21.11.2013 was pleased to direct to all Municipal
organizations / Local Councils for immediately providing record to audit, so that,
financial discipline may be restored to respective organizations. In case of failure to
provide record to audit by auditee organizations, the cases may be taken up under
disciplinary proceedings against officers concerned that may include suspension of
officers”.
Various formations of Mirpurkhas Division, incurred an expenditure of
Rs 508.476 million, but failed to provide record, during the financial years 2014-16, to
audit, in violation of the above rule and instructions. Details are provided at
Annex-MPK5.
Further, following Offices of Mirpurkhas Division, incurred expenditure
amounting to Rs 27.029 million, during financial years 2014-16, on purchase of POL for
official vehicles but did not produce Log Books, Vehicle Maintenance Record, History
Sheets and Petrol account Registers.
[Rupees in Million]
Sr. Year Name of offices Description Amount
1 2014-15 D.Council, Umer kot POL 2.045
2 2015-16 T.C Nangarparkar POL 5.543
3 2015-16 T.C Samaro POL 4.315
4 2015-16 T.C Digri POL 6.703
5 2015-16 T.C Jhuddo POL 8.423
Total 27.029
Audit is of the view that due to non-provision of record authenticity of
expenditure cannot be ascertained by audit.

264
 The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for non-
provision of record in accordance with rules and regulations and same be produced to
audit for verification.
[AIR Paras: 11, 1, 6, 1, 1, 1, 1, 4, 6, 3, 8]

265
5.2.3 Irregularity / Non-Compliance
A. Recovery, Targeted receipts/Outstanding dues
5.2.3.1 Non-Recovery of Targeted Receipts – Rs 57.374 Million
As per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer should
see that all sums due to Government are regularly received and checked against demands
and that they are paid into treasury claiming credit for so much paid into the treasury and
compare with the figures in the statements supplied by the comptroller”.
Following Offices of Mirpurkhas Division, failed to recover targeted receipts
amounting to Rs 57.374 million, during financial year 2015-16, on account of various
heads, in violation of above rules.
[Rupees in Million]
Sr. Name of offices Targeted revenue Actual revenue Shortfall in revenue
1 T.C Samaro 3,643,800 1,444,415 2,199,385
2 T.C Digri 27,274,590 7,338,994 19,935,596
3 T.C Nangarparkar 171,507,709 136,268,892 35,238,907
Total 57,373,888
Audit is of the view that non-recovery of Government Revenue that is a
reflection of weak internal control.
The matter was reported to the management during September to December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for non-
recovery of longstanding dues, besides, effecting recovery of the Government Revenue
without further delay.
[AIR Paras: 15, 4, 21]

5.2.3.2 Non- Recovery of Outstanding Dues - Rs 27.709 Million

As per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer should
see that all sums due to government are regularly received and checked against demands
and that they are paid into treasury claiming credit for so much paid into the treasury and
compare with the figures in the statements supplied by the comptroller”.

266
 Various Town committees of Mirpurkhas division, failed to recover the arrears
from various contractors / tenants, amounting to Rs 27.709 million, during financial year
2015-16, in violation of the above rule.
[Rupees in Million]
Sr. Name of offices Amount
1 T.C Digri 15.786
2 T.C Jhuddo 10.011
3 T.C Kot Ghullam Muhammad 1.912
Total 27.709
Audit is of the view that management failed to take necessary steps and enforce
the prescribed procedures for recovery of arrears/achievement of targeted revenue.
Violation of prescribed rules and procedures was due to weak internal control.
The matter was reported to the management during September to December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the concerned official(s), besides,
effecting recoveries against the government dues/targeted receipts, under intimation to
audit.
[AIR Paras: 3, 5, 3]

5.2.3.3 Loss Due to Non-Revision of Shops Rent - Rs 15.830 Million

As per Rule 9(1) of Sindh Rental Premises Ordinance 1979, “where the fair rent
of any premises has been fixed, no further increase thereof shall be effected unless a
period of three years has elapsed from the date of such fixation or commencement of this
ordinance whichever is later”.
Further, as per ibid, Rule 9(2), “the increase shall not, in any case exceed 10%
per annum on the existing rent”.
Different offices of Mirpurkhas Division, during financial years 2014-16, failed
to revise the rent rates of shops as per Rent Act resulting into loss to government
amounting to Rs 15.830 million, in violation of above rule. Detail is as under:
[Rupees in Million]
Sr. Year Name of offices Amount
1 2014-15 D.C Mirpurkhas 0.129
2 2015-16 T.C Samaro 2.156
3 2015-16 T.C Digri 8.937

267
 [Rupees in Million]
Sr. Year Name of offices Amount
4 2015-16 T.C Jhuddo 3.155
5 2015-16 T.C Kot Ghullam Muhammad 1.453
Total 15.830
Audit is of the view that undue favour was given to tenants resulting into loss to
government and weak financial management.
Violation of rules was due to weak internal control system.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends that rate of rent of shops be revised according to market rate
without further delay.
[AIR Paras: 3, 14, 2, 4, 2]

5.2.3.4 Non-Recovery / Non-deposit of Government Taxes-Rs 5.062 Million

As per Income Tax Ordinance 2001- Section 160, “Payment of tax collected or
deducted.-Any tax that has been collected or purported to be collected under Division II
of this Part or deducted or purported to be deducted under Division III of this Part 5[or
deducted or collected, collected, or purported to be deducted or collected under Chapter
XII] shall be paid to the Commissioner by the person making the collection or deduction
within the time and in the manner as may be prescribed”.
Further, as per Income Tax Ordinance 2001- Section 161, “Failure to pay tax
collected or deducted- Where a person (1) (b) having collected tax under Division II of
this Part 1[or Chapter XII] or deducted tax under Division III of this Part 2[or Chapter
XII] fails to pay the tax to the Commissioner as required under section 160” Moreover,
as per Para 41(a) SFR Volume-I,, “All money received on behalf of Government should
be without undue delay be credited into Government account”.
According to Seventh Schedule of Sindh Finance Act, 1964 amended vide
Schedule-II of Sindh Finance Ordinance, 2000, Professional tax is required to be
deducted from the payments made to contractors engaged in construction work or
providing services and labour vide Rate / Fee of Tax Receipts:
i. Upto 0.5 million 500/-
ii. Exceeding Rs 0.5 million but not exceeding Rs 5 million 1,500/-
iii. Exceeding Rs 5 million but not exceeding Rs 25 million 2,500/-

268
 iv. Exceeding Rs 25 million but not exceeding Rs 100 million 5,000/-
v. Exceeding Rs 100 million but not exceeding Rs 500 million 10,000/-
vi. Exceeding Rs 500 million but not exceeding Rs 1000 million 30,000/-
vii. Above 1000 million 100,000/-

According to Circular No.6 0f 2013, Finance Act 2013, vide C.No.4 (36)
ITP/2013 dated: 19 July, 2013, 41. “Income tax rates for salaried individuals have been
revised. The revised rates are as per the ‘TABLE’ below:
Sr. Taxable income. Rate of tax.
1 0 to Rs 400,000 0%
2 Rs 400,000 to Rs 750,000 5% of the amount exceeding Rs 400,000
3 Rs 750,000 to Rs 1,400,000 10% of the amount exceeding Rs 750,000

Following offices of Mirpurkhas Division, during financial years 2014-16,

provided loss to government worth Rs 5.062 million on account of non-deduction /
non-deposit of income tax, sales tax from bills of contractor and taxable salaries of staff,
professional tax from the bills of contractors as well as non-affixing of stamp duty on
contractual agreement with contractors, in violation of rules.
[Rupees in Million]
Sr. Name of offices Amount
1 T.C, Digri Income Tax 0.035
2 District Council, Umerkot Income Tax 0.019
3 Income Tax 0.034
4 T.C Samaro Income Tax 1.324
5 Tender Fees 0.528
6 Income Tax 0.101
T.C, Nagarparkar
7 Sales Tax 0.284
8 Town Committee, Kunri Professional Tax 0.065
9 T.C Samaro Stamp duty 0.263
10 District Council, Tharparkar Income Tax 0.019
11 District Council Umer Kot Income Tax 0.245
12 T.C, Kot Ghulam Muhammad Sales Tax 0.800
13 T.C, Jhuddo Sales Tax 1.291
14 T.C, Pithoro Tender Fees 0.054
Total 5.062
Audit is of the view that due to non-deduction income tax, professional tax and
non-affixing of stamp duty Government sustained loss of revenue.
Non-observance of prescribed rules and procedures was due to weak internal
controls.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.

269
 Audit recommends fixing of responsibility on person(s) at fault for non-
deduction of government taxes, besides, recovers the amount without further delay.
[AIR Paras: 5, 6, 16, 20, 13, 3, 24, 2, 19, 15, 3, 5, 5, 7, 5]

5.2.3.5 Loss to Government Exchequer – Rs 0.867 Million

As per Rule-88 of Sindh Financial Rules Volume-I, “every government officer
is expected to exercise the same vigilance in respect of expenditure incurred from public
money as a person of ordinary prudence would exercise in respect of expenditure of his
own money and public money should not be utilized for the benefit of a particular person
or community”.
Further, according to Para-4 of Finance Department O. M. No.FD(SR-I)
1(32)/2008-2011, Karachi the 10th July, 2012, “Revised rate of Conveyance Allowance
shall be admissible to civil servants working in BPS 16-19 is Rs 5,000/- per month”.
Moreover, according to Finance Division(Regulation wing) O.M No.F.3(1)
Reg5/2010 dated 1st October, 2013, “It has been decided that Conveyance allowance @
Rs 5,000/- per month will be admissible to officers in BPS-20-22 who are neither
availing free transport facility nor have been allowed monetization of transport
allowance”.
Following Offices of Mirpurkhas Division, during financial years 2014-16,
provided financial loss amounting to Rs 0.867 million to government exchequer on
account of excess payment of salary to employee, non-recovery of conveyance allowance
from the salaries of the officers who were allocated Government vehicles and payment of
conveyance allowance beyond permissible entitlement, in violation of above rules.
[Rupees in Million]
Sr. Year Name of offices Amount
1 2014-15 T.C Kuneri 0.397
2 2014-15 T.C Samaro 0.120
3 2014-15 T.C Kunri 0.060
4 201516 T.C Samaro 0.085
5 2015-16 T.C. Samaro 0.085
6 2015-16 T.C Nangarparkar 0.120
Total 0.867
Audit is of the view that management failed to exercise vigilance resulted into
government exchequer sustained financial loss due to weak financial management

270
 Deviation from prescribed rules resulted into weak internal control system
prevails in the department.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of Loss to Government
Exchequer. Besides amount may immediately be recovered, under intimation to audit
[AIR Paras: 31, 19, 30, 13, 19, 30, 13]

B. Violation of Rules
5.2.3.6 Irregular Execution of Work without PC-I - Rs 212.811 Million
According to SPPRA’s Guidelines Section 2.21 Pre-requisite conditions:
Procuring Agency/ Committee shall not invite bids for development works, unless
following conditions are fulfilled:
(i) Approval of PC-I/PC-II from Competent Forum;
(ii) Issuance of Administrative Approval (A.A) for development schemes;
(iii) Technical Sanction (TS) of a detailed estimate is obtained;
(iv) Funds are either released or anticipated to be released before award of
contract.
Further, according to Planning Commission Manual, competent forum to sanction
schemes:
Sr. Competent Forum Cost of Scheme up to
1 District Development Working Committee (DDWC) Rs. 20 million
2 Departmental Development Working Party (DDWP) Rs. 40 million
3 Provincial Development Working Party (PDWP) Rs. Five billion
4 Central Development Working Party (CDWP) Rs. One billion
5 Executive Committee of the National Economic Council (ECNEC). Above Rs. One billion
After clearance from CDWP

Moreover, as per Para 56 of CPW departmental code, “For each individual work
proposed to be carried out, except petty works petty repairs and repairs for which a lump
sum provision has been sanctioned under paragraph 106, a properly detailed estimate
must be prepared for sanction of competent authority this sanction is known as the
technical sanction to the estimate”.

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 Following Offices of Mirpurkhas Division, executed contract against
development schemes amounting to Rs 212.811 million, during financial year 2015-16,
without preparation of PC-I, obtaining approval from PDWP being the competent forum,
in violation of the above rules.
[Rupees in Million]
Sr. No. Name of Offices Amount
1 T.C Digri 42.540
2 T.C Jhuddo 70.000
3 T.C Kot Ghulam Muhamamd 100.271
Total 212.811
Audit is of the view that award of development work without preparation and
approval of PC-I constituted flagrant violation of rules and procedures.
Violation from prescribed rule was due to weak internal controls and defective
oversight mechanism being practiced by Planning and Development Department and
Finance Department.
The matter was reported to the management during September to December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for irregular award
and execution of work without PC-I, under intimation to audit.
[AIR Paras: 10, 22, 21]

5.2.3.7 Procurement in Violation of SPPRA Rules - Rs 212.155 Million

As per SPPRA Notification No.Dir (A&F)/SPPRA/1-3(GEN)/13-14/087 dated
03-07-2013 “IDs of the NIT/EOI are released after receipt of the Bid Evaluation Report
in terms of Rule-45 of SPP Rules, 2010.
2. SPPRA will release ‘SPPRA-ID’ to the procuring agencies (Pas), once PAs
submit the following documents, complete in all respect, as required under the rules: -
i. Annual Procurement Plan as required under Rule-11 of SPP Rules, 2010;
ii. Notice Inviting Tender, Expression of Interest (EOI) and Pre-qualification
Notice (Requirement of Rule 17);
iii. Bid Evaluation Reports (Prescribed by Rule 45);
iv. Contract Evaluation Form along with Letter of Award, Form of Contract
(Agreement) and Bill of Quantities (Requirement of Rule 50); and
v. Integrity Pact (where applicable) (Requirement of Rule 89).

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 Following Offices of Mirpurkhas Division uploaded / posted their tenders on
SPPRA website. Due to certain deficiencies the SPPRA withheld the IDs of each such
tender. The managements were required to remove the deficiencies and to get ID release
in each case before proceeding further. However, the managements awarded the work for
Rs 136.485 million, during financial year 2014-15, in respect of the tenders against which
SPPRA did not release the IDs.
[Rupees in Million]
Sr. Name of Offices AIR Para Amount
1 T.C Nangarparkar 4 23.943
2 T.C Digri 7 42.542
3 T.C Jhuddo 20 70.000
Total 136.485
Further, following Offices of Mirpurkhas Division, awarded different works
costing 75.670 million through NIT, during financial year 2015-16, but did not hoist bid
evaluation reports on the SPPRA website, in violation of above rule.
[Rupees in Million]
Sr. Name of Offices Amount
1 T.C Nangarparkar 5.670
2 T.C Jhuddo 70.000
Total 75.670
Audit is of the view that work was awarded without release of withheld tender
IDs by SPPRA and without issuing and uploading/hoisting of minutes of bids opening
meeting on the SPPRA website resulted in violation of prescribed rules and unauthorized
award of contract.
Violation from prescribed rule was due to weak internal controls.
The matter was reported to the management during September to December,
2015 and October to December, 2016, but they did not respond to audit observation. The
PAO also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for award of work in
withheld ID and without issuing and hoisting minutes of opening of bids on SPPRA.
[AIR Paras: 4, 7, 20, 12, 28]

5.2.3.8 Award of Work to Unregistered Contractors – Rs 102.818 Million

According to the Sindh Sales Tax on Services Act 2011 Section 24.
Registration.— (1) Registration will be required for all persons who: (a) are residents;

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(b) provide any of the services listed in the Second Schedule from their registered office
or place of business in Sindh; and (c) fulfill any other criteria or requirements which the
Board may prescribe under sub-section (2).
Further, according to notification issued by SGA&CD, GoS, vide No. SORI
(SGA&CD) 2-30/2010 dated: 23.10.2014, amendment in rule 46 (I) (iii) of SPPRA,
“registration with FBR for income tax, sales tax in case of procurement of goods,
registration with Sindh Revenue Board in case of procurement of works and services and
registration with PEC where applicable.”
Following Offices of Mirpurkhas Division, during financial years 2014-16,
awarded various development works amounting to Rs 102.818 million to various
contractors who were not registered with Sindh Revenue Board.
[Rupees in Million]
Sr. Year Name of offices Amount
1 2014-15 T.C Kunri 24.205
2 2014-15 T.C samara 34.370
3 2015-16 T.C samara 44.243
Total 102.818
Audit is of the view that non-compliance of the prescribed procedure resulted
into non-transparency in public spending and constituted weak financial management.
Non-observance of prescribed procedure constituted weak internal control.
The matter was reported to the management during September to December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of award of works to
contractors not registered with SRB, under intimation to audit.
[AIR Paras: 4, 4, 5]

5.2.3.9 Un-Authorized NIT before Obtaining Approval of Competent

Authority - Rs - 100.271 Million
According to the Para 1 and 2 Notification of Government of Sindh, local
Government vide No. SOI/LG/10-7/2013 dated 7th January 2014, “Permission for
development works with the approval of Local Government Department: I am directed to
refer to the subject noted above and all the development works of various local councils

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and other subordinate offices of local Government Department, shall be carried-out after
the approval / permission of this department. In this regard, PC-I of all development
works should be prepared according to the procedure/policy and be forwarded to this
department for approval/permission and thereafter necessary action be taken for
execution of such works after completion of required codal formalities.
Administrator, Town Committee, Kot Ghulam Muhammad, during financial
year 2014-15, floated NIT No.TC/KGM/16/2015 dated 16-3-2105 and published in
newspapers on 29-03-2015, for 305 schemes without prior approval of Secretary, Local
government Department, Government of Sindh, in violation of above rule.
Audit is of the view that NIT floated without approval resulted into unauthorized
award of contract and weak financial management.
Deviation from prescribed rule resulted into weak internal control.
The matter was reported to the management during December, 2015, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for floating NIT
without approval, under intimation to audit.
[AIR Para: 1]

5.2.3.10 Non-Utilization of Development Funds – Rs 76.000 Million

As per Para No.88 of Sindh Financial Rules Volume-I, “every Government
Officer should realize fully and clearly that he will be held personally responsible for any
loss sustained by the Government through fraud or negligence on his part and that he will
also be held personally responsible for any loss arising from fraud or negligence on the
part of any other Government Officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
Further, according to Rule-10 (iv) of General of Financial Rules, “public money
should not be utilized for the benefit of a particular person or section of community and
also according to rule all the claims must be supported with full details and documents”.
Town Officer, Town Committee Dighri, Mirpurkhas Division, during financial
year 2014-15, allocated and reserved funds of Rs 76.000 million for Development
schemes but failed to utilize funds, in violation of above rules.

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 Audit is of the view that due to non-utilization of development funds public
deprived of new schemes and resulting into weak financial management.
Non-observance of prescribed rules constituted weak internal control.
The matter was reported to the management during December, 2015, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility upon the person at fault, under
intimation to audit.
[AIR Para: 7]

5.2.3.11 Non-Advertisement of NITs in News Papers - Rs 51.000 Million

According to SPPRA 2010, Rule 17(1) Procurements over one hundred
thousand rupees and up to one million rupees shall be advertised by timely notifications
on the Authority’s website and may in print media in the manner and format prescribed in
these rules.
Further, according to SPPRA 2010, Rule 17(2).The advertisement in the
newspapers shall appear in at least three widely circulated leading dailies of English,
Urdu and Sindhi Languages.
Town Officer, Town Committee, Dighri, District Mirpurkhas, during financial
year 2015-16, failed to advertise the NITs in newspapers, in respect of works, costing
Rs 51.000 million, in violation of above rules.
Audit is of the view that management failed to observe Sindh Public
Procurement Rules, 2010 in letter and spirit, which reflects the absence of systematic
control and financial discipline in the department.
Such act of negligence predicts lack of transparency in the procedure of
awarding of contract.
The matter was reported to the management during November 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility against person(s) at fault.
[AIR Para: 9]

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5.2.3.12 Irregular Expenditure without Measurement Books
Rs 26.433 Million
As per Para 3 of CPWD Code, “all the executed quantities should be clearly
traced into the documents on which payment are made when the bill is prepared for the
work measurement every page containing the detail measurement must be invariably
scored out by a Diagonal Red Ink”.
Administrators, Town Committees, Samaro and Kunri, Mirpurkhas Division,
during financial year 2014-15, incurred expenditure of Rs 26.433 million on account of
execution of works without maintaining proper measurement books.
Audit noticed following discrepancies in measurement books:
 Separate measurement book should be maintained for each work but contrary to
this single book was used for various works.
 The quantities of measurement books were not matching with the quantities of bill
 Most of the measurement books were not certified by contractor which rendered
measurement as doubtful.

[Rupees in Million]
Sr. Year Name of offices Amount
1 2014-15 Town Committee, Samaro 5.933
2 2014-15 Town Committee, Kunri 20.501
Total 26.434
Audit is of the view that payment to contractors without maintenance of
measurement books resulting into unauthorized payment and weak financial
management.
Non-observance of rules constituted weak internal control.
The matter was reported to managements during December 2015 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault.
[AIR Paras: 9, 13]

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5.2.3.13 Unauthorized Drawal of Funds by Demand Drafts/Cash/Open
Cheques - Rs 20.300 Million
As per Rule 157 (1) and (2) of CTR, “The cheques for more than Rs 200/-
drawn in favor of Corporate or Local Bodies, firms, private persons or Government
servants (in respect of their personal claims) shall always be crossed”.
Following Offices of Mirpurkhas Division, during financial years 2014-16,
drawn an amount of Rs 20.300 million through demand drafts, Cash and open cheques.
The management failed to justify the transactions since the requisite record against the
beneficiaries was missing. Audit couldn’t find any trail of said transaction and hence the
whole transaction stands doubtful / unjustified.
[Rupees in Million]
Sr. Name of offices Amount
1 District council Tharparkar 2014-15 0.136
2 Town Committee, Jhuddo 0.224
3 Town Committee, Samaro 19.940
Total 20.300
Audit is of the view that drawl of funds by demand drafts, cash and open
cheques resulted into unauthorized drawl of public funds without justification, which
constituted weak financial management. Besides, chances of misappropriation of public
money cannot be ruled out.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for unauthorized drawl of funds,
without supporting detail and documents, under intimation to audit.
[AIR Paras: 18, 5, 3]

5.2.3.14 Expenditure incurred without Constitution of Procurement

Committee - Rs 15.578 Million
As per Rule 7 of SPPRA 2010, “The procuring agency shall, with approval of its
Head of the Department, Constitute as many procuring committees, as it deems fit, each
comprising odd number of persons and headed by the gazetted officer not below the rank
of BPS-18, or if not available, the officer of the highest grade, and shall ensure that at

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least one third of the members of a procurement committee are from the agencies or
departments other than the procuring agency”.
Different formations of Mirpurkhas Division, during financial year 2015-16,
incurred expenditure of Rs 15.578 million on account of purchase of various materials
and different works without constitution of procurement committee, in violation of above
rule. Detail is as under:
[Rupees in Million]
Sr. Name of offices Amount
1 T.C Nangarparkar 2.957
2 T.C Jhuddo 4.65
3 T.C Digri 3.000
4 T.C Digri 4.971
Total 15.578
Audit is of the view that purchases were made without constitution of
procurement committee which resulted into non-transparency in public spending.
Violation of prescribed rule was due to weak internal controls.
The matter was reported to managements during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements on account of
expenditure without constitution of procurement committee.
[AIR Paras: 28, 21, 8, 14]

5.2.3.15 Execution of Development Works out of Purview

Rs 15.000 Million
As per Section-72 Schedule-II (part-II) rule 1-16 of Sindh Local Government
Act.2013, “Compulsory functions to be performed by corporations, municipal
committees and town committees, council shall be responsible for water, sewerage,
drainage, sanitation, roads, other than Provincial and district roads, streets and street
lighting; firefighting, park services. 2. Sanitation, A Corporation, Municipal Committee
or Town Committee shall be responsible for the sanitation, and may for that purpose
cause such measures to be taken as are required by or under this Act. 3. Removal,
Collection and Disposal of Refuse: A Corporation, Municipal Committee or Town
Committee shall make adequate arrangements for the removal of refuse from all public

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streets, public latrines, urinals, drains and all buildings and lands vested in the Council
concerned and for the collection and proper disposal of such refuse”.
Further, according to Para 23 of GFR Volume-I, “Every government officer
should realize fully and clearly that he will be held personally responsible for any loss
sustained by government through fraud or negligence on his part and that he will also be
held personally responsible for any loss arising from fraud on the part of any other
government officer to the extent to which it may be shown that he contributed to the loss
by his own action or negligence”.
Town Officer, Town Committee, Kunri, Mirpurkhas Division, during financial
year 2014-15, executed various works of construction of roads amounting to Rs 15.000
million which comes under the purview of “Roads”. Moreover the said development
work was without proper detailed estimates and not vetted by Planning and Development
Department, Government of Sindh. Detail is as under:
[Amount in Rupees]
Sr. Scheme Name of work Cost
1 12 Constt/repair of black top road in Kunri Town ward No.316 3,000,000
2 13 Constt/repair of black top road in Kunri Town ward No.317, 318, 320 3,000,000
3 14 Constt/repair of black top road in Kunri Town ward No.319 A 3,000,000
4 15 Constt/repair of black top road in Kunri Town ward No.319 B 3,000,000
5 16 Constt/repair of black top road in Kunri Town ward No.319 B 3,000,000
Total 15,000,000
Audit is of the view that execution of works out of purview resulted into
unauthorized expenditure which constituted weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to the management during October, 2015 but they did
not respond to audit observation. The PAO failed to convene DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility for execution of works out of
purview, under intimation to audit.
[AIR Para: 11]

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5.2.3.16 Unauthorized Clearance of Liabilities - Rs 7.321 Million
As per Para 289 of Treasury Rules (TR) Vol-I and II, “all charges incurred must
be paid and drawn at once and under no circumstances may be allowed to stand over to
be paid from grant of another financial year”.
Further, as per FD, GoS O.M No.FD/B&E –I/51/2007 dated 02-07-2007,
“liability of previous years shall not be allowed to be cleared unless concurrence is given
by Finance Department (FD)”.
Following Offices of Mirpurkhas Divison, during financial year 2014-16, paid
an amount Rs 7.321 million against liabilities of development works of previous years
without concurrence of Finance Department, in violation of above rules.
[Rupees in Million]
Sr. Year Name of offices Amount
1 2014-15 T.C Digri 5.355
2 2015-16 T.C Jhuddo 1.966
Total 7.321

Audit is of the view that management failed to observe procedures of financial

discipline resulting into weak financial management.
Violation from prescribed rule was due to weak internal controls.
The matter was reported to the management during March, 2014 and December,
2016 but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for payment of liabilities without
concurrence of Finance Department.
[AIR Paras: 02, 10]

5.2.3.17 Un-Authorized Operation of Bank Account - Rs 5.800 Million

According to Finance Department, Government of Sindh letter
No.FD/PS/85/2010-11 dated 18th May, 2011 and followed by other letters
No.FD(RES.IV)/Misc/2011-12 dated 30th March, 2012, No.FD-SO(RES.IV)/2(72)/
2011(Prov) dated 5th December, 2013, 21st May, 2014, “it has been desired by the
Honorable Chief Minister that different Departments/Projects/ Programs / Companies/
Endowment funds/Employees’ benefits and Charitable funds/ Autonomous and Semi-
autonomous Bodies are directed that all bank Accounts dealing with the public money,
281
other than Assignment Accounts, would be maintained in Sindh Bank Limited instead of
other Commercial banks’.
Town Officer, Town Committee Dighri, Mirpurkhas Division, during financial
year 2014-15, operated fixed deposit account in HBL without authority with closing
balance of Rs 5.800 million, in violation of above rule.
Audit is of the view that management unauthorized maintained bank account in
private commercial bank which constituted weak financial management.
Non-observance of rules, policies and procedures in letter and spirit constituted
weak internal control.
The matter was reported to the management during October, 2015 but they did
not respond to audit observation. The PAO failed to convene DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault.
[AIR Para: 1]

5.2.3.18 Development Expenditure in Excess of Budget Grant

Rs 4.650 Million
As per Rule 4(3) of Sindh District Government Budget Rules, 2002, “The Head
of the office is personally responsible for ensuring that total expenditure is kept within
the limits of appropriation. Further, as per Rule 75(I) ibid, “In the event that a grant is
likely to be exceeded the Head of Office shall take immediate steps to prevent the excess
expenditure by adopting prescribed effective measures.
Town Officer, Town Committee, Kot Ghulam Muhammad, District Mirpurkhas,
during financial year 2015-16 incurred an expenditure amounting to Rs 4.650 million in
excess of budget grant of development works. Detail is provided as under.
[Amount in Rupees]
Sr. Head Budget Expenditure Excess
1 Eastablishment Charges 80,520,962 80,404,962 -
2 Non-Development Expenditure 23,320,085 17,848,834 -
3 Development Expenditure 75,610,714 80,260,969 4,650,255
Total 179,451,761 178,514,765 4,650,255
Audit is of the view that irregular expenditure resulting into weak financial
management.

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 The expenditure in excess of budget grant was due to weak internal control
system.
The matter was reported to the management during December, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault.
[AIR Para: 27]

5.2.3.19 Unjustified Payment of Pension - Rs 2.395 Million

According to SI No.85 (vii) of Pension Manual 2006, “Personal appearance of
pensioners and payment through life certificate, a pensioner must take payment in person
after identification by comparison with the Pension Payment Order, at least once a year”.
Chief Officer, District Council, Umer Kot, during financial year 2014-15, paid
an amount of Rs 2.395 million to pensioners and families of deceased employees, in
violation of above rule. Detail is as under. Following observations were raised in this
regard.

 Payment of pension without personal appearance of pensioners.

 Payment without obtaining no-marriage certificates of pensioners issued by
notable/gazette officer.
 Variation in number of pensioners and amount of pension paid was noted.
 PPO were not verified from the issuing authority.
 Increases were not verified by the authorised officers/officials.
 Pensioners saving bank accounts were not transferred after proper approval and
acknowledgment
[Amount in Rupees]
V. No Cheque Date To whom paid Details Amount
254 12226494 29.5.15 retired staff pension m/o May-15, 15 nos 196,360
216 12226453 2.2.15 Retired employees pension for m/o 1/15, 14 nos 185,116
231 12226473 2.4.15 Retired employees Pension m/o 3/15, 15 nos 217,397
Amount for 3 months 598,873
Amount for the year 2,395,492
Audit is of the view that payment of pension to retired employees/families of
deceased employees without personal appearance and fulfilling codal formalities
constituted weak financial management. Moreover, chances of ghost pensioners cannot
be ruled out.

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 Non-observing of prescribed rules was due to weak internal controls.
The matter was reported to the management during September 2015 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault. Besides,
management can ensure payments through bank accounts of pensioners.
[AIR Para: 3]

5.2.3.20 Splitting of Expenditure to Avoid Tender - Rs 1.964 Million

As per Rule 12(1) of SPPRA Rules 2010, “Save as otherwise provided and
subject to the regulations made by the Authority, a procuring agency shall prepare, in
accordance with Rule 11 above, all proposed procurements for each financial year and
shall proceed accordingly without any splitting or regrouping of the procurements already
grouped, allocated and scheduled in the Procurement Plan;
Further as per Rule 17(1) of SPPRA Rules 2010 “Procurements over one
hundred thousand rupees and up to one million rupees shall be advertised by timely
notifications on the Authority’s website and may in print media in the manner and format
prescribed in these rules”.
Following Offices of Mirpurkhas Division, during financial year 2015-16,
awarded works amounting to Rs 1.964 million to contractors / suppliers by way of
splitting to avoid tender, in violation of above rule.
[Rupees in Million]
Sr. Year Name of offices Amount
1 2015-16 T.C, Samaro 0.528
2 2015-16 T.C Jhuddo 1.436
Total 1.964

Audit is of the view that management spilt work orders to avoid tenders resulted
into non-achievement of competitive rates and weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to managements during September to December, 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.

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 Audit recommends fixing of responsibility on account of splitting of work
orders in procurement(s), under intimation to audit.
[AIR Paras: 10, 9]

5.2.3.21 Non-Imposition of Penalty - Rs 1.740 Million

As per agreement made between contractor and Government, “the time frame
given for the completion of work is required to be observed and in case of failure/ delay,
the penalty at the rate of 10% of sanctioned cost may be imposed and deducted from the
bill of contractor”.
Town Officer, Town Committee, Kot Ghulam Muhammad, Mirpurkhas
Division, executed various development works amounting Rs 17.40 million, during
financial year 2015-16, but the contractor did not complete the work within stipulated
time without any valid justification. The penalty @ 10% of total cost amounting to Rs
1.740 million was not imposed/ recovered from the contractor, in violation of above rule.
Audit is of the view that undue favour was extended to contractors resulting into
weak financial management.
Deviation from prescribed rules was due to weak internal control.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for non-imposing penalty on
contractors, besides, effecting recovery without further delay, under intimation to audit.
[AIR Para: 22]

5.2.3.22 Payment without Approval of Competent Authority

Rs 1.739 Million
As per PPWD conditions of contract Clause 12-A, “No deviation from
specifications stipulated in the contract or additional items of work shall be carried out by
the contractor unless the rates of the substituted altered or additional items have been
approved in writing by the competent authority; failing which the Government will not be
bound to entertain any claim on this account”.

285
 Town Committee Jhuddo, District Mirpurkhas, during financial year 2015-16,
made extra payment of Rs 1.739 million on account of payment made against excess
execution work without obtaining approval of competent authority, in violation of rules.
Audit is of the view that cost of additional quantities/work without approval was
unjustified which resulted into excess payment by extending undue favour to contractor
which constituted weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to the management during November 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends recovering the unjustified payment and fixing of
responsibility on person(s) responsible for excess payment, under intimation to audit.
[AIR Para: 25]

5.2.3.23 Excess Execution of Works without Approval - Rs 1.441 Million

As per clause 38 of Contract Agreement, “Quantities shown in tender are
approximate and no claim shall be entertained for quantities of work executed being 30%
more or less than those entered in the tender or estimate”.
Further, according to Rule-88 of SFR Volume-I, “every government officer is
expected to exercise same vigilance in respect of expenditure incurred from public
money, as a person of ordinary prudence would exercise in respect of expenditure of his
own money”.
Town Officer, Town Committee Jhuddo, District Mirpurkhas, during financial
year 2015-16, made extra payment of Rs 1.441 million without approval on account of
excess execution of items of work, beyond the admissible limit of 30% of the estimated
quantity of work, in violation of rules. Detail is as under:
Audit is of the view that cost of additional quantities/work exceeded from 30%
of the original contract quantity resulting into excess payment by extending undue favour
to contractor, which constituted weak financial management.
Deviation from prescribed rules constituted weak internal control.

286
 The matter was reported to the management during December, 2016, but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) responsible for excess
payment from admissible limit, under intimation to audit.
[AIR Para: 23]

5.2.3.24 Unauthorized Provision of Premium – Rs 1.270 Million

As per Notification No. Schedule rates-T (ii) D.S/226, dated 04-05-2006, office
of the Chief Engineer Buildings Department. Government of Sindh, Hyderabad, Para-5,
“The schedule B of the tender shall not incorporate cartage items, premium quoted by the
bidder shall nevertheless be on the basis of rates shown therein including cartage. It must
be specified in schedule B that cartage will not be payable separately and that the bid
offered is including cost of cartage”.
Further, according to notification issued by Chief Engineer, PHED, Hyderabad
vide letter No. DB/4227/2012 dated 25-10-2012 the ceiling of premium fixed by this
department is as under:
Name of Work Premium/Ceiling
Earth work 20 % Below
CC Pavement 10% Below
Pacca/Semi pacca storage tanks 10% Below
Surface drains, brick pavement, masonary feeding channel, catch pit, soak pit 5 % Below
RCC covered Nala 10 % Below
Compound wall, pump house, staff quarters 5 % Below
RCC clear water tank, sump well 10 % Below
RCC collecting tank, screening chamber 5 % Below
Slow sand filter 10 % Below
Shallow tube well (by percussion method), mechanical filters plants,
@ par/No premium
oxidation ponds, katcha storage tanks, deep tube well (through rig),
Rapid gravity filters and RCC high service reservoirs 10 % Below
AC/PVC/PE/GI/black steel and RCC ASTM pipes 20 % Above
Repair work of all civil structures @ par/No premium

Town Officers, Town Committees, Samaro and Kunri, District Umer Kot,
during financial year 2014-15, allowed an unauthorized premium of Rs 1.270 million on
the works, in violation of above rule.

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 [Amount in Rupees]
Sr. Name of office Actual Expenditure Premium allowed
1 T.C Samaro 5,183,716 320,630
2 T.C Kunri 17,505,228 157,417
3 T.C Kunri 10,256,371 792,179
Total 32,945,315 1,270,226

Audit is of the view that due to allowing premium over and above the
permissible limit, government sustained loss. Undue favor was extended to contractors
which constituted weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to the management during September to December,
2015, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for allowing premium to the
contractors. Besides, actual amount may be calculated and recovery may be affected,
under intimation to audit.
[AIR Paras: 6,7,8 ]

5.2.3.25 Execution of Work without Technical Sanction - Rs 1.255 Million

As per Para 56 of CPW departmental code, “For each individual work proposed
to be carried out, except petty works petty repairs and repairs for which a lump sum
provision has been sanctioned under paragraph 106, a properly detailed estimate must be
prepared for sanction of competent authority this sanction is known as the technical
sanction to the estimate”.
Further, as per Para-527 of PWD Manual, Volume-I, “no work shall begin
unless proper detailed design and estimate have been sanctioned, allotment of funds made
and order for its commencement issued by the competent authority”.
Town office, Samaro, Mirpurkhas Division executed works worth Rs 1.255
million, during financial year 2015-16, without obtaining technical sanction from
competent authority, in violation of the above rules. Details are as under:

288
 [Amount in Rupees]
Sr. Scheme WO/date Contractor Name of work Est. Cost
M/s Constt of industrial room @
No.T.C/Samaro/02/of
1 99 M.Hussain vill Hassan K.K Deh 700,000
2014 dt. 24.11.14
Contractor Bhanbhra U.C Samaro Road
Const. of Culverts at vill. Pir
No.T.C/Samaro/118/of M/s Sultan
2 111 Baba Jan (4 Nos) Deh Shah 280,000
2014 dt. 24.11.14 Contractor
Hassan U.C Samaro Road
M/s Ayoub Constt of CC road at Vill.
No.T.C/Samaro/175/of
3 278 Kalroo Lakhano Kalroo Deh 27 275,000
2014 dt. 26.11.14
Contractor Hiral U.C Satriyoon
Total 1,255,000
Audit is of the view that award of work without sanction of detailed design and
estimate from competent authority resulted into unauthorized expenditure. Violation of
laid down procedures was due to weak internal control system.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on the management for execution of
works without obtaining technical sanction from competent authority.
[AIR Para: 7]

5.2.3.26 Irregular Expenditure on Account of Devi Cutting

Rs 1.000 Million
According to Para-23 of General Financial Rules Vol-I, “every government
officer should realize fully and clearly that he will be held personally responsible for any
loss sustained by Government through fraud or negligence on his part and that he will
also be held personally responsible for any loss arising from fraud or negligence on the
part of any other Government officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
Town Officer, Town Committee, Nagarparkar, during financial years 2014-16,
incurred an expenditure of Rs 1.000 million against Devi Cutting surrounding the Town.
Furthermore, Devi (kikar) doesn’t have natural habitat in Nagarparkar. The duty of devi
cutting belongs to Roads department and no detailed area was mentioned in the
documents. Furthermore, there is no detail of contractor such as NIC etc., in violation of
above rule.

289
 Audit is of the view that unjustified expenditure was incurred from public funds
which constituted weak financial management. Moreover, chances of misappropriation
can not be ruled out.
Non-observance of rules and procedures constituted weak internal control
system.
The matter was reported to managements during September 2015 and
December, 2016, but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit recommends that the irregularity may be justified to audit. Responsibility
may be fixed against the person (s) at fault. Steps should be taken to avoid such
irregularities in future.
[AIR Para: 7]

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 CHAPTER-VI
SHAHEED BENAZIRABAD DIVISION

291
6.1 SHAHEED BENAZIRABAD DIVISION

6.1.1 INTRODUCTION

Shaheed Benazirabad Division consists of 03 Districts namely Shaheed

Benazirabad, Sanghar and Naushahro Feroze. Each Corporation / District Council /
Municipal Committee / Town Committee in Shaheed Benazirabad Division is headed by
an Administrator/ Municipal Commissioner /Chief Officer / Chief Municipal Officer/
Town officer who carries out operations as per Sindh Local Government Ordinance,
1979.
The functions of Municipal Corporation/Committees are as following:
1. Prepare spatial plans for the Town including plans for land use, zoning and functions
for which Municipal Corporation/Committeesis responsible.
2. Exercise control over land-use, land-subdivision, land development and zoning by
public and private sectors for any purpose, including agriculture, industry, commerce
markets, shopping and other employment centers, residential, recreation, parks,
entertainment, passenger and transport freight and transit stations.
3. Enforce all municipal laws, rules and bye-laws governing Municipal
Corporation/Committeesfunctioning.
4. Prepare budget, long term and annual municipal development programs in
collaboration with the Union Councils.
5. Collect approved taxes, cesses, user fees, rates, rents, tolls, charges, fines and
penalties.
6. Manage properties, assets and funds vested in the Municipal Corporation/Committees.
7. Develop and manage schemes, including site development in collaboration with Union
Administration.
8. Issue notice for committing any municipal offence by any person and initiate legal
proceedings for commission of such offence or failure to comply with the directions
contained in such notice.
9. Prosecute, sue and follow up criminal, civil and recovery proceedings against violators
of Municipal Laws in the courts of competent jurisdiction.
10. Maintain municipal records and archives.

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6.1.2 Comments on Budget and Accounts (Variance Analysis)

(Rupees in Million)
Excess (+)
S. No. Formation Particulars Budget Expenditure
/ Revenue Savings (-)
Salary 549.054 466.696 (82.358)
District, Non-Salary 530.145 371.102 (159.044)
1 Shaheed
Benazirabad Development 876.227 569.548 (306.679)
Revenue 295.669 118.268 (177.401)
Salary 553.421 470.408 (83.013)
District, Non-Salary 272.206 190.544 (81.662)
2
Sanghar Development 343.233 223.101 (120.132)
Revenue 84.315 33.726 (50.589)
Salary 664.774 565.058 (99.716)
District Non-Salary 438.042 306.629 (131.413)
3 Naushahro
Feroze Development 338.030 219.720 (118.311)
Revenue 1,292.918 517.167 (775.751)
Salary 1,767.249 1,502.162 (265.087)
Total Non-Salary 1,240.393 868.275 (372.118)
Development 1,557.490 1,012.369 (545.122)
Grand Total 4,565.132 3,382.805 (1,182.327)
Revenue 1,672.902 669.161 (1,003.741)

Expenditure 2015-16

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 Original budget of Rs 4,565.132 million was allocated to Chief Officers,
Municipal Corporation and Town Committees of Shaheed Benazirabad Division under
various grants. Variance Analysis of the Revised/Final Grant and Actual Expenditure for
the Financial Year 2015-16 for the audited entities depicted that there was a saving of
Rs 1,182.327 million.

6.1.3 Brief Comments on the Status of Compliance with PAC Directives

The audit reports pertaining to following years have been submitted to Governor
of Sindh. Detail of PAC meetings is given below:
Audit Year No. of Paras Status of PAC Meetings
2012-13 20 Nil
2013-14 06 Nil
2014-15 25 Nil
2015-16 20 Nil

As indicated in the above table, no PAC meeting was convened to discuss the audit
reports of TMAs of Shaheed Benazirabad Division.

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6.2 AUDIT PARAS
6.2.1 Fraud/Embezzlement/Misappropriation
6.2.1.1 Doubtful/Unjustified Payment of Monthly Pension
Rs 59.519 Million
According to SI No.85 (vii) of Pension Manual 2006, “Personal appearance of
pensioners and payment through life certificate, a pensioner must take payment in person
after identification by comparison with the Pension Payment Order, at least once a year”.
Different Offices of Shaheed Benazirabad Division, during financial year
2015-16, paid pension amounting to Rs 59.516 million to retired employees and families
of deceased employees in cash without personal appearance, Copy of CNIC, Life
Certificate and No-Marriage Certificate, in violation of above rules. Details are as under:
[Rupees in Million]
Sr. Formation Amount
1 Chief Municipal Officer, Municipal Committee, Moro, District Naushahro Feroze 2.263
2 Town Officer, Town Committee, Bhirya, District Naushahro Feroze 6.407
3 Town Officer, Town Committee, Naushahro Feroze, District Naushahro Feroze 0.984
4 Town Committee Kazi Ahmed District Shaheed Benazirabad 6.665
5 Municipal Committee, Nawabshah 43.200
Total 59.519
Audit is of the view that pension payment to retired employees/families of
deceased employees without personal appearance and fulfilling codal formalities
constituted violation of rules. Moreover, chances of ghost pensioners cannot be ruled out.
Non-observing of prescribed rules was due to weak internal controls.
The matter was reported to the management during September 2016 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault. Besides,
measures be taken to avoid such practice in future and ensure payments through bank
accounts of pensioners.
[AIR Paras: 6, 11, 12, 14, 14]

295
6.2.1.2 Suspected withdrawal of Public Money- Rs 3.631 Million
As per Rule 23 of SFR, “Every Payment including repayment of money
previously lodged with Government for whatever purpose, must be supported by a
voucher setting forth full and clear particulars of the claim”.
Further, as per Para 155 of GFR Vo-I read with Para 113 of SFR Vol-I, “A
reliable list, inventory or account of all stores in the custody of Government Officers
should be maintained in a form prescribed by competent Authority, to enable a ready
verification of stores and check of accounts at any time and transactions must be recorded
in it as they occur”.
Town Officer, Town Committee, Sakrand, District Shaheed Benazirabad
incurred expenditure of Rs 3.631 million, during financial year 2015-16, on “earth filling” at
various places / areas. Following observations rise in this regard: Further detail in Annex-
SBA1.

 Quotations were not in sealed envelopes.

 CNIC copies of applicants were not shown.
 Copies of CNICs of residents where work done were not available for
acknowledgement of work.
 Earth filling was shown frequently in same areas with short intervals as well.
 Work completion certificates from residents were not obtained.
 In most cases phot copy of Quotations, bills of contractors were used instead
of printed on letter pad stating address, contact number and full details.
 Huge expenditure incurred on earth filling in city area itself stands
unjustified.
Audit is of the view that expenditure was incurred by management without
proper justification resulting into weak financial management. Moreover, chances of
misappropriation cannot be ruled out.
Weak internal controls resulted into deviation from prescribed rules and loss of
public money.
The matter was reported to the management during October-December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management on account of
suspected misappropriation of public money.
[AIR Para: 8]

296
6.2.1.3 Doubtful and Unjustified Payments through Open Cheques
Rs 0.717 Million
As per Rule 157 of CTR, duly adopted by GOS, “The cheques for more than
Rs 200 drawn in favour of Corporate of Local Bodies, firms, private persons or
Government servants (in respect of their personal claims), shall always be crossed”.
Town Officer, Town Committee, Bhriya, incurred expenditure of Rs 0.717
million, during financial year 2015-16, under various heads of accounts by issuing open
cheques without details, in violation of above rule. Details are as under:
[Amount in Rupees]
Date of
Sr. Particulars Instrument No Amount Debited
Transaction
1 4.3.2016 Withdrawal 491257 52,320
2 16.3.2016 Withdrawal 491258 154,725
3 24.3.2016 Withdrawal 491263 50,000
4 24.3.2016 Withdrawal 491264 50,000
5 25.3.2016 Withdrawal 491266 50,000
6 25.3.2016 Withdrawal 491268 200,000
7 26.3.2016 Withdrawal 491262 100,000
8 28.3.2016 Withdrawal 491265 60,149
Total 717,194
Audit is of the view that issuance of open cheques without justification resulted
in non-transparency in public spending, besides, chances of misappropriation of public
money cannot be ruled out.
Violation of prescribed rules was due to weak internal controls.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on managements at fault.
[AIR Para: 18]

297
6.2.2 Non-Production of Record
6.2.2.1 Non-Production of Record - Rs 171.032 Million
As per Section 14 (1) (b) of the Auditor General (Functions, Powers & Terms
and Conditions of Service) Ordinance, 2001, The Auditor-General shall, in connection
with the performance of his duties under this Ordinance, have authority to require that
any accounts, books, papers and other documents which deal with, or form, the basis of
or otherwise relevant to the transactions to which his duties in respect of audit extend,
shall be sent to such place as he may direct for his inspection.
Further, “Chief Secretary vide letter No.DO.NO.SO(C-II)/SGA&CD/1-73/2012
dated 25th October, 2013 duly endorsed by Secretary of LGD vide letter No.
SOA/(LG)LG/4/(77)2013, dated 21.11.2013 was pleased to direct to all Municipal
organizations / Local Councils for immediately providing record to audit, so that,
financial discipline may be restored to respective organizations. In case of failure to
provide record to audit by auditee organizations, the cases may be taken up under
disciplinary proceedings against officers concerned that may include suspension of
officers”.
Various formations of Shaheed Benazirabad Division, incurred an expenditure
of Rs 89.792 million, during financial year 2015-16, but failed to provide record to audit,
in violation of the above rule and instructions. Details are provided at Annex-SBA2.
Further, different formations of Shaheed Benazirabad Division, incurred
expenditure amounting to Rs 81.240 million, during financial year 2015-16, on purchase
of POL for official vehicles but did not produce Log Books, Vehicle Maintenance
Record, History Sheets and Petrol account Registers. Details are provided at Annex-
SBA2.
Audit is of the view that non-provision of record reflects total disregard to the
rules, regulations and system of internal controls.
Due to non-provision of record authenticity of expenditure cannot be ascertained
by audit.
The matter was reported to the managements during October to December, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for non-
provision of record in accordance with rules and regulations.
[AIR Paras: 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 7, 5, 6, 7, 4, 2, 9, 10, 12, 9]
298
6.2.3 Irregularity / Non-Compliance
A. Recovery, Targeted receipts/Outstanding dues
6.2.3.1 Less-Recovery of Targeted Receipts - Rs 41.372 Million
As per Section 96 (1) of Sindh Local Government Act 2013, “A council may
levy, in the prescribed manner all or any taxes, rates, tolls, and fees mentioned in
Schedule V”.
Further, as per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer
should see that all sums due to Government are regularly received and checked against
demands and that they are paid into treasury claiming credit for so much paid into the
treasury and compare with the figures in the statements supplied by the comptroller”.
Various formations of Shaheed Benazirabad Division, failed to recover the
Government dues/targeted receipts amounting to Rs 41.372 million as provided in the
budget, during financial year 2015-16, in violation of the above rule. Details are as under:
[Amount in Rupees]
Para Short
Formation Targeted Collected
No. Recovery
10 Municipal Committee Moro 9,426,794 326,713 9,100,081
10 Town Committee Bhriya 21,145,000 2,669,414 18,475,586
13 Town Committee Naushahro Feroze 10,630,000 6,345,598 4,284,402
13 Town Committee Sakrand 3,037,500 958,842 2,078,658
14 Town Committee Kazi Ahmed 3,507,000 1,366,577 2,133,394
13 Municipal Committee Nawabshah 12,661,000 9,821,877 2,839,123
22 Municipal Committee Shahdadpur 14,706,180 12,475,291 2,230,889
20 Municipal Committee Tando Adam 1,150,000 920,000 230,000
TOTAL 76,263,474 34,884,312 41,372,133
Audit is of the view that management failed to take necessary steps and enforce
the prescribed procedures for recovery of Government dues and achievement of targeted
revenue.
Violation of prescribed rules and procedures was due to weak internal control.
The matter was reported to the management during September to December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the concerned official(s), besides,
effecting recoveries against the Government dues/targeted receipts.
[AIR Paras: 10, 10, 13, 13, 14, 3, 22, 20]
299
6.2.3.2 Non-Recovery of Outstanding Dues - Rs 86.898 Million
As per Section 96 (1) of Sindh Local Government Act 2013, “A council may
levy, in the prescribed manner all or any taxes, rates, tolls, and fees mentioned in
Schedule V”.
Further, as per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer
should see that all sums due to Government are regularly received and checked against
demands and that they are paid into treasury claiming credit for so much paid into the
treasury and compare with the figures in the statements supplied by the comptroller”.
Following formations of Shaheed Benazirabad Division, failed to recover
previous arrears/outstanding charges/dues amounting to Rs 86.898 million, on various
accounts, during financial year 2015-16, in violation of above rules. Details are as under:
[Rupees in Million]
Sr. Name of Formation AIR Para Amount
1 Municipal Committee, Moro 3 4.808
2 Town Committee, Naushehro Feroz 4 9.173
3 Town Committee, Sakrand 11,12 2.168
4 Municiapl Committee, Nawabshah 2,3 70.749
Total 86.898
Audit is of the view that due to inaction by the managements, recovery of the
outstanding revenue could not be effected which also contributed towards poor financial
health of these entities.
Failure to implement prescribed rules resulted in non-recovery of Government
Revenue that is a reflection of weak internal controls.
The matter was reported to the management during September to December
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for non-
recovery of longstanding dues, besides, effecting recovery of the Government Revenue
without any further delay.
[AIR Paras: 3, 4, 11, 12, 2, 3]

300
6.2.3.3 Non-Deduction of Sales Tax on Services - Rs 23.745 Million
As per Section 8 (1) of the Sindh Sales Tax on Services Act 2011, “Subject to
the provision of this Act, there shall be charged, levied and collected a tax known as sales
tax on the value of taxable service at the rate of 16% specified in the schedule in which
the taxable service is listed”.
Further, as per Rule 2 (3) of the Sales Tax Special Procedure (Withholding)
Rules, 2007, “a withholding agent having free tax number (FTN) and falling under clause
(a) (b) and (c) of sub-rule (2) of Rule-1, shall on purchase of taxable goods from
unregistered persons, deduct sales tax at the applicable rate (17%)of the value of taxable
supplies made to him from the payment due to the supplier and unless otherwise specified
in the contract between the buyer and the supplier, the amount of sales tax for the purpose
of this rule shall be worked out on the basis of gross value of taxable supply”.
Following Offices of Shaheed Benazirabad Division, during financial year
2015-16, paid to different contractors/ suppliers/employees for procurement of goods and
services, but failed to provide any proof of deduction/deposit of Sales Tax of Rs 23.745
million, in violation of above rules. Details are as under:
[Rupees in million]
Sr. Name of Offices Amount
1. Municipal Committee, Moro 2.207
2. Town Committee, Bhirya 0.956
3. Town Committee, Naushahro Feroze 2.586
4. Town Committee, Mehrabpur 0.915
5. Town Committee, Kandiaro 11.74
6. Municipal Committee Nawabshah 4.759
7. Municipal Committee Shahdadpur 0.582
Total 23.745
Audit is of the view that due to non-deduction/deposit of sales tax into
Government Treasury the Government sustained loss of revenue.
Non-observance of prescribed rules and procedures was due to weak internal
controls.
The matter was reported to the management during October to December 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for non-
deduction of sales tax, besides, recovers the amount without further delay.
[AIR Paras: 2, 3, 29, 2, 4, 16]

301
6.2.3.4 Non-Deposit of Income Tax - Rs 8.331 Million
As per Rule 77 of CTR Volume-I, “All money received on behalf of
Government should be without undue delay be credited into Government account”.
Further, as per Para 41(a) of SFR Vol-I, “The departments controlling office
should see that all sums due to Government are regularly received and checked against
demands and that they are paid into the treasury”.
Town Officer, Town Committee Naushahro Feroze and Kandiyaro paid to
contractors for execution of different development works and deducted income tax
amounting to Rs 8.331 million at source, during financial year 2015-16, but failed to
deposit the same into Government treasury, in violation of the above rules. Details are as
under:
[Amount in Rupees]
Sr. Name of Offices Para Amount
1. Town Officer Town Committee, Kandiyaro 3 5,655,581
2. Town Officer Town Committee, Naushehro Feroze 3 2,676,553
Total 8,332,134
Audit is of the view that non-deposit of deducted income tax into Government
treasury resulted into loss of public revenue and weak financial management.
Deviation from prescribed rules resulted into weak internal control.
The matter was reported to managements during September to December, 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management on account of
unauthorized retention of income tax. Besides, same may be deposited into Government
treasury, under intimation to audit.
[AIR Paras: 3,3]

6.2.3.5 Non-Recovery of Income Tax from Salaries – Rs 0.789 Million

According to Income Tax Ordinance 2001 (Amended up to June, 2014) Under
Section-12, Salary.— (1) Any salary received by an employee in a tax year, other than
salary that is exempt from tax under this Ordinance, shall be chargeable to tax in that year
under the head “Salary”. (2) Salary means any amount received by an employee from any
employment, whether of a revenue or capital nature, including — (a) any pay, wages or
302
other remuneration provided to an employee, including leave pay, payment in lieu of
leave, overtime payment, bonus, commission, fees, gratuity or work condition
supplements (such as for unpleasant or dangerous working conditions) (c) the amount of
any allowance provided by an employer to an employee including a cost of living,
subsistence, rent, utilities, education, entertainment or travel allowance, but shall not
include any allowance solely expended in the performance of the employee’s duties of
employment;
According to Circular No.6 0f 2013, Finance Act 2013, vide
C.No.4(36)ITP/2013 dated: 19 July, 2013, 41. “Income tax rates for salaried individuals
have been revised. The revised rates are as per the ‘TABLE’ below:
S. No. Taxable income. Rate of tax.
1 0 to Rs. 400,000 0%
2 Rs.400,000 to Rs.750,000 5% of the amount exceeding Rs.400,000
3 Rs. 750,000 to Rs.1,400,000 10% of the amount exceeding Rs.750,000

Administrator, Municipal Committee Shahdadpur, during financial year 2015-

16, failed to deduct income tax amounting to Rs 0.789 million on the taxable salaries of
employees, in violation of rules.
Audit is of the view that undue favor was extended towards employees resulted
into loss to Government and weak financial management.
Deviation from prescribed rules resulted into weak internal control system
prevails in the department.
The matter was reported to managements during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on the management for less
deduction of income tax from taxable salaries of staff. Besides, same may be recovered
and deposited to income tax department, under intimation to audit.
[AIR Para: 5]

303
B. Violation of Rules
6.2.3.6 Unauthorized Payments without Pre-Audit - Rs 130.030 Million
According to Sub Para (2) of Para 32 of the Local Government Accounts
Manual, “Every bill shall be pre-audited by the Accounts Office. The pre-audit shall
ensure that the bill has been sanctioned and that funds are available to make payment.
The pre-audit shall also involve scrutinizing the bill to identify possible fraud and
irregularities”.
Further, according to Rule 111(4) and(5) of Sindh Local Government Act 2013,
"the Provincial Director, Local Fund Audit shall pre-audit all the payments from the
Local Funds of the Councils and a Council shall not with draw or disburse money from
the Local Fund unless it is pre-audited in the prescribed manner”.
Following formations of Shaheed Benazirabad Division, during financial year
2015-16, paid an amount of Rs 130.030 million to staff and contractors without
pre-auditing bills from concerned Local Fund Audit Departments, in violation of above
rules. Details are as under:
[Rupees in Million]
Sr. Name of Offices Para Amount
1. Municipal Committee, Moro 6 15.042
2. Town Committee, Kandiaro 6 31.212
3. Town Committee, Naushahro Feroze 8 4.855
4. Town Committee, Mehrabpur 5,13 53.577
5. Town Committee Sakrand 7 11.542
6. Town Committee Kazi Ahmed 5 12.647
7. Municipal Committee Tando Adam 15 1.155
Total 130.030
Audit is of the view that payments without pre-audit resulted into unauthorized
expenditure.
Non-observance of prescribed control procedures was due to weak internal
control system.
The matter was reported to the management during September to December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for making
payments without pre-audit.
[AIR Paras: 6, 6, 8, 5, 13, 7, 5, 15]

304
6.2.3.7 Execution of Work without Technical Sanction - Rs 72.714 Million
As per Para 56 of CPW departmental code, “For each individual work proposed
to be carried out, except petty works petty repairs and repairs for which a lump sum
provision has been sanctioned under paragraph 106, a properly detailed estimate must be
prepared for sanction of competent authority this sanction is known as the technical
sanction to the estimate”.
Further, as per Para-527 of PWD Manual, Vol-I, “no work shall begin unless
proper detailed design and estimate have been sanctioned, allotment of funds made and
order for its commencement issued by the competent authority”.
Chief Municipal Officer, Municipal Committee, Nawabshah and Town Officer,
Town Committee, Kandiyaro executed works worth Rs 72.714 million, during financial
year 2015-16, without obtaining technical sanction from competent authorities, in
violation of the above rules. Details are as under:
[Rupees in Million]
Sr. Name of Offices Amount
1 Municipal Committee Nawabshah 17.066
2 Town Committee Kandiyaro 55.648
Total 72.714
Audit is of the view that award of work without sanction of detailed design and
estimate from competent authority resulted into unauthorized expenditure.
Violation of laid down procedures was due to weak internal control system.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management for execution of
works without obtaining technical sanction from competent authority.
[AIR Paras: 10, 7]

6.2.3.8 Un-Authorized Withdrawal/Transfer of Funds – Rs 54.529 Million

As per Rule 3 (v) of Sindh District Government and Taluka/Town Municipal
Administration (Budget) Rules 2002, “TMO is responsible for ensuring that funds
allocated are spent on the activities for which the money was provided”.

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 Further, as per to Treasury Rules-13, “Unless in any case the Governor with the
concurrence of the Auditor General. Otherwise direct, money may not be withdrawn from
the public account without the written permission of the Treasury Officer or of a
Government servant of Pakistan Audit Department authorized in this behalf by the
Auditor General.”
Chief Municipal Officer, Municipal Committee, Moro, Town Officer, Town
Committee, Bhirya, Mehrabpur, during financial year 2015-16, drawn an amount of
Rs 54.529 million from Government account via office staff, but no any detail was
provided to audit for justification and authenticity of such drawl of funds, in violation of
above rules. Details are as under:
[Amount in Rupees]
AIR
Sr. Name of Formations Amount
Para
1 Chief Municipal Committee, Moro 9 12,009,926
2 Town Committee, Bhriya 13 9,883,423
3 Town Committee, Meharabpur 11 32,635,899
Total 54,529,248
Audit is of the view that unauthorized transfer of funds resulted into
non-transparency in public expenditure.
Violation of prescribed rules was due to weak internal controls.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management at fault on account
of unauthorized transfer of funds.
[AIR Paras: 9, 13, 11]

6.2.3.9 Splitting of Works to Avoid Tender – Rs 53.130 Million

As per Rule 12(1) of SPPRA Rules 2010, “Save as otherwise provided and
subject to the regulations made by the Authority, a procuring agency shall prepare, in
accordance with Rule 11 above, all proposed procurements for each financial year and
shall proceed accordingly without any splitting or regrouping of the procurements already
grouped, allocated and scheduled in the Procurement Plan”.

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 Further, as per Rule 17(1) of SPPRA Rules 2010, “Procurements over one
hundred thousand rupees and up to one million rupees shall be advertised by timely
notifications on the Authority’s website and may in print media in the manner and format
prescribed in these rules”.
Different formations of Shaheed Benazirabad Division, during financial year
2015-16, awarded works amounting to Rs 53.130 million to contractors/suppliers by
splitting work orders to avoid tender, in violation of rules. Details are as under:
[Rupees in Million]
AIR
Sr. Name of Formation Amount
Para
1 Municipal Committee, Moro, District Naushehro Feroze 5 9.455
2 Town Committee, Kandiaro, District Naushehro Feroze 5 13.243
3 Town Committee, Bhirya, District Naushehro Feroze 4 4.935
4 Town Committee, Naushehro Feroze, District Naushehro Feroze 5 15.106
5 Town Committee, Mehrabpur, District Naushehro Feroze 6 5.550
6 Municipal Committee Shahdadpur 15 2.089
7 Municipal Committee, Tando Adam 5 2.752
Total 53.130

Audit is of the view that splitting of work orders deprived the Government from
achieving best competitive rates resulting into weak financial management.
Non-observance of prescribed rules and procedures was due to weak internal
control system.
The matter was reported to the management during September to December,
2016. Town Officer, Town Committee, Naushahro Feroze in its reply dated 30-12-2015
stated that works were done on emergency basis after observing all codal formalities and
there was no splitting. Reply was not tenable as huge purchases were made on same date
by splitting to avoid tender. Other formations did not respond to audit observation. The
PAO also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements on account of
procurements/execution of works by splitting.
[AIR Paras: 5, 5, 4, 5, 6, 15, 5]

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6.2.3.10 Unauthorized Payments without Execution of Contract Agreements
Rs 49.466 Million
According to Para 89(c) of CPWD Code, “The agreement with the contractors
selected must be in writing and should be precisely and definitely expressed; it should
state the quantity and quality of the work to be done, the specifications to be complied
with, the time within which the work is to be completed”.
Chief Municipal Officer, Municipal Committee, Nawabshah and Town Officer
Town Committee, Sakrand awarded and release payments to various contractors against
development works costing Rs 49.466 million, during financial year 2015-16, without
execution of contract agreements, in violation of the above rule. Details are as under:
[Rupees in Million]
Sr. Name of Offices Amount
1 Municipal Committee Nawabshah 32.40
2 Town Committee Sakrand 17.066
Total 49.466
Audit is of the view that management mis-used its authority at the cost of public
interest and Government interest was not safeguard.
Violation of prescribed rules was due to weak internal controls.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for execution of schemes and making
payment without execution of contract agreement.
[AIR Paras: 16, 9]

6.2.3.11 Withdrawal of Public Money without Supporting Vouchers

Rs 40.290 Million
As per Rule 23 of SFR, “Every Payment including repayment of money
previously lodged with Government for whatever purpose, must be supported by a
voucher setting forth full and clear particulars of the claim”.
Chief Municipal Officer, Municipal Committee Moro and Shahdadpur, Town
Officer Town Committee, Bhirya and Mehrabpur, during financial year 2015-16, paid a

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huge amount of Rs 40.290 million to the staff and other person(s) without supporting
vouchers and justification. Details are as under:
[Amount in Rupees]
Sr. Name of Offices Amount
1 Chief Municipal Committee, Moro 13,654,426
2 Town Committee, Bhirya 13,544,683
3 Town Committee, Mehrabpur 11,113,836
4 Town Committee, Shahdadpur 1,977,000
Total 40,289,945
Audit is of the view that payment to the staff without supporting documents
resulted into suspicious withdrawal of funds and weak financial management.
Violation of prescribed rules was due to weak internal control system.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for suspicious
payments to staff. Besides, inquiry be initiated and recover amount, under intimation to
audit.
[AIR Paras: 4, 6, 8, 8]

6.2.3.12 Wasteful Expenditure on Outsourcing of Sanitation Work

Rs 32.400 Million
According to SLGO 2001, SECTION 54 (1), “The functions and powers of the
Taluka Municipal Administration shall be to - (h) provide, manage, operate, maintain and
improve the municipal infrastructure and services, including-
(i) Sewerage, sewage and sewage treatment and disposal;
(ii) Storm water drainage;
(iii) Sanitation and solid waste collection and sanitary disposal of solid, liquid,
industrial and hospital wastes;
Administrator / Town Officer, Town Committee, Sakrand incurred expenditure
of amounting to Rs 32.400 million, during financial year 2015-16, on account of
outsourcing of sanitation work instead of utilizing own sources (Sanitary
Worker/Sweepers), in violation of above rule.

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 Audit is of the view that management failed to utilize services of sanitary
workers/sweepers resultantly public funds were wasted on outsourcing of sanitation
work.
Non-observing of prescribed procedure was due to weak internal control system.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management on account of
non-utilization of services of staff and wastage of public funds through outsourcing.
[AIR Para: 2]

6.2.3.13 Non-Revision of Rent of Government Property – Rs 25.320 Million

According to Para 05 of Letter No.SOA/LG/1/(102)/2010 Dated: 24th May,
2012 Government of Sindh, Local Government Departments, “The rent/rates and other
recoveries may be reviewed / revised to improve the resources of Local Councils”
Further, according to Sub Section (1) Section 9, “Where the fair of any premises
has been fixed, no further increase thereof shall be effected unless a period of three years
has elapsed from the date of such fixation or commencement of this ordinance whichever
is less. Further, according to Sub Section (2) of Section-9 “the increase shall not, in any
case exceed 10% per annum on the existing rent”.
Municipal Officer, Municipal Committee Shaheed Benazirabad and Town
Officer Town Committee, Sakrand, failed to revise rent of Government property/shops
allotted to tenant and MS Sagar Hotel and restaurant since 2001 resulting into loss to
public revenue amounting to Rs 25.320 million, in violation of rules. Details are provided
at Annex-SBA3.
Audit is of the view that non-revision of rent resulted into loss of Government
revenue and weak financial management.
The failure of management to revise the rent in accordance with provision of
Rent Act was due to weak internal control system.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.

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 Audit recommends fixing of responsibility on account of non-enhancement of
rent, besides same be revised in accordance with relevant provisions.
[AIR Paras: 17, 7, 8]

6.2.3.14 Award of Contracts without Tender – Rs 18.586 Million

As per Rule-17(1) of Sindh Public Procurement Rules 2010, “Procurements over
one hundred thousand rupees and up to one million rupees shall be advertised by timely
notifications on the Authority’s website and in print media in the manner and format
prescribed in these rules”.
Chief Municipal Officer, Municipal Committee, Shadadpur and Town Officer,
Town Committee, Sakrand awarded works amounting to Rs 18.586 million, during
financial year 2015-16, to various contractors without calling tender, in violation of
above rule. Details are as under:
[Amount in Rupees]
Sr. Name of Offices Amount
1 Municipal Committee, Shahdadpur 13,210,788
2 Town Committee Sakrand 5,374,740
Total 18,585,528

Audit is of the view that managements did not invite tenders which resulted into
unauthorized expenditure and award of contracts in a non-transparent manner.
Violation from prescribed rules resulted was due to weak internal controls.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements on account of
procurements/execution of works without tenders.
[AIR Paras: 4,5,2]

6.2.3.15 Un-Authorized Utilization of Security Deposit - Rs 13.123 Million

As per Treasury Rules, T. O. 13, “Unless in any case the Governor with the
concurrence of the Auditor General, otherwise direct, moneys may not be withdrawn
from the public account without the written permission of the Treasury Officer or of a

311
Government servant of the Pakistan Audit Department authorized in this behalf by the
Auditor General.”
Further, as per Treasury Rules T.O. Section III, “Moneys standing in the public
account must be either retained in a treasury or deposited in the Bank. The conditions
under which they are deposited in the Bank are governed by the provisions of the State
Bank of Pakistan Act 1934.”
Chief Municipal Officer, Municipal Committee, Nawabshah, during financial
year 2015-16, made unauthorized payments amounting to Rs 13.123 million from
Security Deposit, in violation of above rules.
Audit is of the view that unauthorized expenditure was incurred form security
deposit of contractors resulting into weak financial management.
Deviation from prescribed rules was due to weak internal controls.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility against the official(s) at fault, under
intimation to audit.
[AIR Para: 19]

6.2.3.16 Wasteful Expenditure on Salaries of Sanitation Staff Without

Performing Duties - Rs 12.007 Million
As per Section-72 Schedule-II (part-II) rule 1-16 of Sindh Local Government
Act.2013, “Compulsory functions to be performed by corporations, municipal
committees and town committees, council shall be responsible for water, sewerage,
drainage, sanitation, roads, other than Provincial and district roads, streets and street
lighting; firefighting, park services. 2. Sanitation, A Corporation, Municipal Committee
or Town Committee shall be responsible for the sanitation, and may for that purpose
cause such measures to be taken as are required by or under this Act. 3. Removal,
Collection and Disposal of Refuse: A Corporation, Municipal Committee or Town
Committee shall make adequate arrangements for the removal of refuse from all public
streets, public latrines, urinals, drains and all buildings and lands vested in the Council
concerned and for the collection and proper disposal of such refuse”.

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 Further, according to Rule 88 of SFR Volume-I, “every Government officer is
expected to exercise same vigilance in respect of expenditure incurred from public
money, as a person of ordinary prudence would exercise in respect of expenditure of his
own money”.
Town Officer, Town Committee, Sakrand, District Shaheed Benazirabad, during
financial year 2015-16, incurred an expenditure of Rs 12.007 million on payment of
salaries of sanitation branch/sanitation staff without getting work done from them as the
sanitation work was awarded to private contractor instead of getting work done from
staff, in violation of above rules. Details are as under:
[Rupees in million]
Cheque/date Detail Strength Monthly salary
359728-29/3.8.15 Sanitation branch salary m/o 7/15 54 Employees 1,000,660
Total for the year 12,007,920
Audit is of the view that sanitation work was awarded to private contractor and
management failed to utilize services of sanitation staff to operate as well as maintain
sewerage resulted into wasteful expenditure on salaries which constituted weak financial
management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management for non-utilizing
services of staff, under intimation to audit.
[AIR Para-12]

6.2.3.17 Unauthorized Payment to Staff - Rs 10.061 Million

As per Rule 157(1) and (2) of CTR, “The cheques for more than Rs.200/- drawn
in favour of Corporate of Local Bodies, firms, private persons or Government servants
(in respect of their personal claims) shall always be crossed”.
Further, as per Rule 04 sub rule (06) of the Local Government Accounts
Manual, “Payments on behalf of the local Governments shall be made at the bank or
Government treasury”.

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 Further, as per Rule 88 of SFR Volume-I, “every Government officer is
expected to exercise same vigilance in respect of expenditure incurred from public
money, as a person of ordinary prudence would exercise in respect of expenditure of his
own money”.
Chief Municipal Officer, Municipal Committee, Nawabshah, during financial
year 2015-16, has drawn an amount of Rs 10.061 million, from Government account, in
the name of CMO and store keeper, instead of direct payment to concerned
officials/supplier/contractor, in violation of above rules.
Audit is of the view that Government funds were withdrawn unauthorizedly
resulting into weak financial management. Moreover, chances of misappropriation cannot
be ruled out.
Deviation from prescribed rules was due to weak internal controls.
The matter was reported to managements during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility against the person (s) at fault.
[AIR Paras: 22, 23]

6.2.3.18 Payment of Liabilities without Concurrence of Finance Department

Rs 8.584 Million
According to instructions issued by the Finance Department Government of
Sindh vide letter No. FD-B12 (48)/1996-97 dated 21-10-1996, the expenditure of the
previous years cannot be met from the allocation of the current financial year. Moreover,
as per Para 6 (k) of the Government of Sindh Finance Department Letter No. FD(B&E-
I/4)-I/51/2009 dated 01-07-2009, “Liability of previous years may not be allowed to be
cleared unless concurrence is given by the Finance Department”.
Following Offices of Shaheed Benazirabad Division paid an amount of Rs 8.584
million, during financial year 2015-16, against the liabilities of previous years without
concurrence of Finance Department, in violation of above rules. Details are as under:
[Amount in Rupees]
Sr. Name of Offices Amount
1 Municipal Committee, Moro 767,244
2 Town Committee Naushehro Feroz 895,622

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 [Amount in Rupees]
Sr. Name of Offices Amount
3 Town Committee Kazi Ahmed 1,121,769
4 Municipal Committee, Tando Adam 3,112,483
5 Municipal Committee, Nawabshah 3,686,834
Total 9,583,952

Audit is of the view that management failed to observe procedures of financial

discipline resulting into weak financial management.
Violation from prescribed rule was due to weak internal controls.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility for payment of liabilities without
concurrence of Finance Department.
[AIR Paras: 13,1,15,15,10]

6.2.3.19 Non-Execution of Works by the Contractors - Rs 7.920 Million

As per Clause II of the contract agreement, “The time frame given for
completion of the work is required to be observed and in case of failure/delay, penalty at
the rate of 10% may be imposed on the total cost of the work”.
Further, as per Para-10 (i) of GFR Volume-I, “every public officer is expected to
exercise the same vigilance in respect of expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.
Moreover, as per Para-10 (iv) of GFR Vol-I, “public money should not be
utilized for the benefit of a particular person or section of community”.
Chief Municipal Officer, Municipal Committee, Nawabshah, during financial
year 2015-16, invited tenders for works/schemes costing to Rs 7.920 million and works
were awarded to various contractors during March 2015, but said schemes/works still
have not been executed till close of financial year, in violation of above rules.
Non-execution of development schemes/works, Government sustained financial
loss on tendering process and NIT, which constituted weak internal control and weak
financial management.

315
 The matter was reported to managements during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends investigation of the matter and fixing of responsibility
against the official(s) at fault, under intimation to audit.
[AIR Para: 17]

6.2.3.20 Irregular Expenditure on Development Work Without Physical

Verification - Rs 6.823 Million
As per Government of Sindh, Communication and Works Department
Notification No. C/9-60/77 dated 26th May 1977, “it is the responsibility of the DO to
check 10% measurements before making payment of the bills for the works done by the
contractors”.
Further, As per Para-6.37 of Public Works Department Volume-I, “The
procedure of verification outlined in the foregoing rules is suitable primarily for divisions
executing ordinary works. In the case of special stores depots or divisions or of
construction divisions where there may be large concentration of stores, their physical
verification should be the duty of the executive authorities, and should be performed by
such agency and in such detail as may be decided by the Government in consultation with
the Director, Audit and Accounts (Works)”.
Chief Municipal Officer, Municipal Committee, Nawabshah, during
financial year 2015-16, paid an amount of Rs 6.823 million to the contractors on
execution of development schemes without verification of development schemes/work by
the concerned authorities on the site, in violation of above rules.
Audit is of the view that unauthorized expenditure was incurred without
physical verification resulting into weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to managements during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility against the person (s) at fault.
[AIR Para-12]

316
6.2.3.21 Purchases without Constitution of Procurement Committee
Rs 5.340 Million
As per Rule 7 of SPPRA 2010, “The procuring agency shall, with approval of its
Head of the Department, Constitute as many procuring committees, as it deems fit, each
comprising odd number of persons and headed by the gazetted officer not below the rank
of BPS-18, or if not available, the officer of the highest grade, and shall ensure that at
least one third of the members of a procurement committee are from the agencies or
departments other than the procuring agency”.
Administrator / Chief Municipal Officer, Municipal Committee, Nawabshah,
procured electrical and sanitation material amounting to Rs 5.340 million, during
financial year 2015-16 without constitution of procurement committee, in violation of
above rule.
Audit is of the view that violation of SPPRA rules resulted into non-
transparency in the award of contracts.
Violation of laid down procedures of SPPRA was due to weak internal controls.
The matter was reported to managements during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on the management for non-
transparency in awarding of contracts.
[AIR Para: 20]

6.2.3.22 Un-authorized Expenditure on Silt Clearance - Rs 4.866 Million

As per Para 23 of General Financial Rules Volume-I, “every Government officer
should realize fully and clearly that he will be held personally responsible for any loss
sustained by Government through fraud or negligence on his part and that he will also be
held personally responsible for any loss arising from fraud or negligence on the part of
any other Government officer to the extent to which it may be shown that he contributed
to the loss by his own action or negligence”.
Further, as per Para-10 (i) of GFR Volume-I, “every public officer is expected to
exercise the same vigilance in respect of expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.

317
 Chief Municipal Officer, Municipal Committee Moro and Town Officer Town
Committee, Mehrabpur, during financial year 2015-16, incurred an expenditure
amounting to Rs 4.866 million on lifting of silt clearance from various areas of municipal
committee without fulfillment of following irregularities. Details are as under:
 No any detail of agreement with contractor and other related documents
were provided
 No any number of locations were identified
 No any no of vehicles/Employees/machinery utilized were provided
 Rate analysis was not provided
 Proper detail Planning map was not provided
 No any officer was deputed to monitor the progress of lifting of silt
 When sanitary staff is available why the garbage was got lifted from
contractors etc.

[Amount in Rupees]
Sr. Name of Offices Amount
1 Municipal Committee, Moro 1,153,450
2 Town Committee, Bhirya 3,713,404
Total 4,866,854
From the above irregularities it is assumed that suspicious Process for lifting of
silt clearance was followed.
Audit is of the view that management failed to comply with the rules set forth by
the Government, which constituted weak financial management.
Non-observance of rules and procedures constituted weak internal controls.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that the matter be investigated and responsibility be fixed on
person (s) at fault. Besides, details be provided to audit for verification.
[AIR Paras: 14, 12]

6.2.3.23 Unauthorized Operation of Bank Accounts - Rs 3.589 Million

According to Finance Department, Government of Sindh letter
No.FD/PS/85/2010-11 dated 18th May, 2011, “it has been desired by the Honorable
Chief Minister that different Departments/Projects/ Programs / Companies/ Endowment
funds/Employees’ benefits and Charitable funds/ Autonomous and Semi-autonomous
318
Bodies directly or indirectly under the control of the Government of Sindh now give
preference to Sindh Bank Limited in their banking needs”.
Chief Municipal Officer, Municipal Committee, Nawabshah, during financial
year 2015-16, management opened bank accounts and maintained financial transactions
of Rs 3.589 million in Allied Bank Limited (ABL) and United Bank Limited (UBL)
Nawabshah branches instead of National Bank of Pakistan and Sindh Bank, in violation
of above rule. Detail is provided at Annex-SBA4.
Audit is of the view that opening and maintaining of bank accounts in private
commercial banks without obtaining permission/concurrence from Finance Department
was irregular.
Violation of prescribed rules and procedures was due weak internal control
system.
The matter was reported to managements during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for opening and
maintaining of bank accounts in private commercial banks.
[AIR Para: 21]

6.2.3.24 Doubtful Payment On Fake/Computer Generated Bills

Rs 3.185 Million
As per Para 23 of GFR Volume-I, “Every Government officer should realize
fully and clearly that he will be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will also be held
personally responsible for any loss arising from fraud on the part of any other
Government officer to the extent to which it may be shown that he contributed to the loss
by his own action or negligence”.
Municipal Committee Tando Adam and Shahdadpur made payment of Rs 3.185
million, during financial year 2015-16, on computer generated bills without invoice
number and NTN number mentioned on the bills, in violation of rules. Details are as
under:

319
 [Amount in Rupees]
Sr. Name of Offices Amount
1 Municipal Committee, Tando Adam 1,775,915
2 Municipal Committee, Shahdadpur 1,410,750
Total 3,186,665
Audit is of view that management made payment on un-authentic bills resulting
into doubtful expenditure and weak financial management.
Deviation from prescribed rules resulted into undue favour and weak internal
controls.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that fixing of responsibility on person(s) at fault.
[AIR Paras: 1,9]

6.2.3.25 Non-Reconciliation Of Cheques Deposited / Transferred To Income

Tax Department - Rs 1.651 Million
According to section 160 (chapter X, part V) of the Income Tax Ordinance
2001, state that, “Any tax that has been collected or purported to be collected under
division II of this part or deducted or collected or purported to be deducted or collected
under chapter XII, shall be paid to the Commissioner by the person making the collection
or deduction within the time and manner as may be prescribed (i.e. within 7 days of
deduction or collection)”.
Administrator/CMO, Municipal Committee Moro, during financial year 2015-
16, deducted an amount of Rs 1.651 million from various bills of contractors/suppliers
and the same were shown as transferred to Officer, Inland Revenue-V, Naushahro
Feroze, without providing any proof of payment and mandatory tax statement to audit for
authenticity of the claim which show suspicious payment. Detail in provided as under:
[Amount in Rupees]
Vr. No Cheque Cheque
Sr. No Name of Contractor Amount Paid
and Date No Date
1 67/02.15 16029828 11.02.16 Officer I/R Enforcement-V NF 539,410
2 69/02.16 16029828 11.02.16 Officer I/R Enforcement-V NF 539,410
3 38/05.16 17094021 16.05.16 Officer I/R Enforcement-V NF 572,491
Total 1,651,311

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 Audit is of the view that management failed to comply with rules set out by the
Government, which reflects the absence of systematic control and financial discipline
prevailing in the department.
Deviation from prescribed rules resulted into weak internal controls.
The matter was reported to managements during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault and to provide
proof of payment to audit for verification.
[AIR Para-12]

6.2.3.26 Excess Staff without Approval from Competent Authorities

Rs 0.959 Million
As per Government of Sindh, Local Government Department’s Letter
No.SOA/(LG)1(27)/2011 dated: 6th June, 2011, “no appointment in any grade shall be
made henceforth without consolidated advertisement and fresh approval of the
Government. Approval, if any, earlier issued in this regard may be treated
cancelled/withdrawn”.
Further, as per Para 188 of Sindh Financial Rules Volume-I, “no payment
should be made without the budget provision or prior permission be obtained from
Finance department in order to incur such expenditure”.
Moreover, as per Rule 80 (3)(4) of SFR Volume-I, “it is the responsibility of
DDO to ensure that no expenditure exceeds the limits of the budget provision and in case
the expenditure is exceeded the budget allocation, additional budget grant prior to the
close of the financial year should have been obtained”.
Administrator/TO, Town Committee, Bhirya, District Naushahro Feroze paid an
amount of Rs 0.959 million, during financial year 2015-16, to staff working over and
above sanctioned posts. Neither any approval for increase in Posts was obtained from
Local Government Department nor SNE was got approved from Finance Department,
Government of Sindh, in violation of rule. Details are provided at Annex-SBA5.
Audit is of the view that unauthorized expenditure was incurred against salaries
of staff working over and above sanctioned strength resulting into weak financial
management.
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 Deviation from prescribed rules constituted weak internal control.
The matter was reported to management during December 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on person (s) at fault.
[AIR Para-14]

6.2.3.27 Loss to Government due to Unauthorized Occupation of Government

Property
As per Para 4 of Sindh Local Government (Property) Rules 2001, “All the local
Government shall take such steps as may be necessary to ensure that the property vested
in it is managed and maintained in the best interest of the public”.
Further, as per Rule II (I) of Appendix 18, ibid, “all losses must be reported
forthwith by the officer concerned, not only to the Audit Officer, but also to his own
immediate official superior. Reports must be submitted as soon as reasonable ground
exists for believing that a loss has occurred; they must not be delayed while detailed
enquiries are made”.
During the audit of Town Officers, Town Committees, Mehrabpur and Sakrand,
during financial year 2015-16, it was observed that Government properties were
un-authorizedly occupied which included Driver of Deputy Commissioner, Nawabshah
and HESCO department without paying rent, due to which Government sustained huge
loss, in violation of above rules. Details are provided at Annex-SBA6.
Audit is of the view that unauthorized occupation of Government property
resulted loss of Government property.
Non-compliance of prescribed rules was due to weak internal control system.
The matter was reported to managements during September to December 2016,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for not taking efforts
to vacate Government property against un-authorized occupation. Besides getting the
Government property vacated, financial impact of retention of property may also be
worked out from the date of illegal occupation and recovery be effected.
[AIR Para: 7]
322
 CHAPTER-VII
SUKKUR DIVISION

323
7.1 SUKKUR DIVISION
7.1.1 INTRODUCTION
Sukkur consists of 03 Districts namely Sukkur, Ghotki and Khairpur. Each
Corporation / District Council / Municipal Committee / Town Committee in Sukkur
Division is headed by an Administrator/ Municipal Commissioner /Chief Officer / Chief
Municipal Officer/ Town officer who carries out operations as per Sindh Local
Government Ordinance, 1979.

The functions of Municipal Corporation/Committees are as following:

1. Prepare spatial plans for the Town including plans for land use, zoning and
functions for which Municipal Corporation/Committeesis responsible.
2. Exercise control over land-use, land-subdivision, land development and zoning by
public and private sectors for any purpose, including agriculture, industry,
commerce markets, shopping and other employment centers, residential, recreation,
parks, entertainment, passenger and transport freight and transit stations.
3. Enforce all municipal laws, rules and bye-laws governing Municipal
Corporation/Committeesfunctioning.
4. Prepare budget, long term and annual municipal development programs in
collaboration with the Union Councils.
5. Collect approved taxes, cesses, user fees, rates, rents, tolls, charges, fines and
penalties.
6. Manage properties, assets and funds vested in the Municipal
Corporation/Committees.
7. Develop and manage schemes, including site development in collaboration with
Union Administration.
8. Issue notice for committing any municipal offence by any person and initiate legal
proceedings for commission of such offence or failure to comply with the
directions contained in such notice.
9. Prosecute, sue and follow up criminal, civil and recovery proceedings against
violators of Municipal Laws in the courts of competent jurisdiction.
10. Maintain municipal records and archives.

324
7.1.2 Comments on Budget and Accounts (Variance Analysis)

(Rupees in Million)
Excess (+)
Sr. Formation Particulars Budget Expenditure
/ Revenue Savings (-)
Salary 795.982 676.584 (119.397)
District Non-Salary 238.150 166.705 (71.445)
1
Sukkur Development 382.563 248.666 (133.897)
Revenue 1,275.626 510.250 (765.376)
Salary 536.737 456.226 (80.510)
District Non-Salary 276.719 193.703 (83.016)
2
Ghotki Development 224.664 146.032 (78.633)
Revenue 749.055 299.622 (449.433)
Salary 1,052.050 894.243 (157.808)
District Non-Salary 171.203 119.842 (51.361)
3
Khairpur Development 450.844 293.048 (157.795)
Revenue 1,706.562 682.625 (1,023.937)
Salary 2,384.768 2,027.053 (357.715)
Non-Salary 686.071 480.250 (205.821)
Development 1,058.071 687.746 (370.325)
Grand Total 4,128.911 3,195.049 (933.862)
Revenue 3,731.243 1,492.497 (2,238.746)

Expenditure 2015-16

325
 Original budget of Rs 4,128.911 million was allocated to Chief Officers,
Municipal Corporation and Town Committees of Sukkur Division under various grants.
Variance Analysis of the Revised/Final Grant and Actual Expenditure for the Financial
Year 2015-16 for the audited entities depicted that there was a saving of Rs 933.862
million.

7.1.3 Brief Comments on the Status of Compliance with PAC Directives

The audit reports pertaining to following years have been submitted to Governor
of Sindh. Detail of PAC meetings is given below:

Audit Year No. of Paras Status of PAC Meetings

2012-13 29 Nil
2013-14 06 Nil
2014-15 64 Nil
2015-16 24 Nil

As indicated in the above table, no PAC meeting was convened to discuss the
audit reports of TMAs of Sukkur Division.

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7.2 AUDIT PARAS
7.2.1 Fraud/Embezzlement/Misappropriation
7.2.1.1 Suspicious Cheques Payment without description in Cash Book
Rs 19.519 Million
According to Sindh Local Government Bill 2013 Section 116(7), “Every
member or Employee of a Council and every person, charged with the administration of
the affairs of a council, or acting on behalf of Council shall be personally liable for the
loss, waste, misapplication or un authorized application of any moneys or property
belonging to the Councils which is a direct consequence of his negligence or misconduct,
and the liability of such member, employee or person shall be determined by Government
in the prescribed manner”.
Furthermore, according to para-10(1) of GFR Volume-I, "Every public officer is
expected to exercise the same vigilance in respect of the expenditure incurred from public
money as a person of ordinary prudence would exercise in respect of expenditure of his
own money".
In the office of the Town Officer, Town committee Kotdiji, District Khairpur,
during financial year 2014-15, it was observed that Rs 19.519 million was paid by
cheques to various contractors, but without description of payment in cash book. Further
the names of a few contractors were missing in cash book rendering the payments as
suspicious. Detail is provided at Annex-Suk1.
Audit is of the view that failure of management to comply with the rules reflects
weak internal control system prevailing in the department. Besides, chances of
embezzlement cannot be ruled out.
The matter was reported during November, 2015 but management failed to
provide departmental point of view. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
An in-depth inquiry must be conducted to verify the genuineness of payment,
under intimation to audit.
[AIR Para: 12]

327
7.2.1.2 Suspected Misappropriation due to Understating of Credit Receipts
Rs 19.095 Million
According to Para-23 of General Financial Rules Volume-I, “every Government
officer should realize fully and clearly that he will be held personally responsible for any
loss sustained by Government through fraud or negligence on his part and that he will
also be held personally responsible for any loss arising from fraud or negligence on the
part of any other Government officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
Administrator/Chief Municipal Officer, Municipal Committee, Rohri during
financial year 2014-15, it was observed that the MC receipts accounts showed deposit of
Rs 22.504 million in cash. However, the actual recovery mentioned in the next year
budget was shown as Rs 3.408 million. Audit couldn’t find the trail of Rs 19.095 million
which was suspected to be drawn out of receipts accounts and misappropriated, in
violation of above rule.
Audit is of the view that management failed to exercise the control over the
recoveries which indicates that there exists no system of internal control and effective
financial management.
Non observance of rules constituted weak internal control.
The matter was reported during November, 2015 but management failed to
provide departmental point view. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore desires that the matter may be investigated and justification may
be provided for above violation. Furthermore action may be taken against the persons at
fault for violating the rules.
[AIR Para: 02]

7.2.1.3 Suspicious Payment by Demand Drafts - Rs 12.054 Million

According to Sindh Local Government Bill 2013 Section 116(7), “Every
member or Employee of a Council and every person, charged with the administration of
the affairs of a council, or acting on behalf of Council shall be personally liable for the
loss, waste, misapplication or un authorized application of any moneys or property
belonging to the Councils which is a direct consequence of his negligence or misconduct,

328
and the liability of such member, employee or person shall be determined by Government
in the prescribed manner”.
Further, according to Para-10(1) of GFR Vol-I, "Every public officer is expected
to exercise the same vigilance in respect of the expenditure incurred from public money
as a person of ordinary prudence would exercise in respect of expenditure of his own
money".
In the office of the Town Officer, Town committee Kotdiji, District Khairpur,
during financial year 2014-15, bank statement of the entity reveals that Rs 12.054 million
were drawn by demand drafts without any details of beneficiaries. The management
failed to provide the justification of payment, in violation of above rule.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department.
Chance of embezzlement cannot be ruled out.
The matter was reported during November, 2015 but management did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Genuineness of payment must be justified under intimation to audit.
[AIR Para: 14]

7.2.1.4 Suspicious Embezzlement on account of POL of off Road Vehicles

Rs 7.889 Million
According to Sindh Local Government Bill 2013 Section 116(7), “Every
member or Employee of a Council and every person, charged with the administration of
the affairs of a council, or acting on behalf of Council shall be personally liable for the
loss, waste, misapplication or un authorized application of any moneys or property
belonging to the Councils which is a direct consequence of his negligence or misconduct,
and the liability of such member, employee or person shall be determined by Government
in the prescribed manner”.
Further, according to para-10(1) of GFR Volume-I, "every public officer is
expected to exercise the same vigilance in respect of the expenditure incurred from public
money as a person of ordinary prudence would exercise in respect of expenditure of his
own money".

329
 In the office of the Town Officer, Town committee Kotdiji, District Khairpur,
for the financial year 2014-15, it was observed by the audit that an expenditure
amounting to Rs 6.353 million was incurred on account of POL for Government Vehicles
as per expenditure statement. However, the management incurred expenditure on POL
without supporting vouchers or pre-audit from Local Fund Department. Moreover the
vehicles statement dated: 7.4.14 revealed most of the vehicles are out of order condition.
Audit suspected the amount of POL drawn as an act of embezzlement, in violation of
above rules.
Moreover, Chief Municipal Officer, Municipal Committee Kingri, during
financial year 2015-16, incurred an expenditure of Rs 1.536 million on purchase of POL
from different filling stations, which were approximately 25 KM away from Taluka
Kingri, Furthermore, audit observed 20 filling stations on road between Taluka Kingri to
Khairpur city. However the preference of a particular vendor is unjustified, in violation of
above rules.
This was due to the gross negligence, and internal controls leads to failure of
management to comply with the rules and procedures.
Non-observance of rules constituted weak internal control prevailing in
department. As a result, chances of misappropriation cannot be ruled out.
The matter was reported to the management during October 2015 and
November, 2016 but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
The above financial indiscipline needs to be justified and corrective actions be
taken against persons(s) at fault. The DDO and head of office should be vigilant to
control the expenditure as per rules.
[AIR Paras: 9, 6]

7.2.1.5 Suspected Misappropriation on account of POL - Rs 7.140 Million

According to Sub Section (2) of Section 4 of the Sindh Financial Management
and Accountability Act, 2011, “The rules shall be consistent with the following
principles:-
(a) All financial transactions shall be duly authorized;

330
 (b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
Further, According to Rule 70 Sub rule (1) of Sindh District Government and
Taluka/Town Municipal Administration (Budget) Rules, 2002, “The Heads of Offices
shall be responsible for controlling and managing expenditure from the Grants placed at
their disposal”.
During the audit of Administrator/Chief Municipal Officer, Municipal
Committee, Rohri during financial year 2014-15, it was noticed from “water supply
recovery register” and “amount for POL consumed and paid register” that expenditure on
account of POL amounting to Rs 5.918 million was incurred. The recovery against water
supply was only Rs 0.292 million. Huge POL charges of Rs 5.626 million were incurred
without substantial recovery. Furthermore management incurred expenditure amounting
to Rs 1.514 million on account of POL for those vehicles which were handed over to
NSUSC as per agreement. Detail provided at Annex-Suk2.
Audit is of the view that management such POL funds incurred on unauthorized
vehicles were misappropriated.
Non observance of rules constituted weak internal control.
The matter was reported during November, 2015 but management did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit therefore desires that the matter may be investigated and the
non-observance of Government rules and procedures by the management may please be
explained to audit.
[AIR Paras: 4, 5]

7.2.1.6 Suspicious Payment of Salary Bills – Rs 6.632 Million

According to Sindh Local Government Bill 2013 Section 116(7), “Every
member or Employee of a Council and every person, charged with the administration of
the affairs of a council, or acting on behalf of Council shall be personally liable for the
loss, waste, misapplication or un authorized application of any moneys or property
belonging to the Councils which is a direct consequence of his negligence or misconduct,
and the liability of such member, employee or person shall be determined by Government
in the prescribed manner”.

331
 Further, according to Para-10(1) of GFR Vol-I, "Every public officer is expected
to exercise the same vigilance in respect of the expenditure incurred from public money
as a person of ordinary prudence would exercise in respect of expenditure of his own
money".
In the office of the Town Officer, Town committee Kotdiji, District Khairpur,
during financial year 2014-15, it was observed that an amount of Rs 6.532 million was
paid on account of salary for the month of February 2015, the audit terms it as suspicious
on the following grounds:
 The salary bill was drawn on multiple advices instead of one.
 The whole salary was drawn without pre-audit
 One bill was passed more than the actual claim by RS: 100,000/-
 Some transactions were made to NBP Gambat and NBP Ranipur without
recipients / employee details
 Town Officer endorsement on Cheques and Distribution Lists was
different. Raising suspicion on authenticity of transaction.
Detail provided at Annex-Suk3.
Similarly, In the office of the Town Officer, Town committee Kotdiji, District
Khairpur, during financial year 2014-15, it was observed that Rs 0.100 million were
drawn, which was more than the actual salary bill as per detailed below, Further-more the
cheque amount was found forged in figures and words. The said entry was also not
reflected in cash book either. Detail is as under:
[Amount in Rupees]
Cheque Date Bank Description Bill amount Amount Drawn Embezzled
Manager NBP
435239 2.3.2015 Salary of TC 546,017 646,017 100,000
Kotdiji
Audit is of the view that failure of management to comply with the rules and
reflects weak internal control system prevailing in the department
Financial loss to public exchequer was due to negligence of the management
The matter was reported during November, 2015 but management did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
An in-depth inquiry must be conducted to verify the genuineness of all
employees under intimation to audit and responsibility of fake appointments might be
fixed on the person(s) at fault.
[AIR Paras: 11, 10]

332
7.2.1.7 Suspected Misappropriation in the Head of Liabilities of Development
Rs 5.369 Million
According to Para-23 of General Financial Rules Volume-I, “every Government
officer should realize fully and clearly that he will be held personally responsible for any
loss sustained by Government through fraud or negligence on his part and that he will
also be held personally responsible for any loss arising from fraud or negligence on the
part of any other Government officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
The Administrator/CMO, MC Rohri, booked an expenditure of Rs 5.369 million
in the head “Payment of Liabilities of Development” during financial year 2015-16. The
following point has been raised:
 No Voucher/record produced to Audit.
 No on-going scheme is shown in the progress report of Development.
 No demand in Budget book for the payment of Liabilities of Development.
Hence it is clear that such amount is misappropriated and chance of fraud is
present in this expenditure.
Audit is of the view that management failed to exercise the control over the
recoveries which indicated that there existed no system of internal control and effective
financial management. The non-observance of Government rules and procedures by the
management deprived the Government with revenue.
Non-compliance of rules reflected absence of internal control system in the
department.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends action may be taken against the person (s) at fault.
[AIR Para: 04]

7.2.1.8 Suspected/Double Payment in the Head of Repair of Vehicles and

Repair of Water Supply Schemes – Rs 4.636 Million
According to Para-23 of General Financial Rules Volume-I, “every Government
officer should realize fully and clearly that he will be held personally responsible for any

333
loss sustained by Government through fraud or negligence on his part and that he will
also be held personally responsible for any loss arising from fraud or negligence on the
part of any other Government officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
Further, according to Para-10 (iv) of GFR Volume-I, ”public money should not
be utilized for the benefit of a particular person or section of community and also
according to rule all the claims must be supported with full detail and documents”.
In the office of Administrator/Chief Municipal Officer, Municipal Committee,
Rohri, during financial year 2015-16, it was been observed that the management incurred
expenditure of Rs 7.500 million against repair of vehicle and water supply schemes,
while simultaneously an expenditure of Rs 4.636 million was shown to be incurred on
quotations. The duplicity of single transaction is highly suspicious since no justification,
for a same work via contracts and quotations, was provided to audit, in violation of above
rule.
Audit is of the view that management failed to comply with the orders of the
Government on the subject, which indicate the absence of systematic internal control and
lack of financial discipline prevailing in the department.
Due to improper check and balance over the movement of funds, the
misappropriation of Government money cannot be ignored.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommends that the misappropriated amount may be recovered
or clarified to audit at the earliest. Action may be taken against the persons at fault and
steps may be taken so that such irregularities are not repeated in future.
[AIR Para: 09]

7.2.1.9 Suspected Mis-appropriation – Rs 3.372 Million

According to Para-23 of General Financial Rules Volume-I, “every Government
officer should realize fully and clearly that he will be held personally responsible for any
loss sustained by Government through fraud or negligence on his part and that he will
also be held personally responsible for any loss arising from fraud or negligence on the

334
part of any other Government officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
Further, according to Para-10 (iv) of GFR Volume-I, “public money should not
be utilized for the benefit of a particular person or section of community and also
according to rule all the claims must be supported with full detail and documents”.
Administrator/Chief Municipal Officer, Municipal Committee, Rohri during
financial year 2015-16, has incurred an amount of Rs 6.869 million on Development
works, but progress report only showed Rs 3.498 million. The audit was not provided that
detail of further expenditure of Rs 3.372 million as the said work was reflected in
measurement book nor in work register, in violation of above rule.
Thus, the management failed to comply with the orders of the Government on
the subject, which indicate the absence of systematic internal control and lack of financial
discipline prevailing in the department.
Due to improper check and balance over the movement of funds, the
misappropriation of Government money cannot be ignored.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommends that the misappropriated amount may be recovered
or clarified to audit at the earliest. Action may be taken against the persons at fault and
steps may be taken so that such irregularities are not repeated in future.
[AIR Para: 08]

7.2.1.10 Suspected Misappropriation – Rs 0.180 Million

According to Sub Section (2) of Section 4 of the Sindh Financial Management
and Accountability Act, 2011, “The rules shall be consistent with the following
principles:-
(a) all financial transactions shall be duly authorized;
(b) all financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
Moreover, According to Para-23 of General Financial Rules Volume-I, “every
Government officer should realize fully and clearly that he will be held personally
responsible for any loss sustained by Government through fraud or negligence on his part
335
and that he will also be held personally responsible for any loss arising from fraud or
negligence on the part of any other Government officer to the extent to which it may be
shown that he contributed to the loss by his own action or negligence”.
Administrator/CMO, MC Rohri, during financial year 2014-2015, an amount of
Rs 0.180 million was short credited during the reversal of wrong entry. The management
failed to provide any details about the said transaction. Audit is in view that the said
amount was misappropriated by Bank officials with collusion of Government staff. Detail
is as under:
[Amount in Rupees]
Bank Branch A/c No Date Description Debited Credited Difference
Sindh Bank, 0120-100263- Wrong Entry
05.6.2015 21,428,000 21,248,000 180,000
Rohri 1000 Reverse

Audit is of the view that failure of management to comply with the Rules and
procedure needs to be explained.
Non observance of rules constituted weak internal control.
The matter was reported during November, 2015 but management did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit therefore desires that the matter may be investigated and the
non-observance of Government rules and procedures by the management may please be
explained to audit.
[AIR Para: 06]

336
7.2.2 Non-Production of Record
7.2.2.1 Non-Production of Record – Rs 864.638 Million
As per Section 14 (1) (b) of the Auditor General (Functions, Powers and Terms
and Conditions of Service) Ordinance, 2001, The Auditor-General shall, in connection
with the performance of his duties under this Ordinance, have authority to require that
any accounts, books, papers and other documents which deal with, or form, the basis of
or otherwise relevant to the transactions to which his duties in respect of audit extend,
shall be sent to such place as he may direct for his inspection.
Further, “Chief Secretary vide letter No.DO.NO.SO(C-II)/SGAandCD/1-
73/2012 dated 25th October, 2013 duly endorsed by Secretary of LGD vide letter No.
SOA/(LG)LG/4/(77)2013, dated 21.11.2013 was pleased to direct to all Municipal
organizations / Local Councils for immediately providing record to audit, so that,
financial discipline may be restored to respective organizations. In case of failure to
provide record to audit by auditee organizations, the cases may be taken up under
disciplinary proceedings against officers concerned that may include suspension of
officers”.
Various District Councils, Municipal Corporations, Municipal Committees and
Town Committees of Sukkur Division, incurred an expenditure of Rs 806.033 million but
failed to provide record, during financial year 2014-15, to audit, in violation of the above
rule and instructions. Details are provided at Annex-Suk4.
Further, various formations of Sukkur Division, incurred expenditure amounting
to Rs 58.605 million, during financial years 2014-16, on purchase of POL for official
vehicles but did not produce Log Books, Vehicle Maintenance Record, History Sheets
and Petrol account Registers. Details are provided at Annex-Suk4.
Audit is of the view that non-provision of record was due to non-provision of
record authenticity of expenditure cannot be ascertained by audit.
The matter was reported to managements during September to December 2015
and November, 2016, but they did not respond to audit observation. The PAO also failed
to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for non-
provision of record in accordance with rules and regulations.
[AIR Paras: 1,1,1,1,1,2,1,2,1,3, 5,3,5,3,4,14,4,8,12]

337
7.2.3 Irregularity / Non-Compliance
A. Recovery, Targeted receipts/Outstanding dues
7.2.3.1 Non-Deposit of Income Tax in Government Exchequer
Rs 11.081 Million
According to section 160 (chapter X, part V) of the Income Tax Ordinance
2001, “Any tax that has been collected or purported to be collected under division II of
this part or deducted or collected or purported to be deducted or collected under chapter
XII, shall be paid to the Commissioner by the person making the collection or deduction
within the time and manner as may be prescribed (i.e. within 7 days of deduction or
collection)”.
Following formations of Sukkur Division, during financial years
2014-16, deducted an amount of Rs 11.081 million from various bills of
contractors/suppliers and the same were shown to be transferred to Assistant
Commissioner, Inland Revenue-II, RTO, Sukkur, but no proof of payment i.e. CPRN or
treasury receipt was found on the record. Moreover, the department defaulted on
mandatory tax statements, i.e. 165 and 149. Details are as under:
[Rupees in Million]
Sr. Name of formation Para no. Year Amount
1 CO DC Ghotki 12 2014-15 0.0820
2 TC Pano Akil 2 2015-16 6.537
3 TC Saleh Pat 3 2015-16 4.462
Total 11.081
Audit is of the view that management failed to comply with rules set out by the
Government, which reflects the absence of systematic control and financial discipline
prevailing in the department.
Due to failure of providing tax statement /non-deposit of Income Tax,
Government was deprived of huge revenue collection.
The matter was reported to managements during December 2015 and
November, 2016, but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit therefore desires that the matter may be investigated and justification for
proof of income tax paid duly verified from income tax department may be provided.
Furthermore, action may be taken against the persons at fault for violating the rules of
causing loss to the Government.
[AIR Paras: 2,3]

338
7.2.3.2 Less Realization of Targeted Receipts Set Forth in Budget
Rs 10.284 Million
As per Section 96 (1) of Sindh Local Government Act 2013, “A council may
levy, in the prescribed manner all or any taxes, rates, tolls, and fees mentioned in
Schedule V”.
Further, as per Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer
should see that all sums due to Government are regularly received and checked against
demands and that they are paid into treasury claiming credit for so much paid into the
treasury and compare with the figures in the statements supplied by the comptroller”.
Chief Municipal Officer, Municipal Committee Gambat and Town Officer,
Town Committee Pacca Chang (Faiz Ganj), during financial years 2014-16, failed to
recover the estimated/targeted receipts of Rs 10.284 million, in violation of above rules.
Details are as under:
(Amount in Rupees)
Sr. Name of Office Year Budgeted Recovery Shortfall
1 Municipal Committee, Faiz Ganj 2014-15 1,173,000 0 1,173,000
2 -do- 2015-16 2,433,000 0 2,433,000
3 Municipal Committee, Gambat 2015-16 10,762,138 4,084,246 6,677,892
Total 14,368,138 4,084,246 10,283,892

Audit is of the view that management failed to take necessary steps and enforce
the prescribed procedures for achievement of targeted revenue.
Violation of prescribed rules and procedures was due to weak internal control.
The matter was reported to managements during December 2015 and August to
December, 2016, but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the concerned official(s), besides,
effecting recoveries against the targeted receipts.
[AIR Paras: 6,7]

7.2.3.3 Non-Recovery of Rent Charges – Rs 9.824 Million

As per Section 96 (1) of Sindh Local Government Act 2013, “A council may
levy, in the prescribed manner all or any taxes, rates, tolls, and fees mentioned in
Schedule V”.

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 Further, as per Rule 41 (a) of SFR Vol-1, “The departmental Controlling Officer
should see that all sums due to Government are regularly received and checked against
demands and that they are paid into treasury claiming credit for so much paid into the
treasury and compare with the figures in the statements supplied by the comptroller”.
Different formations of Sukkur Division failed to recover Rs 9.824 million,
during financial years 2014-16, from various defaulters on account of rent of shops, in
violation of above rules. Details are as under:
[Amount in Rupees]
Sr. Name of Offices Recoverable amount
1 MC, Gambat 613,577
2 District Council, Sukkur 8,110,000
3 District Council, Ghotki 1,104,453
Total 9,828,030
Audit is of the view that due to inaction by the management, they could not
recover the outstanding revenue that also contributed towards poor financial health.
Failure to implement prescribed rules resulted in non-recovery of Government Revenue
that is a reflection of weak internal control.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for non-
recovery of dues, besides, effecting recovery of the Government Revenue without any
further delay.
[AIR Paras: 3,7,7]

7.2.3.4 Non-Recovery of Electric Charges from the Residents of District

Council - Rs 3.233 Million
According to Rule-28 of GFR Volume-I, “no amount due to Government should
be left outstanding without sufficient resources and where any dues appear to be
irrecoverable the orders of competent authority for their adjustments must be sought. As
per Government instructions all the utility charges will be paid by the allottee him /
herself”.
During verification of accounts record of office of the Chief Officer, District
Council, Sukkur, during financial year 2014-15, it was observed that electricity was

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consumed by the offices of NADRA, Benazir Income Support Program (BISP) and
various residents of the District Council Colony, from the main electric meter of District
Council. Detail of tentative electric recovery of Rs 3.233 million is as under:
(Amount in Rupees)
Date of Period (in Approx. Total
Occupied Months) Monthly Electric
Sr. Name of Office
Council up to Electric Recovery
Property 30.6.2015 Charges Due
1 NADRA 1.8.2005 119 20,000 23,80,000
2 Benazir I/Support Program 1.7.2009 72 10,000 7,20,000
3 Various residents Nil Nil Nil 133,332
Total 3,233,332

The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during September, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommended that the recovery amounting to Rs 3.233 million
be made from the defaulters and deposited into Government account at the earliest.
Moreover residents may be directed to get their separate sub meters for their electric
consumption.
[AIR Paras: 1,2]

7.2.3.5 Non-Deduction of Taxes - Rs 2.000 Million

According to Rule 2 (3) of the Sales Tax Special Procedure (Withholding)
Rules, 2007, “a withholding agent having free tax number (FTN) and falling under clause
(a) (b) and (c) of sub-rule (2) of Rule-1, shall on purchase of taxable goods from
unregistered persons, deduct sales tax at the applicable rate (17%)of the value of taxable
supplies made to him from the payment due to the supplier and unless otherwise specified
in the contract between the buyer and the supplier, the amount of sales tax for the purpose
of this rule shall be worked out on the basis of gross value of taxable supply”.
Further, Seventh Schedule of Sindh Finance Act, 1964 amended vide Schedule-
II of Sindh Finance Ordinance, 2000, “Professional tax is required to be deducted from

341
the payments made to contractors engaged in construction work or providing services and
labour vide Rate / Fee of Tax Receipts”
i. Upto 0.5 million Rs 500/-
ii. Exceeding Rs. 0.5 million but not exceeding Rs. 5 million Rs. 1,500/-
iii. Exceeding Rs. 5 million but not exceeding Rs. 25 million Rs. 2,500/-
iv. Exceeding Rs. 25 million but not exceeding Rs. 100 million Rs. 5,000/-
v. Exceeding Rs. 100 million but not exceeding Rs. 500 million Rs. 10,000/-
vi. Exceeding Rs. 500 million but not exceeding Rs. 1000 million Rs. 30,000/-
vii. Above 1000 million Rs. 100,000/-

Moreover, as per Rule II of Sindh Finance Ordinance, 2000, “Professional tax is

required to be deducted from the payments made to contractors engaged in construction
work as per rates provided in official gazette”.
Various formations of Sukkur Division, during financial years 2014-16, made
payments to different contractors/suppliers but failed to provide any proof of
deduction/deposit of Sales tax and Professional tax into Government Treasury amounting
to Rs 2.000 million, in violation of above rules. Details are as under:
[Rupees in million]
Sr. Name of formation Head Para Year Amount
1 MC Khairpur GST 14 2015-16 1.034
2 TC Pano Akil -do- 3 2015-16 0.429
3 TC Saleh Pat -do 2 2015-16 0.443
4 MC Gambat P. Tax 11 2015-16 0.024
5 TC Pano Akil -do- 3 2014-15 0.070
Total 2.000
Audit is of the view that due to non-deduction of sales tax and professional tax
the Government sustained loss of revenue.
Non-observance of prescribed rules and procedures was due to weak internal
controls.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on person(s) at fault for non-
deduction of sales tax, besides, recovers the amount without further delay.
[AIR Paras: 14, 3, 2, 11,3]

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 7.2.3.6 Loss to Government due to Un-necessary Advertisement Charges to
Journalists – Rs 1.050 Million
According to Para-10 (iv) of GFR Volume-I, “public money should not be
utilized for the benefit of a particular person or section of community and also according
to rule all the claims must be supported with full detail and documents”.
Further, as per Section (I) of Appendix 18-A of SFR Vol-I, "Means should be
devised to ensure that every Government servant realizes fully and clearly that he will be
held personally responsible for any loss sustained by Government through fraud or
negligence on his part, and that he will also be held personally responsible for any loss
arising from fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his own action or
culpable negligence”.
The Town Officer, Town Committee, Nara, during financial year 2015-16,
incurred a huge expenditure of Rs 1.050 million on un-necessary advertisement and grant
to press club, without valid justification, in violation of above rules. Detail is as under:
[Amount in Rupees]
Sr. Name of Payees Cheque # Date Particulars Total
1 M/s. Nazeer Ahmed 15201268 2/10/2015 Advertisement bill, Daily Sindh 450,000
2 M/s. Nazeer Ahmed 15201283 14/10/2015 Advertisement bill, 14th August 2015 250,000
3 M/s. Nazeer Ahmed 15201292 29/10/2015 Advertisement bill, 14th August 2015 250,000
4 M/s. Press Club Nara 15401782 11/12/2015 Annual Grant to Press Club 100,000
Total 1,050,000
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to management during November, 2016 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
The above financial indiscipline needs to be justified and corrective actions be
taken against persons(s) at fault.
[AIR Para: 5]

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7.2.3.7 Non-Recovery of House Rent Allowance (HRA), Conveyance and
Electricity Charges from Chief Municipal Officer– Rs 0.866 Million
According to Finance Department in the circular No.FD-SR-IV/1(12)77 dated
15-3-1977, “House Rent allowance as fixed by the Government of the Basic pay should
be deducted from the Government servants who have been provided the Government
accommodation”.
Moreover, in light of Government instructions, no Conveyance Allowance will
be allowed to any Government employee who have been provided Government vehicle
during his post.
In the office of Chief Municipal Officer, no House rent allowance, house
maintenance charges and conveyance allowance (Government vehicle No. GS-9638)
were deducted from the salary of concerned CMOs, despite the usage of official
residence and vehicle. Further, electricity was also consumed for the CMO Bungalow
via Government meter. Audit calculated a tentative recovery for five years on account of
HRA, Conveyance and Electricity amounting to Rs 0.866 million. Detail is given below.
[Amount in Rupees]
Period Total
HRA Electricity Conveyance
Location Total (in Recovery
Dues Dues Dues
Months) Dues
CMO,
Bungalow
4,433 5,000 5,000 14,433 60 865,980
occupied by
CMO

The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during November, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommended that the recovery amounting to Rs 0.866 million
be made from the defaulters and deposited into Government account at the earliest.
Moreover direction may be issued to install separate electric meter for personal electric
consumption.
[AIR Para: 11]

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B. Violation of Rules

7.2.3.8 Irregular and Un-authorized Creation of Liabilities

Rs 250.604 Million
As per Para 289 of Treasury Rules (TR) Vol-I and II, “all charges incurred must
be paid and drawn at once and under no circumstances may be allowed to stand over to
be paid from grant of another financial year.
Further, as per FD, GoS O.M No.FD/BandE –I/51/2007 dated 02-07-2007,
“liability of previous years shall not be allowed to be cleared unless concurrence is given
by Finance Department (FD)”.
Following formations of Sukkur Division, created the liabilities on account of
different head of account amounting to Rs 250.604 million, during financial years
2014-16, in violation of above rules. Details are as under.
[Rupees in million]
Sr. Name of Offices Para Year Amount
1 CO DC Khairpur 4 2014-15 30.260
2 CMO Rohri 27 2014-15 2.971
3 CMO Rohri 17 2014-15 196.048
4 MC Khairpur 3 2015-16 21.325
Total 250.604

Audit is of the view that creation of liabilities on account of salaries, pension

and commutation was due to lack of internal controls.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to managements during September to December 2015
and December, 2016, but they did not respond to audit observation. The PAO also failed
to convene the DAC meeting despite pursuance by audit.
Audit recommends an effective Internal Control System should be devised to
avoid such lapses in future.
[AIR Paras: 4,,27,17,3]

345
7.2.3.9 Un-authorized Payments - Rs 170.104 Million
According to Para 188 of Sindh Financial Rules Volume-I, “no payment should
be made without the budget provision or prior permission be obtained from Finance
department in order to incur such expenditure”.
Further, as per Rule 42 (2) and (3) of Sindh Local Government Budget Rules
2001 and under Rule 15(a) of Manual of Contingent Expenditure, “All Expenditure
should be made within the specified budget and no expenditure should be incurred from
another Head of Account”.
Following Offices of Sukkur Division, during financial years 2014-16, incurred
an expenditure of Rs 170.104 million on payments under different heads, without
sanctioned of budget from higher authorities, in violation of above rules. Details are as
under:
(Rupees in Million)
Sr. Name of Offices Amount
1 TO, TC, Nara 104.833
2 MC, Gambat 6.963
3 TC, Fiaz Ganj 48.782
4 TO, TC, Pacca Chang (Faiz Ganj) 9.526
Total 170.104

Audit is of the view that due to the gross negligence, and internal controls leads
to failure of management to comply with the rules and procedures.
Non-observance of rules constituted weak internal control prevailing in
department. As a result, chances of misappropriation cannot be ruled out.
The matter was reported to the management November, 2016 but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
The above financial indiscipline needs to be justified and corrective actions be
taken against persons(s) at fault. The DDO and head of office should be vigilant to
control the expenditure as per rules.
[AIR Paras: 2, 1,1 ,2]

346
7.2.3.10 Non-Payment of Salaries/ Pension to Employees of District Council
Rs 111.500 Million
According to Section 106(2) SLGA 2013, “The moneys credited to the Local
Fund shall be applied in the order of the following preference, Firstly, in the payment of
salaries and allowances to the employees of the Councils”.
Chief Officer, District Council, Sukkur, during financial year 2014-15, failed to
pay salaries/pensions/gratuity/LPR amounting to Rs 111.500 million despite availability
of funds in bank account, in violation of above rule. Detail is attached as below:
[Amount in Rupees]
Total Outstanding Dues of
Total Outstanding Dues of Salaries Total Outstanding Dues
Pension
108,000,0000 3,500,000 111,500,000
Audit is of the view that management’s failure to pay salaries/pensions/gratuity/
leave to employees on regular basis constituted weak financial management.
Deviation from prescribed rule constituted weak internal control.
The matter was reported to management during September, 2015 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on account non-payment of salaries/
pensions/gratuity/leave to the current and retired employees, under intimation to audit.
[AIR Para: 10]

7.2.3.11 Non-Hoisting of Bid Evaluation Report on SPPRA Website -

Rs 110.427 Million
As per Rule 10 of SPPRA 2010, “The procuring agency shall, immediately upon
award of contract, make the evaluation report of the bid, and the contract agreement to
public through hoisting on the Authority’s website as well as on procuring agency’s
website, if the procuring agency has such a website.”
Chief Municipal Officer, Municipal Committee, Khairpur, awarded different
works costing Rs 11.427 million through NIT, during financial year 2015-16, but did not
hoist bid evaluation reports on the SPPRA website, in violation of above rule.
Audit is of the view that violation of SPPRA rule resulted into non-transparency
in the award of contracts.
347
 Violation of prescribed rule was due to weak internal control.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for non-hoisting of
evaluation report on SPPRA website.
[AIR Para: 18]

7.2.3.12 Wastage of Public Funds - Rs 69.260 Million

According to Para-10 (i) of GFR Volume-I, “every public officer is expected to
exercise the same vigilance in respect of expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.
Further, according to Para-10 (iv) of GFR Volume-I, “public money should not
be utilized for the benefit of a particular person or section of community and also
according to rule all the claims must be supported with full detail and documents”.
In the offices of Chief Officer, District Council Sukkur and Chief Municipal
Officer, Municipal Committee, Kahirpur during financial year 2014-16, it was observed
that salaries amounting to Rs 69.260 million were being paid to employees of various
branches without work detailment. Moreover, it is also worth mentioning that no budget
was sanctioned for Government dispensaries/hospitals or for providing some other utility
Details are as under:
(Amount in Rupees)
Sr. Name of Offices No of Employees Year Para Period Amount
1 District Council, Sukkur 126 2014-15 11 12 months 21,946,584
2 MC, Khairpur 211 2015-16 7 -do- 47,314,380
Total 69,260,964
Audit is of the view that management failed to comply with the orders of the
Government on the subject, which indicate the absence of systematic internal control and
lack of financial discipline prevailing in the department.
Government sustained loss on their salaries without providing any services and
also it is suggested that the Medical staff may be transferred to health department,
Government of Sindh and Encroachment staff may be transferred to Municipal
committee Sukkur and Rohri for their effective delivery of services.

348
 The matter was reported to the management during September, 2015 and
November, 2016 but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit therefore recommended that the irregularity may please be clarified and
valid proof for their effective service delivery may be provided to audit. Steps may be
taken so that such irregularities are not repeated in future.
[AIR Paras: 11,7]

7.2.3.13 Payment of Pension without Supporting Documents

Rs 59.774 Million
According to SI No.85 (vii) of Pension Manual 2006, “Personal appearance of
pensioners and payment through life certificate, a pensioner must take payment in person
after identification by comparison with the Pension Payment Order, at least once a year”.
As per Rule-23 of Sindh Financial Rules, “Every Payment including repayment
of money previously lodged with Government for whatever purpose, must be supported
by a voucher setting forth full and clear particulars of the claim”.
Further, According to Section(I) of Appendix 18-A of SFR Vol-I, "Means
should be devised to ensure that every Government servant realizes fully and clearly that
he will be held personally responsible for any loss sustained by Government through
fraud or negligence on his part, and that he will also be held personally responsible for
any loss arising from fraud or negligence on the part of any other Government servant to
the extent to which it may be shown that he contributed to the loss by his own action or
culpable negligence”.
In the offices of Chief Municipal Officer, Municipal Committee, Khairpur and
Gambat of District Khairpur during financial years 2014-16, it was observed the
management incurred expenditure amounting to Rs 59.777 million on payment of
pension and commutation without fulfilling the codal formalities, in violation of above
rule. The following necessary documents were not found attached. Details are as under:
 Life Certificate
 No-marriage Certificate in case of family pension
 Acknowledgment of the recipient
 Copy of CNIC

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 [Amount in Rupees]
Sr. Name of Offices Year Para Amount
1 MC, Khairpur 2014-15 1 45,605,404
2 MC, Gambat 2015-16 4 14,169,249
Total 59,774,653
Audit is of the view that due to non-availability of necessary documents, audit
could not verify the authenticity of the expenditure incurred on payments of pension
therefore chances of mis-appropriation cannot be ruled out.
Violation of prescribed rule was due to weak internal controls.
The matter was reported to managements during September 2015 and
December, 2016, but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for such lapse and all necessary
documents be produced to audit for verification.
[AIR Paras: 1,4]

7.2.3.14 Irregular Expenditure without Physical Verification of Schemes

Rs 59.772 Million
As per Government of Sindh, Services, General Administration and
Coordination Department (Regulation Wing) Karachi, NO. SORI(SGAandCD)2-
30/2010, dated 8th March, 2010, “(1) Except for defect liability or maintenance by the
supplier, consultant or contractor, as specified in the conditions of contract, performance
of the contract shall be deemed close on the issue of overall delivery certificate,
certificate of completion of deliverables, or taking over certificate which shall be issued
within thirty days of final taking over of goods or receiving the deliverables or
completion of works enabling the supplier or contractor to submit final bill and the
procuring agency to carry out any inspection of goods, works or services related thereto,
as provided in the contract agreement and auditors to do substantial audit”.
Further, As per Public Works Department Volume-I Para-6.37, “The procedure
of verification outlined in the foregoing rules is suitable primarily for divisions executing
ordinary works. In the case of special stores depots or divisions or of construction
divisions where there may be large concentration of stores, their physical verification
should be the duty of the executive authorities, and should be performed by such agency
and in such detail as may be decided by the Government in consultation with the
Director, Audit and Accounts (Works)”.
350
 Following formations of Sukkur Division, during financial years 2014-16, paid
an amount of Rs 59.772 million to various contractors on execution of development
schemes without verification of development schemes/work on the site. Progress report
and list of sample vouchers are attached with the report. Details are as under:
[Rupees in Million]
Sr. Name of Offices Para Year Amount
1 CMO Rohri 19 2014-15 21.311
2 CMO Rohri 13 2015-16 6.869
3 TC Pano Akil 7 2014-15 26.763
4 TC Saleh Pat 5 2014-15 4.829
Total 59.772

The failure of management failed to observe Government rules and procedures,

which reflects the absence of systematic control and financial discipline prevailing in the
department. Furthermore due to improper planning the Government sustained a loss. The
entire expenditure stood irregular due to non-observance of the Government rules.
The matter was reported to the management during September, 2015 to
November, 2016 but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit therefore recommends that irregularity be justified to audit
[AIR Paras: 13,19,7,5]

7.2.3.15 Irregular Expenditure on Procurement without Constitution of

Procurement Committee – Rs 57.351 Million
As per Rule 7 of SPPRA 2010, “The procuring agency shall, with approval of its
Head of the Department, Constitute as many procuring committees, as it deems fit, each
comprising odd number of persons and headed by the gazetted officer not below the rank
of BPS-18, or if not available, the officer of the highest grade, and shall ensure that at
least one third of the members of a procurement committee are from the agencies or
departments other than the procuring agency”.
Following formations of Sukkur Division procured different material amounting
to Rs 48.814 million without constitution of procurement committee, during the year
2014-15, in violation of above rule. Details are as under:

351
 [Rupees in Million]
Sr. Name of formation Para no. Year Amount
1 CMO Rohri 23 2014-15 20.770
2 CMO Khairpur 18 2014-15 8.537
3 TC Kotdiji 7 2014-15 28.044
Total 57.351
Audit is of the view that violation of SPPRA rules resulted into non-
transparency in the award of contracts.
Violation of laid down procedures of SPPRA was due to weak internal controls.
The matter was reported to the management during November, 2015 and
January, 2016 but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management for
non-transparency in awarding of contracts.
[AIR Paras: 23,18,7]

7.2.3.16 Irregular Award of Work to Un-registered Contractors

Rs 47.409 Million
As per Section 24(1) of Sindh Sales Tax on Services Act 2011, “Registration
will be required for all persons who: (a)are residents; (b)provide any of the services listed
in the Second Schedule from their registered office or place of business in Sindh”.
Chief Municipal Officer, Municipal Committee, Kahirpur awarded various
works amounting to Rs 47.409 million, during financial year 2015-16, to contractors not
registered with Sindh Revenue Board, in violation of above rule.
Audit is of the view that management awarded contracts to unregistered
contractors with SRB resulting into non-transparency in award of contracts. Besides,
chances of tax evasion cannot be ruled out.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.

352
 Audit recommends fixing of responsibility on management for awarding work to
unregistered contractors with SRB.
[AIR Para: 15]

7.2.3.17 Non-Compliance of Integrity Pact - Rs 38.001 Million

As per Rule 89 of SPPRA 2010, “Procurements exceeding the Rs 10 million for
goods works, and Rs 2.5 million for services shall be subject to an integrity pact, as
specified by regulations, between the procuring agency and the suppliers or contractors or
consultants”.
In the office of Chief Municipal Officer, Municipal Committee, Khairpur during
financial year 2015-16, it was observed that the management awarded various schemes of
Rs 38.001 million, but failed to execute integrity pact with contractors, in violation of the
above rule.
Audit is of the view that department failed to execute integrity pact with
contractors and failed to safeguard departmental interests which constituted weak
financial management.
Non-securing of integrity pact constituted weak internal control.
The matter was reported to management during November, 2016 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for not safeguarding the departmental
interests, under intimation to audit.
[AIR Para: 17]

7.2.3.18 Expenditure by Way of Splitting – Rs 23.824 Million

As per Rule-17(1) of Sindh Public Procurement Rules 2010, “Procurements over
one hundred thousand rupees and up to one million rupees shall be advertised by timely
notifications on the Authority’s website and in print media in the manner and format
prescribed in these rules”.
Further, as per Rule 12(1) of SPPRA Rules 2010, “Save as otherwise provided
and subject to the regulations made by the Authority, a procuring agency shall prepare, in
accordance with Rule 11 above, all proposed procurements for each financial year and

353
shall proceed accordingly without any splitting or regrouping of the procurements already
grouped, allocated and scheduled in the Procurement Plan”.
Following formations of Sukkur Division, during financial years 2014-16,
incurred expenditure amounting to Rs 23.824 million without calling tender and by
splitting to avoid tender and quotations, in violation above rules. Details are as under:
[Rupees in Million]
Sr. Name of formation Para no. Year Amount
1 MC Gambat 8 2015-16 1.050
2 MC Kingri 11 2015-16 2.707
3 TC Faiz Ganj 8 2015-16 8.626
4 TC Nara 10 2015-16 3.019
5 TC Kotdiji 6 2014-15 2.694
6 TC, Pano Akil 6 2015-16 3.852
7 TC, Saleh Pat 4 2015-16 1.876
Total 23.824

Audit is of the view that splitting of work deprived the Government from
achieving best competitive rates.
Non-observance of prescribed rules and procedures deprived Government from
achieving economical rates for its procurements.
The matter was reported to the management during November, 2015 and
November, 2016 but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit recommends for fixing of responsibility on managements on account of
procurements/execution of works without tenders/by splitting.
[AIR Paras: 8,11,8,10,6, 6, 4]

7.2.3.19 Un-authorized Payment of Liabilities – Rs 20.918 Million

As per FD, GoS letter No. FD/CWandM-I)(26) 91-92(P.T.II) dated 24-06-1993,
“all charges incurred must be paid at once and under no circumstances may be allowed to
stand over to be paid from the grant of subsequent year”.
Further, as per FD, GoS letter No. FD/BandE –I/51/2007 dated 02-07-2007,
“liability of previous years shall not allowed to be cleared unless concurrence is given by
FD”.

354
 Following formations of Sukkur Division, during financial years 2014-16, paid
an amount of Rs 20.918 million to clear previous year liabilities without concurrence of
FD, in violation of the above rules. Details are as under:
[Rupees in Million]
Sr. Name of formation Para no. Year Amount
1 MC Rohri 2 2015-16 13.689
2 TC Pano Akil 8 2014-15 5.658
3 MC Kingri 3 2015-16 1.571
Total 20.918

Audit is of the view that non-observance of laid down rules resulted into
un-authorized expenditure, which constituted weak financial management.
Non-observance of prescribed rules constituted weak internal control.
The matter was reported to the management during October, 2015 and
November, 2016 but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on incurring unauthorized
expenditure and same may be regularized from competent authority.
[AIR Paras: 2,8,3]

7.2.3.20 Irregular Expenditure on Development without Obtaining

Completion Certificate – Rs 18.843 Million
As per Government of Sindh, Services, General Administration and
Coordination Department (Regulation Wing) Karachi, NO. SORI(SGAandCD)2-
30/2010, dated 8th March, 2010, “(1) Except for defect liability or maintenance by the
supplier, consultant or contractor, as specified in the conditions of contract, performance
of the contract shall be deemed close on the issue of overall delivery certificate,
certificate of completion of deliverables, or taking over certificate which shall be issued
within thirty days of final taking over of goods or receiving the deliverables or
completion of works enabling the supplier or contractor to submit final bill and the
procuring agency to carry out any inspection of goods, works or services related thereto,
as provided in the contract agreement and auditors to do substantial audit”.
In the office of Administrator/Town Officer, Town Committee Pano Akil,
during financial year 2014-15, it was observed that an amount of Rs 18.843 million was

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incurred on development work through final bills, but the completion certificate was not
found on the record in violation of Government procedures.
The failure of management failed to observe Government rules and procedures,
which reflects the absence of systematic control and financial discipline prevailing in the
department. Furthermore due to improper planning the Government sustained a loss. The
entire expenditure stood irregular due to non-observance of the Government rules.
Due to non-availability of completion certificate, it is assumed that the work has
not been completed which is loss to Government.
The matter was reported to the management during September, 2015 and
January 2016 but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit therefore desires that the matter may be looked into and the completion
certificates may be obtained from the concerned, under intimation to audit.
[AIR Para: 18]

7.2.3.21 Irregular Expenditure on De-silting – Rs 18.530 Million

According to Section-72 Schedule-II (part-II) Rule 1-16 of Sindh Local
Government Act.2013, “Compulsory functions to be performed by corporations,
municipal committees and town committees, council shall be responsible for water,
sewerage, drainage, sanitation, roads, other than Provincial and district roads, streets and
street lighting; firefighting, park services. 2. Sanitation, A Corporation, Municipal
Committee or Town Committee shall be responsible for the sanitation, and may for that
purpose cause such measures to be taken as are required by or under this Act. 3.
Removal, Collection and Disposal of Refuse: A Corporation, Municipal Committee or
Town Committee shall make adequate arrangements for the removal of refuse from all
public streets, public latrines, urinals, drains and all buildings and lands vested in the
Council concerned and for the collection and proper disposal of such refuse”.
Following formations of Sukkur Division, during financial years 2014-16,
incurred an expenditure of Rs 18.530 million on de-silting of drains and removal of
debris despite having large number of sanitation staff. Moreover, no details of
measurements were recorded in measurement books, work registers and vouchers also
didn’t reflect the necessary details for authenticating the expenditure. Detail is as under:

356
 [Rupees in Million]
Sr. Name of formation Para no. Year Amount
1 CMO Rohri 25 2014-15 3.830
2 CMO Gambat 5 2014-15 0.524
3 CMO Kingri 6 2014-15 8.193
4 TC Nara 11 2015-16 5.983
Total 18.530

Audit is of the view that management failed to comply with the rules set forth by
the Government, which reflects the presence of week internal controls.
Such act of negligence predicts lack of transparency in the expenditure made.
The matter was reported to the management during November, 2015 and
December, 2016 but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management for incurring
expenditure on desilting, besides having available sanitary staff, under intimation to
audit.
[AIR Paras: 25,5,6,11]

7.2.3.22 Unauthorized Transfer of Funds to Various Contractors

Rs 15.089 Million
As per Rule 3 (v) of Sindh District Government and Taluka/Town Municipal
Administration (Budget) Rules 2002, “TMO is responsible for ensuring that funds
allocated are spent on the activities for which the money was provided”.
Further, According to Treasury Rules-13, “Unless in any case the Governor with
the concurrence of the Auditor General. Otherwise direct, money may not be withdrawn
from the public account without the written permission of the Treasury Officer or of a
Government servant of Pakistan Audit Department authorized in this behalf by the
Auditor General.”
Town Officer, Town Committee, Saleh Pat, District Sukkur, during 2014-15,
unauthorizedly transferred funds amounting to Rs 15.089 million without justification, in
violation of above rules.

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 Audit is of the view that unauthorized transfer of funds resulted into
non-transparency in public expenditure. Violation of prescribed rules was due to weak
internal controls.
The matter was reported to the management during October, 2015 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management at fault on account
of unauthorized transfer of funds.
[AIR Para: 7]

7.2.3.23 Non-Invitation of Tender on account of Development Works

Rs 11.732 Million
According to Sindh Public Procurement Rules 2010, “Procurements over
Rupees one hundred thousand and up to Rupees one million shall be advertised by timely
notifications on the Authority’s website and may in print media in the manner and format
specified by regulations issued by the Authority from time to time, or If no such formats
have been specified by the authority, in the manner and format, which conforms most
closely to the principles of procurements i.e. openness of competition, fairness,
transparency etc. and to procedural requirements given in these rules and regulations,
issued in pursuance of these rules”.
Further, As per Para 126 of PWD Manual Volume-I, “Nothing in these rules is
to be construed into a permission to officers to carry out in portions any group of works
or alterations or to make purchase of which the cost in the aggregate would exceed what
they are empowered to sanction under the rules”.
In the office of Chief Officer District Council, Ghotki, during financial year
2014-15, it has been observed that an expenditure of Rs 11.732 million was incurred on
various development works, carried out without calling open tender. Moreover the
following discrepancies were noticed:
 There was non- constitution of procurement committee
 Administrative and technical sanctions were not obtained
 Tender register was not made.
 No work order was made. .
 The NTN and STRN of contractors were not mentioned on the bills. The entity
didn’t care to collect proper cash-memos.
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  Measurement books were not made.
 No Comparative Statements ,Contractors Ledgers ,Security deposit register or
Completion Certificate was maintained
 Multiple payments over one lac have been split
 Payment made to the contractor without any pre-audit by DAO.
 Non deduction of sales tax @ 16 % on supply of mud.
 Amount paid to contractor for mud not found as per schedule of rates.
In absence of all these codal formalities, the whole expenditure is highly
irregular and unsubstantiated and audit is of the view that fraudulent payments /
embezzlement of funds cannot be ruled out.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during September, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Non-observance of Government rules and irregularity may be justified to audit,
serious action be taken against the person at fault.
[AIR Para: 4]

7.2.3.24 Irregular Award of Work to the Contractors – Rs 11.732 Million

As per PEC letter # PEC/ Consult/ ES/ 1900017 dated 01-09-2005,
“non-engineering works shall be constructed except by constructer or operated except by
operator licensed as such by the council (PEC). All consulting engineering services in
Pakistan shall be entrust only a consulting engineer duly registered as such with the
council (PEC)”. Further as per Planning and Development Department, Government of
Pakistan’s letter # 1(63-A) PP and H/ PD/ 2005 dated 14-09-2005, “all respective
provincial departments, city/ district Government, TMA’s UC Administrations, housing,
water supply and sanitation agencies must ensure compliance of the instructions given in
Pakistan Engineering Council byelaws 1986 and 1987 are fully implemented in all
engineering contracts and procurement of engineering services and works in order to
restrain from pre-qualification of all such local and foreign firms, which do not abide by
PEC laws and rules”.

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 Further According to the Sindh Sales Tax on Services Act 2011 Section 24,
“Registration.-(1) Registration will be required for all persons who: (a) are residents; (b)
provide any of the services listed in the Second Schedule from their registered office or
place of business in Sindh; and (c) fulfill any other criteria or requirements which the
Board may prescribe under sub-section (2)”.
Chief Officer, District Council, Ghotki, during financial year 2014-15, awarded
works costing Rs 11.732 million irregularly to the contractors, following irregularities
were found:
 Contractors were not registered with Sindh Revenue Board
 Contractors were not registered with PEC/ in violation of above mentioned
directives of Government.
 Sales tax registration certificate and active tax payer list was not obtained as
per requirement of NIT.
 Income tax registration certificates of all contractors not obtained as per
requirement of NIT.
 Undertaking/affidavit for no litigation from contractor was not obtained.
Audit is of the view that failure of management to comply with the rules reflects
weak internal control system prevailing in the department which constituted weak
financial management
The matter was reported to the management during September, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that responsibility be fixed on person(s) at fault and it may
be ensured that such irregularity will not repeat in future and necessary record may
immediately be maintained.
[AIR Para: 6]

7.2.3.25 Irregular Expenditure against Work Charged Salaries

Rs 10.472 Million
As per Rule-23 of Sindh Financial Rules, “Every Payment including repayment
of money previously lodged with Government for whatever purpose, must be supported
by a voucher setting forth full and clear particulars of the claim”.
Further, as per Section(I) of Appendix 18-A of SFR Vol-I, "Means should be
devised to ensure that every Government servant realizes fully and clearly that he will be
360
held personally responsible for any loss sustained by Government through fraud or
negligence on his part, and that he will also be held personally responsible for any loss
arising from fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his own action or
culpable negligence”.
In the office of Chief Municipal Officer, Municipal Committee Kingri and Town
officer Town Committee Nara, District Khairpur during financial year 2015-16, it was
observed, that amount of Rs 10.472 million was drawn on account of work charged
establishment salaries.
Audit observed following discrepancies.
 Payments were made in the name of staff instead of respective employees.
 Payment was disbursed in cash
 Acknowledgement receipts were not obtained from work charged employees.
 Revenue stamps were not affixed.
 CNIC were missing
Audit is of the view that that amount was withdrawn in the name of staff
members instead of respective employees resulted into suspected misappropriation by
management and reflects weak financial management.
Violation of prescribed rules resulted into doubtful drawl which constituted
weak internal control.
The matter was reported to managements during November 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility for doubtful drawl of funds in the
name of staff members, under intimation to this office.
[AIR Paras: 9,8]

7.2.3.26 Un-authorized Increase in SNE Approval from Competent

Authorities - Rs 10.188 Million
According to Para 188 of Sindh Financial Rules Volume-I, “no payment should
be made without the budget provision or prior permission be obtained from Finance
department in order to incur such expenditure. Further according to rule 80 (3)(4) of SFR
volume-I, it is the responsibility of DDO to ensure that no expenditure exceeds the limits

361
of the budget provision and in case the expenditure is exceeded the budget allocation,
additional budget grant prior to the close of the financial year should have been
obtained”.
In the office of Administrator/Town Officer, Town Committee Pano Akil,
during 2014-15, it was noticed that in the financial year 2013-14, number of working
strength was 562 where as in financial 2014-15 working strength was increased to 592.
The mentioned increase in SNE was without approval from Local Government
Department and Finance Department, Government of Sindh, in violation of rule. Detail is
attached as below.
[Amount in Rupees]
Financial Year Total No. of Posts Expenditure Incurred
2013-14 562 6,958,043
2014-15 592 7,807,084
Difference 30 849,041 x 12 Months = 10,188,492

The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during September, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore desires that justification may be provided to audit and the same
may be regularized from the competent authority at the earliest and proper measures
should be adopted to avoid such lapses in future.
[AIR Para: 5]

7.2.3.27 Un-authorized Purchase of Vehicles – Rs 9.674 Million

According to Notification issued by Finance Department, Government of Sindh
with the directives of Chief Minister, Sindh vide No. FD/BandE-1/2(360)/Ban/2012-13
dated 17-5-2013, “the ban was imposed by the chief Minister for a. Procurement of
vehicles of all categories from non-development budget. Above ban will be relaxed by
the orders of Chief Minster”.
In the offices of Administrator/TO, Town Committee Pano Akil, District
Sukkur, Town Officer, Town Committee, Faiz Ganj District Khairpur, during financial
year 2014-15, it was noticed that Five vehicles (Fire Brigade HINO 300, Tractor

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IMT 549, Electricity Mazda with Stairs, Garbage Mazda and Water Bouzer, Toyota
Hilux Vigo) amounting to Rs 9.674 million were purchased for Town Committees
without approval from competent authority. Moreover, it was also noticed that the
purchased vehicles were not accounted for in dead stock register. Detail is as under:
[Amount in Rupees]
Sr. Name of Offices Year Amount
01 TC, Faiz Ganj 2014-15 3,674,000
02 TC, Pano Akil 2014-15 6,000,000
Total 9,674,000

Audit is of the view that Government orders/rules were violated as the vehicles
were purchased during ban period without seeking exemption from competent authority,
which constituted violation of Government instructions. The expenditure was incurred in
violation of ban.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during September, 2015 to
November, 2016 but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management for purchase of
vehicle without approval, and all necessary documents be produced to audit for
verification.
[AIR Paras: 13, 14]

7.2.3.28 Irregular Purchase Of Electric Material - Rs 8.118 Million

According to Para-10 (i) of GFR Volume-I, “every public officer is expected to
exercise the same vigilance in respect of expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.
Further, according to Para-10 (iv) of GFR Volume-I, “public money should not
be utilized for the benefit of a particular person or section of community.
In the office of Administrator/Chief Municipal Officer, Municipal Committee,
Rohri, during financial year 2014-15, it was observed that an expenditure amounting to

363
Rs 8.118 million was incurred on purchase of electric material. Audit observed out
following irregularities.
 Details of purchased Lights, Poles, Savors, Bulbs, Wires etc was not present
 Location for installing electric material was not indicated
 Purchased material was not accounted for in relevant stock register
 No detail of old electric material was provided
 Detailed estimate and map was not provided
 No proper indent, issue register against electric material was available
 It was noticed that expenditure apprx. Rs 1,300,000 was also incurred on
Repair and rewinding of Electric Motors and an approximately amount of
Rs 1,000,000 was incurred on rewinding of Electric Transformers without
any requisition or nature of repair.

Audit is of the view that management failed to comply with the rules set forth by
the Government, which reflects the absence of systematic internal prevailing in the
department.
Non-observance of rules and procedures constituted weak internal control and
weak financial management.
The matter was reported to the management during November, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore desires that the matter may be investigated and the
non-observance of Government rules and procedures by the management may please be
explained to audit. Furthermore it is suggested that the proper measurement should be
adopted to avoid such lapses in future.
[AIR Para: 22]

7.2.3.29 Unauthorized Payments made during Ban on Development Works

on Quotation Basis - Rs 7.836 Million
According to letter issued by LGD vide No.SOI/LG/MISC/10-7/2013 on the
subject Ban on payment(s) of Development works on Quotation basis, “I am directed to
refer to the subject noted above and to inform that the honorable Minister to LGD has
been pleased to impose ban on payments of all types of expenditure excluding salary and
pension components in all local councils and other sub ordinate offices of LGD. No other

364
payment shall be made till issuance of such orders/ instructions by the competent
authority.”
Following formation of Sukkur Division, during financial years 2014-16,
incurred an expenditure of Rs 7.836 million on account of Development works on
Quotation basis during the period of ban imposed by Government, in violation of above
rule. Details are as under:
[Rupees in Million]
Sr. Name of Offices Para Year Amount
1 MC Rohri 3 2015-16 1.366
2 TC Pano Akil 4 2015-16 3.852
3 CMO Kingri 2 2014-15 2.618
Total 7.836

Audit is of the view that expenditure incurred during the period, when the ban
was imposed by Government, expenditure has resulted into failure of management to
abide by instructions/orders issued by the competent authority and reflects weak
administrative and financial management. Besides, misappropriation of public money
cannot be ruled out.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to the management January, 2016 and November, 2016
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of failure of management
to abide by the instructions/orders of competent authority and initiate action against
illegal payments made, under intimation to this office.
[AIR Paras: 3,4,2]

7.2.3.30 Irregular Payments to DC Inland Revenue – Rs 5.607 Million

As per section 100 of the Sindh Budget Manual, “The consolidated accounts of
the controlling officer have as pointed out in the paragraph 98, to be reconciled monthly
with the accounts of comptroller. The object of this procedure is to ensure the accuracy of
departmental accounts, and such accuracy is necessary in order to make departmental
control really effective and to prevent misclassification or other errors in accounts.”

365
 Further, As laid down is Para 34(d) of the Sindh Financial Rule Vol-I, “as well
as the instruction of the Finance Department, “receipts of Government need to be
deposited into the bank and should be reconciled with the treasury”.
In the office of the Town Officer, Town Committee, Nara during financial year
2015-16, it was observed that an amount of Rs 5.607 million was recovered by DC Inland
Revenue, Khaiprur on account of Income Tax. The department failed to provide any
detail of income tax deductions which were made by the office. Furthermore the
management didn’t care to have the payments reconciled with DC Inland Revenue to
avoid double taxation. Detail provided as under:
[Amount in Rupees]
Sr. Name of Payees Cheque # Date Amount
1 DC Inland Revenue Khairpur 15401759 7/12/2015 600,000
2 DC Inland Revenue Khairpur PO 350607 31/03/016 1,545,000
3 DC Inland Revenue Khairpur 17426321 30/06/2016 3,462,075
Total 5,607,075
Audit is of the view that management failed to reconcile the amount of income
tax, resulted into non-transparency in management of public funds, which constituted
weak financial management.
Non-observance of prescribed procedure constituted weak internal control.
The matter was reported to managements during November 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for non-
reconciliation of payments made to DC Inland Revenue; it may be reconciled, under
intimation to audit.
[AIR Para: 16]

7.2.3.31 Irregular Expenditure on account of Quotation Works

Rs 4.253 Million
As per Para 155 of GFR Volume-I read with Para 113 of SFR Volume-I, “A
reliable list, inventory or account of all stores in the custody of Government officers
should be maintained in a form prescribed by competent authority, to enable a ready
verification of stores and check of accounts at any time and transactions must be recorded
in it as they occur”.

366
 Further, as per Rule 10 of GFR, “Every officer authorized to incur expenditure
from the public fund should observe high standards of financial propriety”.
Town Officer, Town Committee Kotdiji District Khairpur, during financial year
2014-15, incurred an expenditure of Rs 4.253 million on quotation basis. Moreover, the
bills/vouchers/ supply orders were without cheque numbers, NTN, STRN (contractors)
and dates of issuance of cheques, in violation of above rule.
Thus, the management failed to observe Government rules in letter and Spirit,
which reflects the absence of systematic control and financial discipline in the
department.
The matter was reported to managements during November 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Matter may be inquired in detail by fixing of responsibility against person(s) at
fault under intimation to audit.
[AIR Para: 04]

7.2.3.32 Unauthorized Payments – Rs 4.243 Million

According to Para-10 (iv) of GFR Volume-I, “public money should not be
utilized for the benefit of a particular person or section of community and also according
to rule all the claims must be supported with full detail and documents”.
Further, Section (I) of Appendix 18-A of SFR Vol-I, "Means should be devised
to ensure that every Government servant realizes fully and clearly that he will be held
personally responsible for any loss sustained by Government through fraud or negligence
on his part, and that he will also be held personally responsible for any loss arising from
fraud or negligence on the part of any other Government servant to the extent to which it
may be shown that he contributed to the loss by his own action or culpable negligence”.
Town Officer, Town Committee, Nara during financial year 2015-6 incurred an
expenditure of Rs 4.243 on polio campaign, repair and maintenance of press club and to
Pakistan Rangers Head Quarter, Taluka Nara.
i. Audit is of the view that Polio campaign is sole responsibility of Health
department for which concerned authorities were provided a heavy budget.
ii. Whereas Pakistan Rangers is also provided with a handsome budget for
subordinate offices.
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 iii. Whereas the repair and maintenance of Press club is undue favour to
journalists.
Non-observance of rules constituted weak internal control prevailing in
department. As a result, chances of misappropriation cannot be ruled out.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
The above financial indiscipline needs to be justified and corrective actions be
taken against persons(s) at fault. The DDO and head of office should be vigilant to
control the expenditure as per rules.
[AIR Para: 13]

7.2.3.33 Irregular and Un-Justified Expenditure on Supply of Drinking

Water - Rs 3.848 Million
According to Para-10 (iv) of GFR Volume–I, “public money should not be
utilized for the benefit of a particular person or section of community and also according
to rule all the claims must be supported with full detail and documents”.
Further, as per Section (I) of Appendix 18-A of SFR Vol-I, "Means should be
devised to ensure that every Government servant realizes fully and clearly that he will be
held personally responsible for any loss sustained by Government through fraud or
negligence on his part, and that he will also be held personally responsible for any loss
arising from fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his own action or
culpable negligence”.
The Town Officer, Town Committee, Nara, during financial year 2015-16,
incurred an expenditure of Rs 3.848 on supply of sweet drinking water in different areas
of Town Committee, Nara, without getting approval of competent authority. Moreover,
no justification was provided to audit for provision of huge expenditure on supply of
water to specific areas of Town Committee, Nara.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department.

368
 The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
The above financial indiscipline needs to be justified and corrective actions be
taken against persons(s) at fault. The DDO and head of office should be vigilant to
control the expenditure as per rules.
[AIR Para: 17]

7.2.3.34 Non-Utilization of Services of Tax Staff and Paid Salary thereof -

Rs 3.091 Million
According to Para-10 (i) of GFR Volume-I, “every public officer is expected to
exercise the same vigilance in respect of expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.
Further, according to Para-10 (iv) of GFR Volume-I, “public money should not
be utilized for the benefit of a particular person or section of community and also
according to rule all the claims must be supported with full detail and documents”.
Administrator/Town Officer, Town Committee Pano Akil, during financial year
2014-15, failed to depute the Octroi staff and utilize their services, in violation of
Government rule.
Thus, the management failed to comply with the orders of the Government on
the subject, which indicate the absence of systematic internal control and lack of financial
discipline prevailing in the department.
Government sustained loss on their salaries without providing any services.
The matter was reported to management during September, 2015 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommended that the irregularity may please be clarified to
audit and the steps may be taken so that such irregularities are not repeated in future.
[AIR Para: 6]

369
7.2.3.35 Irregular Expenditure on Retirement Emoluments without
Supporting Documents – Rs 2.858 Million
According to Para-10 (i) of GFR Volume-I, “every public officer is expected to
exercise the same vigilance in respect of expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money”
and according to Para-10 (iv) of GFR Volume-I, “public money should not be utilized for
the benefit of a particular person or section of community and also according to rule all
the claims must be supported with full detail and documents”.
In the office of Chief Officer, District Council, Sukkur, during financial year
2014-15, it was observed that Commutation, Gratuity and Financial Assistances was paid
to the staff and widows of employees of District Council without any supporting
documents/ evidences for verification.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during September, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore desires that the matter may be investigated and the
non-observance of Government rules and procedures by the management may please be
explained to audit. Furthermore it is suggested that the proper measures should be
adopted to avoid such lapses in future.
[AIR Para: 7]

7.2.3.36 Irregular Drawl of Over Time – Rs 2.540 Million

As per Rule 5 of Chapter 1 of SFR Volume-1, “the amount of allowance
granted to meet expenditure of particular type should be so regulated that allowances are
not on the whole source of profit of the recipient”.
Further, according to Para-10 (iv) of GFR Volume-I, “public money should not
be utilized for the benefit of a particular person or section of community and also
according to rule all the claims must be supported with full detail and documents”.

370
 In the office of the Chief Municipal Officer, Municipal Committee, Khairpur,
during financial year 2015-16, it was observed that over time amounting to Rs 2.540
million in addition to their salaries was paid each month to fire brigade staff without any
details of work detailment.
Thus, the management failed to comply with the orders of the Government on
the subject, which indicate the absence of systematic internal control and lack of financial
discipline prevailing in the department.
Government sustained loss on their over time without providing any services.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommended that the irregularity may please be clarified to
audit and the steps may be taken so that such irregularities are not repeated in future.
Moreover, amount may be recovered from the incumbent and in future over time
allowance per hour may be allowed in light of Government instructions.
[AIR Para: 10]

7.2.3.37 Irregular Payment to Awaiting for Posting Period Salary

Rs 2.386 Million
According to Government of Sindh Finance Department letter No. FD (SR-
III)13/5-84 Dated 08TH March, 1999, “The Administrative Departments have,
frequently, been referring the cases to Finance Department for treating the intervening
period as compulsory waiting for posting. Period of 30 days, for issuing posting orders,
has been allowed to Administrative Departments in exceptional cases and that too not
being followed in letter and spirit. At the same time initiated disciplinary action against
the officer who is found responsible for causing deliberate delay in issuing posting orders
beyond 30 days. Further, it has been directed that only those cases with extra ordinary
and un-avoidable situation, where compulsory waiting for posting beyond 30 days is
involved are be referred to this Department with full justification and documentary proof
for consideration”.
Further, According to Para-10 (iv) of GFR Volume-I, “public money should not
be utilized for the benefit of a particular person or section of community and also
according to rule all the claims must be supported with full detail and documents”.

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 Town Officer, Town Committee, Pacca Chang (Faiz Ganj) and Nara of District
Khairpur, during financial years 2014-16, incurred an expenditure of Rs 2.386 million on
payment of salary against the intervening period for waiting for posting, in violation of
above orders. Furthermore, complete supporting record like Service book, LPC, Current
and Last posting orders, the supporting record were not produced for verification. Details
are as under:
[Amount in Rupees]
Sr. Name of Offices Para Year Amount
1 TC, Faiz Ganj 6 2015-16 1,336,000
2 TC, Nara 7 2015-16 1,050,000
Total 2,386,000

Audit is of the view that failure of management to comply with the rules reflects
weak internal control system prevailing in the department which constituted weak
financial management
The Government instructions were over looked and thus payment may be
suspicious and loss to Government.
The matter was reported to the management November, 2016 but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit therefore desires that the matter may be investigated and the
non-observance of Government rules and procedures by the management may be
explained to audit and all necessary documents be produced to audit for verification.
[AIR Paras: 6,7]

7.2.3.38 Irregular Payment on Electricity Charges without Detailed Bill

Summary - Rs 2.100 Million
According to Rule 88 of Sindh Financial Rules Vol-I, “Every public officer
should exercise the same vigilance in respect of expenditure incurred from Government
revenues, as a person of ordinary prudence would exercise in spending his own money”.
Further, As per Rule-23 of Sindh Financial Rules Vol-I, “Every Payment
including repayment of money previously lodged with Government for whatever
purpose, must be supported by a voucher setting forth full and clear particulars of the
claim”.

372
 During the course of audit on account record of Chief Municipal Officer,
Municipal Committee Kingri, during financial year 2015-16, it has been observed that an
amount of Rs 2.100 million was paid to Revenue Officer, SEPCO for payment of
electricity without detailed bill summary against consumption of units for official meters.
This was due to the gross negligence, and internal controls leads to failure of
management to comply with the rules and procedures.
Violation of prescribed rule was due to weak internal controls.
The matter was reported to the management November, 2016 but they did not
respond to audit observation. The PAO also failed to convene the DAC meeting despite
pursuance by audit.
Audit recommends fixing of responsibility for such lapse and all necessary
documents be produced to audit for verification.
[AIR Para: 14]

7.2.3.39 Unauthorized Award of Auctions – Rs 1.680 Million

According to Notification issued from Local Government Department,
Government of Sindh vide No. SO-A/LG/4/(82)/2013 Dated. 27.05.2014, “The auctions
papers of the taxes, rates and fees etc as provided in schedule-V (Part-I, Part-II and Part-
III) appended to the Sindh Local Government Act,2013 should be submitted to this
department for approval latest by 15th June.2014, so that the menace of litigation is
avoided failing which the delinquent officer/officials will be held responsible for loss
inflicted to Government exchequer till confirmation of auction by Government,
possession shall not be handed over to contractor”.
In the office of the Administrator/ Town Officer, Town Committee, Pano Akil,
during financial year 2014-2015, it was observed that 4 auctions on account of cattle piri,
wallar fee, advertisement fee and parking fee, which comes to total amount of Rs 1.680
million, were awarded to various auctioneers without getting approval from Local
Government Department, in violation of above orders. Detail provided as under:
[Amount in Rupees]
Sr. Type of Auctions Auctions Allotted to Auctioned Amount
1 Cattle Piri M/s Dodo Khan 805,000
2 Wallar Fee M/s Dodo Khan 605,000
3 Parking Fee M/s Iran Ali 140,000
4 Advertisement Fee M/s Meer Muhammad 130,000
Total 1,680,000

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 The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during September, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore desires that irregularity be justified to audit, responsibility be
fixed against the person (s) at fault and steps be taken to avoid such irregularities in
future.
[AIR Para: 4]

7.2.3.40 Irregular Payment to Contractors without Pre-audit

Rs 1.657 Million
As per Sub Para-32 (2) of the Local Government Accounts Manual, “Every bill
shall be pre-audited by the Accounts Office. The pre-audit shall ensure that the bill has
been sanctioned and that funds are available to make payment. The pre-audit shall also
involve scrutinizing the bill to identify possible fraud and irregularities”.
Further, as per Rule 111(4) and (5) of Sindh Local Government Act 2013, "the
Provincial Director, Local Fund Audit shall pre-audit all the payments from the Local
Funds of the Councils and a Council shall not with draw or disburse money from the
Local Fund unless it is pre-audited in the prescribed manner”.
Town Officer, Town Committee, Pacca Chang (Faiz Ganj), incurred expenditure
of Rs 1.657 million, during financial year 2014-15, without pre-audit by the Local Fund
Audit, in violation of the above rules.
Audit is of the view that payments without pre-audit resulted into unauthorized
expenditure. Violation of prescribed rules was due to weak internal controls.
The matter was reported to management during November, 2016 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility against management for payments
made without pre-audit.
[AIR Para: 11]

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7.2.3.41 Irregular and Un-justified Payments in the Name of Deputy
Commissioner, Khairpur – Rs 1.500 Million
According to Rule 88 of Sindh Financial Rules Vol-I, “Every public officer
should exercise the same vigilance in respect of expenditure incurred from Government
revenues, as a person of ordinary prudence would exercise in spending his own money”.
As per Section (I) of Appendix 18-A of SFR Vol-I, "Means should be devised to
ensure that every Government servant realizes fully and clearly that he will be held
personally responsible for any loss sustained by Government through fraud or negligence
on his part, and that he will also be held personally responsible for any loss arising from
fraud or negligence on the part of any other Government servant to the extent to which it
may be shown that he contributed to the loss by his own action or culpable negligence”.
During the course of audit of Town Officer, Town Committee Nara, during
financial year 2015-16, it has been observed that a huge payment of Rs 1.500 million was
transferred directly in the name of Deputy Commissioner, Khairur without any details or
nature of expenditure. Furthermore, an amount of Rs 0.500 million for donation to Red
Crescent was also made in favour of Deputy Commissioner, Khairpur instead of paying
to Red Crescent, directly. Detail is as under:
[Amount in Rupees]
Sr. Cheque # Date Particulars Amount
1 13877624 17/08/2015 Transfer to Deputy Commissioner Khairpur 500,000
2 16651783 18/03/2016 Donation to Red Crescent 500,000
3 16772014 17/06/2016 Transfer to Deputy Commissioner Khairpur 500,000
Total 1,500,000

The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on doubtful payments in the name of
Deputy Commissioner, Khairpur, justification be provide for such type of suspicious
payments and the amount under question be recovered from the person at fault, under the
intimation to audit.
[AIR Para: 06]

375
7.2.3.42 Irregular Payments of Legal Fees – Rs 1.500 Million
According to Rule 88 of Sindh Financial Rules Vol-I, “Every public officer
should exercise the same vigilance in respect of expenditure incurred from Government
revenues, as a person of ordinary prudence would exercise in spending his own money”.
Further, as per Section (I) of Appendix 18-A of SFR Vol-I, "Means should be
devised to ensure that every Government servant realizes fully and clearly that he will be
held personally responsible for any loss sustained by Government through fraud or
negligence on his part, and that he will also be held personally responsible for any loss
arising from fraud or negligence on the part of any other Government servant to the
extent to which it may be shown that he contributed to the loss by his own action or
culpable negligence”.
In the office of the Town Officer, Town Committee Nara, during financial year
2015-16, it has been observed that payment of Rs 1.390 was made on account of legal
fees to 3 different legal advisors without any justification. The management failed to
provide details of any court case in which the management was made a party.
Furthermore, the approval of law department was also not sought in appointment of legal
advisors. Detail is as under:
[Amount in Rupees]
Sr. Name of Payees Cheque # Date Total
1 M/s. Qurban Ali Malano 15201240 22/09/2015 400,000
2 M/s. Qurban Ali Malano 15201257 28/09/2015 100,000
3 M/s. Mailk Naeem Iqbal 15201258 28/09/2015 100,000
4 M/s. Noor Muhammad Soomro 15201259 28/09/2015 95,000
5 M/s. Qurban Ali Malano 15401725 6/11/2015 200,000
6 M/s. Noor Muhammad Soomro 15401726 6/11/2015 95,000
7 M/s. Qurban Ali Malano Nil 14/11/2015 100,000
8 M/s. Qurban Ali Malano 15401756 7/12/2015 100,000
9 M/s. Qurban Ali Malano 16095007 4/1/2016 200,000
Total 1,390,000
Audit is of the view that failure of management to comply with the rules reflects
weak internal control system prevailing in the department which constituted weak
financial management
Such act of negligence predicts lack of transparency in the expenditure made.
The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.

376
 Audit recommends fixing of responsibility on the management for incurring such
a huge expenditure without proper justification, beside record be immediately provided to
audit for verification, under intimation to this office.
[AIR Para: 12]

7.2.3.43 Irregular Salaries made to Contingent Paid Staff - Rs 1.364 Million

According Rule-88 of Sindh Financial Rules Volume-1, “Every public officer
should exercise the same vigilance in respect of expenditure incurred from Government
revenue as a person ordinary prudence would exercise in spending his own money”.
Further, as per Rule -89 of Sindh Financial Rules Volume-1, “it is the duty of
countersigning officer to see that the charges made in contingent bills are of obvious
necessity and are at fair and reasonable rates.
In the office of the Chief Officer District Council, Ghotki, during financial year
2014-15, it was observed that an expenditure of Rs 1.364 million was incurred on account
of payment of salaries of contingent staff.
There were 542 employees are working on permanent basis as per sanction
strength provided by the entity. However no rationale was provided for incurrence of
expenditure on contingent paid staff. No acquaintance roll was available and the amount
was credited to DDO account where the pay is disbursed manually. Audit was unable to
authenticate the expenditure since complete record was not available.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during September, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Matter may be investigated and justified to audit.
[AIR Para: 5]

377
7.2.3.44 Unauthorized Drawl of Monthly Fixed Travelling Allowance (PTA)
Rs 0.715 Million
According to Rule-28 of GFR Vol-I, “no amount due to Government should
be left outstanding without sufficient resources and where any dues appear to be
irrecoverable the orders of competent authority for their adjustments must be sought”.
Further, no any instructions by the Government are issued to draw the
permanent Travelling Allowance (PTA) to any employee.
Moreover, according to Para-10 (iv) of GFR Vol-I, “public money should not be
utilized for the benefit of a particular person or section of community”.
In the office of the Administrator/CMO, Municipal Committee Rohri, during
financial year 2014-15, it was noticed that management paid Permanent Traveling
allowance (PTA) amounting to Rs 0.715million to staff.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to the management during November, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit, therefore recommended that the recovery be made from the incumbent
from date of initial payment and be deposited into Government account
[AIR Para: 12]

7.2.3.45 Irregular Appointments

As per Notification issued from Local Government Department, Government of
Sindh vide No.SOA/(LG)1(27)/2011 dated 6-6-2011, “No appointment in any grade shall
be made henceforth without consolidated advertisement and fresh approval of the
Government. Approval, if any, earlier issued in this regard may be treated cancelled /
withdrawn”.
Further, as per Government of Sindh, Services, General Administration and
Cooperation Department notification No.SOV(SandGAD)X-15/90-98 dated:12-02-2008,
Advertisement should be given for all vacant posts and for Posts in BPS-5 and above,

378
there shall be a written test followed by interview, whereas, for posts in BPS-1 to BPS-4
only interviews shall be conducted through departmental selection committee.
In the office of the Chief Officer, District council Khairpur, during financial
year 2014-15, it was observed that 2 new employees were appointed on permanent basis,
without going through prescribed procedure, in violation of the above rules. Detail
provided as under:
[Amount in Rupees]
Sr. Name of Employee Designation Gross Pay Pay Per Year
1 Mr. Ghulam Mujtaba P.R.O BPS-16 31,877 382,524
2 Mr. Danish Mushtaque A.A.O BPS-16 26,877 322,524
Total 58,754 705,048
Audit is of the view that recruitments were made without following prescribed
procedure resulting into non-transparency in recruitment and weak financial
management.
Deviation from prescribed rules was due to weak internal control.
The matter was reported to the management during November, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends investigation for fixing of responsibility on official (s) for
unauthorized appointments without fulfillment of codal formalities, under intimation to
audit.
[AIR Para: 3]

7.2.3.46 Non-Accountal of Security and Call Deposits

According to Government instructions, “all security and call deposits should be
kept in charge in responsible Government servant and recorded the same in his
appropriate deposit register”.
Further, According to Provision contained in Rule-113 of Sindh Financial Rule
Volume-I, “all materials received should be examined, counted, measured or weighed as
the case may be, when delivery is taken and they should be kept in charge of a
responsible Government servant who should be required to give a certificate that he
actually received the materials and recorded them in his appropriate stock register”.

379
 In the office of Administrator/CMO, MC Rohri, during financial year 2014-15,
it was observed that the call deposits and security deposits for Rs 0.244 million on
account of auctions for Fruit, vegetable fee, Hoarding, Signboard fee and temporary Stall
fee were found not accounted for in the relevant register.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
The matter was reported to management during November, 2015 but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommends that the amount of security and call deposits as per
detail attached be accounted for in relevant register or deposited into Government
accounts and deposited challans may please shown to audit for verification at the earliest.
[AIR Para: 47]

7.2.3.47 Irregular and Unjustified Agreement with North Sindh Urban

Services Corporation (NSUSC)
According to agreement made between Municipal Committee and North Sindh
Urban Services Corporation (NSUSC) dated 15th October, 2009, “NSUSC will deliver
all level of services as indicated in agreement”.
The levels of Services will be monitored by the TMA, with advice from
Independent Verifier, a consultant firm hired under the Sindh Cities Improvement
Investment Program (SCIP).
In the office of Administrator/CMO, MC Rohri, during the financial year
2014-15, it was observed that management was paying millions of rupee to NSUSC
without monitoring satisfactory services by the NSUSC. Moreover, no action or
correspondence was made by the TMA with NSUSC over citizens’ complaints. It is
pertinent to mention that 346 employees of TMA office were transferred to NSUSC for
granting undue benefit to vendor
Thus, the management failed to observe the Government rules and procedures,
which reflects the absence of systematic control and financial discipline prevailing in the
department.

380
 Government and Public of the City sustained loss in shape of bad delivery of
services.
The matter was reported to the management during November, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore, recommend that the better service delivery may be enhances
and monitoring and evaluation system may be strong. Action may be taken against the
persons at fault and it is also suggested that the proper measurement should be adopted to
avoid such lapses in future.
[AIR Para: 40]

7.2.3.48 Un-authorized Retention of Government Vehicles

As per Section(I) of Appendix 18-A of SFR Vol-I, "Means should be devised to
ensure that every Government servant realizes fully and clearly that he will be held
personally responsible for any loss sustained by Government through fraud or negligence
on his part, and that he will also be held personally responsible for any loss arising from
fraud or negligence on the part of any other Government servant to the extent to which it
may be shown that he contributed to the loss by his own action or culpable negligence”.
Further, as per Rule II (I) of Appendix 18, ibid, “all losses must be reported
forthwith by the officer concerned, not only to the Audit Officer, but also to his own
immediate official superior. Reports must be submitted as soon as reasonable ground
exists for believing that a loss has occurred; they must not be delayed while detailed
enquiries are made”.
In the office of the Administrator/Chief Officer, District Council Khairpur,
during financial year 2014-15, it was observed by the audit that Chief Officer failed to
recover vehicles under occupation and usage by un-authorized personals.
Audit is of the view that unauthorized retention of vehicles by various officers
resulted into unauthorized retention of vehicles and weak financial management.
Deviation from prescribed rule resulted into weak internal control.
The matter was reported to the management during November, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.

381
 Audit recommends fixing of responsibility on managements for not taking
efforts to recover official vehicles from un-authorized retention by ex-officers. Besides,
financial impact of retention of vehicles may be worked out from the date of illegal
retention and effect recovery. Moreover, all out efforts may be made to recover vehicles,
under intimation to audit.
[AIR Para: 6]

7.2.3.49 Un-authorized Appointment / Posting of Staff Above Sanctioned

Strength
According to Para 188 of Sindh Financial Rules Volume-I, “no payment should
be made without the budget provision or prior permission be obtained from Finance
department in order to incur such expenditure”.
Further according to Rule 80 (3)(4) of SFR Volume-I, “it is the responsibility of
DDO to ensure that no expenditure exceeds the limits of the budget provision and in case
the expenditure is exceeded the budget allocation, additional budget grant prior to the
close of the financial year should have been obtained”.
In the office of the Chief Municipal Officer, Municipal Committee Kingri,
during financial year 2015-16, it was been observed that un-authorized
appointments/postings were made over and above the sanctioned strength. Audit is of the
opinion that payment of salaries to 75 officers/officials in excess of sanctioned strength is
irregular and un-authorized. Detail is as under:
Sr. Name of post with BPS. Sanctioned Working Excess
1 Computer Operator BS-07 0 1 1
2 Fire Fighter BS-06 1 2 1
3 Naib Qasid BS-01/02 16 47 31
4 Chowkidar BS-01/02 12 19 7
5 Malhi BS-01 11 46 35
6 Helper Disposal BS-01/02 9 10 1
Total 49 124 75

From the above facts, it becomes obvious that management failed to observe the
Government laws and regulations, which reflect poor internal control, lack of drawing
and disbursing knowledge and improper financial discipline.

382
 The matter was reported to the management during November, 2016 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommends that justification be provided for un-authorized
appointment/posting of staff above approved sanctioned strength, under intimation to
audit.
[AIR Para: 18]

7.2.3.50 Un-authorized Occupation of Council Property

According to Para-23 of General Financial Rules Volume-I, “every Government
officer should realize fully and clearly that he will be held personally responsible for any
loss sustained by Government through fraud or negligence on his part and that he will
also be held personally responsible for any loss arising from fraud or negligence on the
part of any other Government officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
Further, According to Para-10 (i) of GFR Volume-I, “every public officer is
expected to exercise the same vigilance in respect of expenditure incurred from public
money as a person of ordinary prudence would exercise in respect of expenditure of his
own money”.
Moreover, as per Para-10 (iv) of GFR Volume-I, that public money should not
be utilized for the benefit of a particular person or section of community and also
according to rule all the claims must be supported with full detail and documents”.
In the offices of Chief Officer, District Council Sukkur and Khairpur, during
financial year 2014-15, it was observed that property of District Councils situated in
Jurisdiction of District Sukkur and Khairpur were under adverse occupation by NADRA,
Benazir Income Support Program (BISP) and private persons without any payment of
rent or any legal authority
Audit is of the view that department failed to safe guard its property which
indicates that there exists no system of internal control. The non-observance of
Government rules and procedures by the management deprived the Government loss and
it is apprehended that with the passage of time, this occupation may become
non-challengeable.

383
 Audit is of the view that failure of management to comply with the rules reflects
weak internal control system prevailing in the department which constituted weak
financial management
The matter was reported to the management during September, 2015 and
November, 2015 but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit therefore recommended that the un-authorize occupying over Government
property may be vacated through legal way or as the competent authority deemed
necessary. Responsibility may be fixed on incumbent at fault, needful may be done now,
compliance verified from audit and proper measurement should be adopted to avoid such
lapses in future.
[AIR Paras: 3,7]

7.2.3.51 Irregular and un-authorized Promotions of Officials

According to ESTA Code Chapter No.II, Para No.8, “For Proper administration
of a service, Cadre or Post, the appointing authority shall cause a seniority list of the
members for the time of such service, cadre or post”.
Further, as per Government instruction, promotion cases may be made in light of
instructions given by the competent authority i-e, Seniority List, Service period,
promotion committee, Confidential Reports, Approval from competent authority etc
Moreover, according to Para-10 (iv) of GFR Volume-I, “public money should
not be utilized for the benefit of a particular person or section of community and also
according to rule all the claims must be supported with full detail and documents”.
In the office of Administrator/CMO, MC Rohri, during financial year 2014-15,
the management promoted staff illegally and without fulfillment of codal formalities.
Management preferred juniors to be promoted instead of seniors.
The failure of management to comply with the rules reflects weak internal
control system prevailing in the department which constituted weak financial
management
Due to non-observing of above codal formalities, the promotions of inefficient
employees cannot be ignored.

384
 The matter was reported to the management during November, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
The irregularity be justified to audit and relevant document may please be
provided to audit. Responsibility be fixed against the person (s) at fault and steps be taken
to avoid such irregularities in future.
[AIR Para: 38]

385
 CHAPTER-VIII
LARKANA DIVISION

386
8.1 LARKANA DIVISION
8.1.1 INTRODUCTION
Larkana Division consists of 05 Districts namely Larkana, Shikarpur,
Jacobabad, Kamber and Kashmore. Each Corporation / District Council / Municipal
Committee / Town Committeein Larkana Division is headed by an Administrator/
Municipal Commissioner /Chief Officer / Chief Municipal Officer/ Town officer who
carries out operations as per Sindh Local Government Ordinance, 1979.
The functions of Municipal Corporation/Committees are as following:
1. Prepare spatial plans for the Town including plans for land use, zoning and functions
for which Municipal Corporation/Committeesis responsible.
2. Exercise control over land-use, land-subdivision, land development and zoning by
public and private sectors for any purpose, including agriculture, industry, commerce
markets, shopping and other employment centers, residential, recreation, parks,
entertainment, passenger and transport freight and transit stations.
3. Enforce all municipal laws, rules and bye-laws governing Municipal
Corporation/Committeesfunctioning.
4. Prepare budget, long term and annual municipal development programs in
collaboration with the Union Councils.
5. Collect approved taxes, cesses, user fees, rates, rents, tolls, charges, fines and
penalties.
6. Manage properties, assets and funds vested in the Municipal Corporation/Committees.
7. Develop and manage schemes, including site development in collaboration with Union
Administration.
8. Issue notice for committing any municipal offence by any person and initiate legal
proceedings for commission of such offence or failure to comply with the directions
contained in such notice.
9. Prosecute, sue and follow up criminal, civil and recovery proceedings against violators
of Municipal Laws in the courts of competent jurisdiction.
10. Maintain municipal records and archives.

387
8.1.2 Comments on Budget and Accounts (Variance Analysis)

(Rupees in Million)
Excess (+)
S. No. Formation Particulars Budget Expenditure
/ Revenue Savings (-)
Salary 557.979 474.282 (83.697)
Non-Salary 133.990 93.793 (40.197)
1 Larkana
Development 214.655 139.526 (75.129)
Revenue 974.158 389.663 (584.495)
Salary 389.926 331.437 (58.489)
Non-Salary 200.048 140.034 (60.014)
2 Shikarpur
Development 149.741 97.332 (52.409)
Revenue 498.885 199.554 (299.331)
Salary 275.066 233.806 (41.260)
Non-Salary 52.650 36.855 (15.795)
3 Jacobabad
Development 96.656 62.826 (33.830)
Revenue 334.219 133.687 (200.531)
Salary 698.214 593.482 (104.732)
Non-Salary 199.084 139.358 (59.725)
4 Kamber
Development 367.705 239.008 (128.697)
Revenue 910.704 364.282 (546.423)
Salary 309.264 262.874 (46.390)
Non-Salary 375.502 262.851 (112.650)
5 Kashmore
Development 220.670 143.435 (77.234)
Revenue 628.836 251.534 (377.302)
Salary 2,230.449 1,895.882 (334.567)
Total Non-Salary 961.274 672.891 (288.382)
Development 1,049.426 682.127 (367.299)
Grand Total 4,241.149 3,250.900 (990.249)
Revenue 3,346.802 1,338.721 (2,008.081)

388
 Expenditure 2015-16

Original budget of Rs 4,241.149 million was allocated to Chief Officers,

Municipal Corporation and Town Committees of Larkana Division under various grants.
Variance Analysis of the Revised/Final Grant and Actual Expenditure for the Financial
Year 2015-16 for the audited entities depicted that there was a saving of Rs 990.249
million.

8.1.3 Brief Comments on the Status of Compliance with PAC Directives

The audit reports pertaining to following years have been submitted to Governor
of Sindh. Detail of PAC meetings is given below:
Audit Year No. of Paras Status of PAC Meetings
2012-13 21 Nil
2013-14 03 Nil
2014-15 69 Nil

As indicated in the above table, no PAC meeting was convened to discuss the audit
reports of TMAs of Larkana Division.

389
8.2 AUDIT PARAS
8.2.1 Misappropriation / Fraud
8.2.1.1 Mis-Statement in Outstanding Recovery Position to Conceal
Suspected Misappropriation – Rs 25.858 Million
According to Para-10 (i) of GFR Volume-I, “every public officer is expected to
exercise the same vigilance in respect of expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.
Further, according to Para 28 of GFR Volume-I, “No amount due to
Government should be left outstanding without sufficient reason and where any dues
appear to be irrecoverable orders of the competent authority for their adjustment must be
sought”.
In the office of the Administrator/Chief Municipal Officer, Municipal
Committee, Jacobabad, during financial year 2014-15, there was discrepancy in
statements of outstanding dues. One statement indicated an amount of Rs 61.866 million
while the other showed Rs 36.008 million. This discrepancy has rendered the whole
accounting record dubious.
[Amount in Rupees]
Name of Items Arrears in First Statement Arrears .in 2nd Statement Difference
Shop Rent 10,926,066 10,154,749 771,317
Ground Rent 41,188,842 17,108,486 24,080,356
Water Rent 9,751,420 8,744,920 1,006,500
Total 61,866,328 36,008,155 25,858,173
Audit is of that the management failed to observe the Government rules and
procedures, which reflects the absence of systematic control and financial discipline
prevailing in the department.
Due to misstatement or concealment of accurate recovery position, the
misappropriation in collection of Government dues cannot be ignored.
The matter was reported to management during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommends that the matter may be investigated and actions
may be taken against the persons at fault and fixing responsibility on the management for

390
concealment of such data in both statements. The irregularity may be justified to audit at
the earliest.
[AIR Para: 28]

8.2.1.2 Suspected Misappropriation on Purchase/Supply of Vehicles,

Machinery and Equipments – Rs 25.850 Million
According to Notification issued by Finance Department, Government of Sindh
with the directives of Chief Minister, Sindh vide no. FD/B&E-1/2(360)/Ban/2012-13
dated 17-5-2013, “the ban was imposed by the Chief Minister for a. Procurement of
vehicles of all categories and luxury items like air conditioners, furniture, computer etc
from non-development budget”.
Further, according to Provision contained in Rule-113 of Sindh Financial Rule
Volume-I, “all materials received should be examined, counted, measured or weighed as
the case may be, when delivery is taken and they should be kept in charge of a
responsible Government servant who should be required to give a certificate that he
actually received the materials and recorded them in his appropriate stock register”.
Furthermore, according to Para-23 of General Financial Rules Volume-I, “every
Government officer should realize fully and clearly that he will be held personally
responsible for any loss sustained by Government through fraud or negligence on his part
and that he will also be held personally responsible for any loss arising from fraud or
negligence on the part of any other Government officer to the extent to which it may be
shown that he contributed to the loss by his own action or negligence”.
In the office of Administrator/Chief Municipal Officer, Municipal Committee,
Jacobabad, during financial year 2014-15, procured vehicles / machinery and equipment
amounting to Rs 25.850 million. Details are provided at Annex-LRK1. Following
irregularities were pointed out by the audit.
i. Purchase was without tender
ii. No prior approval was taken from competent authority despite ban period.
iii. The vendor M/s Pacific Enterprises Quetta had invalid NTN / STRN, address,
telephone numbers, date, Reference No., Audit found bogus invoices /
vouchers in record.
iv. The purchase was made without budget allocation.
v. Delivery challan, purchase order, original ownership documents,
warranty/Guarantee certificate, purchase orders, sales certificates etc were
bogus.

391
 vi. Stock entry was not made.
Audit is of the view that the whole transaction reflects absence of internal
control which constituted weak financial management. The expenditure was incurred in
contravention of rules.
The matter was reported to managements during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for unjustified
purchase and supply of vehicles / machinery and equipments, under intimation to audit.
[AIR Para: 8]

8.2.1.3 Suspected Misappropriation on Purchases - Rs 11.502 Million

According to Sub Section (2) of Section 4 of the Sindh Financial Management
and Accountability Act, 2011, “The rules shall be consistent with the following
principles:-
(a) All financial transactions shall be duly authorized;
(b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
Further, According to Rule 70 Sub rule (1) of Sindh District Government and
Taluka/Town Municipal Administration (Budget) Rules, 2002, “The Heads of Offices
shall be responsible for controlling and managing expenditure from the Grants placed at
their disposal”.
Moreover, According to Para-23 of General Financial Rules Volume-I, “every
Government officer should realize fully and clearly that he will be held personally
responsible for any loss sustained by Government through fraud or negligence on his part
and that he will also be held personally responsible for any loss arising from fraud or
negligence on the part of any other Government officer to the extent to which it may be
shown that he contributed to the loss by his own action or negligence”.
Various formations of Larkana Division, during financial years 2014-16,
incurred an expenditure of Rs 11.502 million on account of purchase of different
materials, but audit pointed out following observations:

392
 i. The material was purchased without indent received from concerned department
/ incharge
ii. Purchase was on quotation basis.
iii. Purchased material was not accounted for in stock register (on the verification it
was also noticed that the fake stock entry and outward no for quotation was
found)
iv. On the verification from the store section, it was noticed that the purchased
material for the said department was not actually purchased.
v. Issue register was not provided to audit.
vi. Number of purchased materials etc was not provided
vii. Location for installation of purchased electric material was not indicated
viii. No detail of old electric material was provided
ix. Proper detail Planning map was not provided
x. No officer was deputed to monitor the usage of electric material.
[Rupees in Million]
Sr. Name of Offices Para Year Amount
1 Municipal Commissioner, MC Larkana 3 2014-15 3.555
2 Chief Municipal Officer, MC, Jacobabad 5 2014-15 1.955
3 Chief Municipal Officer, MC Jacobabad 2 2015-16 2.052
4 Chief Municipal Officer, MC, Jacobabad 7 2014-15 0.967
5 Chief Municipal Officer, MC, Jacobabad 4 2014-15 0.394
6 Town Officer, Town Committee, Garhi Khero 2 2015-16 2.579
Total 11.502
Audit is of the view that expenditure on account of purchase of different
material without observing codal formalities resulted into suspected misappropriation of
public funds which constituted weak financial management.
Deviation from prescribed rules and procedures constituted weak internal
control system.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on account of suspected
misappropriation of public funds on account of purchase of different materials, under
intimation to audit.
[AIR Paras: 3,5,2,2, 7, 4]

393
8.2.1.4 Suspected Misappropriation on Repair of Vehicles – Rs 5.386 Million
According to Sub Section (2) of Section 4 of the Sindh Financial Management
and Accountability Act, 2011, “The rules shall be consistent with the following
principles:-
(a) All financial transactions shall be duly authorized;
(b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
Further, according to Para-23 of General Financial Rules Volume-I, “every
Government officer should realize fully and clearly that he will be held personally
responsible for any loss sustained by Government through fraud or negligence on his part
and that he will also be held personally responsible for any loss arising from fraud or
negligence on the part of any other Government officer to the extent to which it may be
shown that he contributed to the loss by his own action or negligence”.
Furthermore, according to Government of Sindh Transport department letter No.
SO (II) 4-32/80 dated 30-3-1986, the repair of Government vehicles should be carried out
through Government workshops otherwise NOC should be obtained from Government
workshop.
Various formations of Larkana Division, during financial years 2014-16,
incurred an expenditure of Rs 5.386 million on repair of different vehicles of Municipal
Committee. Audit observed following discrepancies.
i. The repair of Tractors/trollies, Fire brigade and Car was made without
requisition from drivers or sanitation department / incharge.
ii. Repair work was carried out on quotation basis
iii. Expenditure on repair of Tractor, Trolley, and Fire Brigade was made
without maintaining history sheet, in violation of above rules
iv. Repair work was claimed to be carried out from Private workshop, without
NOC from Government workshop
v. Old Scrap material was not accounted for in stock register
vi. Audit noticed that despite the claimed repair the said Tractors/trollies were
found standing on the bricks.
vii. No requisition from drivers found not available on record

394
 [Rupees in million]
Sr. Name of formation Para # Year Amount
1 Chief Municipal Officer, MC, Jacobabad 6 2014-15 2.015
2 Chief Municipal Officer, MC Jacobabad 3 2015-16 1.981
3 Town Officer, Town Committee, Garhi Khero 6 2015-16 1.390
Total 5.386
Audit is of the view that misappropriation of funds constituted an act of
commission on part of management.
Government sustained financial Loss due to absence of internal control and
financial management.
The matter was reported to managements during December 2015 and August to
December, 2016, but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit recommends that misappropriation of funds may be recovered, under
intimation to audit.
[AIR Paras: 6,3,6]

8.2.1.5 Suspected Misappropriation on Execution of Development Schemes

Rs 3.218 Million
According to Sub Section (2) of Section 4 of the Sindh Financial Management
and Accountability Act, 2011, “The rules shall be consistent with the following
principles:-
(a) All financial transactions shall be duly authorized;
(b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
Further, According to Rule 70 Sub rule (1) of Sindh District Government and
Taluka/Town Municipal Administration (Budget) Rules, 2002, “The Heads of Offices
shall be responsible for controlling and managing expenditure from the Grants placed at
their disposal”.
In the office of Administrator/Chief Municipal Officer, Municipal Committee,
Jacobabad, during financial year 2014-15, it was noticed that an expenditure of Rs 3.218
million was incurred on execution of development schemes. Audit observed following
discrepancies.
i. The schemes were executed without approval of competent authority

395
 ii. Tenders were not called and execution was on quotation basis.
iii. Audit could not found any trail of said expenditure. Measurement books,
Tender register and work register etc.
iv. On the query of audit it was admitted that these schemes were not executed.
The statement of concerned official is available with audit.
v. The misappropriation of funds is an act of commission on part of
management.
Audit is of the view that misappropriation of funds indicates the absence of
systematic internal control and lack of financial discipline.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommends that misappropriated fund may be recovered, under
intimation to audit.
[AIR Para: 03]

8.2.1.6 Suspicious Refund of Security and Call Deposits – Rs 2.548 Million

According to Sub Section (2) of Section 4 of the Sindh Financial Management
and Accountability Act, 2011, “The rules shall be consistent with the following
principles:-
(a) All financial transactions shall be duly authorized;
(b) All financial transactions shall be recorded promptly, clearly, accurately,
logically and coherently.
Further, according to Para-23 of General Financial Rules Volume-I, “every
Government officer should realize fully and clearly that he will be held personally
responsible for any loss sustained by Government through fraud or negligence on his part
and that he will also be held personally responsible for any loss arising from fraud or
negligence on the part of any other Government officer to the extent to which it may be
shown that he contributed to the loss by his own action or negligence”.
In the office of Administrator/Chief Municipal Officer, Municipal Committee,
Jacobabad, during financial year 2014-15, it was noticed that the security and call

396
deposits amounting to Rs. 2.548 million were refunded to the contractors/suppliers
without completion of schemes. Details are as under:
(Amount in Rupees)
Sr. Month Amount Work Contractor
Earth Filling Work at Ali Pur
1 Aug-14 79,780 M/s Ammer Bux
Village
Earth Filling Work at Juma
2 Sep-14 49,303 M/s Ammer Bux
Khan Dasti Village
Construction of CC Block at
3 Oct-14 19,773 M/s Ammer Bux
Sher Shah Street
4 Nov-14 600,000 Nil Nil
5 Dec-14 1,800,000 Nil Nil
Total 2,548,856
Audit is of the view that refund of call deposit and security without completion
of schemes indicates absence of internal control and effective financial management.
The matter was reported to managements during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends investigation and fixing of responsibility for suspicious
refund, under intimation to audit.
[AIR Para: 30]

8.2.1.7 Suspected Misappropriation on account of POL - Rs 0.404 Million

According to Para-23 of General Financial Rules Volume-I, “every Government
officer should realize fully and clearly that he will be held personally responsible for any
loss sustained by Government through fraud or negligence on his part and that he will
also be held personally responsible for any loss arising from fraud or negligence on the
part of any other Government officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
In the office of Administrator/Chief Municipal Officer, Municipal Committee,
Jacobabad, during financial year 2014-15, it was noticed that the POL amounting to
Rs 0.404 million was charged on out of order vehicle. Moreover, the said vehicle was not
running in the department and was under custody of Assistant Commissioner, Jacobabad.
Further, moreover the claim was beyond the ceiling. Detail is provided at Annex-LRK2.

397
 Audit is of the view that management failed to exercise the control over the
expenditure which indicated absence of internal control and effective financial
management.
Due to misappropriation funds, Government sustained financial loss.
The matter was reported to management during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommends that the matter may be investigated and action may
be taken against the persons at fault for violating the rules of causing loss to the
Government.
[AIR Para: 9]

8.2.1.8 Fraudulent Drawl of Funds on Account of POL by Fake Signatures of

Competent Authority – Rs 0.260 Million
According to Para-23 of General Financial Rules Volume-I, “every Government
officer should realize fully and clearly that he will be held personally responsible for any
loss sustained by Government through fraud or negligence on his part and that he will
also be held personally responsible for any loss arising from fraud or negligence on the
part of any other Government officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
Further, according to Para-10 (i) of GFR Volume-I, “every public officer is
expected to exercise the same vigilance in respect of expenditure incurred from public
money as a person of ordinary prudence would exercise in respect of expenditure of his
own money”.
In the office of Administrator/Chief Municipal Officer, Municipal Committee,
Jacobabad, during financial year 2014-15, it was noticed that Assistant Commissioner
after relinquishment of the charge of Administrator on 12th June 2014, passed POL bills
amounting to Rs 0.260 million. Hence the said funds were fraudulently drawn from
Government Account and same may be recovered, in violation of above rules.
The department thus, failed to exercise the control over the weak internal control
and financial management.
Due to fraudulent withdrawal of funds, Government sustained financial and
reputational loss.

398
 The matter was reported to management during December 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommends that the matter may be investigated and action may
be taken against the persons at fault for violating the rules of causing loss to the
Government.
[AIR Para: 2]

399
8.2.2 Non-Production of Record
8.2.2.1 Non-Production of Record – Rs 801.315 Million
As per Section 14 (1) (b) of the Auditor General (Functions, Powers & Terms
and Conditions of Service) Ordinance, 2001, The Auditor-General shall, in connection
with the performance of his duties under this Ordinance, have authority to require that
any accounts, books, papers and other documents which deal with, or form, the basis of
or otherwise relevant to the transactions to which his duties in respect of audit extend,
shall be sent to such place as he may direct for his inspection.
Further, “Chief Secretary vide letter No.DO.NO.SO(C-II)/SGA&CD/1-73/2012
dated 25th October, 2013 duly endorsed by Secretary of LGD vide letter No.
SOA/(LG)LG/4/(77)2013, dated 21.11.2013 was pleased to direct to all Municipal
organizations / Local Councils for immediately providing record to audit, so that,
financial discipline may be restored to respective organizations. In case of failure to
provide record to audit by auditee organizations, the cases may be taken up under
disciplinary proceedings against officers concerned that may include suspension of
officers”.
Various Municipal Corporations, Municipal Committees and Town Committees
of Larkana Division, incurred an expenditure of Rs 724.490 million, but failed to provide
record, during financial years 2014-16, to audit, in violation of the above rule and
instructions. Details are provided at Annex-LRK3.
Further, various formations of Larkana Division, incurred an expenditure of
Rs 76.825 million, during financial years 2014-16, on purchase of POL for official
vehicles, but did not produce Log Books, Vehicle Maintenance Record, History Sheets
and Petrol account Registers. Details are provided at Annex-LRK3.
Audit is of the view that due to non-provision of record authenticity of
expenditure cannot be ascertained by audit.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the managements for
non-provision of record in accordance with rules and regulations.
[AIR Paras:1,21,1,1,2,1,2,1,1,1,1,1,1,1,1, 14,8,23,13,3,6,11,1,6,5,11,4,4]

400
8.2.3 Irregularity / Non-Compliance
A. Recovery, Targeted receipts/Outstanding dues
8.2.3.1 Non-Recovery from Defaulters – Rs 95.654 Million
According to Para 28 of GFR Volume-I, “No amount due to Government should
be left outstanding without sufficient reason and where any dues appear to be
irrecoverable orders of the competent authority for their adjustment must be sought”.
Various formations of Larkana Division, during financial years 2014-16, failed
to recover rent amounting to Rs 95.654 million from tenants, who defaulted on payment
of monthly rent. Detail is as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC, Kandhkot 14 2014-15 1.048
2 Chief Municipal Officer, MC, Jacobabad 11 2014-15 36.008
3 Chief Municipal Officer, MC Jacobabad 4 2015-16 58.598
Total 95.654

Audit is of the view that due to non-recovery of rent government sustained loss
of revenue and constitutes weak financial management.
Due to less efforts of the management, Government sustained financial loss.
The matter was reported to managements during September to December 2015
and December, 2016, but they did not respond to audit observation. The PAO also failed
to convene the DAC meeting despite pursuance by audit.
Audit recommends that the recovery may be made and got verified by the audit.
[AIR Paras: 14,11,4]

8.2.3.2 Less Realization of Targeted Receipts – Rs 67.746 Million

As per Section 96 (1) of Sindh Local Government Act 2013, “A council may
levy, in the prescribed manner all or any taxes, rates, tolls, and fees mentioned in
Schedule V”.
Further, Rule 41 (a) of SFR Vol-I, “The departmental Controlling Officer should
see that all sums due to Government are regularly received and checked against demands
and that they are paid into treasury claiming credit for so much paid into the treasury and
compare with the figures in the statements supplied by the comptroller”.

401
 Following formations of Larkana Division, during financial years 2014-16,
failed to recover the estimated/targeted receipts of Rs 67.746 million in violation of
above rules. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC, Jacobabad 32 2014-15 11.411
2 Chief Municipal Officer, MC, Shahdadkot 3 2014-15 0.326
3 Chief Municipal Officer, MC Shahdadkot 8 2015-16 3.814
4 Chief Municipal Officer, MC Shikarpur 2 2015-16 34.049
5 Chief Municipal Officer, MC Kamber 9 2015-16 8.885
6 Chief Municipal Officer, MC Kandhkot 2 2015-16 3.886
7 Chief Municipal Officer, MC Shikarpur 4 2015-16 5.375
Total 67.746
Audit is of the view that management failed to take necessary steps and enforce
the prescribed procedures for achievement of targeted revenue.
Violation of prescribed rules and procedures was due to weak internal control.
The matter was reported to management during September to December, 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the concerned official(s), besides,
effecting recoveries against the targeted receipts.
[AIR Paras: 32,3,8,2,2,4 ]

8.2.3.3 Loss to Government due to Non-deduction/Non-deposit of Taxes

Rs 15.346 Million
According to section 160 (chapter X, part V) of the Income Tax Ordinance
2001, “Any tax that has been collected or purported to be collected under division II of
this part or deducted or collected or purported to be deducted or collected under chapter
XII, shall be paid to the Commissioner by the person making the collection or deduction
within the time and manner as may be prescribed (i.e. within 7 days of deduction or
collection).
Following formations of Larkana Division, during financial years 2014-16,
failed to deduct taxes/deposit deducted taxes into Government treasury amounting to
Rs 15.346 million, in violation of above rule. Detail is as under:

402
 [Rupees in Million]
Non-Deduction/Deposit of Income Tax
Sr. Name of Formation Para # Year Amount
1 Town Officer, Town Committee, Bakrani 11 2014-15 1.03
2 Town Officer, Town Committee, Garhi Yasin 7 2015-16 6.914
Chief Municipal Officer, MC, Jacobabad 13 2014-15 1.624
Total 9.568
Non-Deduction/Deposit of Sales Tax
1 Town Officer, Town Committee, Garhi Khero 9 2015-16 1.334
2 Chief Municipal Officer, MC Jacobabad 9 2015-16 1.578
3 Town Officer, Town Committee, Dokri 13 2014-15 1.093
4 Chief Municipal Officer, MC, Jacobabad 13 2014-15 1.036
Chief Municipal Officer, MC, Jacobabad 12 2014-15 0.737
Total 5.778
Grand Total 15.346

Audit is of the view that Government sustained loss of revenue due to non-
deduction/non-deposit of deducted taxes into Government treasury which resulted into
short receipt and constituted weak financial management.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit therefore recommends fixing of responsibility on managements for non-
deduction/non-deposit of taxes into Government treasury. Besides, amount in question
may be recovered and deposited into treasury without further delay.
[AIR Paras: 11,7, 09,13,13,9], 14, 12],

8.2.3.4 Non-Recovery of Government Dues - Rs 4.434 Million

According to Para 28 of GFR Volume-I, “No amount due to Government should
be left outstanding without sufficient reason and where any dues appear to be
irrecoverable orders of the competent authority for their adjustment must be sought”.
Following formations of Larkana Division, during financial year 2015-16, failed
to recover outstanding dues, despite availability of huge recovery staff, in violation of
above rule. Detail is as under:

403
 [Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC Thull 2 2015-16 0.635
2 Chief Municipal Officer, MC Shikarpur 3 2015-16 3.799
Total 4.434

Audit is of the view that management failed to observe the Government laws
and regulations, which reflects poor internal control, and improper financial discipline.
Government sustained financial loss because of weak financial management.
The matter was reported to management during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that the recovery may be made, under intimation to audit.
[AIR Paras: 2,3]

8.2.3.5 Poor Performance in Collection – Rs 3.576 Million

According to Para-23 of General Financial Rules Volume-I, every Government
officer should realize fully and clearly that he will be held personally responsible for any
loss sustained by Government through fraud or negligence on his part and that he will
also be held personally responsible for any loss arising from fraud or negligence on the
part of any other Government officer to the extent to which it may be shown that he
contributed to the loss by his own action or negligence”.
Further, according to Clause 7.2.(a) 1and2 of Government of Sindh, Local
Government Public Health Engineering Rural Development and Katchi Abadies
Department, Notification No. SOV/MC-V (25) / 2000 dated 24.6.2002 that (a)(1)“
Reserve or upset price for the auction will be fixed by adding fifteen percent to the
average of last three years income” and (2)“If no successful bid is received on this upset
price in consecutive three times open auctions, then the matter for reduction in the upset
price be preferred to the concerned council for obtaining approval but the revised upset
price as a result of such reduction shall not less than the average of last three years
income plus ten percent”.
Moreover, according to notification issued from Government of Sindh, Local
Government Department, Karachi vide no. SOA/LG/1(102)/2010 dated 24.5.2012 Para
No.5, “the rents /rates and other recoveries may be reviewed /revised to improve the
resources of the local councils”.

404
 Administrator/Chief Municipal Officer, Municipal Committee, Jacobabad,
during financial year 2014-15, failed to achieve the targeted receipts against the target of
Rs 4.500 million. It is pertaining to mention that management had rejected the bid offer
in recent option by different contractor against Parking fee, Rezki ground fee, Subzi Fruit
fee, and Grass fee and failed to achieve even contractors’ Offer Rate. The short collection
amounts to Rs 3.576 million, as detailed below.
[Amount in Rupees]
Offers Received Recovery made
Official Loss to
Sr. Name of Contract but Auction Order through
Bid Government
Not awarded Department
1 Cattle Piri 1,268,933 - 581,200 687,733
2 Parking Fee 881,764 923,000 901,710 21,290
3 Rezki Ground Rent 1,001,156 1,755,000 802,156 952,844
4 Sabzi Fruit Fee 1,182,007 2,010,000 146,600 1,863,400
5 Grass Fee 106,119 113,000 70,210 42,790
6 Gara Fee 26,795 - 24,890 1,905
7 Licence Fee 27,231 - 23,160 4,071
8 Slaughter House 9,335 - 7,268 2,067
Total 4,503,340 4,801,000 2,557,194 3,576,100
Audit is of the view that the department’s failure to collection of above fees
deprived the Government of revenue which resulted into weak internal control. .
Deviation from prescribed rules and procedures constituted weak internal
control.
The matter was reported to management during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on the person(s) at fault, besides,
outstanding dues/fees may be recovered under intimation to audit.
[AIR Para: 11]

8.2.3.6 Less Recovery of Income Tax – Rs 1.344 Million

As per Section 153 (1) (Payments for goods and services) of Income Tax
Ordinance 2001 amended in finance act 2014, income tax rates have been enhanced at
following rates”.

405
 Description Reference
Sale of goods section 153 (1)(a)
4% of the gross amount payable in case of companies
4.5% of the gross amount payable in case of other tax payers
Rendering of providing of services Section 153 (1)(b) No.DC/(I.R)/(WHT)/SGR/RTO-
8% of the gross amount payable in case of companies HYD/2014-15/89 dated
10% of the gross amount payable in case of other tax payers 24.7.2014 by D.C Inland
Execution of contract section 153 (1)© Revenue, WHT unit-X Sanghar
7% of the gross amount payable in case of companies
7.5% of the gross amount payable in case of other tax payers
10% of the gross amount payable in case of sportspersons

Further, as per Section 160 (Payment of tax collected or deducted) of the same
ordinance, “Any tax that has been collected or purported to be collected shall be paid to
the Commissioner by the person making the collection or deduction within the time and
in the manner as may be prescribed”.
Administrator/Town Officer, Town Committee, Dokri, District Larkana,
deducted Rs 4.980 million, during financial year 2015-16, from contractors; however, the
bank statement showed credit entry of Rs 3.636 million to FBR, thus less deposit of
Rs 1.344 million. The audit also observed absence of reconciliation and default on part of
management for submission of mandatory 165 tax statement to FBR. Detail provided as
under:
[Amount in Rupees]
Sr. Head of account Expenditure noted Tax amount due Tax rate
1 Earth filling 3,900,363 292,527 7.5%
2 De-silting 13,179,335 988,450 7.5%
3 De-watering 14,949,612 1,121,221 7.5%
4 Debris 24,137,707 1,810,328 7.5%
5. Repair of RCC Nalla 5,051,140 378,836 7.5%
6. Purchase of street light material 6,430,818 289,387 4.5%
7. Purchase of DDT powder 1,272,850 54,578 4.5%
8. Sanitation material 990,456 44,570 4.5%
Total 69,912,281 4,979,897
Audit is of the view that non-deposit of deducted income tax into Government
treasury constituted weak financial management.
Non-observance of prescribed rules constituted weak internal control system.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.

406
 Audit recommends fixing responsibility on account of unauthorized retention of
income tax. Besides, same may be deposited into Government treasury, under intimation
to audit.
[AIR Para: 11]

8.2.3.7 Loss to Government due to Unauthorized Payment of Electric

Charges of CMO Bungalow - Rs 0.255 Million
According to Rule-28 of GFR volume-I, “no amount due to Government should
be left outstanding without sufficient resources and where any dues appear to be
irrecoverable the orders of competent authority for their adjustments must be sought”.
Further, as per Government instructions, “Government officer will also pay all
utility bills from his own pocket during the time of using Government accommodation”.
Administrator/Chief Municipal Officer, Municipal Committee, Jacobabad,
during financial year 2014-15, paid the bills against Accommodation of Chief Municipal
Officer.
[Amount in Rupees]
Total Outstanding
Type of Paid
Reference No Address Tariff Dues as on
Connection Amount
30.9.2014
06 38241 Chief Officer
Jacobabad 1 15,456,661 254,628
0019491 House

Audit is of the view that department failed to exercise the control over the
expenditure which indicates that there exists no system of internal control and effective
financial management.
Government instructions were not followed. Hence Government sustained
financial loss.
The matter was reported to management during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommended that the recovery amounting to Rs 0.255 million
be made from the CMOs concerned and deposited into Government account, under
intimation to audit.
[AIR Para: 16]

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B. Violation of Rules

8.2.3.8 Irregular Award of Work to Contractors not Registered with Sindh

Revenue Board – Rs 207.728 Million
According to the Sind Sales Tax on Services Act 2011 Section 24,
Registration.— (1) Registration will be required for all persons who: (a) are residents;
(b) provide any of the services listed in the Second Schedule from their registered office
or place of business in Sindh; and (c) fulfill any other criteria or requirements which the
Board may prescribe under sub-section (2).
Chief Municipal Officer, Municipal Committee, Kamber during financial year
2015-16, awarded different contracts amounting to Rs 207.728 million to various
contractors who were not registered with Sindh Revenue Board, in violation of above
rule.
Audit is of the view that management ignored rules and procedures set forth by
the Government that constituted weak financial management.
Violation of rules was due to weak internal controls.
The matter was reported to managements during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility under intimation to audit.
[AIR Para: 10]

8.2.3.9 Award of Work without Integrity Pact – Rs 123.416 Million

As per Rule 89 of SPPRA 2010, “The highest standard of ethics is required from
staff of procuring agency and bidders during pre- qualification, bidding process and the
execution of works. In pursuance of this policy, terms of corruption and fraudulent
practices are well defined in SPP Rule 2(q). Officials of procuring agency shall not use
their authority or office for personal gain and maintain the highest standards of honesty
and integrity by developing the highest possible standards of professional competence in
using funds and other resources for which they are responsible to provide the maximum
benefit to the project and procuring agency. Procurements exceeding Rs 10 million for
goods and works, and Rs 2.5 million for consulting services are subject to an integrity
pact, as specified by Rules, between the procuring agency and suppliers or contractors or

408
consultants. Integrity Pact documents as prescribed above can be downloaded from the
authority‘s website”.
Chief Municipal Officer, Municipal Committee, Kamber, during financial year
2015-16, awarded various schemes of Rs 123.416 million, but failed to execute integrity
pact with contractors, in violation of the above rule. Details are as under:
[Rupees in Million]
Sr. Name of Scheme Name of Contractor Cost
1 Reconditioning of road and rehabilitation of main drain of Kamber M/s. Streata 104.062
2 Construction of library in Jinnah Bagh, Kamber M/s. Munir Chandio 19.353
Total 123.415

Audit is of the view that department failed to execute integrity pact with
contractors to safeguard departmental interest which constituted weak financial
management.
Non-securing of integrity pact constituted weak internal control.
The matter was reported to managements during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing responsibility for not safeguarding the departmental
interests, under intimation to audit.
[AIR Para: 14]

8.2.3.10 Payment of Pension without Supporting Documents

Rs 68.702 Million
According to SI No.85 (vii) of Pension Manual 2006, “Personal appearance of
pensioners and payment through life certificate, a pensioner must take payment in person
after identification by comparison with the Pension Payment Order, at least once a year”.
Further, As per Rule-23 of Sindh Financial Rules, “Every Payment including
repayment of money previously lodged with Government for whatever purpose, must be
supported by a voucher setting forth full and clear particulars of the claim”.
Following formations of Larkana Division, during financial years 2014-16,
incurred an expenditure amounting to Rs 68.702 million on payment of pension and
commutation without fulfilling the codal formalities, in violation of above rule. The
following necessary documents were not found attached. Detail is as under:

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  Life Certificate
 No-marriage Certificate in case of family pension
 Acknowledgment of the recipient
 Copy of CNIC
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC Kamber 3 2015-16 11.941
2 Chief Municipal Officer, MC Shahdadkot 3 2015-16 13.763
3 Chief Municipal Officer, MC, Jacobabad 26 2014-15 42.998
Total 68.702

Audit is of the view that due to non-availability of necessary documents, audit

could not verify the authenticity of the expenditure incurred on payments of pension
therefore chances of mis-appropriation cannot be ruled out.
Violation of prescribed rule was due to weak internal controls.
The matter was reported to managements during December 2015 and August to
December, 2016, but they did not respond to audit observation. The PAO also failed to
convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility for such lapse and all necessary
documents be produced to audit for verification.
[AIR Paras: 3, 3, 26]

8.2.3.11 Violation of SPPRA – Rs 68.020 Million

As per Rule-17(1) of Sindh Public Procurement Rules 2010, “Procurements over
one hundred thousand rupees and up to one million rupees shall be advertised by timely
notifications on the Authority’s website and in print media in the manner and format
prescribed in these rules”.
Following formations of Larkana Division, during financial years 2014-16
awarded various supply/work orders amounting to Rs 68.020 million, through quotations
without inviting open tender, in violation of above rule. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para Year Amount
1 Town Officer, Town Committee, Tangwani 5 2014-15 5.220
2 Chief Municipal Officer, MC, Jacobabad 22 2014-15 16.460
3 Town Officer, Town Committee, Garhi Yasin 9 2015-16 13.965

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 [Rupees in Million]
Sr. Name of Formation Para Year Amount
4 Town Officer, Town Committee, Garhi Khero 14 2015-16 18.516
5 Chief Municipal Officer, MC Kandhkot 8 2015-16 5.836
6 Town Officer, Town Committee, Kashmore 6 2015-16 8.023
Total 68.020
Audit is of the view that non-observance of laid down rules resulted into
irregular expenditure and non-transparency in award of contract which constituted weak
financial management.
Non-observance of prescribed rules was due to weak internal controls.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing responsibility on account of non-inviting tender, under
intimation to audit.
[AIR Paras: 5,22,9,14,8,6]

8.2.3.12 Wasteful Expenditure on Salaries of Staff - Rs 67.003 Million

According to Para-10 (i) of GFR Volume-I, “every public officer is expected to
exercise the same vigilance in respect of expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money”.
Further, according to Para-10 (iv) of GFR Volume-I, “public money should not
be utilized for the benefit of a particular person or section of community and also
according to rule all the claims must be supported with full detail and documents”.
Following formations of Larkana Division, during financial year 2014-15, paid
salaries amounting to Rs 67.003 million to the staff lying idle. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC, Shahdadkot 11 2014-15 24.402
2 Chief Municipal Officer, MC, Jacobabad 33 2014-15 20.335
3 Municipal Commissioner, MC Larkana 2 2014-15 22.266
Total 67.003

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 Audit is of the view that management failed to comply with the orders of the
Government on the subject, which indicate the absence of systematic internal control.
Thus, Government sustained loss on the salaries without gaining any services.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during September to December 2015,
but they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommended that fixing of responsibility on person(s) at fault, under
intimation to audit.
[AIR Paras: 11, 33, 2]

8.2.3.13 Unauthorized Execution of Development Work without Technical

Sanction - Rs 40.304 Million
As per Director General (Technical) Local Government Department,
Government. of Sindh Hyderabad letter No.DB/ 329/ 2005 Hyderabad Dated 16-08-2005,
“officers of grade-18 and above have the powers as under: -
S# Category Financial Powers
1 Assistant Engineer/ TO (I&S) (of B-17/ Below) No Powers
The work having A.A cost of Rs.0.6
2 Executive Engineer/ TO (I&S) (of B-18)
Million.
The work having A.A cost of Rs.3.0
3 Superintending Engineer (of B-19)
Million
4 Director General/ Chief Engineer (of B-20) No limit (full powers)

Further, as per Para 56 of CPW departmental code, “For each individual work
proposed to be carried out, except petty works petty repairs and repairs for which a lump
sum provision has been sanctioned under paragraph 106, a properly detailed estimate
must be prepared for sanction of competent authority this sanction is known as the
technical sanction to the estimate”.
Moreover, as per Para-527 of PWD Manual, Volume-I, “no work shall begin
unless proper detailed design and estimate have been sanctioned, allotment of funds made
and order for its commencement issued by the competent authority”.
Following formations of Larkana Division, during financial years 2014-16,
executed works of Rs 40.304 million without obtaining technical sanction and

412
administrative approval from competent authority, in violation of the above rules. Details
are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC, Jacobabad 20 2014-15 5.430
2 Chief Municipal Officer, MC Kamber 15 2015-16 34.874
Total 40.304

Audit is of the view that award of work without technical sanction and approval
from competent authority resulted into unauthorized expenditure and weak financial
management.
Deviation from prescribed rules resulted into unauthorized expenditure and
weak internal control.
The matter was reported to managements during December 2015 and December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management for execution of
works without obtaining technical sanction from competent authority, under intimation to
audit.
[AIR Paras: 20,15]

8.2.3.14 Execution of Contract without Agreement – Rs 40.245 Million

As per Para 89(c) of CPWD Code, "The agreement with the contractors selected
must be in writing and should be precisely and definitely expressed; it should state the
quantity and quality of the work to be done, the specifications to be complied with, the
time within which the work is to be completed”.
Following formation of Larkana Division, during financial year 2015-16, it
awarded various works/contracts amounting to Rs 34.095 million to contractors without
execution of contract agreements. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC Kamber 16 2015-16 34.095
2 Town Officer, Town Committee, Garhi Yasin 12 2015-16 6.150
Total 40.245

413
 Audit is of the view that government interest was not safeguard due to the gross
negligence and failure of management to comply with the rules and procedures.
Deviation from prescribed rules was due to weak internal controls.
The matter was reported to managements during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit therefore recommends that strict observance of the above rule be realized
and responsibility may be fixed on the incumbent at fault and avoid such lapses in future.
[AIR Paras:16,12]

8.2.3.15 Irregular Payment without Pre-audit – Rs 35.764 Million

As per Sub Para-32 (2) of the Local Government Accounts Manual, “Every bill
shall be pre-audited by the Accounts Office. The pre-audit shall ensure that the bill has
been sanctioned and that funds are available to make payment. The pre-audit shall also
involve scrutinizing the bill to identify possible fraud and irregularities”.
Further, as per Rule 111(4) and (5) of Sindh Local Government Act 2013, "the
Provincial Director, Local Fund Audit shall pre-audit all the payments from the Local
Funds of the Councils and a Council shall not with draw or disburse money from the
Local Fund unless it is pre-audited in the prescribed manner”.
Following formations of Larkana Division, during financial years 2014-16,
incurred an expenditure of Rs 35.764 million, without pre-audit by the Local Fund Audit,
in violation of the above rules. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC Kandhkot 19 2014-15 12.962
2 Town Officer, Town Committee, Tangwani 15 2014-15 0.763
3 Chief Municipal Officer, MC Shahdadkot 17 2015-16 5.893
4 Chief Municipal Officer, MC Shikarpur 5 2015-16 7.966
5 Chief Municipal Officer, MC Shikarpur 16 2015-16 0.300
6 Town Officer, Town Committee, Kashmore 2 2015-16 7.880
Total 35.764
Audit is of the view that payments without pre-audit resulted into unauthorized
expenditure.
Deviation from prescribed procedure constituted weak internal control.

414
 The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility against management for payments
made without pre-audit.
[AIR Paras: 19,15,17,5,16,2]

8.2.3.16 Non-Hoisting of Bid Evaluation Reports on SPPRA Web Site

Rs 32.212 Million
As per Rule 10 of SPPRA 2010, “The procuring agency shall, immediately upon
award of contract, make the evaluation report of the bid, and the contract agreement to
public through hoisting on the Authority’s website as well as on procuring agency’s
website, if the procuring agency has such a website.”
Following formation of Larkana Division, during financial years 2014-16,
awarded different works costing Rs 32.212 million through NIT, but did not hoist bid
evaluation reports on the SPPRA website, in violation of above rule. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Town Officer, Town Committee, Garhi Yasin 2 2015-16 30.000
2 Chief Municipal Officer, MC, Jacobabad 21 2014-15 2.212
Total 32.212
Audit is of the view that violation of SPPRA rule resulted into non-transparency
in the award of contracts.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during December 2015 and December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements for non-hoisting of
evaluation reports on SPPRA website.
[AIR Paras: 2,21]

8.2.3.17 Irregular Payment to Daily Wages Staff – Rs 30.489 Million

According to Local Government Department letter NO.SOA/(LG)1(27)/2011
Dated: 6.6.2011, by SO Admn, In continuation to this department’s letter of even number

415
dated: 27.5.2011 and 28.5.2011, “I am directed to convey that no appointment in any
grade shall be made henceforth without consolidated advertisement and fresh approval of
Government. Approval, if any, earlier issued in this regard may be treated
cancelled/withdrawn. In view of the above, you are directed to strictly adhere to the
above instructions of competent authority. Any deviation from above will render the
defaulter(s) liable for disciplinary action”.
Following formations of Larkana Division, during 2014-16, appointed daily
wages employees for sanitation work, by ignoring the rules and Government instructions,
due to which Government exchequer sustained a financial loss amounting to Rs 30.489
million, in violation of above rule. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC Jacobabad 6 2015-16 0.459
2 Chief Municipal Officer, MC Thull 3 2015-16 16.911
3 Chief Municipal Officer, MC, Shahdadkot 15 2014-15 3.721
4 Town Officer, Town Committee, Bakrani 6 2014-15 5.738
5 Town Officer, TC, Kashmore, District Kashmore @ Kandhkot 3 2015-16 3.660
Total 30.489
Audit is of the view that expenditure incurred in violation of rules resulted into
non-transparency in public spending which constituted weak financial management.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on managements.
[AIR Paras: 6, 3, 15, 6, 3]

8.2.3.18 Irregular Expenditure on Outsourcing Sanitation Work

Rs 27.878 Million
According to Section-72 Schedule-II (part-II) rule 1-16 of Sindh Local
Government, Act 2013, “Compulsory functions to be performed by corporations,
municipal committees and town committees, council shall be responsible for water,
sewerage, drainage, sanitation, roads, other than Provincial and district roads, streets and
street lighting; firefighting, park services. 2. Sanitation, A Corporation, Municipal
Committee or Town Committee shall be responsible for the sanitation, and may for that

416
purpose cause such measures to be taken as are required by or under this Act. 3.
Removal, Collection and Disposal of Refuse: A Corporation, Municipal Committee or
Town Committee shall make adequate arrangements for the removal of refuse from all
public streets, public latrines, urinals, drains and all buildings and lands vested in the
Council concerned and for the collection and proper disposal of such refuse”.
Following formations of Larkana Division, during financial years 2014-16,
incurred unjustified expenditure of Rs 27.878 million to various contractors on
outsourcing the desilting of drains and removal of debris. Despite the provision of large
number of sanitation staff, such huge payment to contractors is un-justified, in violation
of above rule. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Town Officer, Town Committee, Dokri 7 2014-15 9.051
2 Chief Municipal Officer, MC Kamber 12 2015-16 5.097
3 Chief Municipal Officer, MC Shahdadkot 11 2015-16 1.853
4 Chief Municipal Officer, MC Thull 4 2015-16 2.978
5 Town Officer, Town Committee, Garhi Yasin 6 2015-16 3.052
6 Chief Municipal Officer, MC Shahdadkot 12 2015-16 5.847
Total 27.878
Audit is of the view that management failed to comply with the rules set forth by
the Government, which reflects the presence of week internal controls.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing of responsibility on the management for incurring
expenditure on outsourcing desilting and removal of debris, under intimation to audit.
[AIR Paras: 7,12,11,4,6,12]

8.2.3.19 Irregular Expenditure on Procurement without Constitution of

Purchase and Inspection Committees – Rs 26.712 million
As per Rule 7 of SPPRA 2010, “The procuring agency shall, with approval of its
Head of the Department, Constitute as many procuring committees, as it deems fit, each
comprising odd number of persons and headed by the gazetted officer not below the rank
of BPS-18, or if not available, the officer of the highest grade, and shall ensure that at

417
least one third of the members of a procurement committee are from the agencies or
departments other than the procuring agency”.
Following formations of Larkana Division, procured different material
amounting to Rs 26.712 million without constitution of procurement committee, during
financial years 2014-16, in violation of above rule. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Town Officer, Town Committee, Dokri 10 2014-15 6.431
2 Town Officer, Town Committee, Bakrani 13 2014-15 7.023
3 Chief Municipal Officer, MC, Jacobabad 26 2014-15 3.731
4 Chief Municipal Officer, MC Kandhkot 5 2015-16 2.948
5 Town Officer, Town Committee Kashmore 10 2015-16 6.579
Total 26.712

Audit is of the view that violation of SPPRA rules resulted into

non-transparency in the award of contracts.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during September to December 2015
and August to December, 2016, but they did not respond to audit observation. The PAO
also failed to convene the DAC meeting despite pursuance by audit.
Audit recommends fixing responsibility on the managements for
non-transparency in awarding of contracts.
[AIR Paras: 10,13,26,5,10]

8.2.3.20 Irregular Purchases – Rs 23.089 Million

As per Para 155 of GFR Volume-I read with Para 113 of SFR Volume-I, “A
reliable list, inventory or account of all stores in the custody of Government officers
should be maintained in a form prescribed by competent authority, to enable a ready
verification of stores and check of accounts at any time and transactions must be recorded
in it as they occur”.
Further, as per Rule 10 of GFR, “Every officer authorized to incur expenditure
from the public fund should observe high standards of financial propriety”.

418
 Following formations of Larkana Division, during financial years 2014-16,
incurred an expenditure of Rs 23.089 on account of purchase of electric material but there
was no evidence of purchases entered in stock register as well as record related to
distribution of said items hence the expenditure incurred so is doubtful, in violation of the
above rules. Details are as under:
[Rupees in Million]
S# Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC Kandhkot 6 2014-15 4.223
2 Town Officer, Town Committee, Tangwani 4 2014-15 5.925
3 Town Officer, Town Committee, Kashmore 6 2014-15 10.175
4 Chief Municipal Officer, MC Kandhkot 3 2015-16 2.766
Total 23.089

Audit is of the view that improper internal control system and inadequate
financial discipline prevailing in the department.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during September to December 2015
and December, 2016, but they did not respond to audit observation. The PAO also failed
to convene the DAC meeting despite pursuance by audit.
Audit recommends that matter may be inquired in detail by fixing responsibility
against person(s) at fault, under intimation to audit.
[AIR Paras: 6,4,6,3]

8.2.3.21 Unjustified Salaries to Excess Staff – Rs 21.046 Million

As per Para 188 of Sindh Financial Rules Volume-I, “no payment should be
made without the budget provision or prior permission be obtained from Finance
department in order to incur such expenditure”.
Further, as per Rule 80 (3)(4) of SFR Volume-I, “it is the responsibility of DDO
to ensure that no expenditure exceeds the limits of the budget provision and in case the
expenditure is exceeded the budget allocation, additional budget grant prior to the close
of the financial year should have been obtained”.
In the office of the Administrator/Chief Municipal Officer, Municipal
Committee, Jacobabad, the management increased the number of posts from 670 (2009-
10) to 795. However, neither any approval for increase in posts was obtained from Local

419
Government Department nor SNE was approved from Finance Department / S&GAD,
Government of Sindh, in violation of rule. Detail is attached as below.
[Amount in Rupees]
Yearly Pay of Monthly Yearly Excess
Difference
SNE in Budget working strength Working Exp of Pay Expenditure
B/W Col 2
2009-10 in FY 2014-15 Strength in of one from Previous
and 1
FY 2014-15 Employee SNE
1 2 3 4 5 6
670 795 133,857,336 125 14,031 21,046,751

Audit is of the view that management made appointments over and above the
SNE without legal authority which constituted weak financial management.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for unauthorized
appointments, under intimation to audit.
[AIR Para: 32]

8.2.3.22 Expenditure by way of Splitting – Rs 12.260 Million

As per Rule-17(1) of Sindh Public Procurement Rules 2010, “Procurements over
one hundred thousand rupees and up to one million rupees shall be advertised by timely
notifications on the Authority’s website and in print media in the manner and format
prescribed in these rules”.
Further, as per Rule 12(1) of SPPRA Rules 2010, “Save as otherwise provided
and subject to the regulations made by the Authority, a procuring agency shall prepare, in
accordance with Rule 11 above, all proposed procurements for each financial year and
shall proceed accordingly without any splitting or regrouping of the procurements already
grouped, allocated and scheduled in the Procurement Plan”.
Following formations of Larkana Division, incurred an expenditure amounting
to Rs 12.260 million, during financial year 2015-16, without calling tender and by
splitting to avoid tender, in violation above rules. Details are as under:

420
 [Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC Shahdadkot 10 2015-16 4.328
2 Chief Municipal Officer, MC Shikarpur 7 2015-16 0.946
3 Town Officer, Town Committee, Khanpur 2 2015-16 4.841
4 Chief Municipal Officer, MC Kamber 11 2015-16 2.145
Total 12.260

Audit is of view that that splitting of work deprived the Government from
achieving best competitive rates and constitutes weak financial management.
Non-observance of prescribed rules and procedures was due to weak internal
control system.
The matter was reported to managements during August to December, 2016, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends for fixing of responsibility on managements on account of
procurements/execution of works without tenders/by splitting.
[AIR Paras: 10, 7, 2, 11]

8.2.3.23 Irregular Payment on Removal of Debris – Rs 11.545 Million

According to Rule 10 (1) of GFR Volume-I, “every Government officer is
expected to exercise same vigilance in respect of expenditure incurred from public
money, as a person of ordinary prudence would exercise in respect of expenditure of his
own money”.
Further, according to Para-10 (iv) of GFR Volume-I, “public money should not
be utilized for the benefit of a particular person or section of community”.
Following formations of Larkana Division, during financial year 2014-15,
incurred an expenditure of Rs 11.545 million on account of “removal of debris”, in
violation of the above. Audit observed following discrepancies in the process. Details are
as under:
 The expenditure was incurred without any justification.
 Audit suspected fake quotations since the envelop of the quotations were not
found. The quotations were without NTN / STRN and computer generated
without genuine invoice number.
 Sales tax was not deducted.

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  Work orders were found split up.
 Payment in full was made without completion certificate record.
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Town Officer, Town Committee, Dokri 8 2014-15 9.262
2 Town Officer, Town Committee, Khanpur 10 2014-15 2.283
Total 11.545

Audit is of the view that management was negligent and irregular expenditure
incurred that resulted into non-transparency in public spending, which constituted weak
financial management.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends detailed inquiry of the matter and fixing of responsibility
upon the person(s) at fault. Besides, effective measures are taken to avoid such lapses in future.
[AIR Paras: 8,10]

8.2.3.24 Un-authorized Clearance of Liabilities – Rs 6.723 Million

As per FD, GoS letter No. FD/CW&M-I)(26) 91-92(P.T.II) dated 24-6-1993,
“all charges incurred must be paid at once and under no circumstances may be allowed to
stand over to be paid from the grant of subsequent year”.
Further, as per FD, GoS letter No. FD/B&E –I/51/2007 dated 2-7-2007,
“liability of previous years shall not allowed to be cleared unless concurrence is given by
FD”.
Following formations of Larkana Division, during financial year 2014-15, paid
an amount of Rs 6.723 million to clear previous year liabilities without concurrence of
FD, in violation of the above rules. Details are as under:
[Rupees in Million
Sr. Name of Formation Para Year Amount
1 Municipal Commissioner, MC Larkana 11 2014-15 1.023
2 Chief Municipal Officer, MC, Jacobabad 27 2014-15 5.700
Total 6.723

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 Audit is of the view that non-observance of laid down rules resulted into
un-authorized expenditure, which constituted weak financial management.
Non-observance of prescribed rules constituted weak internal control.
The matter was reported to managements during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing responsibility on incurring unauthorized expenditure.
[AIR Paras: 11, 27]

8.2.3.25 Irregular Expenditure on Development Work without Physical

Verification of the Schemes - Rs 5.430 Million
As per Government of Sindh, Services, General Administration and
Coordination Department (Regulation Wing) Karachi, NO. SORI(SGA&CD)2-30/2010,
dated 8th March, 2010, “(1) Except for defect liability or maintenance by the supplier,
consultant or contractor, as specified in the conditions of contract, performance of the
contract shall be deemed close on the issue of overall delivery certificate, certificate of
completion of deliverables, or taking over certificate which shall be issued within thirty
days of final taking over of goods or receiving the deliverables or completion of works
enabling the supplier or contractor to submit final bill and the procuring agency to carry
out any inspection of goods, works or services related thereto, as provided in the contract
agreement and auditors to do substantial audit.
Further, As per Public Works Department Volume-I Para-6.37, “The procedure
of verification outlined in the foregoing rules is suitable primarily for divisions executing
ordinary works. In the case of special stores depots or divisions or of construction
divisions where there may be large concentration of stores, their physical verification
should be the duty of the executive authorities, and should be performed by such agency
and in such detail as may be decided by the Government in consultation with the
Director, Audit and Accounts (Works)”.
Administrator/Chief Municipal Officer, Municipal Committee, Jacobabad
during financial year 2014-15, paid an amount of Rs 5.430 million to the contractors on
execution of development schemes without verification of development schemes/work on
the site by Management, in violation of above rules.

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 Audit is of the view that management failed to observe Government rules and
procedures, which reflects the absence of systematic control and financial discipline
prevailing in the department. Huge amount of Public money is at stake due to non-
verification of development work. The entire expenditure stood irregular due to non-
observance of the Government rules.
Due to non-physically verification of the development work, Government
sustained financial loss.
The matter was reported to the management during November, 2015 but they
did not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit
Audit therefore recommends that irregularity be justified to audit, responsibility
be fixed against the person (s) at fault and steps be taken to avoid such irregularities in
future.
[AIR Para: 19]

8.2.3.26 Irregular Auctions - Rs 5.018 Million

According to Government of Sindh, Local Government Department’s Letter
NO.SOA/(LG)/I(102)/2010(Part), “In order to make the auction process transparent, fair
and competitive, certain policy provisions have been modified accordingly and it is
therefore, reiterated that all concerned should ensure that while acting g upon these
guidelines, following instruction should also be adhered to in their true scene/spirit:-
 In order to ensure transparency, the local Governments shall ensure the
submission of auction papers to the Local Government Department immediately
for confirmation and formal approval.
 As soon As the contracts/offers are approved by the Government, the concerned
Local Government shall enter into an agreement on the lines of model draft
agreement with the contractor and after observing codal formalities, the
possession of the contract will be handed over to the contractor without any
delay.
Further, according to Government of Sindh, Local Government. Public Health
Engineering, Rural Development and Katchi Abadies Department’s Notification
No.SOV/MC-V(25)/2000 Dated 24th June, 2002.
(1) “All participants in an auction shall deposit through pay orders/demand drafts an
amount equal to ten percent of the reserved price, failing which they shall not be
permitted to participate in the auction

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 (7) “The contractor shall furnish Bank Guarantee equal to fifteen percent of
contractual amount before entering into contract agreement for proper
performance of the contract”
Following formations of Larkana Division, during financial years 2014-16,
awarded different contracts amounting to Rs 5.018 million through open auctions.
However, audit observed following discrepancies in the process of auction:
 Auctions were called without approval from Local Government Department
 2% Call Deposit was not accounted for.
 15% bank Guarantee was not collected.
 No security deposit was obtained.
 NTN certificates were not found in record
 Contract fee was not obtained in advance
 Advance Income Tax @10% was non-deducted.
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC, Shahdadkot 4 2014-15 2.818
2 Chief Municipal Officer, MC Shikarpur 6 2015-16 2.200
Total 5.018

Audit is of the view that contractors were provided undue favour resulted into
misuse of powers which constituted weak financial management.
Award of auction in violation of Government rules constituted weak internal
control system and Government interests are at stake.
The matter was reported to managements during December 2015 and December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing responsibility on person(s) at fault. Besides, matter be
justified under intimation to audit.
[AIR Paras: 4,6]

8.2.3.27 Unjustified Excess Expenditure on account of POL

Rs 4.237 Million
According to Rule 4(3) of Sindh District Government Budget Rules, 2002, “the
head of the office is personally responsible for ensuring that total expenditure is kept
within the limits of appropriation” and as per Rule 75 (i) ibid, “in the event that a grant is

425
likely to be exceeded the head of office shall take immediate steps to prevent the excess
expenditure by adopting prescribed effective measures”.
Further, as per Rule 88 (iii, iv) of SFR volume-I, “Drawing and Disbursing
officer is responsible for seeing that expenditure is within available appropriation and that
all steps have been taken with a view to obtain an additional appropriation, if the original
appropriation has either been exceeded or is likely to be exceeded”.
Administrator/Chief Municipal Officer, Municipal Committee, Jacobabad,
during financial year 2014-15, incurred unjustified excess expenditure on account of POL
amounting to Rs 4.237 million, in violation of above rules. Detail is provided at
Annex-LRK4.
Audit is of the view that expenditure incurred in excess constituted weak
financial management.
Non-observance of rules and procedures constituted weak internal control.
The matter was reported to managements during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing of responsibility on management at fault.
[AIR Para: 17]

8.2.3.28 Irregular Purchase of Material – Rs 3.974 Million

According to para-10(1) of GFR Volume-I, , "Every public officer is expected to
exercise the same vigilance in respect of the expenditure incurred from public money as a
person of ordinary prudence would exercise in respect of expenditure of his own money".
Following formations of Larkana Division, during financial year 2014-15, an
expenditure of Rs 3.974 million was incurred on account of purchase of electric and
drainage material. In this regard following discrepancies were noted.
 The electric material were purchased from unlicensed electric suppliers
 The materials were purchased on quotation basis and on higher rates than
market rate without company rate list, and without guarantee/warranty cards.
 Purchases were made without constitution of procurement committee.
 Warranty cards of savers and lights were not available
 The savers were changed / purchased on continual basis without claiming
warranty of savers.

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  Consumption account of purchased material was not produced
 No Inspection of street lights for ascertaining their quality and quantity
carried out by inspection committee.
 Stock taking and issue register of material was not produced.
 Indent/demand and distribution for electric and drainage material was not
available.

Details are as under:

[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC, Kamber 2 2014-15 1.493
2 Town Officer, Town Committee, Tangwani 6 2014-15 2.481
Total 3.974

Audit is of the view that irregular expenditure incurred on account of purchase

of electric and drainage material has resulted into non-transparency in public spending
which constituted weak financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to managements during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends responsibility may be fixed on the persons at fault and
adequate measures should be devised so as to avoid such lapses in future.
[AIR Paras: 2,6]

8.2.3.29 Award of Work without Calling Tender – Rs 2.742 Million

According to Rule 17 (1) of Sindh Public Procurement Rules, 2010,
“Procurements over one hundred thousand rupees and upto one million rupees shall be
advertised by timely notifications on the Authority’s website and may in print media in
the manner and format prescribed in these rules”.
Further, according to Para-126 of PWD Manual Volume-I, , “Nothing in these
rules is to be construed into a permission to officers to carry out in portions any group of
works or alterations or to make purchase of which the cost in the aggregate would exceed
what they are empowered to sanction under rules”.

427
 Following formations of Larkana Division, during financial years 2014-16,
incurred expenditure on various head of accounts amounting to Rs 2.742 million, through
quotations to avoid tenders. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Chief Municipal Officer, MC, Shikarpur 4 2014-15 2.380
2 Chief Municipal Officer, MC Shikarpur 14 2015-16 0.362
Total 2.742

Audit is of the view that the management failed to observe Sindh Public
Procurement Rules, 2010 in letter and Spirit, which reflects the absence of systematic
control and financial indiscipline prevailing in the department.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during December 2015 and December,
2016, but they did not respond to audit observation. The PAO also failed to convene the
DAC meeting despite pursuance by audit.
Audit recommends fixing responsibility against person(s) at fault and
justification may be provided to audit for expenditure incurred without tender .
[AIR Paras: 4,14]

8.2.3.30 Un-authorized Payments through Open Cheques – Rs 2.338 Million

According to rule 157 (1) and (2) of CTR, , “The cheques for more than Rs
200/- drawn in favour of Corporate or Local Bodies, firms, private persons or
Government servants (in respect of their personal claims) shall always be crossed”.
Further, according to Rule 04 Sub Rule (06) of the Local Government Accounts
Manual, “Payments on behalf of the local Governments shall be made at the bank or
Government treasury”.
Following formations of Larkana Division, during financial year 2014-15, paid
an amount of Rs 2.338 million paid through cash/open cheques instead of crossed
cheques, in violation of rule. Details are as under:
[Rupees in Million]
Sr. Name of Formation Para # Year Amount
1 Town Officer, Town Committee, Bakrani 7 2014-15 1.591
2 Chief Municipal Officer, MC, Shahdadkot 13 2014-15 0.747
Total 2.338

428
 Audit is of the view that payment through cash/open cheques resulted into
unauthorized expenditure and non-transparency in public spending which constituted
weak financial management. Besides, misappropriation of public money cannot be ruled
out.
Non-observance of rules on payment through cross cheques constituted weak
internal control.
The matter was reported to managements during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing responsibility on management on account of payment
through cash/open cheques, under intimation to audit.
[AIR Paras: 7,13]

8.2.3.31 Irregular Payment on account of Earth Filling - Rs 2.094 Million

According to rule 10 (1) of GFR Volume-I, , “every Government officer is
expected to exercise same vigilance in respect of expenditure incurred from public
money, as a person of ordinary prudence would exercise in respect of expenditure of his
own money”.
Administrator/Chief Municipal Officer, Municipal Committee, Kamber, District
Kamber-Shahdadkot @ Kamber, during financial year 2014-15, incurred an expenditure
of Rs 2.094 million on “earth filling”, in violation of above rule. Audit found following
discrepancies.
 Most of the work orders were issued on the single date
 Most of the work was shown in a single locality.
 Satisfactory work completion from residents was not obtained.
 There was splitting in work-orders.
 Payment was made in cash.
 Government taxes i.e service tax etc were not deducted
 Huge expenditure was shown @ Rs 800 to 3000 per dumper trip.
 There were some bills which were paid approval of Administrator on note
sheet.

Audit is of the view that expenditure incurred in violation of rules resulted into
non-transparency in public spending which constituted weak financial management.

429
 Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends responsibility may be fixed upon the person(s) at fault.
Besides, effective measures are taken to avoid such lapses in future.
[AIR Para: 7]

8.2.3.32 Irregular Purchase of Liveries and Uniform – Rs 1.712 Million

According to Para 139 of GFR Vol-I, contingencies regulated by scales include
such charges as liveries to class-IV servants it should be the duty of controlling officer to
see that the charges incurred are in accordance with the prescribed scales and conditions
which govern them”.
In the office of the Chief Municipal Officer, Municipal Committee, Shikarpur,
during financial year 2014-15, it was observed that funds amounting to Rs 1.712 million
were utilized on purchase of liveries/uniform, in violation of above rule, but audit pointed
out following irregularities.
1. Liveries register was not maintained
2. Acknowledgement receipt was not taken from the staff.

Audit is of the view that management failed to comply with the rules set forth by
the Government, which reflects the absence of systematic control and financial discipline
prevailing in the department.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends responsibility may be fixed against the person (s) at fault.
[AIR Para: 15]

430
8.2.3.33 Un-authorized Expenditure - Rs 1.210 Million
According to Sindh Local Government Bill 2013 Section 116(7), “Every
member or Employee of a Council and every person, charged with the administration of
the affairs of a council, or acting on behalf of Council shall be personally liable for the
loss, waste, misapplication or un authorized application of any moneys or property
belonging to the Councils which is a direct consequence of his negligence or misconduct,
and the liability of such member, employee or person shall be determined by Government
in the prescribed manner”.
Municipal Commissioner, Larkana Municipal Corporation, Larkana, during
financial year 2014-15, incurred an un-authorized expenditure amounting to Rs 1.210
million on account of various contingences on Quotation basis in ban period by the
Government, in violation of above rule.
Audit was of the view that unauthorized expenditure was incurred resulting into
weak financial management.
Deviation from prescribed rules was due to weak internal control system.
The matter was reported to management during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Responsibility of the un-authorized expenditure be fixed on the person at fault,
under intimation to audit.
[AIR Para: 05]

8.2.3.34 Irregular Payment on De-Watering – Rs 0.719 Million

According to rule 10 (1) of GFR Volume-I, states that, “every Government
officer is expected to exercise same vigilance in respect of expenditure incurred from
public money, as a person of ordinary prudence would exercise in respect of expenditure
of his own money”.
Further, according to Para-10 (iv) of GFR Volume –I, , “public money should
not be utilized for the benefit of a particular person or section of community”.
Administrator/Town Officer, Town Committee, Bakrani, District Larkana,
during financial year 2014-15, incurred an expenditure of Rs 0.719 million on
“de-watering”, in violation of above rules. Audit observed following discrepancies.

431
  Most of the work orders were issued on the single date
 Most of the work was shown in a single locality.
 Satisfactory work completion from residents was not obtained.
 There was splitting in work-orders.
 Payment was made in cash.
 Government taxes i.e service tax etc were not deducted

Audit is of the view that expenditure incurred in violation of rules resulted into
non-transparency in public spending which constituted weak financial management.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends responsibility may be fixed upon the person(s) at fault.
Besides, effective measures are taken to avoid such lapses in future.
[AIR Para: 10]

8.2.3.35 Use of Electricity by the Unauthorized Residents - Rs 0.422 Million

According to Para 28 of GFR Volume-I, , “No amount due to Government
should be left outstanding without sufficient reason and where any dues appear to be
irrecoverable orders of the competent authority for their adjustment must be sought”.
In the office of the Administrator/Chief Municipal Officer, Municipal
Committee Jacobabad, during financial year 2014-15, the management paid bills against
electricity consumed by the un-authorized residents.
The Department thus, failed to comply with Government rules, which indicates
that there exists no system of internal control and effective financial management.
The matter was reported to management during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that the recovery amounting to Rs 0.422 million be made
from the concerned and deposited into Government account at the earliest.
[AIR Para: 15]

432
8.2.3.36 Unauthorized Occupation on Municipality Property
According to Para-4 of Sindh Local Government (Property) Rules 2001, “All the
local Government shall take such steps as may be necessary to ensure that the property
vested in it is managed and maintained in the best interest of the public”.
Further, as per Rule II (I) of Appendix 18, ibid, “all losses must be reported
forthwith by the officer concerned, not only to the Audit Officer, but also to his own
immediate official superior. Reports must be submitted as soon as reasonable ground
exists for believing that a loss has occurred; they must not be delayed while detailed
enquiries are made”.
Moreover, according to Para-23 of General Financial Rules Volume-I, “every
Government officer should realize fully and clearly that he will be held personally
responsible for any loss sustained by Government through fraud or negligence on his part
and that he will also be held personally responsible for any loss arising from fraud or
negligence on the part of any other Government officer to the extent to which it may be
shown that he contributed to the loss by his own action or negligence”.
In the office of the Administrator/Chief Municipal Officer, Municipal
Committee, Jacobabad, during financial year 2014-15, municipal property was
encroached by other departments and personals. Audit also observed that the occupants
were consuming electricity from the bulk supply of main electric meter of municipality,
in violation of above rules.
Audit is of the view that department, failed to safe guard Government property
which indicates absence of internal control.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to managements during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommended responsibility may be fixed at fault, under intimation to
audit.
[AIR Paras: 38,39]

8.2.3.37 Improper Maintenance of Cash Book

According to S.F.R Vol.-I, Rule-34(b), , “the cash book should be closed and
balanced each day, and the balance of each column at the end of the month should be

433
verified with the balance of each in hand and a certificate to that effect recorded in the
cash book under the signature of the Government servant responsible for the money”.
In the office of the Administrator/Town Officer, Town Committee, Dokri,
District Larkana, during financial year 2014-15, following omissions was noticed in cash
book, which may be completed and compliance reported to audit.
1. According to rules each entry receipt side as well as payment side is required
to be signed by the TO/Administrator and Accountant but the needful has not
been done.
2. The totals of the Cash book are required to be checked by other than the
writer of cash book and certificate to the effect that the totals were checked
by me is required to be recorded in cash book after the close of each month
but the needful has not been done.
Audit is of the view that management failed to comply with the orders of
Government on the subject which indicate the absence of systematic internal control and
lack of financial discipline which constituted weak financial management.
Non-observance of rules constituted weak internal control.
The matter was reported to managements during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends cash book may be maintained in manner as prescribed by the
Government.
[AIR Para: 19]

8.2.3.38 Irregular Promotions of Officials

According to ESTA Code Chapter No.II, Para No.8, “For Proper administration
of a service, Cadre or Post, the appointing authority shall cause a seniority list of the
members for the time of such service, cadre or post.
Further, as per Government instruction, promotion cases may be made in light of
instructions given by the competent authority i-e, Seniority List, Service period,
promotion committee, Confidential Reports, Approval from competent authority etc
Moreover, according to Para-10 (iv) of GFR Volume-I, that public money
should not be utilized for the benefit of a particular person or section of community and
also according to rule all the claims must be supported with full detail and documents”.

434
 In the following formations of Larkana Division, during financial year 2014-15,
staff was promoted without fulfillment of proper DPC and codal formalities. Details are
as under:
Sr. Name of Formation Para # Year No. of employees promoted
1 Municipal Commissioner, MC Larkana 23 2014-15 18
2 Chief Municipal Officer, MC, Jacobabad 41 2014-15 07
Total -
Audit is of the view that management failed to comply with the rules set forth by
the Government, which reflects the absence of systematic control and financial discipline
prevailing in the department.
Due to non-observing of above codal formalities, the promotions of inefficient
employees cannot be ignored.
The matter was reported to managements during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends that responsibility be fixed against the person (s) at fault,
under intimation to audit.
[AIR Paras: 23,41]

8.2.3.39 Irregular Appointments Over and Above the Sanctioned Strength

According to Rule 68 of SFR, Vol-I, “When the entertainment of a new
establishment or a change, temporary or permanent, is proposed in an office, a letter fully
explaining the proposal and the conditions which have given rise to them, together with
the proposition statement, if necessary under Para . III, should be submitted to the
competent authority. In this letter should be set out inter alia:-
i. the present cost, either the section or sections effected of the total
establishment as the circumstances of the case may indicate to be necessary;
ii. details of the pay of the post or posts and the number of posts which it is
proposed to add or modify.”
In the office of the Administrator/ TO, TC Garhi Kharo, during financial year
2015-16, it was observed that 03 officials in different capacities/posts were working over
and above the sanctioned strength, in violation of above rules. Details provided as under:
Sanction Posts Working Excess
157 160 3

435
 Audit is of the view that management made appointments over and above the
sanctioned strength without legal authority which constituted weak financial
management.
Deviation from prescribed procedure constituted weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends fixing of responsibility on management for unauthorized
appointments over and above the sanctioned strength.
[AIR Para: 4]

8.2.3.40 Unauthorized Increase in Cadre Strength

As per Government of Sindh APT Rules 1974 (11), “Initial appointment to the
post in BPS-3 to 15 shall be made on the recommendation of the Departmental Selection
Committee after the vacancies in these BPSs have been advertised in the newspaper. (16)
Posts in BPS-1 and 2 shall ordinarily be filled on local basis”.
According to rule 23 of GFR Vol-I, “Every Government officer should realize
fully and clearly that he will be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will also be held
personally responsible for any loss arising from fraud or negligence on the part of any
other Government officer to the extent to which it may be shown that he contributed to
the loss by his own action or negligence”.
Chief Municipal Officer, Municipal Committee Shikarpur, District Shikarpur
during 2015-16, un authorizedly enhanced sanctioned strength related to various cadres
from 535-posts to 683-posts by increasing 148-posts (27.66% percent) from financial
years 2010-15 without approval from Competent authority/Chief Minister Sindh through
SG&AD Department Sindh, in violation of rules. Detail as given below:
Detail of Posts
Variation b/w 2010-
FY 2010-11 FY 2014-15 Excess
11 and 2014-15
Sanctioned Posts Sanctioned Posts Excess Posts Excess of Post %
535 683 148 27.66

436
 Audit is of the view that management exercised its authority without legal
justification which constituted weak financial management.
Creating posts was not the competency of Chief Municipal Officer, which
resulted into unauthorized creation/enhancement of various cadres in Chief Municipal
Officer, constituted weak internal control.
The matter was reported to management during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends that position may please be justified and inquiry may be
initiated as matter needs immediate attention of management and comprehensive reply be
furnished to audit.
[AIR Para: 17]

8.2.3.41 Non-Maintenance of Property Register

According to Sub-Rule (1) (a)(b) of Rule 6 of the West Pakistan Municipal
Committees (Property) Rules, 1962, “Particulars of all property vesting in a Municipal
Committee shall be entered, in the case of Moveable property, in the register to be
maintained in Form I and in the case of immovable property, in a register to be
maintained in Form II.
Form I
[See rule 6(a)]
Register of Moveable Property

Disposal-manner
Serial Description of Date of Manner of
Price date and price Remarks
No property purchase use
fetched
Form II
[See rule 6(b)]
Register of Property
(1) S.No (2) Description of Property (3) Situation and boundaries (4) Area (5)
Settlement and Jamabandi No. (6) Date of acquisition and the manner of acquisition (7)
Price paid at the time of acquisition (8) Date of Registration (9) Conditions subject to
which the property is held (10) Main particulars about the history of the property (11)
Improvement made in the Property since acquisition (12)Mode of occupation, and the
purpose for which used (13) If leased, give the detail of lease overleaf (14) If any

437
expenditure is incurred on maintenance give the details overleaf (15) Detail of
encroachment, if any, and action taken to remove them (16) Annual verification, give the
details overleaf (17) Estimated value of the Property (18) Miscellaneous particulars (19)
Signature of the Manager.
Further, as per Para-6(a) and (b) of the Sindh Local Government (property)
Rules 2001, , “Particular as the property vested in a council shall be in case of movable
property in the register in Form-I and in case of immovable form-III”
In following formations of Larkana Division, during financial year 2014-15,
neither property register nor other record was maintained as per requirements of the
above mentioned rule. Due to non-maintenance of property record, audit is of the view
that the council property is at risk of unauthorized occupation.

S# Name of Formation Para # Year

1 Town Officer, Town Committee, Dokri 16 2014-15
2 Town Officer, Town Committee, Bakrani 16 2014-15
3 Chief Municipal Officer, MC, Jacobabad 46 2014-15

Audit is of the view that management failed to comply with the rules set forth by
the Government.
Non-observance of rules and procedures constituted weak internal control.
The matter was reported to managements during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit therefore recommends that irregularity be justified to audit, responsibility
be fixed against the person (s) at fault, under intimation to audit.
[AIR Paras: 16, 16, 46]

8.2.3.42 Non-removal of Illegal Encroachment

According to section-III of Sindh Public Property (Removal of
Encroachment) Act, 1975, “Government or any authority or officer authorized by the
Government. in this behalf may require the person directly or indirectly responsible for
encroachment to remove such encroachment together with the structure, if any, raised by
him on the public property, within the period not less than three days as may be specified
in the order”.

438
 Following formations of Larkana Division, during financial years 2014-15,
failed to remove encroachments established on permanent and semi-permanent basis in
the shape of shops, houses and huts on council’s land at various places, in violation of
above rule.
Sr. Name of Formation Para # Year
1 Town Officer, Town Committee, Dokri 15 2014-15
2 Town Officer, Town Committee, Bakrani 17 2014-15

Audit is of the view that management failed to safeguard Government property

resulting into loss of Government. property and traffic blockade on roads which
constituted weak administrative and financial management.
Deviation from prescribed rules constituted weak internal control.
The matter was reported to managements during August to December, 2015, but
they did not respond to audit observation. The PAO also failed to convene the DAC
meeting despite pursuance by audit.
Audit recommends fixing responsibility on account of failure of management to
initiate action against illegal encroachments. Besides, same may be removed
immediately, under intimation to audit.
[AIR Paras: 15,17]

8.2.3.43 Failure to Get Approval of New Appointments

According to D.D (Finance)/PLGC/2010/167n dated: 4-2-2010 issued from
Government of Sindh, Provincial Local Government Commission (Inspection,
Monitoring and Evaluation Cell) Karachi, , “local Government, across the province,
make commitments beyond their budgetary allocation/funds by initiating new
development schemes, inviting tenders, creating new employments opportunities and
miscellaneous expenditure. Thus create liabilities for next financial year. Hence this
department direct to refrain from such practice in future and under the provision 120(1)
of Sindh local Government Ordinance 2001, which describe that no local Government
can incur liabilities read with section 109 which restricts to make any budgetary
commitment contrary to law including award of contract or tendering of development
work”.
In the office of the Municipal Commissioner, Larkana Municipal Corporation,
Larkana, during financial year 2015-16, 33 employees were appointed in various cadres

439
and scales with-out getting prior approval from finance department. In this regard a letter
was written by the LMC to local Government Department regarding provision of budget
for these employees however; the authenticity of the letter is suspicious.
The violation of rules in new appointment was due to failure of internal control
system prevailing in the department
Audit is of the view that suspicious appointment of employees constituted weak
financial management.
The matter was reported to managements during December, 2016, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit recommends inquiry must be conducted to verify the genuineness of letter
and mode of appointments, under intimation to audit.
[AIR Para: 24]

8.2.3.44 Unauthorized Operation of Financial Transactions in ABL and

Askari Bank
According to Finance Department, Government of Sindh letter
No.FD/PS/85/2010-11 dated 18th May, 2011 “it has been desired by the Honorable Chief
Minister that different Departments/Projects/ Programs / Companies/ Endowment
funds/Employees’ benefits and Charitable funds/ Autonomous and Semi-autonomous
Bodies directly or indirectly under the control of the Government of Sindh, , “now give
preference to Sindh Bank Limited in their banking needs”.
According to Notification No.FD/RO/FS/30/2006 dated 28/9/2006 issued by
Finance Department, Government of Sindh, Karachi, , “all bank accounts of the
Government department / entities, being operated in private / commercial banks, should
immediately be closed and the public funds maintained in such accounts transferred to
respective PLAs forthwith. The details of all such accounts / account number, name and
address of the bank and the date of opening of account) and amount returned to PLAs
should be sent to the Finance Department”.
Administrator/Chief Municipal Officer, Municipal Committee, Jacobabad,
during financial year 2014-15, did not obtain permission from Finance Department,
Government of Sindh, to operate bank accounts for official transactions in ABL and

440
Askari Banks, Jacobabad. Further, no detail was provided to audit whether these accounts
have been opened in the name of particular Local Council or being operated by DDO.
Audit is of the view that opening and maintaining of Bank accounts in private
commercial banks resulted into non-transparency in expenditure, which constituted weak
financial management.
Deviation from prescribed rules and procedures constituted weak internal
control system.
The matter was reported to managements during December, 2015, but they did
not respond to audit observation. The PAO also failed to convene the DAC meeting
despite pursuance by audit.
Audit therefore recommends that the action may be taken against the person at
fault and responsibility may be fixed on incumbent, under intimation to audit.
[AIR Para: 42]

441
 ANNEXES

SECRETARY LOCAL GOVERNMENT

DEPARTMENT,
ALL DEVELOPMENT AUTHORITIES,
SINDH BUILDING CONTROL AUTHORITY,
KARACHI METROPOLITAN CORPORATION &
KARACHI WATER & SEWERAGE BOARD

442
 Annex-I
(Executive Summary)

Memorandum for departmental accounts Committee (MFDAC)

Part-i Paras related to current Audit Year 2016-17

[Rupees in Million]
Para No. Particulars Amount
LGD-1 Project Director Water Supply & Sewerage Project HAD
2 Loss of public money on account of repair of transport 0
6 Annual physical verification of stock not conducted
LGD-2 Director General Planning and Development Control HAD
5 Irregular payment on account of GP fund 0.986
7 Wasteful expenditure on celebration charges 0.220
LGD-3 Director General Planning and Development Control HAD
5 Irregular payment on account of GP fund 0.508
6 Irregular & unauthorized expenditure on account of TA DA 0.084
7 Loss of public money on account of repair of transport 0.639
11 Internal check not conducted
12 Annual physical verification of stock and store not conducted
LGD-4 Secretary LGD Housing & Town Planning
3 Non-deduction of conveyance allowance 0.005
6 Un-authorized expenditure on account of pay & allowances 0.455
9 Un-authorized expenditure on account of POL 0.079
13 Improper maintenance of service books of officials -
14 Non-maintenance of dead stock register -
15 Non-conducting of annual physical verification of stocks & stores -
16 Internal audit & inspection not conducted -
17 Irregular expenditure by splitting work orders 0.608
LGD-5 MC Water & Sanitation Agency
4 Un-authorized transfer of funds 0.001
5 Less-Deduction of Income Tax on Salaries Paid to Employees 0.115
Recovery on account of less deduction of general provident fund
7 0.188
from salaries of employees
Recovery on account of Non-deduction of general provident fund
8 0.879
from salaries of government employees
9 Unjustified Withdrawal of Conveyance Allowance 0.060
Unauthorized Payment of House Rent Allowance Along-with
10 0.431
Accommodation
11 Non-Recovery of House Maintenance Charges 0.288
12 Irregular payment on account of rent a car 0.420

443
 [Rupees in Million]
Para No. Particulars Amount
13 Loss of Public Money on Account of Repair of Transport 0.234
LGD-6 PD I Housing HAD
9 Improper maintenance of cash book. 0.000
PD II Housing HAD 0.000
Non-Reconciliation of deducted income tax from salaries of
17 0.355
employees
18 Improper maintenance of cash book. 0.000
LGD-7 Director General Sindh Building Control Authority
LGD-9 Director General, Lyari Development Authority
7 Loss to government due to less recovery of stamp duty 0.023
9 Non hoisting of bid evaluation report on SPPRA website 0
LGD-10 Project Director Shaheed Mohtarma Benazir Bhutto Townships, Sindh
2 Loss to government due to non-deduction of professional tax 0.065
LGD-11 Director Recovery KDA
4 Non conducting of annual physical verification of stock and store -
LGD-12 Malir Development Authority
Unauthorized award of contract due to non-execution of
19 0.000
agreement
20 Non maintenance of cash book 0.000
21 Annual physical verification of stock and stores not conducted 0.000
22 Non maintenance of tendering process record 0.000
Non production of record related to new appointment BPS- 1 to 16
23 0.000
without codal formalities and finance Department prior approval
24 Non production of expenditure statement and Bank statement 0.000
25 Non maintenance of contractor ledger 0.000
26 Non maintenance of pre audit register 0.000
27 Non maintenance of dead stock register 0.000
28 Non maintenance of annual appropriation account 0.000
29 Non maintenance of annual finance account 0.000
LGD-13 Director General Larkana Development Authority
9 Non-accountal of purchased items into relevant Stock Register 3.093
10 Improper maintenance of Cash Book -
Irregular expenditure by way of splitting procurement(s) to avoid
14 0.288
tender
15 Non-deduction of GST on purchases 0.040
LGD-14 Director General Sehwan Development Authority
8 Withdrawal of cash shown as transfer in bill 0.350
Non approval of statement of estimated receipts and expenditure
18 -
for the financial year 2014-15 & 2015-16
Concealment of record in collaboration with anti-corruption
20 -
establishment

444
 [Rupees in Million]
Para No. Particulars Amount
22 Non submission of report of activities to government of Sindh -
Unauthorized direct payment to employees on account of
23 0.794
contingencies
LGD-15 Regional Director Sindh Building Control Authority Hyderabad
17 Internal audit & inspection not conducted by controlling officer. -
18 Non-maintenance of dead stock registers -
Irregular payment of salaries due to non-verification of pay in
19 -
service books
Unauthorized payments without signature of Assistant Director
21 -
HQ & Assistant Account Officer
RDD-1 Director General Rural Development Department Hyderabad
14 Non maintenance of cash book.
22 Annual Physical Verification of Stock & Stores not conducted
RDD-2 Assistant Director General Rural Development Department Hyderabad
4 Unjustified expenditure in excess of budget grant 2.376
5 Irregular drawing cheques in the name of DDO instead of vendors 0.021
6 Annual physical verification of stock / stores not conducted -
RDD-3 Director General Rural Development Department Hyderabad
3 Irregular drawing cheques in the name of DDO instead of vendors 0.003
4 Non maintenance of dead stock register -
5 Annual physical verification of stock/ stores not conducted -
6
PHE-1 EE Public Health Engineering Sanghar
12 Irregular payment of salary to work charged employee’s 0.541
PHE-4 EE Public Health Engineering Umerkot
1 Non production of Record
8 Wasteful expenditure incurred on cancelled NIT 0.219
PHE-5 EE Public Health Engineering Jamshoro
6 Non adjustment of advance payment 0.338
PHE-7 EE Public Health Engineering Shaheed Benazirabad
7 Irregular payment on a/c of third party validation 0.450
PHE-8 EE Public Health Engineering Badin
Loss to public exchequer on account of less deduction of stamp
8 0.021
duty
Non-inspection of important building & works in division by
17 -
Executive Engineer annually
PHE-9 EE Public Health Engineering Khairpur - II
7 Non-recovery of stamp duty. 0.194
Recovery of liquidated damages for delayed execution of
8 0.315
development schemes.

445
 [Rupees in Million]
Para No. Particulars Amount
PHE-10 EE Public Health Engineering Khairpur - I
12 Non-recovery of stamp duty 0.142
Recovery of liquidated damages for delayed execution of
13 0.537
development schemes
PHE-11 EE Public Health Engineering Naushahro Feroze
Late deposit of collected earnest money (call deposits) in bank
19 0.467
account
PHE-12 EE Public Health Engineering Tando Muhammad Khan
Improper Tender Forms issued to contractors without mentioning
10 -
below rates Column
11 Refund of performance security of running scheme 0. 252
Non-forfeiture of bid security of the contractors failing to start the
12 0.576
work
Unauthorized expenditure incurred on original work from O/M
15 0. 800
account
20 Non–maintenance of Important Registers -
PHE-13 EE Public Health Engineering Matiari
8 Non completion of schemes within stipulated completion period 0.539
PHE-14 EE Public Health Engineering Mirpurkhas
4 Less deduction of security deposit 0.250
5 Non-recovery of earnest money 0.578
9 Irregular refund of security deposit 0.172
14 Non-maintenance of log books 0.132
15 Non accountal of misc. items 0.097
PHE-15 EE Public Health Engineering Sukkur
8 Improper maintenance of cash book 0.000
PHE-16 EE Public Health Engineering Hyderabad
7 Irregular payment without 10% check measurement by the XEN 2.854
Loss to govt. due to non-installation of CNG Kit in Government
8 0.262
vehicles
Irregular payment on account of extra lead without preparation of
12 0.279
lead chart
13 Non recovery advances amounting 0.531
14 Non clearance of form-78 in the month of June 0.113
16 Payment of previous liability from current allocation 0.482
18 Non-accountal of purchased items 0.232
20 Irregular expenditure of on work charge establishment 0.540
21 Internal audit & inspection not conducted by controlling officer -
PHE-18 Superintendent Engineering Public Health Engineering Hyderabad
3 Transgression of financial powers 0.044
Unjustified expenditure on TA/DA bills without supporting
6 0.046
documents

446
 [Rupees in Million]
Para No. Particulars Amount
7 Improper maintenance of cash book -
8 Non-accountal of purchased articles into stock register 0.093
9 Non-verification of stock & stores at the close of financial year -
10 Internal audit & inspection not conducted by controlling officer -
PHE-19 EE Public Health Engineering Larkana
9 Irregular undue creation of liability 0.685
10 Undue favour to contractor due to non-affixation of stamp duty 0.080
13 Irregular payment on non accountal of call deposit 0.210
16 Non verification of service books -
PHE-20 EE Public Health Engineering Karachi
6 Irregular payment on non accountal of call deposit 0.606
8 Non verification of service books -
11 Non-maintenance of tendering process record -
Non production of record related to new appointment from BPS-1
12 to 16 without codal formalities and finance department prior -
approval
13 Non-maintenance of cash book -
14 Annual physical verification of stock and stores not conducted -
PHE-21 EE Public Health Engineering Shikarpur
Payment of liability Director Information (Advertisement), GoS
19 0.642
on account of previous advertisement
PHE-22 EE Public Health Engineering Kamber Shahdadkot @ Kamber
2 Irregular expenditure due to non-invitation of tender 0.249
Loss to government due to unauthorized expenditure on account
6 0.419
of difference cost
8 Non remittance of tender fee into government treasury 0.042
Unauthorized expenditure on account of clearance of liabilities
11 0.352
from budget grant of current financial year 2015-16
PHE-23 EE Public Health Engineering Kamber Shahdadkot @ Kamber
3 Non reconciliation of expenditure 3.062
4 Unjustified expenditure in excess of budget grant 0.236
5 Non accountal of materials in stock register
6 Annual physical verification of stock/stores not conducted
KMC-1 Senior Director, Financial Advisor
3 Transgression of Financial Power in Purchase of Stationery 0.351
Splitting of sanction orders to avoid inviting open tender on
4 0.198
purchase of furniture.
6 Loss to government due to Non-Deduction of Income Tax 0.044
14 Annual Physical Verification of Stock & Stores not conducted. 0.000
KMC-2 Director Safari & Alladin Park
Non maintenance of Map of Land and Property of Safari and
8 0.000
Aladin Park.

447
 [Rupees in Million]
Para No. Particulars Amount
KMC-3 MS Abbasi Shaheed Hospital
10 Non maintenance of important registers/books 0.000
Internal audit and inspection not conducted by the controlling
11 0.000
officer
KMC-8 Director Charged Parking
5 Unauthorized use of government vehicle without entitlement 0.000
9 Non black listing of the contractors 0.000
KMC-9 Karachi Institute of Heart Disease
Recovery of excess payment on purchase of liquid oxygen gas on
3 0.213
high rate
KMC-10 Director Media Management
Non deposition of collected income tax & Sindh sales tax into
6 0.810
government account
KMC-11 Director Technical Services
10 Irregular expenditure on preparation of sub base course 0.000
15 Un-authorized appointments 0.000
19 Non-reconciliation of expenditure 0.000
20 Improper maintenance of cash book 0.000
KMC-13 Principal, Karachi Medical & Dental College (KMDC)
5 Irregular expenditure on account of printing & publication 0.868
KMC-14 Director Solid Waste Management
Un-authorized entitlement of p.o.l on account of motor cycles
5 0.065
allowed to officials
6 Non-remittance of govt. taxes into public exchequer 0.637
KMC-16 Senior Director, Municipal Services
Signing of blank indents of POL by Assistant Director Transport
17 0.000
Health KMC
Irregular payment on account of search dog trainers despite the
18 0.773
fact that veterinary doctor withdrew his services
21 Unjustified reinstatement promotion of Senior Director r 0.000
23 Non maintenance of cash book 0.000
25 Unauthorized award of work on withheld NIT 0.000
KMC-17 Senior Director Medical Services
Unauthorized appointment of 04 contract employees without
3 0.000
going through prescribed procedure
5 Unauthorized use of government vehicle beyond entitlement 0.000
KMC-19 MS Gizri Maternity Hospital
7 Non conducting of annual physical verification of stock and store 0.000
KMC-20 MS Landhi Medical Complex
Illegal occupation of residence of Landhi Medical Complex by
5 0.000
other department's personnel/ employees

448
 [Rupees in Million]
Para No. Particulars Amount
Wastage of public assets due to non-functioning of costly
6 machines (X ray & Ultra Sound) and payment of salary to related 0.000
employees
7 Annual physical verification of dead stock items
KMC-21 Chief City Wardens
Unauthorized appointments and illegal driving of official vehicles
4 0.000
by city wardens without valid driving licenses
KMC-22 Director, Estate
12 Non-maintenance of telephone trunk calls register 0.021
13 Non-conducting of annual physical verification of stock and stores 0.000
14 Non-maintenance of stationary/ consumable article register 0.000
KW&SB-1 Project Director S-III
Loss to revenue non-payment of motor vehicle tax of official
13 -
vehicles
KW&SB-3 Project Director RO Plant Keamari & Lyari Town
3 Non-provision of electricity bills of K-Electic -
4 Non-provision of revenue record of RO plants -
7 Non-provision of penalty clause in O&M contract agreement -
Not handing over of RO plant (operation and maintenance to chief
10 -
engineers (KW&SB)
KW&SB-5 Chief Engineer E&M
3 Irregular payment on account of leave encashment 0.324
4 Non-disposal of old spare parts -
KW&SB-6 Resident Engineer Pipri Division (P&F)
Irregular expenditure on replacement of worn out parts during
5 -
repair of pump house
6 Non accountal of stationary 0.010
7 Excess payment in contradiction to approved entitlement 0.042
KW&SB-7 ADP/PSDP
9 Irregular payment on hire charges of machinery 0.237
KW&SB-8 DMD Revenue Resource Generation
Unauthorized expenditure on account of pay & allowances of
13 -
employees appointed over & above approved sanctioned strength
TMA-1 Town Officer, Town Committee, Manjhand District Jamshoro
9 Internal inspection not conducted by the controlling authority
TMA-2 Chief Municipal Officer, Municipal Committee, Kotri, District Jamshoro
16 Hiring of legal advisor without consultation of Law Department 0.300
Unauthorized appointment of SCUG Engineer Branch cadre post
17
without prescribed qualification
18 Non-submission of income tax returns
19 Internal inspection not conducted by the controlling authority

449
 [Rupees in Million]
Para No. Particulars Amount
TMA-3 Town Officer, Town Committee, Thana Bula Khan, District Jamshoro
2 less deduction of stamp duty 0.020
14 Non-submission of income tax returns
15 Internal inspection not conducted by the controlling authority
TMA-4 Town Officer, Town Committee, Sehwan Sharif, District Jamshoro
15 Non accountal of purchases in the stock register 3.230
16 Payment of development works without checking by TO (I&S) 0.701
17 Unauthorized payment of arrears of salary without verification 0.272
18 Illegal encroachments on properties of Town Committee
19 Loss to revenue due to non-utilization of property
20 Unauthorized use of vehicles without registration
TMA-5 Town Officer, Town Committee, Mirpur Sakro, District Thatta
10 Non-Imposition of Penalty due to delay in completion of works 0.606
28 Recovery on account of excess payment of HRA 0.291
29 Recovery on account of excess payment of Medical allowance 0.172
32 Unauthorized clearance of previous liabilities 2.722
33 Unjustified expenditure incurred on purchase of lime 0.892
35 Annual physical verification of stock/stores not conducted 0.000
TMA-6 Chief Municipal Officer, Municipal Committee, Thatta, District Thatta
Unauthorized posting of officials in contravention to orders of
10 0.000
Honorable Supreme Court of Pakistan.
14 Recovery on account of over payment of pension 0.640
21 Annual Physical verification of stock and stores not conducted 0.000
TMA-7 Town Officer, Town Committee, Ghora Bari, District Thatta
Unauthorized posting of officials in contravention to orders of
14 0.000
Honorable Supreme Court of Pakistan.
21 Annual physical verification of stock/stores not conducted 0.000
23 Non-Maintenance of dead stock register 0.000
Chief Municipal Officer, Municipal Committee, Tando Muhammad Khan,
TMA-8
District Tando Muhammad Khan
2 Wasted public funds on account of advertisement charges 0.050
3 Deprived public due to cancellation of Tender Notice -
Irregular award of electrical work to contractors without electrical
4 0.825
license
Irregular creation of liabilities and payment from current year’s
5 0.933
budget
8 Non-accountal purchased articles in stores 0.705
14 Less-recovery of income tax on taxable salaries of staff 0.028
16 Irregular award of contract without obtaining bank guarantee 0.147
Administrator failed to improve resources of Council by removing
18 -
illegal encroachment & dispute

450
 [Rupees in Million]
Para No. Particulars Amount
20 Improper maintenance of cash book -
Non-maintenance budget control registers (Appropriation
21 -
Accounts)
22 Non-maintenance of dead stock registers -
23 Non-verification of stock & stores at the close of financial year -
24 Internal audit & inspection not conducted by controlling officer. -
Town Officer, Town Committee, Tando Ghulam Hyder, District Tando
TMA-9
Muhammad Khan
Non-transparency in tendering due to invalid procurement
3 -
committee
7 Non-deduction of Shrinkage Charges on Earth Work 0.363
13 Non-Retrieval of missing vehicle of council -
17 Unauthorized payment of salaries to staff without pre-audited bills 0.801
Irregular open payment to Accountant on account of salaries of
19 0.406
Adhoc Staff
20 Non-maintenance of dead stock registers -
Town Officer, Town Committee, Bulri Shah Kareem, District Tando Muhammad
TMA-10
Khan
1 Irregular tender notice without prescribed response time -
5 Loss to public exchequer on account of stamp duty 0.014
Irregular award of electrical work to contractors without electrical
7 0.883
license
8 Non-deduction of Shrinkage Charges on Earth Work 0.045
12 Unjustified expenditure on outsourcing of sanitation works 0.975
14 Irregular open payment on account of salaries of Adhoc Staff 0.088
Non-maintenance budget control registers (Appropriation
18 -
Accounts)
19 Non-verification of stock & stores at the close of financial year -
20 Internal audit & inspection not conducted by controlling officer -
Chief Municipal Officer, Municipal Committee, Moro, District
TMA-11
Naushahro Feroze
Irregular payment on pre- audited bills from junior auditor instead
15 0.653
of assistant director, local fund audit department
16 Internal check not observed -
17 Failure to perform functions by controlling authority -
Non-removal of encroachment from municipal committee
19 -
jurisdiction
Non-maintenance of dead stock article register & non-conducting
20 -
of annual physical verification.
21 Non-maintenance of property register /assets register -

451
 [Rupees in Million]
Para No. Particulars Amount
Town Officer, Town Committee, Kandiaro, District
TMA-12
Naushahro Feroze
Loss to government due to non-recovery of outstanding dues from
4 0.685
defaulters
18 Internal check not conducted -
19 Failure to perform functions by controlling authority -
20 Non accountal of material purchased in the relevant stock register 0.164
21 Non-maintenance of property register /assets register -
22 Non-removal of encroachment from town committee jurisdiction -
Town Officer, Town Committee, Bhirya, District Naushahro
TMA-13
Feroze
Loss to government due to non-deposit of deducted income tax
3 0.177
into government account
Irregular & unauthorized process of bill for reimbursement of
15 0.643
medical charges
Irregular & unjustified drawl of funds without signature of
16 0.672
administrator on bills
Unjustified payment to Mr. Hafez Ahmed wagan on a/c of his
17 0.633
awaiting period salary
19 Irregular & unjustified payment on a/c of newspapers 0.242
20 Waste of public money due to outsourcing of sanitation work 0.440
Unauthorized payment to legal advisors without consultation of
21 0.125
law department
22 Unjustified purchase of electric material 0.359
24 Non-maintenance of property register /assets register -
25 Internal check not conducted -
26 Non-removal of encroachment from town committee jurisdiction -
Town Officer, Town Committee, Naushahro Feroze, District
TMA-14
Naushahro Feroze
Unjustified pension payment to retired employees without
14 0.984
obtaining valid life & no marriage certificates
Unauthorized clearance of previous liabilities without approval
15 0.896
from higher authorities
Irregular & unauthorized payment on a/c of medical
16 0.504
reimbursement charges
18 Non-maintenance of property register -
Town Officer, Town Committee, Mehrabpur, District
TMA-15
Naushahro Feroze
loss to government due to non-deposit of deducted income tax into
3 0.387
government account
4 loss to government due to non-recovery of conveyance allowance 0.060

452
 [Rupees in Million]
Para No. Particulars Amount
unauthorized clearance of previous pol liabilities without approval
15 0.792
from higher authorities
17 irregular & unauthorized expenditure on account of liveries 0.642
18 non-maintenance of property register /assets register -
19 internal check not observed -
20 non accountal of material purchased in the relevant stock register 0.809
Chief Municipal Officer, Municipal Committee, Qasimabad,
TMA-16
District Hyderabad
11 Undue Favor to Contractor by Discounting Contractual 0. 563
Unauthorized Advance Payment as legal fee to Jhamat Jethanad &
12 0.700
Company despite having agreement with another advocate
22 Annual Physical Verification of Stock/Stores not conducted -
TMA-17 Town Officer, Town Committee, Samaro, District Umerkot
12 Non-recovery of Professional Tax 189,000/- 0.189
21 Non-accountal of procured articles into stock register 0.995
Doubtful expenditure on POL of fire brigade without reported
22 -
fire/emergency cases
23 Non-production of record -
TMA-18 Town Officer, Town Committee, Pano Akil, District Sukkur
Loss to government due to non-deduction of income tax from
7 0.168
auctions
15 Failure to perform functions by controlling authority. -
16 Non-removal of encroachment from town committee jurisdiction. -
18 Non accountal of material purchased in the relevant stock register 6.107
Non-maintenance of dead stock register for the assets of TMA
20 -
office
21 Maintenance of cash book -
22 Annual physical verification of stock and stores not conducted -
Chief Municipal Officer, Municipal Committee, Rohri,
TMA-19
District Sukkur
6 Irregular Expenditure on Extra items given 0.420
23 Failure to perform functions by controlling authority 0.000
24 Un authorized payment of conveyance allowance 0.040
TMA-20 Town Officer, Town Committee, Saleh Pat, District Sukkur
12 Irregular & unauthorized repair of vehicles 0.681
Unauthorized running of government vehicles without having
13 0.000
registration numbers
14 Failure to perform functions by controlling authority 0.000
15 Non-removal of encroachment from town committee jurisdiction 0.000
21 Unauthorized payment of conveyance allowance 0.170

453
 [Rupees in Million]
Para No. Particulars Amount
Chief Municipal Officer, Municipal Committee, Tando Jam (Hyderabad Rural)
TMA-21
Dist: Hyderabad
22 Improper maintenance of cash book without bank reconciliation -
23 Non–maintenance of dead stock/store register -
TMA-22 DMC Malir
Undue favour to officers in violation of the orders of honourable
3
supreme court of Pakistan
6 Non-recovery of stamp duty 0.026
7 Undue favour in awarding of cattle piri contract
TMA-23 Town Committee Matli District Badin
6 Unauthorized retention of call deposits 0.238
7 Unauthorized POL allowed to Contractor without justification 0.150
Non-registration of Government Vehicles & non-payment of
15 -
annual Tax of vehicles
16 Non-removal of illegal encroachments on govt. Property -
18 Non-Maintenance Of Dead Stock Register -
Non-Verification Of Stock & Stores At The Close Of Financial
19 -
Year
Internal Audit & Inspection Not Conducted By Controlling
20 -
Officer
21 Non-production of record -
TMA-24 Chief Municipal Officer, Municipal Committee, Badin
7 Non-Maintenance Of History Sheet 0.672
11 Non-Recovery Of Professional Tax 0.040
13 Payment of bills without pre-audit 0.236
Loss to Govt. due to failed to Dispose off/auction the Out of
14 0.000
Order/Off Road Vehicles.
15 Non-registration of govt. Vehicles & annual tax of vehicles 0.000
18 Improper Maintenance Of Cash Book. 0.000
21 Non-Maintenance of Pre-Audit Registers 0.000
22 Non-Maintenance Of Dead Stock Register 0.000
23 Improper Sanitation System In The Limits Of Town Committee 0.000
TMA-25 Town Officer, Town Committee, Shaheed Fazil Rahu (Golarchi)
4 Unauthorized Appointed During Ban Period 0.697
7 Non-registration of govt. Vehicles & annual tax of vehicles 0.000
9 Non-Recovery Of Professional Tax 0.018
12 Award Of Work By Splitting To Avoid Tenders 0.360
16 Annual Physical Verification Of Stock/Stores Not Conducted 0.000
18 Non-Removal Of Illegal Encroachment From Limits Of City 0.000
19 Non-Maintenance Of Pre-Audit Registers 0.000
20 Improper Maintenance Of Cash Book 0.000

454
 [Rupees in Million]
Para No. Particulars Amount
Internal audit and inspection not conducted by the controlling
21 0.000
office
22 Improper Sanitation System In The Limits Of Town Committee 0.000
23 Non-production of record 0.000
TMA-26 Town Committee Sakrand District Shaheed Benazirabad
14 Recovery on account of unauthorized payment of allowance 0.230
15 Recovery on account of excess payment of HRA 0.036
16 Recovery on account of excess payment of Medical allowance 0.062
19 Non-Recovery of Income Tax from Salaries of Staff 0.830
21 Improper maintenance of cash book 0.000
TMA-27 Town Committee Kazi Ahmed District Shaheed Benazirabad
Unauthorized allotment of government vehicle to officer without
11 0.000
entitlement
13 Non-recovery of outstanding dues of shop rent 0.684
17 Annual physical verification of stock/stores not conducted 0.000
18 Improper maintenance of cash book 0.000
TMA-28 DMC Central
23 Non-deduction of general provident fund 0.239
24 Award of computer allowance without entitlement 0.144
26 Irregular payment without acknowledgement receipt 0.397
Irregular payment on account repair& maintenance of official
27 0.598
vehicle
30 Non-preparation of monthly reports of expenditure -
31 Non-maintenance / designed of map of municipal property -
32 Non-maintenance of pre-audit register -
33 Annual physical verification of stock and stores not conducted -
35 Non-maintenance of dead stock register -
TMA-29 Town Officer Town Committee Jhando Mari District Tando Allahyar
10 Doubtful utilization of pol on unknown activities 0.826
11 Illegal appointment during ban period 0.652
12 Unauthorized direct payment to employees on repair of vehicles 0.173
20 Non-maintenance of consumption account of purchase of items 0.764
21 Irregular payment without acknowledgement receipt 0.303
23 Non-preparation of monthly reports of expenditure -
24 Non-maintenance / designed of map of town committee property -
25 Non-maintenance of pre-audit register -
26 Annual physical verification of stock and stores not conducted -
28 Non-maintenance of dead stock register -
Chief Municipal Officer Municipal Committee Tando Allahyar District Tando
TMA-30
Allahyar
7 Irregular expenditure on account of POL 3.738

455
 [Rupees in Million]
Para No. Particulars Amount
Non-payment of arrears to the retired employees of municipal
8 0.698
committee
12 Undue favour to contractor due to non-affixation of stamp duty 0.014
19 Non-maintenance of dead stock register -
Non-maintenance / designed of map of municipal committee
20 -
property
TMA-31 Town Officer Town Committee Nangarparkar
Failure to deduct security deposits and call deposits on execution
5 0.844
development works
20 Recovery on account of payment of HRA 0.071
23 Unjustified payment on account of loan/ advances 0.759
24 Payment of pension without obtaining life certificate 0.176
Non-deduction of general provident fund & benevolent fund from
25 0.000
salaries
26 Doubtful expenditure on polio 0.144
27 Doubtful payment on account of earth filling 0.635
33 Non-deposit of annual tax of vehicles 0.000
38 Unauthorized retention of government vehicle 0.000
39 Improper maintenance of cash book 0.000
40 Non-accountal of assets into stock register 0.000
41 Non – maintenance of important registers 0.000
TMA-32 Town Officer Town Committee Tando Bagho District Badin
9 Non-Collection of Professional Tax 0.017
10 Loss to Government on account of stamp duty 0.028
14 Excess consumption of POL beyond prescribed ceiling 0.410
22 Non-Maintenance Of Dead Stock Register -
TMA-33 Town Officer Town Committee Talhar District Badin
4 Irregular work of non SCUG staff transferred from other Town 3.013
5 Non-utilization of public funds 5.094
9 Outsourcing of silt clearance and de-watering 0.382
11 Non-production of record 0.000
12 Non-Recovery of Professional Tax 0.032
14 Improper maintenance of cash book 0.000
Improper sanitation system in the limits of municipal committee
15 0.000
instead of huge consumption of POL and huge sanitation staff
16 Non-removal of illegal encroachments from limits of Town 0.000
18 Non-maintenance of pre audit register 0.000
19 Non-maintenance of dead stock register 0.000
20 Annual physical verification stock/store not conducted 0.000
Internal audit and inspection not conducted by the controlling
21 0.000
officer

456
 [Rupees in Million]
Para No. Particulars Amount
TMA-34 DMC Korangi
Loss to government due to excess payment to contractor on lifting
5 0.583
of offal's in shah faisal zone
Loss to government due to non-disposal/sale proceed of old spare
6 0.609
parts
Unjustified payment on account of salary during intervening
9 0.399
period
Loss to government due to excess payment to contractor on
18 0.152
engaging loader and food items
19 Non-removal of encroachment from limits of DMC 0.000
20 Improper sanitation and solid waste management in DMC 0.000
21 Non-conducting of annual physical verification of stock and stores 0.000
22 Internal audit & inspection not conducted
TMA-35 Chief Municipal Officer Municipal Committee Khairpur
6 Suspicious payment on anti-malaria 0.495
8 Non-recovery of income tax from salaries 0.078
16 Loss to Government due to non-recovery of professional tax 0.045
Non-prevention of Government property & non-removal of illegal
19 -
encroachments from town
Improper Sanitation System within Jurisdiction of Municipal
20 -
Committee, Khairpur
TMA-36 Town Officer Town Committee Pacca Chang (Faiz Ganj) Dist Khairpur
5 Un-authorized payment of liabilities 0.434
14 Annual physical verification of stock/stores not conducted -
15 Improper maintenance of cash book -
16 Non-recovery of professional tax 0.058
Non-prevention of Government property & non-removal of illegal
17 -
encroachments from town
Improper Sanitation System within Jurisdiction of Town
18 -
Committee
TMA-37 Chief Municipal Officer Municipal Committee Kingri Dist Khairpur
7 Fraudulent payment on drawl of POL. 0.455
10 Loss due to non-deduction of sales tax on electric items. 0.208
16 Non-conducting of annual physical verification of dead stock. -
Non-prevention of Government property & non-removal of illegal
17 -
encroachments from town.
Improper Sanitation System within Jurisdiction of Municipal
19 -
Committee, Kingri.
TMA-38 Chief Municipal Officer Municipal Committee Gambat Dist Khairpur
5 Irregular payment to awaiting period salary. 0.550
9 Loss due to non-deduction of sales tax on electric items. 0.179
10 Irregular payment to contractors without pre-audit. 4.158

457
 [Rupees in Million]
Para No. Particulars Amount
Non-prevention of Government property & non-removal of illegal
16 -
encroachments from town
17 Improper sanitation system within jurisdiction of town -
18 Annual Physical verification -
Chief Municipal Officer Municipal Committee Kandhkot District Kashmore @
TMA-39
Kandhkot
9 Non-deduction of sales tax on purchase of lime & DDT powder 0.449
10 Loss due to less deduction of income tax 0.176
11 Loss due to non-recovery of professional tax amounting to 0.017
12 Irregular purchase of liveries 0.489
15 Non-maintenance of pre-audit register -
16 Failure to conduct pre-audit of receipts -
18 Annual physical verification of stock/stores not conducted -
19 Improper maintenance of cash book -
20 Improper sanitation system in the limits of Town Committee -
TMA-40 Town Officer Town Committee Kashmore District Kashmore @ Kandhkot
12 Improper maintenance of cash book -
14 Loss due to non-recovery of professional tax amounting to 0.018
17 Non-maintenance of pre-audit register -
19 Improper sanitation system within town jurisdiction -
20 Annual physical verification of stock/stores not conducted -
TMA-41 Hyderabad Municipal Corporation
11 Unauthorized appointment of Contract/Daily Contract staff -
Unauthorized payment without mentioning date of completion on
16
completion certificate
Unauthorized expenditure incurred on development work without
24 0.975
Technical Sanction
36 Award of Contract through Collusive Practices 0.580
37 Non – forfeit of lapsed deposit 0.447
38 Unauthorized supply of water through fire tenders 0.146
Payment made on account of Pension without obtaining Life
39 -
Certificate
Loss to Government due to Non-Recovery of Income
45 0.195
Tax/Additional Income Tax from Auctioneers
Unauthorized Provisional Payment without Approval of Budget
53 -
Estimates
54 Non–maintenance of Property Record -
Non–Payments of Financial Assistance / Gratuity / Leave
55 -
Encashment & Difference of Pension to Retired Employees
56 Payment withdrawal through fictitious vouchers 0.370
TMA-42 DMC West
2 Irregular payments without obtaining receipt acknowledgement 0.587

458
 [Rupees in Million]
Para No. Particulars Amount
Irregular expenditure by way of splitting work orders (on open
3
rate basis)
11 Improper sanitation and solid waste management in DMC -
12 Non-removal of encroachment from limits of FMC -
13 Non-maintenance of dead stock register -
14 Improper system for functioning & issuance of trade license -
01. District Municipal Corporation, District West (SITE
Zone)
21 Irregular payments without obtaining receipt acknowledgement 0.200
22 Irregular expenditure by way of splitting work orders 0.593
23 Improper system for functioning & issuance of trade license -
24 Non-maintenance of dead stock register. -
25 Non-removal of encroachment from limits of DMC -
26 Improper sanitation and solid waste management in DMCs -
02. District Municipal Corporation, District West ( Baldia
Zone)
Failure to furnish mandatory income tax statements and sales tax
33 -
returns
Non-maintenance of stock registers (stationery and consumable
35 -
articles registers)
36 Non-conducting of annual physical verification of stock and stores -
37 Non-removal of encroachment from limits of DMC -
03. District Municipal Corporation, District West (Orangi
Zone)
40 Doubtful expenditure on account of overtime allowance 0.291
42 Loss to government due less-deduction of income tax 0.013
Unauthorized expenditure on account of clearance of liabilities
44 0.291
from budget grant of current financial year (2015-16)
TMA-43 DMC South
23 Non-recovery of professional tax 0.043
Irregular reimbursement of medical charges to other department’s
24 0.319
employee out of dmc south funds
25 Poor performance of trade licensing department 0.000
Unauthorized posting of officers on against post/ops basis in
27 0.000
contravention to orders of honorable supreme court of Pakistan.
TMA-44 DMC East
4 Un-authorized use of government vehicles beyond entitlement -
TMA-45 Town Officer Town Committee Nara District Khairpur
9 Loss due to non-deduction of sales tax on electric items 0.585
TMA-46 Municipal Committee Nawabshah District Shaheed Benazirabad
24 Wasteful expenditure on a/c of over time paid to staff 0.951
25 Non-imposition of penalty 0.546

459
 [Rupees in Million]
Para No. Particulars Amount
Unjustified payment to Mr. Tufail Ahmed Soomro ex CMO in
26 0.133
violation of the order of honorable supreme court of Pakistan
TMA-47 Municipal Committee Shahdadpur District Sanghar
6 Non-maintenance of property record of immovable property. -
Payment made on account of pension without obtaining life
13 -
certificate
17 Non-registration of govt. vehicles -
21 Un-authorized payment to Mr. Intizar Ali , accounts clerk 0.786
25 Improper maintenance of cash book -
Improper sanitation system in surrounding area of municipal
27 -
committee.
28 Non-maintenance of pre-audit registers (budget control registers). -
29 Non-verification of stock & stores at the close of financial year -
30 Internal audit & inspection not conducted by controlling officer.
TMA-48 Town Committee Digri District Mirpurkhas
5 Non-deduction of sales tax 0.194
6 Award of work without calling tender 0.562
11 Non-imposition of penalty on contractors 0.190
17 Irregular expenditure without maintaining loan register 0.930
Irregular expenditure without obtaining proper acknowledgement
19 0.500
receipt
Irregular payment on account of financial assistance without
20 0.800
supporting documents
22 Recovery of income tax form the salaries of staff 0.114
23 Annual physical verification of stock/stores not conducted 0.000
TMA-49 Town Committee Kot Ghulam Muhammad District Mirpurkhas
4 Loss to Government Due to Shortfall in Targeted Recovery 0.111
6 Non- Deduction of Income Tax of Rs. 0.025 Million 0.025
7 Loss To Government Due to Suspicious Fraudulent Payment 0.281
8 Un-Authorized Payment of Liability 0.670
Doubtful Employees Working in Town Committee Kot Ghulam
14 -
Muhammad
15 Irregular payment to awaiting period salary 0.488
16 Doubtful Payment With-out Supporting Documents 0.500
Irregular payment of Conveyance allowance During Medical
19 0.074
Leave
20 Irregular payment of Conveyance allowance 0.143
24 Non-Forfeiture Of 2% Bid Security Rs 0.137 Million 0.137
TMA-50 Town Committee Jhudo District Mirpurkhas
8 Non-Deduction of Sales Tax On Repair of Vehicles 0.109
9 Non-Recovery Of Conveyance Allowance 0.154

460
 [Rupees in Million]
Para No. Particulars Amount
Irregular Expenditure without Obtaining Proper
16 0.220
Acknowledgement Receipt
19 Recovery of Income Tax from the salaries of Employees 0.019
24 Irregular Issuance of Partial Work Order 0.500
26 Irregular Payment of Sub Standard Work 0.442
27 Doubtful payment of against repair of TMO Office 0.494
29 Non-Imposition of Penalty on Contractors 0.370
33 Annual Physical Verification Of Stock/Stores Not Conducted
-
TMA-51 Municipal Committee Shahdadkot
7 Non-recovery of Government dues 0.417
9 Non-revision of rents of Government property 0.526
15 Non-recovery of stamp duty 0.018
Non-prevention of Government property & non-removal of illegal
16 -
encroachments from town
Improper Sanitation System within Jurisdiction of Municipal
18 -
Committee, Shahdadkot
TMA-52 Town Committee Matiari
10 Unjustified award of work "De-watering" without disposal 0.785
11 Irregular procurement of uniform to staff 0.296
12 Irregular & doubtful repair of vehicles 0.365
Non-registration of govt. vehicles & non-payment of annual tax of
13 -
vehicles
19 Irregular joining allowed to staff prior to Medical Certificate -
20 Irregular appointment of over age employee -
21 Non-termination of service of fake appointment -
22 Non-recovery of income tax on taxable salaries of staff 0.021
23 Recovery of overpaid House Rent Allowance 0.051
Irregular payment of salaries due to non-verification of pay in
25 -
service books
26 Loss to govt. on account of stamp duty 0.006
Non-prevention of councils interest by obtaining of bank
29 0.166
guarantee as per rules
32 Non-prevention of council property by registering property -
33 Non-maintenance of dead stock registers -
34 Non-verification of stock & stores at the close of financial year -
35 Internal audit & inspection not conducted by controlling officer. -
TMA-53 Municipal Committee Tando Adam
6 Non-production of record -
8 Irregular with drawl of ta/da 0.319
16 Non-adjustment of appointed staff without sanctioned posts -

461
 [Rupees in Million]
Para No. Particulars Amount
Non-registration of govt. vehicles & non-payment of annual tax of
17 -
vehicles
18 Non-recovery of income tax on taxable salaries of staff 0.022
19 Irregular payment of salaries against intervening period 0.934
24 Non-collection of advance income tax on auctions 0.425
26 Improper maintenance of cash book -
Improper sanitation system in surrounding area of municipal
27 -
committee.
28 Non-maintenance of pre-audit registers (budget control registers). -
29 Non-verification of stock & stores at the close of financial year -
30 Internal audit & inspection not conducted by controlling officer. -
TMA-54 Municipal Committee Kamber
7 Un-justified payment on fumigation spray 0.142
13 Loss to Government due to non-recovery of professional tax 0.047
Non-prevention of Government property & non-removal of illegal
18 -
encroachments from town.
TMA-55 Town Committee New Saeedabad
1 Wasted public funds on account of advertisement charges 0.734
4 Non-deduction of Shrinkage Charges on Earth Work 0.127
7 Unauthorized procurement without procurement committee 0.524
8 Non-accountal purchased articles in stores 0.524
Non-registration of council vehicles & non-payment of annual tax
13 -
of vehicles
Unauthorized operation from other banks accounts instead of
16 0.160
Sindh Bank Accounts
Irregular absorption of Non-SCUG staff transferred from other
17 -
councils
18 Irregular appointment/hiring of adhoc staff 0.756
Undue favor to staff due to non-obtaining of security bond as per
20 -
terms & condition of appointment
21 Unauthorized & unjustified payment of honorarium to staff 0.109
Irregular & unjustified payment of conveyance allowance in
24 0.035
intervening period
Irregular payment of salaries due to non-verification of pay in
25 -
service books
27 Non-prevention of council property by registering property -
28 Non-maintenance of dead stock registers -
29 Non-verification of stock & stores at the close of financial year -
30 Internal audit & inspection not conducted by controlling officer -
TMA-56 Town Committee Johi District Dadu
8 Recovery against stamp duty 0.031
13 Payment of bitumen without supporting vouchers 0.400

462
 [Rupees in Million]
Para No. Particulars Amount
14 Irregular payment of substandard work 0.856
19 Non accountal of misc. items 0.496
20 Non-maintenance of dead stock register 0.000
TMA-57 Municipal Committee Dadu
19 Non-maintenance of dead stock register
TMA-58 Town Officer Town Committee Ghari Yaseen District Shikarpur
11 Doubtful payments to staff instead of vendors 0.100
14 Loss to Government due to Non-Deduction of Professional Tax 0.026
15 Loss to Govt. due to Non-Deduction/Non-Deposit of Income Tax 0.069
Payments of Pension without Obtaining Necessary Certificates
16 0.005
from Pensioner
17 Un-Authorized Transfer of Funds 0.450
18 Non-Maintenance of Dead Stock Register. -
Non-conducting of Annual Physical Verification of Stock and
19 -
Stores
20 Internal Audit & Inspection not Conducted -
21 on-Removal of Encroachment from Limits of Town Committee -
Improper Sanitation and Solid Waste Management in Town
22
Committee
23 Improper maintenance of cash book -
TMA-59 Town Officer Town Committee Khanpur District Shikarpur
15 Non-accountal / non-deposit of 2% call deposit 0.157
20 Loss due to non-recovery of professional tax 0.014
23 Improper maintenance of cash book. -
24 Annual physical verification of stock/stores not conducted -
Non-removal of illegal encroachment from limits of town
25 -
committee
TMA-60 Chief Municipal Officer Municipal Committee Shikarpur District Shikarpur
8 Un-authorized transfer of funds 0.095
10 Wasteful expenditure on a/c of over time paid to fire brigade staff 0.448
Irregular Expenditure on account of Grant of Loans without
12 0.100
maintenance of relevant Record
13 Non accountal of miscellaneous Items 0.079
Suspected Mis-appropriation of Public Revenue Due to Non-
17 0.079
Deposit of Income Tax
Non-monitoring of performance of north Sindh urban services
21 -
corporation (nsusc) by mc Shikarpur
22 Non-maintenance of pre-audit registers -
23 Annual physical verification of stock/stores not conducted. -

463
 Part-ii Paras related to current Audit Year 2015-16
(Rupees in Million)
Para No Para Amount
LGD-4 DG Monitoring & Evaluation, Department
4 Irregular use of Government vehicle beyond entitlement
5 Unjustified expenditure on conveyance allowance 0.025
6 Irregular posting of Junior Clerk (BS-07) against the post of Senior Clerk (BS-09)
7 Irregular posting of DPA (BS-12) against the post of computer operator (BS-12)
8 Irregular expenditure against repair of transport 0.084
9 Non-reconciliation of expenditure from AG Sindh 6.809
10 Irregular payment in excess of budget grant 0.035
11 Excess expenditure over and above the budget grant 0.386
12 Non-surrendering of saving 1.414
14 Annual physical verification of stock and stores not conducted
LGD-5 Provincial Election Authority, Sindh
2 Loss to Government due to theft of Government vehicle
6 Non-recording of cash transaction in cash book 0.013
7 Irregular reimbursement of medical claim without special medical board report 0.025
8 Unjustified payment of NIPA allowance 0.007
9 Unauthorized change in date of birth of employee after appointment
12 Improper annual physical verification of stock and stores
LGD-7 Municipal Training & Research Institute
2 Overpayment of special pay 0.001
3 Unjustified expenditure against conveyance charges 0.062
5 Non-deduction of sales tax on services 0.013
6 Doubtful expenditure through cash/ open cheques 0.307
Violation of supreme courts orders by not repatriating junior clerk (BS-07)
7
working against the post of audio visual operator (BS-10)
8 Unjustified handing over of MTRI building to ATC court
9 Mis-classification of funds 0.079
12 Annual physical verification of stock and stores not conducted
LGD-9 Chairman/ Judge, Appellate Tribunal Local Councils Sindh, Karachi
2 Recovery of reimbursement of medicine bills 0.094
4 Irregular reimbursement of medical claim without special medical board report 0.048
5 Unjustified expenditure without calling tender 0.100
6 Purchase of furniture despite ban 0.100
11 Non accountal of purchased items into stock register 0.299
12 Unjustified expenditure on conveyance allowance 0.046
13 Excess expenditure over and above the budget grant 2.050
15 Improper maintenance of cash book 1.598
16 Overpayment of honoraria 0.044
17 Annual physical verification of stock and stores not conducted
LGD-11 Secretary, Local Government Department, Sindh
4 Irregular expenditure without constitution of procurement committee 0.861
10 Transgression of financial power 0.861
11 Non accountal of purchased items into stock register 1.499
12 Non-maintenance of dead stock register

464
 (Rupees in Million)
Para No Para Amount
16 Non-maintenance of dead stock register
LGD-13 Secretary, Local Government Board, Sindh
9 Recovery against un-authorized payment of honorarium 0.272
10 Recovery against payment of honorarium to un-authorized persons. 0.382
Non-deduction of income tax from the payment of hiring paid to employees
12 0.037
against rent payment.
14 Splitting of bills to avoid tender. 0.130
15 Doubtful expenditure through cash/open cheques. 0.960
17 Undue payment to staff. 0.196
19 Failure to prepare annual procurement plan. 0.737
20 Improper maintenance of cheque registers.
22 Improper maintenance of seniority list

Details of AIR Pars Of KMC

KMC-05 Administrator, KMC, 2014-15
9 Loss to Government due to non-recovery of computer allowance 0.018
10 irregular payment of POL beyond prescribed ceiling (limit) per month 1.750
18 Non-remittance of Government taxes into public exchequer 0.170
20 Irregular payment without acknowledgement receipts 2.685
21 Irregular and undue favor in fixation of contract employees pay
KMC-13 Principal, Karachi Medical & Dental College, KMC
7 Non-deduction of general provident fund 0.369
KMC-17 MS Spencer Eye Hospital
2 Non-reconciliation of challans from relevant authorities 0.574
8 Non-maintenance of consumption account register 0.027
KMC-17 MS Spencer Eye Hospital
7 Non-recovery of house rent allowance 0.094
10 Non-maintenance of dead stock register
KMC-21 MS Landhi Medical Complex
3 Non-reconciliation of challans from relevant authorities 0.473
7 Wasteful expenditure on purchased of X-Ray machine 0.224
KMC-3 Director Media Management
4 Irregular payment of advertisements bills prior to maturity period 2.722
KMC-4 Director Safari Park & Aladdin Park
6 Non-adjustment of advance 1.500
7 Non-maintenance of livestock register by the curator
KMC-6 Director Solid Waste Management
4 Collection of insulation fee from few Hospitals/ Labs/ Private practitioners
8 Non-maintenance of dead stock register
KMC-7 Senior Director, Veterinary Services
8 Recovery against irregular payment of POL beyond prescribed ceiling (Limit)
9 Posting of Sr. Director veterinary without veterinary qualification
10 Non-appointment of project coordinator in violation of contract agreement
KMC-8 Senior Director, Transport & Communication
3 Payment of salaries to idle staff

465
 (Rupees in Million)
Para No Para Amount
KMC-10 Executive Director, Institute of Heart Disease
4 Irregular creation of liabilities
KMC-11 Senior Director, Information Technology
3 Irregular expenditure by way of splitting procurement s to avoid tender 0.198
8 Unauthorized allotment of Government vehicles beyond entitlement
9 Unauthorized entitlement of POL beyond ceiling fixed by Sindh Govt: 0.275
KMC-12 Director, Store & Procurement
Unauthorized payment without evaluation report and other documents hoisting on
3 0.979
authority website
5 Non-execution of performance security 0.098
7 Irregular expenditure without obtaining proper acknowledgement receipts 2.472
8 Non accountal of various items in relevant stock register
KMC-14 Director, Katchi Abadis
7 Non accountal of various items in stock register 0.184
KMC-15 Director, Charged Parking
5 Non-maintenance of cash book
KMC-19 Director Estate
7 Non-utilization of funds 0.600
KMC-22 Senior Director, Finance / Financial Advisor
11 Non-accountal of Procured items 7.025
13 Non-maintenance of dead stock register -
14 No-conducting of annual physical verification of stock & store
KMC-24 Senior Director, Municipal Services
6 Unauthorized payment of adhoc relief 0.092
10 Irregular expenditure on account of execution of work
15 Non-maintenance of security deposit register
16 Non-Preparing of procurement plan
17 Non-maintenance of appropriation/ disbursement
18 Non-conducting of annual physical verification of stock and stores
19 Non-recovery of house maintenance / electricity charges 0.032
20 Non-maintenance of dead stock register
21 Non-maintenance of stationery and consumable articles register
KMC-25 Senior Director, Health & Medical Services
2 Expenditure without preparing annual procurement plan
3 Non-recovery of stamp duty 0.028
5 Appointment of staff without approval of competent authority
7 Non accountal of stores 0.210
8 Non-maintenance of dead stock register
KMC-26 Director, Health & Medical Services
4 Non accountal of stores 0.210
5 Non-maintenance of dead stock register
Details of AIR Pars Of KW&SB
KW&SB - 40 Managing Director KW & SB 2014-15
7 Consumption of POL beyond authorized ceiling 0.949
9 Misuse budget head of miscellaneous 0.232

466
 (Rupees in Million)
Para No Para Amount
14 Payment without enlistment 0.379
15 Non-reconciliation of accounts statement
16 Payments without acknowledgement of receipts from payees
18 Improper maintenance of personal files and non-completion of service books -
19 Non-conducting of annual physical verification of dead stock articles
20 Non-maintenance of dead stock register
21 Non-utilization of funds
22 Unauthorized expenditure on entertainment from imprest account
KW&SB - 01 Deputy Managing Director (RRG) KW & SB 2014-15
6 Unauthorized use of Government vehicle beyond entitlement
KW&SB - 15 Deputy Managing Director (Finance) KW & SB 2014-15
Irregular payment on account of financial assistance without supporting
7 0.500
documents
9 Irregular expenditure on repair & maintenance of Government vehicles 0.274
10 Non accountal of stationary 0.907
KW&SB - 29 Deputy Managing Director (TS) KW & SB 2014-15
4 Recovery on account of payment of over time allowance 0.046
KW&SB - 09 Chief Engineer (E&M) KW&SB 2014-15
2 Recovery on account of payment of over time allowance 0.200
3 Non-surrender of savings 4.471
KW&SB - 21 Chief Engineer (Central) KW & SB 2014-15
3 Unauthorized payment on account of salary to adhoc employees 0.434
KW&SB - 22 Chief Engineer (Malir) KW & SB 2014-15
3 Irregular preparation of estimate 0.945
KW&SB - 07 Resident Engineer, Hub Pumping Station
3 Irregular payment on account of leave encashment to officer/ Officials 1.265
4 Expenditure incurred in excess of budget grant 10.009
KW&SB - 08 Resident Engineer, Hub Filter Plant
4 Non-utilization of funds 1.040
5 Non-surrendering of saving 5.064
KW&SB - 30 Resident Engineer, Dhabeji (Pumping)
2 Non-execution of performance security 0.150
8 Recovery on account of electricity charges from the allottees of staff quarters 0.234
KW&SB - 10 Annual Development, Program Scheme, KW & SB 2014-15
CE (Construction of new 100 MGD Pumping House, Equipped with M&E
Pumping Machine) at Dhabeji
CE (Providing / Laying & Replacement of Power Feeder 300 MM 11 KV. HT
armored Cable along with Upgradation with KESC Substation of KW&SB Bulk
Pumping Station)
Executive Engineer (Sewerage), North Karachi Town
5 Execution of works without executing integrity pact
Executive Engineer (Water) Site Town (Construction of new pumping station at
Mianwali Colony UC# 9, Site Town)
12 Non-revision of performance guarantee
Executive Engineer (Civil) Canal Maintenance Division (Establishment of Water
Testing Laboratory at Chilys)

467
 (Rupees in Million)
Para No Para Amount
KW&SB - 03 Reverse Osmosis Water & Desalination Plants, Lyari, Keamari Town, KW & SB 2014-15
Non-setting up of performance indicators and benchmarks to judge the quality /
4
quantity of water supplied
KW&SB - 04 Director Medical Services
10 Non-deduction of benevolent fund 0.060
KW&SB - 05 Project Director S-III
Delayed submission of performance security after 14 days from letter of
10
acceptance
15 Execution of project without environmental impact assessment
16 Limiting scope of tender to national bidders only
KW&SB - 6 Executive Engineer, Hub Division Civil
3 Non-reconciliation of expenditure from finance department of KW&SB
4 Non-utilization of funds 1.310
5 Non-surrender of savings 13.399
KW&SB - 11 Executive Engineer, STP – III
1 Non-transparency of Government spending due to non-maintenance of log book 0.357
5 Irregular payment on account of leave encashment 0.546
6 Non-utilization of funds 6.186
KW&SB - 13 Executive Engineer, STP – II
5 Irregular payment on account of leave encashment 0.749
KW&SB - 14 Executive Engineer, STP – I
3 Irregular payment on leave encashment
5 Non-utilization of funds on account of purchase of material 0.200
KW&SB - 17 Executive Engineer, (E&M) Korangi Town
4 Irregular payment on account of leave encashment 0.347
5 Non-utilization of funds 1.594
KW&SB - 18 Executive Engineer, (E&M- Water) Jamsheed Town
1 Expenditure over & above budget grant 6.679
2 Irregular payment on account of leave encashment to employees 0.901
KW&SB - 19 Executive Engineer, Sewer Cleaning Equipment & Services Division
3 Non-maintenance of cash book
5 Unauthorized payment on account of salary to adhoc employees 0.397
KW&SB - 20 Executive Engineer, (E&M - Water) Gulshan e Iqbal
2 Unauthorized payment on account of salary to adhoc employees 0.651
KW&SB - 24 Executive Engineer, (Water Distribution) Jamsheed Town
1 Expenditure over & above budget grant 9.791
KW&SB - 27 Executive Engineer, Civil (E&M - Sewerage)
4 Unjustified completion of work within one day 0.442
KW&SB - 28 Executive Engineer, Civil, Gharo Division
6 Expenditure incurred in excess of budget grant 22.781
7 Non-surrender of savings 2.944
KW&SB - 34 Executive Engineer, (Water Distribution) North Nazimabad
Defective and inaccurate budgeting causing non-utilization of Rs. 5.403 Million
4 8.569
and excess expenditure of Rs. 3.166 Million
KW&SB - 36 Executive Engineer, Purification Plant Division

468
 (Rupees in Million)
Para No Para Amount
Defective and inaccurate budgeting causing non-utilization of Rs. 21.935 Million
4 29.222
and excess expenditure of Rs. 7.286 Million
KW&SB - 38 Executive Engineer, Canal Maintenance Division,
Defective and inaccurate budgeting causing non-utilization of Rs. 2.570 (m) and
3 7.542
excess expenditure of Rs. 4.972 (m)
KW&SB - 39 Executive Engineer, (Sewerage) North Nazimabad
Defective and inaccurate budgeting causing non-utilization of Rs. 2.231 Million
4 5.889
and excess expenditure of Rs. 3.658 Million
5 Non-recovery of professional tax 0.003
KW&SB - 42 Executive Engineer, (Sewerage) Gulshan e Iqbal Town
2 Irregular expenditure on replacement of sunk down sewerage 0.399
5 Unauthorized appointment of staff on adhoc basis
KW&SB - 43 Executive Engineer, (E&M) Malir Town
4 Non-surrender of savings 1.806
KW&SB - 44 Executive Engineer, (E&M) Shah Faisal Town
1 Expenditure incurred in excess of the budget grant 0.661
KW&SB - 45 Executive Engineer, (Water) Shah Faisal Town
1 Expenditure incurred in excess of the budget grant 1.547
2 Non-surrendering of savings 6.776
KW&SB - 46 Executive Engineer, (Sewerage) Shah Faisal Town
2 Non-utilization of funds 2.803
KW&SB - 47 Executive Engineer, (Water Distribution) Scheme- 33
2 Non-utilization of funds 8.973
KW&SB - 48 Executive Engineer, (Sewerage) Malir Town
1 Expenditure incurred in excess of the budget grant 1.877
2 Non-surrendered of savings 9.969
KW&SB - 16 XEN, K.D, Civil – I
1 Irregular expenditure due to non-ratification of Board
5 Irregular award of contract without procurement plan
KW&SB - 02 Incharge Hydrant Services/ Tanker Operations KW & SB 2014-15
2 Irregular posting of staff without sanctioned strength

469
 Annex-II
Audit Impact Summary

1. Doubtful Expenditure without Supporting Vouchers

Rs 114.587 Million
Various formations working under Secretary (LGD), KMC & KW&SB, during
financial year 2015-16, paid an amount of Rs 114.587 million without supporting
vouchers/record to justify the expenditure, in violation of above rules.

2. Misappropriation of Public Fund - Rs 4.706 Million

In violation of above rules Regional Director Town Planning (SBCA) Hyderabad
during financial year 2015-16 have drawn an amount of Rs 4.706 million from SBCA
account NBP CD4002734907. The said amount was deposited by sponsors of various
housing schemes against scrutiny / approval fee. The department has not deposited the
said amount in the consolidated fund of the Province and Rs 4.706 million has been
drawn illegally, without any approval. On the pretext of meeting out contingencies, an
amount of Rs 4.706 million was misappropriated.

3. Doubtful Withdrawal of Cash from the Accounts of Housing Schemes

Rs 4.625 Million
Director General, Sehwan Development Authority withdrew public funds amounting
to Rs 4.625 million, during financial years 2014-16, in cash from the bank accounts of
different housing schemes. However, no vouchers, bills or supporting vouchers were
found against the transactions. Only the counterfoils of the cheque books showed that the
cheques were issued to clear from payee account only but the bank statement revealed
that transaction were made in cash

4. Fraudulent Payment on Earth Work - Rs 3.000 Million

Director General, Sehwan Development Authority, made payment of Rs 3.000

million, during financial years 2014-16, by preparing thirty identical quotations of earth
work embankment in deserted area through two cheques issued on the same dates. Audit
observed that the said payments were made without work estimates as well as
non-inviting open tender. Moreover, neither sales tax registration was provided nor PEC
category of contractor was available in the record.

470
1. Misuse of Funds on Private Rest House - Rs 1.500 Million
Director General, Sehwan Development Authority incurred expenditure of
Rs 1.500 million, during financial years 2014-16, on acquiring of a private bungalow
from Mr. Burhan Memon. The entity had its own rest house worth Rs 8.000 million,
which was constructed in 2009 which was not utilized; despite the fact another rented
building was hired without approval and technical vetting from Works Department,
Government of Sindh. Moreover, the detail of official usage and accommodation of
Government servant for residential purposes was not mentioned in payment,

6. Non-Recovery of Outstanding Dues - Rs 70,051.261 Million

Various formations working under LGD, KMC & KW&SB, during financial years
2014-16, failed to recover outstanding dues amounting to Rs 70,051.261 million on
account of Sale of Plots, Transfer of Property, Ballot, Water and sewerage charges, long
outstanding dues from retail consumers (defaulters) and water supply through private
water tanker service to various Government functionaries/dignitaries and departments

7. Non-Achievement of Targeted Receipt - Rs 9,649.63 Million

Various formations working under LGD, KMC & KW&SB, failed to recover the
targeted receipts amounting to Rs 9,648.859 million during financial year 2015-16.

8. Loss to Government Exchequer - Rs 662.740 Million

Various formations working under LGD & KW&SB, during financial year
2015-16, failed to fulfill their responsibility by taking effective measures to recover dues
from defaulters, resultantly Government sustained loss of Rs 662.740 million

9. Non-Deduction of Sales Tax on Taxable Service – Rs 505.167 Million

The various formations working under LGD, KMC & KW&SB, made payments to
service providers i.e. consultants, Legal Advisors and Contractors etc., but failed to
deduct sales tax on services amounting to Rs 505.167 million.

10. Non-Recovery of Overpaid House Rent Allowance

Rs 188.398 Million

Various formations working under LGD, KMC & KW&SB, paid excess house
rent allowance amounting to Rs 188.398 million to employees, during financial years
2009-16.

471
 Annex-SLG1

Doubtful/Fraudulent expenditure without supporting vouchers

[Rupees in Millions]
Particulars AIR
Department Year Name of Formation Amount
Para
Secretary, Local Government, Legal charges
2015-16 4 63.001
Housing & Town Planning Dept.
LGD 0010008852360048
D.G. Sindh Building Control 0
2009-16 ABL 31
Authority
18477-8 ABL (Closed)
POL, Office Misc.
Expenses, Telephone,
Misc. Items, Repair of
Director Land Management-II 09 7.753
Vehicles, Purchase of
KMC 2015-16
Computers & Office
Equipments
PD, Lines Area Re-Development
23 1.737
Project
DMD Revenue Resource Bills Printing Charges
2015-16 11 43.052
Generation
KW&SB Crescent Company on
account services within the
2015-16 Project Director, S-III Project 11 0.781
work through 8th running
bill for the contract
TOTAL 116.324

Annex-SLG2

Fraudulent withdrawal of cash from the account of Housing Schemes

(Amount in Rupees)
Bank Account Number Cheque No Date Amount
1449-03 01707208 21-07-2014 1,000,000
-do- 01707204 22-07-2014 500,000
-do- 01707209 25-07-2014 350,000
-do- 01707269 19-08-2015 250,000
-do- 01707270 25-08-2015 150,000
-do- 01707280 18-09-2015 125,000
31000 2279401 11-08-2015 300,000
-do- 4732924 23-09-2015 550,000
-do- 4732925 23-09-2015 600,000
4101 774345 17-05-2016 200,000
-do- 774336 05-12-2014 600,000
Total 4,625,000

472
 Annex-SLG3
Illegal Approval of Layout Plans of Housing Societies

Name of Area (Acres Date of

Sr. District Violation of rules
Scheme & Ghuntas) approval
Usama Town 10 Acres 4 31-03-2016 Mirpurkhas 1. No NOC from Utility Departments, Despite draftsman
Ghunta report of presence of high tension wire passing through
the plot,
2. No NOC from TMA
3. No copy/agreement with TMA
4. No demarcation plan
5. No quarterly development report furnished
6. No schedule of development
7. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Yaseenabad 20 Acres 4 31-03-2016 Mirpurkhas 1. No NOC from Utility Departments
HS Ghunta 2. No NOC from TM
3. No copy/agreement with TMA
4. NO demarcation plan
5. No quarterly development report furnished
6. No schedule of development
7. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Al-Najaf Town 5 acres 20 18-06-2016 Nawabshah 1. No NOC from Utility Departments
Ghuta 2. No NOC from TMA
3. No copy/agreement with TMA
4. No Roobkari of Mukhtiarkar
5. Applicant ownership/lease deed not attached/found
6. Form (VII) not original nor attested
7. No encumbrance certificate by sub-registrar
8. The hole demarcation was accurately mark by draftsman
and yet processed for approval
9. NO demarcation plan
10. No quarterly development report furnished

473
 Name of Area (Acres Date of
Sr. District Violation of rules
Scheme & Ghuntas) approval
11. No schedule of development
12. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Al-Ahmed City 14 acres 3 11-04-2016 Nawabshah 1. .No NOC from Utility Departments
ghunta 2. No NOC from TMA
3. No copy/agreement with TMA
4. No Roobkari of Mukhtiarkar
5. Applicant ownership/lease deed not attached/found
6. Form (VII) not original nor attested
7. No encumbrance certificate by sub-registrar
8. No demarcation plan after approval.
9. No quarterly development report furnished
10. No schedule of development
11. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
New Faisal 3 acres 23.5 29-06-2016 Badin 1. .No NOC from Utility Departments
town ghuntas 2. No NOC from TMA
3. No copy/agreement with TMA
4. No Roobkari of Mukhtiarkar
5. Applicant ownership/lease deed not attached/found
6. Form (VII) not original nor attested
7. No encumbrance certificate by sub-registrar
8. No demarcation plan after approval.
9. No quarterly development report furnished
10. No schedule of development
11. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
A One sharif 2 acres and Dadu 1. .No NOC from Utility Departments
town 28 ghuntas 2. No NOC from TMA
Deh 44 Dadu 3. No copy/agreement with TMA
4. No Roobkari of Mukhtiarkar.
5. According to draftsman, the plot had railway line passing

474
 Name of Area (Acres Date of
Sr. District Violation of rules
Scheme & Ghuntas) approval
through it.
6. Applicant ownership/lease deed not attached/found
7. Form (VII) not original nor attested
8. No encumbrance certificate by sub-registrar
9. No demarcation plan after approval.
10. No quarterly development report furnished
11. No schedule of development.
12. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Ayaz Ali 4 acres 30-05-2016 Shaheed 1. .No NOC from Utility Departments
model town Benazirabad 2. No copy/agreement with TMA
3. Roobkari of Mukhtiarkar not on prescribed format.
4. The undertaking by sponsor had different signature than
the CNIC copy Attached (i.e. Ayaz Ali signature
different)
5. Applicant ownership/lease deed not attached/found
6. Form (VII) not original nor attested
7. No encumbrance certificate by sub-registrar
8. No demarcation plan after approval.
9. No quarterly development report furnished
10. No schedule of development.
11. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
G M Garden 5 acres 20 Shaheed 1. No NOC from Utility Departments
City Ghuntas Benazirabad 2. No copy/agreement with TMA
Deh Mari 3. No Roobkari of Mukhtiarkar
sabir Taluka 4. Applicant ownership/lease deed not attached/found
daur 5. Form (VII) not original nor attested
6. No encumbrance certificate by sub-registrar
7. No demarcation plan after approval.
8. No quarterly development report furnished
9. No schedule of development.
10. No survey by the department to ensure keeping of

475
 Name of Area (Acres Date of
Sr. District Violation of rules
Scheme & Ghuntas) approval
approved layout plan and development work, hence an
alternation have not been checked
Al Fateh 3 acres 2 28-04-2016 Ghotki 1. No NOC from Utility Departments
Model Town Ghuntas 2. No copy/agreement with TMA
Phase- 2 ---3 3. No Roobkari of Mukhtiarkar
acres 9 4. Applicant ownership/lease deed not attached/found
ghuntas 5. Form (VII) not original nor attested
6. No encumbrance certificate by sub-registrar
7. No demarcation plan after approval.
8. No quarterly development report furnished
9. No schedule of development.
10. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Sawai villas 5 acres 2.05.2016 Sanghar 1. .No NOC from Utility Departments
Phase 1 and 2. 4 acres 38 2. No copy/agreement with TMA
ghuntas 3. No Roobkari of Mukhtiarkar
4. Applicant ownership/lease deed not attached/found
5. Form (VII) not original nor attested
6. No encumbrance certificate by sub-registrar
7. No demarcation plan after approval.
8. No quarterly development report furnished
9. No schedule of development
10. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Allama Iqbal 4 acres 10 29.06.2016 Sanghar 1. .No NOC from Utility Departments
Town Ghuntas (Tandoadam) 2. Fully Residential however still proceeded for approval
3. No copy/agreement with TMA
4. No Roobkari of Mukhtiarkar
5. Applicant ownership/lease deed not attached/found
6. Form (VII) not original nor attested
7. No encumbrance certificate by sub-registrar
8. No demarcation plan after approval.
9. No quarterly development report furnished

476
 Name of Area (Acres Date of
Sr. District Violation of rules
Scheme & Ghuntas) approval
10. No schedule of development
No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Barkat 1 Acre 23 30-06-2016 Sukkur 1. The department has allowed conversion of agricultural
commercial Ghuntas land to a housing scheme which is a domain of BOR
market Sindh high powered regularization committee headed by
a Rtd Judge.
2. .No NOC from Utility Departments
3. No copy/agreement with TMA
4. Fully commercial plots yet approved
5. Applicant ownership/lease deed not attached/found
6. Form (VII) not original nor attested
7. No demarcation plan after approval.
8. No quarterly development report furnished
9. No schedule of development
No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Madini City 13 acres 30 1.03.2016 Tando 1. No NOC from Utility Departments
Phase 1,2,3. Ghuntas 31.03.2016 Muhammad 2. No copy/agreement with TMA
28.04.2016 khan 3. No Roobkari of Mukhtiarkar
4. Applicant ownership/lease deed not attached/found
5. Form (VII) not original nor attested
6. No encumbrance certificate by sub-registrar
7. No demarcation plan after approval.
8. No quarterly development report furnished.
9. No schedule of development.
10. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Memon Town 2 acres 3 6.04.2016 Matiari 1. No NOC from Utility Departments (however NOC from
extension Ghuntas TMA available)
2. No copy/agreement with TMA
3. Applicant ownership/lease deed not attached/found

477
 Name of Area (Acres Date of
Sr. District Violation of rules
Scheme & Ghuntas) approval
4. Form (VII) not original nor attested
5. No encumbrance certificate by sub-registrar
6. No demarcation plan after approval.
7. No quarterly development report furnished
8. No schedule of development
No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Satellite Town 64 Acres 30.05.2016 Thatta 1. The said layout is disputed since the sponsor’ title of land
housing Survey is challenged by another heir namely Mubeen Ahmed
Scheme number siddiqui, who claimed that his signature on the power of
279,298, attorney is bogus.
299,495,300 2. The signature were challenged since 19-04-1982
(23.06.2016)
3. The department has not cared to have encumbrance
certificate from Sub registrar.
4. The said letter was sent to NAB, Deputy Commissioner
and TMA for disputed Form VII.
5. The department have not responded however nor initiated
an inquiry.
Raza Valley Acre 20 12-052016 Hyderabad 1. No NOC from Utility Departments (however NOC from
ghunta TMA available)
2. No copy/agreement with TMA and as per rule
3. No Rubkari
4. Applicant ownership/lease deed not attached/found
5. Form (VII) not original nor attested
6. No encumbrance certificate by sub-registrar
7. No demarcation plan after approval.
8. No quarterly development report furnished
9. No schedule of development
10. No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation has not been checked.
Maria Golden 1 acre 23 ½ 12-02-2015 Hyderabad 1. All residential
City Housing Ghuntas 2. No NOC from Utility Departments

478
 Name of Area (Acres Date of
Sr. District Violation of rules
Scheme & Ghuntas) approval
Scheme 3. No copy/agreement with TMA
4. No Rubkari
5. Applicant ownership/lease deed not attached/found
6. Form (VII) not original nor attested
7. No encumbrance certificate by sub-registrar
8. No demarcation plan after approval.
9. No quarterly development report furnished
10. No schedule of development
No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked
Al-Wahid City 3 acre 19-02-2016 Umerkot 1. No NOC from Utility Departments
21ghuntas 2. No copy/agreement with TMA
3. Applicant ownership/lease deed not attached/found
4. Form (VII) not original nor attested
5. No encumbrance certificate by sub-registrar
6. No demarcation plan after approval.
7. No quarterly development report furnished
8. No schedule of development
No survey by the department to ensure keeping of
approved layout plan and development work, hence an
alternation have not been checked

479
 Annex-SLG4

Non-Production of Record

[Rupees in Millions]
AIR
Department Year Name of Formation Amount
Para
Secretary, Local Government, Housing & Town 1 0
2015-16
Planning Department 2 10,354.137
2015-16 Secretary, Local Government Board, Sindh 1 0
LGD 1 0
2014-15 D.G. Sehwan Development Authority
9 10.520
2015-16 Hyderabad Development Authority 9 50
2015-16 Director Recoveries (KDA) 1 728.690
1 0
2015-16 DG, Technical Services
7 12.930
2015-16 Sr. Director, Financial Advisors 1 0
2015-16 Director, Safari Park 1 23.429
2015-16 Director, Land Management-II 3 11.596
2015-16 -do- 12 0
2015-16 Director, Charged Parking 1 6.560
KMC
2015-16 Director, Media Management 1 0.805
2015-16 Karachi Institute of Heart Disease 1 0
2015-16 Karachi Medical & Dental College 1 0
2015-16 Sr. Director, Medical & Health Services 1 155.112
2015-16 Sr. Director, Municipal Services 1 0
2015-16 M.S Gizri Hospital 1 1.176
2014-15 PD, Lines Area Re-Development Project 1,27 0
2015-16 DMD Finance (KW&SB) 01 0
2015-16 Project Director, S-III Project, KW&SB 01 1,050.285
KW&SB Reserve Osmosis Water Desalination Plants Keamari 01 0
2015-16
& Lyari Towns (KW&SB) Karachi 08 0
2014-15 Superintending Engineer, KW&SB (Complete) 01 0
TOTAL 12,405.240

Non-Production of Supporting Record of POL Expenditure

[Rupees in Millions]
AIR
Department Year Name of Formation Amount
Para
Secretary, Local Government, Housing & Town
2015-16 10 4.962
Planning Department
2015-16 Secretary, Local Government Board, Sindh 11 3.319
LGD
2015-16 D.G Hyderabad Development Authority 8 3.954
2015-16 M.D WASA HAD 14 11.122
2015-16 PD WSSP HAD 1 0.384

480
 [Rupees in Millions]
AIR
Department Year Name of Formation Amount
Para
2015-16 PD Shaheed Mohtarma Benazir Bhutto Township 6 0.250
2011-15 Director Recoveries KDA 3 7.219
2014-15 PD, Lines Area 3 1.369
2015-16 Senior Director Finance/Financial Advisor 7 2.359
2015-16 Senior Director, Municipal Services, KMC [Fumigation] 3 15.472
2015-16 Director Safari Park/Alladin Park 7 4.00
2015-16 Senior Director Land Management-II 7 1.995
2015-16 Senior Director Transport & Communication 5 5.197
2015-16 Director Charged Parking 7 6.015
2015-16 Director Media Management 2 1.942
KMC
2015-16 MS Abbasi Shaheed Hospital 5 6.001
2015-16 MS Sobhraj Maternity Hospital 3 2.885
2015-16 Executive Director Karachi Institute of Heart Disease 5 1.490
2015-16 Senior Director Medical & Health Services 4 0.500
2015-16 MS Gizri Maternity Home 4 0.778
2015-16 Chief City Wardens 2 7.604
2013-16 Director, Land Enforcement 3 9.999
2015-16 DMD Revenue Resource Generation 12 2.075
2015-16 Incharge Hydrant Services & Tanker Operation 05 0.501
KW&SB
2015-16 DMD Finance 06 0.399
2014-15 Chairman Secretariat 6 2.933
TOTAL 104.724

481
 Annex-SLG5

Non-recovery of outstanding dues

[Rupees in Millions]
AIR
Department Year Name of Formation Amount
Para
2014-16 D.G. Sehwan Development Authority 17 1,355.704
2009-16 D.G. Sindh Building Control Authority 3 138.985
LGD 2015-16 Director, Planning & Development Control (HDA) 2 4.891
2015-16 M.D WASA 1 2,077.557
2015-16 D.G. Lyari Development Department 6 2,867.436
2 1.770
2015-16 Land Management-II
KMC 4 10,315.296
2015-16 Director, Transport & Communication Department 9 10.144
2014-15 PD, Lines Areas 10 600.00
-do- -do- 18 54.340
2015-16 07 19,354.578
DMD Revenue Resource Generation
KW&SB 2015-16 08 33,921.862
2015-16 Incharge Hydrant Services & Tanker Operation 01 3.038
TOTAL 70,705.601

Annex-SLG6

Non-achievement of targeted receipt

[Rupees in Millions]
AIR Targeted Realized Shortfall/
Department Year Name of Formation
Para Revenue Revenue Deficit
LGD 2011-15 Director Recoveries (KDA) 2 9,620.500 3,332.402 6,288.098
2015-16 DG, Parks & Horticulture 2 59.050 15.584 43.466
2015-16 Director, Safari Park 4 55.495 39.428 16.067
2015-16 Director, Land Management-II 5 930.500 169.979 760.521
2015-16 Director, Charged Parking 3 77.525 48.649 28.876
KMC 2015-16 Director estate 4 100.500 99.733 0.767
2015-16 Abbasi Shaheed Hospital 2 62.300 6.247 56.053
2015-16 Director Solid Waste Management 1 35.000 24.000 11.000
2015-16 Director, T&CD 9 14.300 4.156 10.144
2013-16 Director, Land Enforcement 6 1,297.700 130.804 1,166.896
KW&SB 2015-16 DMD Revenue Resource Generation 3 8,792.910 6,357.950 2,434.960
TOTAL 21,045.78 10,228.932 10,816.848

482
 Annex-SLG7

Loss to Government Exchequer

[Rupees in Millions]
Department Year Name of Formation AIR Para Amount
2009- D.G. Sindh Building Banker Equity Investment
2 110.000
16 Control Authority
Ground rent, water &
2011- Lyari Expressway conservancy charges from the
2 0
LGD 15 Resettlement Project allottees of plots of Lyari
Expressway
Auction the plots and to
2015- Director Recoveries
12 receive the installments / 253.824
16 (KDA)
payments of sales proceeds
Un-regularized billing process
of water distributed through
02 255.140
2015- DMD Revenue Resource hydrants and tanker operations
16 Generation in different areas of city
granted rebate to various
06 0.480
KW&SB consumers
Free water tankers were
Incharge Hydrant provided on account of “Gratis
2015-
Services & Tanker 02 Trips” to various Government 24.050
16
Operation functionaries, politicians and
prominent personalities
TOTAL 643.494

483
 Annex-SLG8

Non-deduction of Sales Tax on Taxable Service

(Rupees in Million)
Amount Amount
AIR
Department Year Name of Formation Paid of Sales
Para
Tax
26 27.938 4.191
2009-16 D.G. Sindh Building Control Authority
28 67.680 10.829
LGD 2015-16 Secretary, Local Government Board 6 1.000 0.170
DG, Rural Development Department [1/5th
2015-16 17 2,000.000 68.00
of Total GST)
KMC 2015-16 DG Technical Services 2 3,253.623 488.05
KMC 2015-16 DG, Parks & Horticulture 6 3.600 0.504
KMC 2014-15 PD, Lines Area 11 51.000 0.867
Executive Engineer, Canal Maintenance 10.107
2015-16 01 1.415
KW&SB Division (Civil) under ADP/PSDP Scheme
2015-16 DMD Finance 10 5.575 0.178
TOTAL 573.337

Annex-SLG9

Non-recovery of overpaid House Rent/Other Allowances

[Rupees in Millions]
AIR
Department Year Name of Formation Admissible Allowed Difference
Para
D.G. Sindh Building Control
2009-16 5 274.925 397.114 122.189
Authority
2015-16 P.D. Housing (HDA-I) 7 2.078 1.438 0.639
2015-16 P.D. Housing (HDA-II) 4 1.573 1.089 0.484
D.G. Hyderabad Development
2015-16 2
LGD Authority 3.325 2.302 1.023
Director, Planning & Development
2015-16 1
Control (HDA) 3.594 2.488 1.106
2015-16 M.D WASA 6 3.508 2.429 1.079
D.G. Lyari Development
2015-16 5
Department 9.239 6.398 2.840
2008-15 PD, Lines Area 6 25.328 36.583 11.255
2015-16 DG, Technical Services 3 - - 7.942
2015-16 DG, Parks & Horticulture 1 35.007 24.236 10.771
KMC 2015-16 Director, Safari Park 6 - - 1.735
2015-16 Director, Zoo 3 - - 1.242
2015-16 Director, Land Management-II 10 - - 0.205
2015-16 Sr. Director, Transport & 1 - - 3.524

484
 [Rupees in Millions]
AIR
Department Year Name of Formation Admissible Allowed Difference
Para
2015-16 Communication 8 - - 0.194
2015-16 Director, Charged Parking 11 10.359 9.193 1.166
2015-16 Director, Media Management 5 - - 0.481
2015-16 MS, Sobhraj Maternity Hospital 1 3.386 2.344 1.042
2015-16 Karachi Institute of Heart Disease 2 - - 10.011
2015-16 2 - - 2.567
Karachi Medical & Dental College
2015-16 6 - - 11.137
2015-16 Director, Solid Waste Management 4 - - 1.145
2011-16 Chief Medical Officer, KDA 1 - - 1.192
2013-16 Director, Land Enforcement 5 - - 10.636
DMD Revenue Resource - -
2015-16 04 3.031
Generation
KW&SB
2015-16 DMD Finance 07 - - 0.555
2015-16 Chairman Secretariat 2 - - 0.076
TOTAL 209.267

Annex-SLG10

Non-Deduction of Income Tax

[Rupees in Millions]
AIR
Department Year Name of Formation Amount
Para
Secretary, Local Government, Housing & Town Planning
2015-16 5 2.835
Department
2015-16 Secretary, Local Government Board, Sindh 5 0.102
2015-16 DG Larkana Development Authority 13 0.082
LGD 0.354
2015-16 P.D. Housing (HDA-II) 5
2015-16 D.G. Hyderabad Development Authority 1 1.557
2015-16 M.D, WASA (HDA) 5 0.114
2015-16 D.G. Lyari Development Department 13 65.903
2015-16 Director, Zoo 1 4.163
2015-16 Director General (Parks & Horticulture) KMC 5 0.406
2015-16 Abbasi Shaheed Hospital 6 2.839
KMC
2015-16 1 4.163
Director, Zoological Garden (Zoo)
2015-16 5 0.607
2014-15 PD, Lines Area 12 0.867
Executive Engineer, Canal Maintenance Division (Civil) 8.172
11
2015-16 under ADP/PSDP Schemes
KW&SB Project Director, S-III Project 14 3.699
2014-15 Chairman Secretariat 11 0.145
TOTAL 96.008

485
 Annex-SLG11

Unauthorized Appointments

[Rupees in Millions]
AIR No. of
Department Year Name of Formation Amount
Para Appointments
2 277 0
2015-16 D.G Larkana Development Authority 3 0
11 1 0
7 1155 2,323.223
8 2 85.687
LGD
2009-16 D.G SBCA 9 219 0
11 04 0
19 224 25.144
2015-16 DG, Parks & Horticulture 1 3.600
2015-16 D.G. Lyari Development Department 12 21 5.840
2015-16 Director Safari Park/Alladin Park 5 17 2.016
2015-16 Director Charged Park 8 13 0
2015-16 Chief City Warden 5 1,389 0
KMC
2014-15 PD, Lines Area Re-Development Project 9 50 0
2015-16 MS Landhi Medical Complex 4 23 2.924
2013-16 Director, Land Enforcement 8,11 9 3.785
KW&SB 2014-15 Chairman Secretariat 9 8 2.180
TOTAL 3,413 2,454.399

486
 Annex-SLG12

Non-Maintenance of Cash Book

[Rupees in Millions]
Department Year Name of Formation AIR Para Amount
2015-16 Senior Director Finance/Financial Advisor 5 102.369
2015-16 Senior Director Land Management-II 11 101.291
KMC
2015-16 Director Solid Waste Management 3 84.745
2011-15 Chief Medical Officer, KDA 6 339.334
LGD 2015-16 Regional Director Town Planning (SBCA) 14 18.87
Incharge Hydrant Services & Tanker Operation 08 0
Executive Engineer, Canal Maintenance Division (Civil)
15 0
under ADP/PSDP Schemes
KW&SB 2015-16 RE,Pipri 02 104.804
DMD Finance 09 40.655
Chief Engineer, E&M 01 317.898
TOTAL 1,109.966

Annex-SLG13

Split group work in parts to avoid tender

Summary
[Rupees in Millions]
AIR
Department Year Name of Formation Amount
Para
2015-16 DG SBCA 11 15.100
LGD
2015-16 MD, WASA HDA 2 3.044
TOTAL 18.144

(Amount in Rupees)
DG Sindh Building Controlling Authority (2009-16) Para-11
Name of Nature of
Head of Account F.Y Amount
Region Expenditure
Addition/Alteration/ Renovation of Office Quotations 8,654,847
Hyderabad Purchase of Furniture -do- 2,482,608
2015-2016
Region Purchase of Items for Conference Hall -do- 1,963,847
Un-foreseen Expenditure -do- 1,999,150
Total 15,100,452

487
 MD WASA HDA (Para-2)
(Amount in Rupees)
Work Order
S.No Name of contractor Name of work Date Amount
No
P/L/J & T 12"dia ASTM pipe line
LSMD/SKP/H
1 M/S. Abdul Nizam opposite urban hospital unit No. 11 6/2/2015 26,350
DA/211/2015
latifabad
P/L/J & T 12"dia ASTM pipe line
LSMD/SKP/H
2 M/S. Abdul Nizam opposite urban hospital unit No. 11 6/2/2015 26,350
DA/212/2015
latifabad
P/L/J & T 12"dia ASTM pipe line
LSMD/SKP/H
3 M/S. Abdul Nizam opposite urban hospital unit No. 11 6/2/2015 49,600
DA/223/2015
latifabad
P/L/J & T 12"dia ASTM pipe line
LSMD/SKP/H
4 M/S. Abdul Nizam opposite urban hospital unit No. 11 6/2/2015 49,600
DA/224/2015
latifabad
Desalting of sewerage collecting
LSMD/SKP/H
5 M/S. Abdul Nizam tank / sum well at disposal pumping 6/2/2015 30,000
DA/227/2015
station unit No. 11
Desalting of sewerage collecting
LSMD/SKP/H
6 M/S. Abdul Nizam tank / sum well at disposal pumping 6/2/2015 40,000
DA/228/2015
station unit No. 11
P/L/J & T 12"dia ASTM pipe line
LSMD/SKP/H
7 M/S. Abdul Nizam opposite urban hospital unit No. 11 6/2/2015 49,600
DA/214/2015
latifabad
P/L/J & T 12"dia ASTM pipe line
LSMD/SKP/H
8 M/S. Abdul Nizam opposite urban hospital unit No. 11 6/2/2015 49,600
DA/214/2015
latifabad
P/L/J & T 12"dia ASTM pipe line
LSMD/SKP/H
9 M/S. Abdul Nizam opposite urban hospital unit No. 11 6/2/2015 49,600
DA/215/2015
latifabad
P/L/J & T 12"dia ASTM pipe line
LSMD/SKP/H
10 M/S. Abdul Nizam opposite urban hospital unit No. 11 6/2/2015 49,600
DA/216/2015
latifabad
P/L/J & T 12"dia ASTM pipe line
LSMD/SKP/H
11 M/S. Abdul Nizam opposite urban hospital unit No. 11 6/2/2015 49,600
DA/217/2015
latifabad
P/L/J & T 12"dia ASTM pipe line
LSMD/SKP/H
12 M/S. Abdul Nizam opposite urban hospital unit No. 11 6/2/2015 49,600
DA/213/2015
latifabad
Desalting of sewerage collecting
LSMD/SKP/H
13 M/S. Abdul Nizam tank / sum well at disposal pumping 6/2/2015 40,000
DA/229/2015
station unit No. 11
Desalting of sewerage collecting
LSMD/SKP/H
14 M/S. Abdul Nizam tank / sum well at disposal pumping 6/2/2015 40,000
DA/230/2015
station unit No. 11
Desalting of sewer line different dia
LSMD/SKP/H
15 M/S. Abdul Nizam 12" to 14" @ different locations 6/2/2015 40,000
DA/231/2015
sub-divisions-III HDA Latifabad

488
 MD WASA HDA (Para-2)
(Amount in Rupees)
Work Order
S.No Name of contractor Name of work Date Amount
No
Desalting of sewer line different dia
LSMD/SKP/H
16 M/S. Abdul Nizam 12" to 14" @ different locations 6/2/2015 40,000
DA/232/2015
sub-divisions-III HDA Latifabad
Desalting of sewer line different dia
LSMD/SKP/H
17 M/S. Abdul Nizam 12" to 14" @ different locations 6/2/2015 40,000
DA/233/2015
sub-divisions-III HDA Latifabad
Desalting of sewer line different dia
LSMD/SKP/H
18 M/S. Abdul Nizam 12" to 14" @ different locations 6/2/2015 40,000
DA/234/2015
sub-divisions-III HDA Latifabad
P/L/J & T 12" RCC ASTM sewer
from nathoo dhobi to ever shine LSMD/SKP/H
19 M/S. Abdul Nizam 18/4/2015 49,525
P/St. Unit No. 10 Latifabad, DA/832/2015
Hyderabad
P/L/J & T 12" RCC ASTM sewer
from nathoo dhobi to ever shine LSMD/SKP/H
20 M/S. Abdul Nizam 18/4/2015 49,525
P/St. Unit No. 10 Latifabad, DA/833/2015
Hyderabad
P/L/J & T 12" RCC ASTM sewer
from nathoo dhobi to ever shine LSMD/SKP/H
21 M/S. Abdul Nizam 18/4/2015 49,525
P/St. Unit No. 10 Latifabad, DA/834/2015
Hyderabad
P/L/J & T 12" RCC ASTM sewer
from nathoo dhobi to ever shine LSMD/SKP/H
22 M/S. Abdul Nizam 18/4/2015 49,525
P/St. Unit No. 10 Latifabad, DA/837/2015
Hyderabad
P/L/J & T 12" RCC ASTM sewer
from nathoo dhobi to ever shine LSMD/SKP/H
23 M/S. Abdul Nizam 18/4/2015 49,525
P/St. Unit No. 10 Latifabad, DA/838/2015
Hyderabad
P/L/J & T 12" RCC ASTM sewer
from nathoo dhobi to ever shine LSMD/SKP/H
24 M/S. Abdul Nizam 18/4/2015 49,525
P/St. Unit No. 10 Latifabad, DA/839/2015
Hyderabad
P/L/J & T 12" RCC ASTM sewer
from nathoo dhobi to ever shine LSMD/SKP/H
25 M/S. Abdul Nizam 18/4/2015 49,525
P/St. Unit No. 10 Latifabad, DA/840/2015
Hyderabad
P/L/J & T 12" RCC ASTM sewer
from nathoo dhobi to ever shine LSMD/SKP/H
26 M/S. Abdul Nizam 18/4/2015 49,525
P/St. Unit No. 10 Latifabad, DA/841/2015
Hyderabad
P/L/J & T 12" RCC ASTM sewer
LSMD/SKP/H
27 M/S. Abdul Nizam from nathoo dhobi to ever shine 18/4/2015 49,525
DA/842/2015
P/St. Unit No. 10 Latifabad,

489
 MD WASA HDA (Para-2)
(Amount in Rupees)
Work Order
S.No Name of contractor Name of work Date Amount
No
Hyderabad
P/L/J & T 12" RCC ASTM sewer
from nathoo dhobi to ever shine LSMD/SKP/H
28 M/S. Abdul Nizam 18/4/2015 49,525
P/St. Unit No. 10 Latifabad, DA/843/2015
Hyderabad
P/L/J & T 12" RCC ASTM sewer
from nathoo dhobi to ever shine LSMD/SKP/H
29 M/S. Abdul Nizam 18/4/2015 49,525
P/St. Unit No. 10 Latifabad, DA/844/2015
Hyderabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
30 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1042/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
31 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1043/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
32 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1044/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
33 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1045/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
34 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1046/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
35 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1047/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
36 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1048/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
37 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1049/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
38 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1050/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
39 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1051/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
40 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 42,000
DA/1054/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
41 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 42,000
DA/1055/2015
4 Latifabad

490
 MD WASA HDA (Para-2)
(Amount in Rupees)
Work Order
S.No Name of contractor Name of work Date Amount
No
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
42 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1035/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
43 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1036/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
44 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1037/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
45 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1038/2015
4 Latifabad
P/L/J & T PVC 12" dia from LD-I
LSMD/SKP/H
46 M/S. Abdul Nizam P/Station to Bhitai hospital unit No. 14/05/2015 48,000
DA/1039/2015
4 Latifabad
Cleaning / opening of choked sewer
LSMD/HDA/S
47 M/S. Abdul Nizam 36" dia at makrani para P/Station 23/9/2015 49,980
KP/2325/2015
(1st operation)
Cleaning / opening of choked sewer
LSMD/HDA/S
48 M/S. Abdul Nizam 36" dia at makrani para P/Station 23/9/2015 49,980
KP/2326/2015
(2nd operation)
Cleaning / opening of choked sewer
LSMD/HDA/S
49 M/S. Abdul Nizam 36" dia at makrani para P/Station 23/9/2015 49,980
KP/2327/2015
(3rd operation)
Cleaning / opening of choked sewer
LSMD/HDA/S
50 M/S. Abdul Nizam 36" dia at makrani para P/Station 23/9/2015 49,980
KP/2328/2015
(4th operation)
M/S. National
Rewinding of motor 25 BHP, SKP/QSMD/W
51 Electric & Winding 14/7/2015 46,000
Naseem Nagar P/Station ASA/HDA/478
works
M/S. National
Rewinding of motor 25 BHP, SKP/QSMD/W
52 Electric & Winding 14/7/2015 43,500
Zeeshan P/Station ASA/HDA/482
works
M/S. National
Rewinding of motor 25 BHP, SKP/QSMD/W
53 Electric & Winding 16/7/2015 49,900
Diplayee P/Station ASA/HDA/493
works
M/S. National
Rewinding of motor 25 BHP, SKP/QSMD/W
54 Electric & Winding 22/7/2015 47,000
Citizen Colony P/Station ASA/HDA/504
works
M/S. National
Rewinding of motor 75 BHP, SKP/QSMD/W
55 Electric & Winding 10/6/2015 47,000
Diplayee P/Station ASA/HDA/409
works
M/S. National
Rewinding of motor 75 BHP, SKP/QSMD/W
56 Electric & Winding 19/6/2015 45,500
Diplayee P/Station ASA/HDA/430
works

491
 MD WASA HDA (Para-2)
(Amount in Rupees)
Work Order
S.No Name of contractor Name of work Date Amount
No
M/S. National
Rewinding of motor 75 BHP, SKP/QSMD/W
57 Electric & Winding 19/6/2015 45,500
Diplayee P/Station ASA/HDA/431
works
M/S. National
Rewinding of motor 75 BHP, SKP/QSMD/W
58 Electric & Winding 26/6/2015 45,500
Diplayee P/Station ASA/HDA/434
works
M/S. National
Rewinding of motor 75 BHP, SKP/QSMD/W
59 Electric & Winding 26/6/2015 45,500
Diplayee P/Station ASA/HDA/435
works
M/S. National
Rewinding of motor 75 BHP, SKP/QSMD/W
60 Electric & Winding 26/6/2015 47,000
Diplayee P/Station ASA/HDA/436
works
M/S. National
Rewinding of motor 25 BHP, SKP/QSMD/W
61 Electric & Winding 8/7/2015 47,000
Naseem Nagar P/Station ASA/HDA/459
works
M/S. National
Rewinding of motor 10 BHP, SKP/QSMD/W
62 Electric & Winding 14/7/2015 30,850
Candio goth P/Station ASA/HDA/480
works
Hire Charges 7 Installation of 90
M/S. M.K. SKP/QSMD/W
63 KVA diesel generator at thandi 1/6/2015 48,000
Enterprises ASA/HDA/386
sarak p/station, qasimabad
Hire Charges 7 Installation of 90
M/S. M.K. SKP/QSMD/W
64 KVA diesel generator at thandi 1/6/2015 48,000
Enterprises ASA/HDA/387
sarak p/station, qasimabad
P/L/J & T 6" dia MS pipeline in CWSMD/HDA
65 M/S. Sunny Traders 9/9/2015 50,000
gari khata /AB/1255
P/L/J & T 6" dia MS pipeline in CWSMD/HDA
66 M/S. Sunny Traders 9/9/2015 50,000
gari khata /AB/1256
Total 3,044,445

492
 Annex-SLG14

Irregular expenditure on POL without Entitlement

[Rupees in Millions]
Department Year Name of Formation AIR Para Amount
SLG 2015-16 Director Recoveries (KDA) 07 0
SLG 2015-16 D.G Lyari Development Authority 03 1.273
2015-16 Senior Director Finance/Financial Advisor 12 2.025
2015-16 Senior Director Land Management-II 8 5.005
KMC 2015-16 Senior Director Transport & Communication 2 0.932
2015-16 KM&DC 8 2.754
2015-16 Sr. Director/F.A KMC 10 2.411
2015-16 Director, TCD 7 0
2015-16 Director, Media Management 3 1.002
KW&SB 2015-16 DMD Revenue Resource Generation 09 1.924
TOTAL 17.326

Annex-SLG15

Unauthorized posting/adjustment of staff without sanctioned strength

[Rupees in Millions]
Department Year Name of Formation AIR Para Amount
LGD 2009-16 DG SBCA 18 0
2015-16 Chief City Warden 8 1.630
KMC
2013-16 Director, Land Enforcement 12 10.861
KW&SB 2015-16 Incharge Hydrant Services & Tanker Operation 07 0
TOTAL 12.491

DG SBCA (2009-16) Para – 18

Sr. No. Financial Year Sanctioned Strength
01 2009-2010 970
02 2015-2016 2,227
Total increase 1,257

Chief City Wardens (Para-08)

Per Month Gross Sanctioned Posts as per
Sr. Name Designation / BPS
Salary Budget Book
1 Mr. Qaiser Nazneen Clerk (B-07) Rs.22,640 Nil
2 Ms. Nadia Saleem Assistant (B-14) Rs.33,582 Nil
3 Ms. Anila Waseem Clerk (B-07) Rs.23,177 Nil
4 Mr. M. Yousaf Clerk (B-07) Rs.23,177 Nil
5 Ms. Samina Zahid Assistant (B-14) Rs.33,582 Nil
Total unauthorized expenditure during Rs.1,633,896
F.Y.2015-16

493
 Director, Land Enforcement [AIR Para: 12]

Sr. Name of officer Monthly Salary Three years Salary

1. M.Shakir Zaki 117,266 4,221,576

2. Asif Jetha 104,031 3,745,116

3. Abdul Majeed 80,386 2,893,896

Total 10,860,588

Annex-SLG16

Unauthorized Retention of Government Vehicles

[Rupees in Millions]
AIR
Department Year Name of Formation Amount
Para
2015-16 Secretary Local Govt & HTP 8 0
2015-16 Secretary Local Govt Board 9 0
2015-16 D.G Larkana Development Authority 8 0
LGD 2015-16 D.G SBCA 24 0
2015-16 D.GSBCA (KDA Officials) 23 0
2015-16 PD SMBB Township 8 0
2015-16 D.G. Lyari Development Authority 4 1.029
KMC 2015-16 Karachi Institute of Heart Diseases, KMC 10 0
TOTAL 1.029

D.G SBCA (Para-24)

Sr. Name of Registration
Name of Official Department Model
No. Vehicle No.
01 Mr. Mohammad Shahid Director CIIM, KMC Suzuki Cultus 2005 GL-7341
Director, Archives &
02 Mr. Mohammad Adnan Qureshi Suzuki Mehran 2003 GL-7140
Research, KMC
Xen, Engineering
03 Mr. Mohammad Masood Khan Suzuki Carry 1980 GL-5120
Department, KMC
Syed Nasir Shah & Ex-Minister
Toyota Hilux
04 Transport & then Ex- Minister GoS - GS-5492
Vigo
Food
05 - Add: Secretary, LG Honda City - GL-2244

D.G SBCA (Para-23)

Sr. No. Name of Vehicle Registration No.
01 Suzuki Hi-Roof GL-5146
02 Suzuki Hi-Roof GL-6069

494
 D.G SBCA (Para-23)
Sr. No. Name of Vehicle Registration No.
03 Suzuki Hi-Roof GL-5534
04 Suzuki Car GL-0325
05 Suzuki Car GL-0084
06 Suzuki Van GL-5214
07 Suzuki Van GL-5220
08 Suzuki Jeep GL-3150
09 Suzuki Hi-Roof GL-5178
10 Suzuki Margalla GL-0062
11 Suzuki Margalla GL-0063
12 Suzuki Van GL-5138
13 Suzuki Jeep GL-3337

Secretary Local Govt & HTP (Para-8)

S# Name of Officer/Official to Whom Vehicle Allotted Detail of Vehicles
1 Mr. Ali Ahmed Lund, Former Secretary LGD Toyota Corolla GS-7126
2 Mr. Riaz Hussain Sahito, Former D.S (Gen) LGD Cultus GSB-125
3 Mr. Faheem Akhtar Junejo, Supdtg. Engineer, HDA Suzuki Cultus GS-6781

Secretary Local Govt Board (Para-09)

S# Vehicle No Type Retained By
1 GS-5428 Toyota Corolla Minister PHE&RDD
2 GS-0522 Suzuki Margalla Former SS (Tech) LGD
3 GS-9887 Toyota Corolla Ex-Minister LG

D.G Larkana Development Authority (Para-08)

S.No Vehicle Type with Model Registration Remarks
1 Toyota Corolla GLI GS-9006
2 Toyota Corolla GLI Metallic Gray AFR
3 Suzuki Alto VXR 1000cc GS-9011
4 Suzuki Cultus 1000cc AFR
5 Mehran VXR 800 cc AFR Vehicles are in custody of Ex. D.G Dr
6 Alto 800cc GS-9012 Asghar Abbas Shaikh & Ex. Assistant
7 City (Honda) 2015 Secretary, Noor Nabi Shaikh
8 Suzuki Swift 2013
9 Margala GS-0024
10 06 Motor Bikes -
11 03 Split A.C with Stablizer -

495
 D.G Lyari Development Authority (Para-04)
S During F.Y
To Whom Allotted Vehicle No POL Quota Avg Rate P/Month
# 2015-16
1 Ex-DG, LDA GS-5646 250 70 17,500 210,000
2 Ex-Engineer SMBBT GS-5790 175 70 12,250 147,000
3 Ex-Engineer (Agha Nafees) GS-195-B 125 70 8,750 105,000
4 Ex-Engr HB-II GS-467-B 175 70 12,250 147,000
5 Ex-Engr.HB-I (Agha Nafees) GL-4882 175 70 12,250 147,000
Ex-Engg. (E&M) Yarwer
6 GS-757-B 175 70 12,250 147,000
Mehdi
7 Ex-Engineer (Safdar) GS-9799 150 70 10,500 126,000
Total (Tentative/Approximately) 1,029,000

PD SMBB Township 9Para-08)

S# To Whom Allotted Vehicle Make
01 Ex-Minister LGD KT-1398 Toyota Vigo
02 Ex-Secretary, LGD GS-447-B Toyota Corolla
03 P.D SMBBT GS-445-B Toyota Hilux Double Cabin

496
 ANNEXES
PUBIC HEALTH ENGINEERING
DEPARTMENT

497
 Annex-PHE1

Non-Production of Record

(Rupees in Million)
Sr. Name of Office Amount
1 XEN, Public Health Engineering, Division-I, Khairpur 0
2 XEN, Public Health Engineering, Shikarpur 35.553
3 Chief Engineer, PHE, Hyderabad 0
4 XEN, PHE, Dadu 40.144
5 XEN, PHE, Jamshoro 21.657
6 SE, PHE, Hyderabad 0
7 XEN, PHE, Badin 0
8 XEN, PHE, Matiari 3.000
9 XEN, PHE, Naushahro Feroze 47.546
10 XEN, PHE, Shaheed Benazirabad 41.521
11 XEN, PHE, Mirpurkhas 200.00
Total 389.421

Non-Production of Record related to POL Consumption

[Rupees in Million]
Sr. Offices / Zones POL Expenditure
1. Chief Engineer, PHE, Hyderabad 0.530
2. XEN, PHE, Jamshoro 0.652
3. SE, PHE, Hyderabad 0.177
4. XEN, PHE, Badin 0.600
5. XEN, PHE, Hyderabad 0.523
6. XEN, PHE, Naushahro Feroze 1.189
7. XEN, PHE, Shaheed Benazirabad 0.957
Total 4.628

498
 Annex-PHE2

(Rupees in Million)
Sales Tax
Sr. Formation Expenditure Amount of Tax
1 XEN, Public Health Engineering, Shikarpur 28.432 3.98
2 XEN, Public Health Engineering, Dadu 12.427 1.74
3 XEN, Public Health Engineering, Badin 41.400 1.159
4 XEN, PHE, Tharparkar @ Mithi 68.809 1.926
5 XEN, PHE, Tando Muhammad Khan 15.623 2.344
6 XEN, PHE, Ghotki 178.715 5.275
7 XEN, PHE, Naushahro Feroze 138.965 19.455
1 XEN, PHE, Tando Muhammad Khan 6.088 1.035
2 XEN, PHE, Larkana 15.650 2.661
Income Tax
1 XEN, PHE Hyderabad 20.9 1.045
Stamp Duty
1 XEN, PHE, Jamshoro 0.493
2 XEN, PHE, Mirpurkhas 0.087
3 XEN, PHE, Tharparkar @ Mithi 0.678
4 XEN, PHE, Umerkot 0.350
5 XEN, PHE, Naushahro Ferzoe 0.283
6 XEN, PHE, Shaheed Benazirabad 0.106
Grand Total 42.617

499
 Annex-PHE3

Payment of Land without Obtaining Ownership

(Amount in Rupees)
Date of Cheque No
Sr. Bill No Contractor Work Amount
Bill & Date
Lum sum Payment for Land
M/s Asstt.
2390131 Acquisition at Disposal work at
1 H-227 28.6.2016 Commissioner/LAO 7,200,000
Dt.28.6.2016 New Hyder Shah Colony for
Mirpur Mathelo
U/D/S Mirpur Mathelo
M/s Asstt. Lum sum Payment for Land
2390132
2 H-228 28.6.2016 Commissioner/LAO Acquisition at Water work for 7,200,000
Dt.28.6.2016
Daharki U/W/S/S Daharki
M/s Asstt. Payment of Land Acquisition at
2390133
3 H-229 28.6.2016 Commissioner/LAO Disposal Work at Kalhora Phatak 1,034,500
Dt.28.6.2016
Mirpur Mathelo Zone for U/D/S Mirpur Mathelo
Lum sum Payment for Land
M/s Asstt.
2390134 Acquisition at Disposal work at
4 H-230 28.6.2016 Commissioner/LAO 4,266,500
Dt.28.6.2016 Gharibabad Zone for U/D/S
Mirpur Mathelo
Mirpur Mathelo
Total 19,701,000

500
 Annex-PHE4

Unjustified Payment for 3rd Party Monitoring

[Amount in Rupees]
Sr. Bill No & Cheque No
Paid to On a/c of Charged to Amount
No Date & Date
1% Third Party
H-224 2390113 Urban Water Supply
1 Validation 650,000
Dt.28.6.2016 Dt.28.6.2016 Scheme Daharki
Charges
1% Third Party Urban Drainage
H-225 2390114
2 Deputy Director Validation Scheme Mirpur 500,000
Dt.28.6.2016 Dt.28.6.2016
(MEC) P&D Charges Mathelo
Department GoS 1% Third Party
H-226 2390115 Urban Drainage
3 Karachi Validation 500,000
Dt.28.6.2016 Dt.28.6.2016 Scheme Ghotki City
Charges
1% Third Party Urban Drainage
H-188 1979981
4 Validation Scheme Mirpur 1,710,000
Dt.26.6.2015 Dt.26.6.2015
Charges Mathelo
Total 3,360,000

501
 Annex-PHE5

Award of Works to Higher Bidder

[Amount in Rupees]
Name of Work [SPPRA Cost Comparison
Amount Ranking
No.27847] N.I.T No: offered with Reasons for
S.No Name of Firm or Bidder of Award in Terms Remarks
TC/G-148/662 Dated 20- by the estimated Acceptance/Rejection
of Work of cost
04-2016 bidder cost
List of PHED
1st 20.47 %
M/S Raza Constructor 772,044 Non-responsive works not
Lowest below
1- Paver Block and provided
1-A Drains at village Kundo List of PHED
Unar 3rd 0.25 % works provided and
Mr. Safdar Ali Channa 973,182 973,182 Responsive
Lowest above recommended for
award of work
List of PHED
2- C.C.Block & Drainage 1st 2.27 % works provided and
1-B M/S Raza Constructor 1,463,026 Responsive
at Gaheja Lowest above recommended for
award of work
Mr. Maqsood Ahmed 4th 0.02 % List PHED work
10- Construction of Paver 1,932,634 Non-responsive
Shaikh Lowest Above not provided
block and drains in
List of PHED
2-A Khalifa Muhalla Khalifa
M/S Akhtar Muhammad 5th 1.83 % works provided and
Nasarullah Street 1,967,551 1,967,551 Responsive
& Brothers Lowest Above recommended for
Shikarpur
award of work
8- Paver Block and List of PHED
Drains at village Mr. Maqsood Ahmed 3rd works provided but
2-B 2,023,045 4.45% above Responsive
Faqeerabad U.C Jindo Shaikh Lowest work awarded to
dero Taluka Garhi Yasin 1st Lowest
Total 2,940,733

502
 ANNEXES
DMCs KARACHI

503
 Annex-DMC1

Non-Deduction / Deposit of Taxes

(Amount in Rupees)
S# Name of DMC/Zone Sales Tax
1 West (Keamari Zone) 17,952,729
2 Korangi 2,515,097
3 East (Gulshan-e-Iqbal Zone) 22,118,003
4 East (Jamsheed Zone) 9,775,911
5 South 14,094,348
6 DMC, Malir 950,000
7 Central 1,332,462
8 South 1,326,325
9 DMC Malir 95,021
Total 70,159,896
Non-Deduction/Non-Deposit if Income Tax
1 Korangi 223,783
2 DMC Malir 380,000
3 DMC Central 1,530,240
Total 2,134,023
Grand Total 72,293,919

Annex-DMC2

Non-Recovery of Outstanding Dues

[Amount in Rupees]
No. of Outstanding
Sr. Location
defaulters as on 30-6-16
1 Karsaz road 15 9,343,750
2 Agha khan road/Pir Sibghatullah Road/ Stadium Road 12 1,078,125
3 Rashid Minhas road 25 4,087,500
4 Shaheed-e-Millat road 20 2,925,000
5 University road 57 6,281,250
6 Sir Shah Suleman Road 20 2,925,000
7 A-Shabbir Ahmed Usmani Road 28 2,278,125
8 Tipu Sultan Road 3 225,000
9 Abul Hassan Isphani Road 4 300,000
10 Jamaluddin Afghani road 2 328,125
11 Hyder Ali Road 2 328,125
12 Gulistan-e-Johar road 6 628,125
Total 194 30,728,125

504
 ANNEXES
HYDERABAD DIVISION

505
 Annex-Hyd1
Doubtful Payments / Suspected Withdrawal from Public Money

(Rupees in million)
Sr. Formation Particulars Para # Amount
CMO, Municipal
Payment made on computer generated bills without
1. Committee, Qasimabad, 3 0.541
invoice number and NTN number
District Hyderabad
CMO, Municipal Payment made on computer generated bills without
2. Committee, Tando Jam, invoice number and NTN number mentioned on the 8 1.780
District Hyderabad bills
Payment made on fake quotations on plain papers
Town Officer, Town which was computer printed, same handwriting on all
3. Committee, Mirpur Sakro, quotations. Work order, quotation, bill of 8 12.255
District Thatta supplier/contractor were without outward/serial
numbers and without date
CMO, Municipal Payment made on computer generated bills without
4. Committee, Hala, District invoice number and NTN number mentioned on the 13 0.190
Matiari bills
Payment made on computer generated bills without
CMO, Municipal
invoice number and NTN number mentioned on the
5. Committee, Matiari, District 6 6.633
bills, moreover the quotation and payment vouchers,
Matiari
bills were also not signed.
Town Officer, Town Payment made on computer generated bills without
6. Committee, New Saeedabad, invoice number and NTN number mentioned on the 11 0.266
District Matiari bills
Town Officer, Town Payment made on computer generated bills without
7. Committee, Mirpur Bathoro, invoice number and NTN number mentioned on the 8 19.492
District Sujawal bills
Payment made on fabricated vouchers, likewise
Town Officer, Town
notice of inviting quotations and supply/work orders
8. Committee, Sujawal, 4 5.476
were issued without having outward number and
District Sujawal
dated (Blank)
misappropriated public funds fabricated bills and
CMO, Municipal quotations. Since, bills and quotations found self-
9. Committee, Matiari, District generated, even pattern, without signature of the 2 0.791
Matiari, 2015-16 contractors, without reference numbers, date and
address and SRB and FBR Registration Numbers
Municipal Officer,
10. Withdrawal of funds from NBP during 2014-15 16 1.211
Municipal Committee, Dadu
Suspicious withdrawal of salaries of staff from the
11. bank in the name of Staff members without 3 26.111
Town Officer, Town justification
Committee, Mirpur Sakro, Suspicious withdrawal of funds from the bank in the
12. 6 2.190
District Thatta name of Staff members without justification
Suspicious withdrawal of funds from the bank in the
13. 7 4.898
name of private persons without justification
14. Town Officer, Town Withdrawal of funds by Assistant Commissioner by 7 0.455

506
 (Rupees in million)
Sr. Formation Particulars Para # Amount
Committee, New Saeedabad, sanctioning approval prior to his taking charge (pre-
District Matiari dating)
Chief Officer, District Suspicious withdrawal of funds from the bank in the
15. 5 0.487
Council, Sujawal, name of Staff members without justification
Withdrawal of funds by Assistant Commissioner by
16. Town Officer, Town sanctioning approval prior to his taking charge (pre- 6 0.965
Committee, Sujawal, District dating)
Sujawal Suspicious withdrawal of funds from the bank in the
17. 9 0.550
name of staff members without justification
Town Officer, Town
Suspicious withdrawal of funds from the bank in the
18. Committee, Jati, District 12 4.049
name of staff members without justification
Sujawal
CMO, Municipal
19. 14 0.276
Committee, Hala 2014-15 Procurement of various items against bills/invoices
CMO, Municipal without invoice number and NTN number,
20. 8 0.951
Committee, New Saeedabad supporting vouchers, delivery challans, entry in stock
Administrator, Town register and measurement books were not produced
21. Committee, Mirpur Bathoro for verification. 14 2.076
2014-15
Total 91.643

507
 Annex-Hyd2
Non-Production of Record

(Amount in Rupees)
Sr. Name of Office AIR No. F.Y Amount
01 HMC, District Hyderabad 01 2015-2016 107,291,269
02 CMO, MC, Qasimabad, District Hyderabad 19 2015-2016 0
03 CMO, MC, Tando Jam, District Hyderabad 01 2015-2016 0
04 CMO, MC, Kotri, District Jamshoro 01 2015-2016 0
05 TO, TC, Thana Bula Khan, District Jamshoro 01 2015-2016 0
06 TO, TC, Manjhand, District Jamshoro 01 2015-2016 120,000,000
07 TO, TC, Mahar, District Dadu 01 2015-2016 5,434,627
08 CMO, MC, Thatta, District Thatta 01 2015-2016 0
09 CMO, MC, Ghorabari, District Thatta 01 2015-2016 4,500,000
10 CMO, MC, Mirpur Sakro, District Thatta 01 2015-2016 10,700,000
11 CMO, MC, Matli, District Badin 09 2015-2016 5,093,636
12 TO, TC, Talhar, District Badin 01 2015-2016 63,838,218
13 CMO, MC, Hala, District Matiari 01 2014-2015 0
14 CMO, MC, Matiari, District Matiari 01 2014-2015 12,062,449
15 CMO, MC, Matiari, District Matiari 05 2014-2015 931,600
16 TO, TC, New Saeedabad, District Matiari 30 2014-2015 0
17 CMO, MC, Tando Allahyar, District Tando Allahyar 01 2015-2016 1,326,564
18 TO, TC, Jhando Mari, District Tando Allahyar 01 2015-2016 0
19 TO, TC, Jhando Mari, District Tando Allahyar 02 2015-2016 0
20 TO, TC, Mirpur Bathoro, District Sujawal 01 2014-2015 12,034,111
21 CMO, MC, Sujawal, District Sujawal 01 2014-2015 84,314,112
22 TO, TC, Jati, District Sujawal 01 2014-2015 609,619
Total 428,136,205

Non-Production of Supporting Record of POL

(Amount in Rupees)
AIR
Sr. Name of Office F.Y Amount
Para
1 Hyderabad Municipal Corporation, District Hyderabad 40 2015-16 34,840,072
Administrator/CMO, Municipal Committee Qasimabad District
2 14 2015-16 10,337,627
Hyderabad
Administrator/CMO, Municipal Committee Tando Jam District
3 18 2015-16 7,800,960
Hyderabad
4 Administrator/CMO, Municipal Committee Sehwan District Jamshoro 11 2015-16 13,125,447
5 Administrator, Town Committee, Thana Bula Khan District Jamshoro 8 2015-16 2,955,418
Administrator, Municipal Committee Tando Muhammad Khan District
6 12 2015-16 5,826,232
Tando Muhammad Khan
Administrator, Municipal Committee Bulri shah Karim, District Tando
7 13 2015-16 493,000
Muhammad Khan

508
 (Amount in Rupees)
AIR
Sr. Name of Office F.Y Amount
Para
8 Administrator, Municipal Committee Dadu, District Dadu 18 2014-15 5,065,148
9 Administrator, Municipal Committee K.N. Shah, District Dadu 17 2014-15 1,379,241
10 Administrator, Municipal Committee Mehar, District Dadu 15 2014-15 6,096,159
11 Administrator, Town Committee, Juhi, District Dadu 11 2014-15 5,636,019
12 Chief Municipal Officer, Municipal Committee Thatta, District Thatta 4 2015-16 9,402,714
13 Town Officer, Town Committee Ghora Bari, District Thatta 9 2015-16 5,759,401
14 Town Officer, Town Committee Mirpur Sakro, District Thatta 21 2015-16 4,197,759
15 Administrator, Municipal Committee Badin, District Badin 4 2015-16 8,993,000
16 Administrator, Municipal Committee Matli, District Badin 12 2015-16 4,637,549
17 Administrator, Town Committee, Shaheed Fazil Rahu District Badin 5 2015-16 6,280,391
18 Administrator, Town Committee, Tando Bago, District Badin 12 2015-16 6,945,707
19 Administrator, Municipal Committee Hala, District Matiari 16 2014-15 9,262,878
20 Administrator, Municipal Committee Matiari, District Matiari 12 2014-15 5,827,769
21 Administrator, Town Committee, Jati, District Sujawal 2014-15 10 2014-15 4,677,437
22 Town Officer, Town Committee Matiari 14 2015-16 2,680,115
23 Town Officer, Town Committee Hala 9 2015-16 7,652,890
24 Town Officer, Town Committee New Saeedababd 15 2015-16 2,529,144
25 Chief Officer, District Council, Dadu 02 2014-15 1,086,936
26 Chief Officer, District Council, Sujawal 03 2014-15 270,924
27 Town Officer, Town Committee, Sujawal 08 2014-15 1,742,404
28 Town Officer, Town Committee, Jati 14 2014-15 1,833,166
Total 177,335,507

509
 Annex-Hyd3
Non-Recovery of Targeted Receipt

[Amount in Rupees]
Sr. Name of Offices Para Estimate Recovery Shortfall
1. Administrator/MC, Hyderabad Municipal Corporation 47 11,070,500 411,000 10,659,500
2. Administrator/CMO, Municipal Committee Qasimabad 19 5,194,915 2,140,629 3,074,286
3. Administrator/CMO, Municipal Committee Tando Jam 20 5,960,000 429,390 5,530,610
4. Administrator/CMO, Municipal Committee Kotri 6 21,171,749 260,720 20,911,029
5. Administrator/CMO, Municipal Committee Kotri 7 11,797,940 5,158,185 5,694,998
6. Administrator/CMO, Municipal Committee Kotri 12 9,626,195 512,933 9,113,262
7. Administrator/CMO, Municipal Committee Sehwan 3 1,819,000 0 1,819,000
8. Administrator, Town Committee, Thana Bula Khan 3 4,375,277 433,900 3,941,377
9. Administrator, Municipal Committee Tando Muhammad Khan 19 5,552,254 906,884 4,645,370
10. Administrator, Municipal Committee Dadu 27 16,244,000 3,547,829 12,696,171
11. Chief Officer District Council, Dadu 5 9,587,138 2,849,825 6,737,313
12. Administrator, Municipal Committee K.N. Shah 25 1,608,050 532,709 1,075,341
13. Administrator, Municipal Committee Mehar 27 14,731,010 8,216,817 6,514,193
14. Administrator, Town Committee, Juhi 16 3,653,626 386,885 3,266,741
15. Administrator, Municipal Committee Badin 3 31,147,847 2,821,021 28,590,135
16. Administrator, Municipal Committee Badin 5 2,721,945 885,540 1,836,405
17. Administrators, Town Committee Shaheed Fazil Rahu 3 6,952,689 1,029,423 5,923,266
18. Administrators, Town Committee Tando Bago 13 7,507,449 752,253 6,755,196
19. Administrator, Municipal Committee Hala 3 4,450,000 358,157 4,091,843
20. Administrator, Municipal Committee Hala 4 4,481,250 3,738,500 786,500
21. Administrators, Town Committee New Saeedabad 15 1,567,788 1,052,575 515,213
22. Town Officer, Town Committee Matiari 31 3,975,000 1,150,457 2,824,543
23. Town Officer, Town Committee Hala 24 4,816,051 1,032,456 3,783,595
24. Town Officer, Town Committee New Saeedababd 26 1,299,060 165,489 1,133,571
Total 191,310,733 38,773,577 151,919,458

510
 Annex-Hyd4

Non-Deduction of Sales Tax on Services

(Amount in Rupees)
Sales tax
Sr. Name of Office AIR No. F.Y Expenditure
Amount
1. HMC, Hyderabad 30 2015-2016 6,307,601 1,072,291
2. -do 22 2015-2016 65,133,541 9,118,696
3. -do- 7 2015-2016 81,789,447 12,553,415
4. MC, Qasimabad 7 2015-2016 9,303,926 1,361,472
5. -do- 8 2015-2016 17,153,553 2,573,032
6. -do- 10 2015-2016 16,360,000 2,290,400
7. -do- 13 2015-2016 6,500,000 944,444
8. CMO, MC, Hyderabad Rural (Tando Jam 14 2015-2016 7,663,448 1,302,786
9. TO, TC, Sehwan, District Jamshoro 1 2015-2016 336,150 57,146
10. TO, TC, Manjhand, District Jamshoro 2 2015-2016 1,834,700 311,899
11. TO, TC, Talhar, District Badin 2 2015-2016 789,123 126,260
12. CMO, MC, Tando Allahyar 9 2015-2016 1,036,267 176,165
13. MC, Kotri 4 2015-2016 762,640 129,647
14. MC, Sehwan 2 2015-2016 180,460,260 28,873,102
15. MC, Manjhand 3 2015-2016 155,330 21,742
16. MC, Tando Muhammad Khan 15 2015-2016 1,511,000 151,100
17. MC, Dadu 10 2015-2016 5,875,944 881,392
18. MC, Khairpur Nathan Shah 6 2015-2016 1,721,869 258,280
19. MC, Mehar 7 2015-2016 2,276,442 341,466
20. MC, Badin 2 2015-2016 2,283,940 365,430
21. MC, Shaheed Fazil Rahu 1 2015-2016 2,009,187 301,378
22. TC, Matiari 3 2015-2016 3,725,738 521,603
23. -do- 27 2015-2016 1,617,806 161,781
24. TC, Hala 2 2015-2016 1,259,352 176,309
25. -do- 21 2015-2016 4,010,600 401,060
26. TC, New Saeedabad 6 2015-2016 2,833,003 396,620
Total 424,710,867 64,868,916

511
 Annex-Hyd5
Non–deposits of Income Tax into Treasury
(Amount in Rupees)
Non-deposited Total
Sr. Description At the rate Amount
income tax period
(a) (b) (d) (e) (f) g=d+f
Administrator, Hyderabad Municipal Corporation, District Hyderabad, 2015-16 [AIR Para:28]
391,433 +
Income Tax collected or deducted KIBOR +
1 6,691,168 809,240 = 7,885,541
on account of various bills works 3% P/Q
1,194,373
Administrator, Municipal Committee, Tando Jam, District Hyderabad, 2015-16 [AIR Para:4]
DEDUCTED AT THE TOTAL AMOUNT
Sr. DESCRIP.
TAX @ 7.5% RATE PERIOD (d + f)
(a) (b) (d) (e) (f) (g)
Income Tax collected or deducted 161,981 +
5,747,325 KIBOR +
1 on account of various works 3,263,150
- 2,978,424 3% P/Q 332,268
(Excluding POL and Utility Bills)
Unpaid IT and Surcharges 2,768,901 494,249 3,263,150
Administrator/CMO, Municipal Committee Tando Allah Yar, District Tando Allahyar, [AIR Para:4]
Income Tax collected or deducted
1 on account of various works 16,660,000 - - 16,660,000
(Excluding POL and Utility Bills)
Administrator/TO, Town Committee (Jhando Mari) District Tando Allah yar [AIR Para:3]
Income Tax collected or deducted
1 on account of various works 1,387,440 - - 1,387,440
(Excluding POL and Utility Bills)
Administrator/TO, Town Committee Jati, District Sujawal [AIR Para:9]
Tax non-
Average
Sr. Detail deposited Surcharge Total to be deposited
expenditure
upto Jun’15
1 Jul-14 11,542,390 582,242 104,803.56 687,045.56
2 Aug-14 11,542,390 582,242 95,902.44 678,144.44
3 Sep-14 11,542,390 582,242 87,001.31 669,243.31
4 Oct-14 11,542,390 582,242 78,387.32 660,629.32
5 Nov-14 11,542,390 582,242 69,486 651,728.20
6 Dec-14 11,542,390 582,242 60,872.20 643,114.20
7 Jan-15 11,542,390 582,242 51,971.08 634,213.08
8 Feb-15 11,542,390 582,242 43,069.96 625,311.96
9 Mar-15 11,542,390 582,242 35,030.23 617,272.23
10 Apr-15 11,542,390 582,242 26,129.11 608,371.11
11 May-15 11,542,390 582,242 17,515.12 599,757.12
12 Jun-15 11,542,390 582,242 8,901.12 591,143.12
Sub-total 138,508,680 6,986,904 679,070 7,665,974
Town Officer, Town Committee Matiari, 2015-16 [AIR Para:4]
1 Income Tax 10,000,000 2015-16 10,000,000
Total 46,862,105

512
 Annex-Hyd6

Non-Recovery of Outstanding Dues

(Amount in Rupees)
Sr. Formation Amount
1. Administrator, Hyderabad Muncipal Corporation, District Hyderabad 2,985,600
2. Administrator, Municipal Committee, Qasimabad, District Hyderabad 133,400
3. Administrator, Municipal Committee, TMK, District Tando Muhammad Khan 227,300
4. Administrator, District Council, Dadu 2,212,186
5. Administrator, Municipal Committee, Thatta, District Thatta 2,334,218
6. Administrator, Town Committee, New Saeedabad, District Matiari 995,351
7. Administrator, Municiipal Committee, Tando Allahyar, District Tando Allahyar 2,596,762
8. Town Officer, Town Committee Matiari 161,781
9. Town Officer, Town Committee Hala 401,060
Total 12,047,658

Annex-Hyd7
Non-Reconciliation of Electricity Dues

(Amount in Rupees)
Sr. Name of Department F.Y. Department Code Amount
AIR Para: 08
TMA, Jamshoro 2015-16 37271 2,705,121,459
1 Municipal Committee, Kotri 2015-16 37251 1,354,480,629
Municipal Committee, Kotri 2015-16 33101 5,810,725
Sub-total 4,065,412,813
AIR Para: 10
2 Town Committee, Sehwan Sharif 2015-16 37331 884,610,664
Sub-total 884,647,995

AIR Para: 06
2015-16 20 37225 0054440 R 985,150
2015-16 28 37225 0047915 R 2,288,929
2015-16 20 37225 0054422 R 16,909,760
3 Town Committee, Thana Bula Khan
2015-16 20 37225 0048431 R 53,206,388
2015-16 20 37225 0054424 R 14,929,578
2015-16 20 37225 0048432 R 45,775,925
Sub-total 134,095,730
AIR Para: 04
1 TMA, Sunn (TC, Majhand) 2015-16 37341 564,628,214
Sub-total 564,628,214

513
 (Amount in Rupees)
Sr. Name of Department F.Y. Department Code Amount
AIR Para: 03
Sr. CMO, Thatta FY Meter/connection Arrear
1 TMO water supply makli 2015-16 Old A.c 07372730057780 13,186,234
2 Urban WS Shah jahan Masjid 2015-16 Old A.c 537270057357 5,992,257
3 TMO wss Thatta 2015-16 Old A.c 2372710059100 2,731,119
4 Urban WS Shah jahan Masjid 2015-16 Old A.c 537270057358 1,232,425
5 TMO wss Shaikh fareed 2015-16 Old Ac 07372730057750 12,315,864
6 TMO WSS Naka Thatta 2015-16 Old Ac 08372710057740 551,736
7 TMO WSS Makli 2015-16 Old A.c 07372730057790 1,052,222
8 TMO WSS Near Gh Hussain Pump 2015-16 Old A.c 24372730028049 971,023
9 TMA WSS Shah Murad road 2015-16 Old A.c 24372710000070 358,427
Sub-total 38,391,307
Total 5,687,176,059

514
 Annex-Hyd8

Award of Contracts without Tender

(Amount in Rupees)
Sr. Formation Amount
1. CMO, Municipal Committee, Qasimabad [AIR Para: 5] 5,667,144
2. CMO, Municipal Committee, Kotri [AIR Para: 9] 3,098,735
3. CMO, Municipal Committee, Sehwan [AIR Paras: 8] 6,168,275
4. TO, Town Committee, Majhand [AIR Paras: 5] 1,834,700
5. CMO, Municipal Committee, Tando Muhammad Khan [AIR Paras: 6] 1,130,881
6. CMO, Municipal Committee, Tando Muhammad Khan [AIR Paras: 7] 335,000
7. TO, Town Committee, Bulri Shah Karim [AIR Paras: 10] 1,346,600
8. TO, Town Committee, Tando Ghulam Hyder [AIR Paras: 09] 1,473,629
9. CMO, Municipal Committee, Dadu 2014-15 [AIR Paras: 14] 4,920,640
10. TO, Town Committee, Khairpur Nathan Shah [AIR Paras: 07] 450,000
11. TO, Town Committee, Khairpur Nathan Shah [AIR Paras: 13] 2,046,284
12. TO, Town Committee, Mehar [AIR Paras: 10] 1,389,816
13. TO, Town Committee, Mehar [AIR Paras: 11] 3,221,416
14. TO, Town Committee, Shaheed Fazil Rahu [AIR Paras: 11] 4,400,000
15. TO, Town Committee, Mirpur Sakro [AIR Paras: 5] 4,000,000
16. TO, Town Committee, Tando Bago [AIR Paras: 6] 1,752,750
17. TO, Town Committee, Tando Bago [AIR Paras: 7] 1,897,260
18. CMO, Municipal Committee, Hala [AIR Paras: 12] 344,592
19. CMO, Municipal Committee, Tando Allahyar [AIR Paras: 5] 853,888
20. TO, Town Committee, Jhando Mari [AIR Paras: 6] 449,000
21. TO, Town Committee, Mirpur Bathoro [AIR Paras: 13] 2,965,932
22. Town Officer, Town Committee Matiari, during 2015-16 [AIR Para:8] 982,255
23. Town Officer, Town Committee Hala, during 2015-16 [AIR Para:3] 337,840
24. Town Officer, Town Committee New Saeedababd, during 2015-16 [AIR Para:5] 589,706
25. Town Officer, Town Committee New Saeedababd, during 2015-16 [AIR Para:9] 3,015,079
Total 54,671,422

515
 Annex-Hyd9

Unauthorized Appointment

(Amount in Rupees)
Monthly
Monthly Salary Salary
Nos of Salary
S.No. Branch
New Staff March,
Oct, 2015 (2015-16)
2016
Administrator, Municipal Committee, Tando Muhammad Khan District TMK 2015-16 [AIR Para:13]
1 General 12 168,230 168,230 2,018,760
2 Accounts 1 12,966 12,966 155,592
3 Engineering 3 41,801 41,801 501,612
4 Water Supply 11 144,233 144,233 1,730,796
5 Beatification 2 27,766 27,766 333,192
6 Encroachment 1 14,800 14,800 177,600
7 Garden 6 76,596 76,596 919,152
8 Library 1 12,766 12,766 153,192
9 Fire Brigade 4 53,623 53,623 643,476
10 Taxation 15 203,660 203,660 2,443,920
11 Sanitation 51 653,616 653,616 7,843,392
12 Drainage 2 28,070 28,070 336,840
TOTAL 109 17,257,524
Administrator, Municipal Committee, Thatta District Thatta 2015-16 [AIR Para:18]
Salary
S.No Details Cheque date Amount
month
1 Contract employees various UC 15925884 24.2.16 Pay 1/16 379,125
Contract employees
2 15925884 24.2.16 Pay 1/16 112,750
helper/beldar
3 Contract employee F.B 15925884 24.2.16 Pay 1/16 24,000
Daily wages staff in UC
4 15925884 24.2.16 Pay 1/16 40,000
Jungshahi
5 Contract staff beldar/NQ 15925884 24.2.16 Pay 1/16 89,330
6 Contract basis staff 15925884 24.2.16 Pay 1/16 510,757
7 Daily wages Beldar/helper 15925884 24.2.16 Pay 1/16 80,000
Amount for one
1,235,962
month
Total for one year 14,831,544
Total 32,089,068

516
 Annex-Hyd10

Unauthorized Revision of Estimates without Calling Fresh Tenders

[Amount in Rupees]
Scheme Original Revised Increased Excess
Sr. Name of work Total exp.
no. estimate estimate in % revision
Town Officer, Town Committee, New Saeedabad
Const. of surface drain
Above
1. for soomra / hajana 04 1,000,000 2,299,000 1,299,000 843,667
125%
muhalla ns town
Const. of cc block at
Above
2. haji kamil jamali 06 2,000,000 3,045,500 1,045,000 2,461,354
50%
colony ns town
Const. of cc block at
Above
3. house of asghra shah 39 1,000,000 2,503,780 1,503,780 2,124,354
150%
to yuqoob channa ns
Surface drain from
Above
4. mehran colony to shop 16 700,000 1,209,500 509,500 1,024,572
50%
of dost ali umrani
Const. of cc topping
APPROX
5. for street no. 1 ward 24 541,000 975,000 434,000 823,253
100%
no. 04 new saeedabad
CC topping for mochi
Above
6. masjid to khaskheli 28 275,000 900,500 625,500 763,536
200%
muhalla ns town
Total 5,516,000 10,933,280 - 5,416,780 8,040,736
Sub-division Hyderabad City (HMC)
P/F Pavers at Dehli Sheer Maal to
1 Kalo Pakore Wala UC 09 City 2,000,000 4,000,000 100% 2,000,000 3,997,475
Hyderabad
P/F Pavers from service shop to
2 firdous Filling station at both 1,200,000 2,400,000 100% 1,200,000 2,390,642
sides of UC 09 City Hyderabad
Total 3,200,000 6,400,000 - 3,200,000 6,388,117
Grand Total 14,428,853

517
 Annex-Hyd11
Un-authorized Use of Vehicles Without Registration
Sr. Vehicle Type with Model Status Handed over by Condition
CMO, MC, Tando Muhammad Khan (F.Y 2015-2016) AIR No.11
1 Tractor Trolley Un-registered Donated by GOS Running
2 Fire Brigade Lorry (Van) Un-registered Donated by D.C. Running
TO, TC, Tando Ghulam Hyder, District TMK, (F.Y 2015-2016) AIR Para No.14
1 Fire Birgade Un-registered - On Road
2 Jeep Jimny Un-registered - missing (since 8 Years)
3 Mehran Car Un-registered - missing (since 8 Years)
4 4 NO Rickshaw Un-registered - On Road
5 Tractor Trolley Un-registered - missing (since 8 Years)
CMO, MC, Dadu (F.Y 2014-2015) AIR Para No.21
1 Fire Brigade Hino Un-registered Donated by GoS 1992 On Road
2 Fire Brigade Master Un-registered Donated by GoS 2008 On Road
3 Lifter Machine Un-registered Donated by GoS 2012 On Road
4 Sucker Machine Un-registered Donated by GoS 2012 On Road
5 Vinch Machine Un-registered Donated by GoS 2012 On Road
6 Refuse Van Mzada (Old Un-registered Donated by GoS Off road
7 Refuse Van Mazda-1 Un-registered Donated by GoS (MPA) On Road
8 Refuse Van Mazda-2 Un-registered -do- On Road
9 Refuse Van Mazda-3 Un-registered -do- On Road
10 Tractor MF-240 Un-registered - On Road
11 Tractor MF-350 Un-registered - On Road
12 Dozer Un-registered 2008 On Road
CMO, MC, Hyderabad Rural (Tando Jam) (F.Y 2015-2016) AIR Para No.19
1 Suzuki Mehran Un-registered 2011 On road
2 Suzuki Ravi Pick-up Un-registered 2010 On road
3 Tractor Torlley Un-registered 2008 On road
4 Fire Tender Un-registered 2008 On road
5 Refuse Van Un-registered 2009 On road
6 Tractor with front loader Un-registered 2009 On road
CMO, MC, Hala, Matiari (F.Y 2014-2015) AIR Para No.18
1 Old Tractor Un-registered 1990-91 On road
2 Tractor 4X4 Un-registered 2008 On road
3 Fire Fighter Un-registered 2008 On road
4 Fire Bragade Un-registered 2012 On road
5 Refuse van Un-registered 2009 On road
6 Tractor IMT Un-registered 2014 On road
7 Tractor Rusi 520 Un-registered 2014 On road
Town Officer, Town Committee New Saeedababd, during 2015-16 [AIR Para:13]
1 Fire Brigade (Large) Un-registered 2009 On road
2 Fire Brigade (Small) Un-registered 2009 On road
3 Loader Tractor Un-registered 2009 On road
4 Tractor Trolley Un-registered 2009 On road
5 Shazor Pic Up Un-registered 2009 On road

518
 ANNEXES
MIRPURKHAS DIVISION

519
 Annex-MPK1

Doubtful Technical Sanction of Development Works

[Amount in Rupees]
Sr. W.O/date Contractor Name of work Est.Cost TS
1 3772/16.3.15 Prem chand Constt of water tan 5 nos various villages in UC Bustan 3.000 3,002,500
2 3775/16.3.15 Prem chand Constt of water tan 5 nos various villages in UC Nabisar 3.000 3,002,500
3 3748/16.3.15 M.Hussain Constt of s/drains of all types in Kunri Ward.319 A 1.500 1,500,000
Providing installing PVC pressure pipe 4" dia various places
4 3762/16.3.15 Saifal Kapri 1.500 1,492,350
of WSS kunri
Constt of boundary wall around katcha khada near s.tank WSS
5 3744/16.3.15 Saifal Kapri 2.004 2,004,150
phase-I Kunri
6 3777/16.3.15 Prem chand Constt of water tanks 5 nos various villages in UC Chajro 3.000 3,000,000
7 3780/16.3.15 Prem chand Constt of culverts various places in Tal Kunri 3.000 3,010,500
8 3768/16.3.15 Shah Rukh Repair and maintenance of rest house T.C Kunri 1.201 1,201,300
9 3776/16.3.15 Prem chand Constt of water tanks 5 nos various villages UC Memon Kunri 3.000 3,002,500
10 3779/16.3.15 Prem chand Brick pavement of various link streets of Tal Kunri 3.000 3,002,000
Total 24,217,800

520
 Annex-MPK2

Doubtful Payment Made on account of POL

[Amount in Rupees]

Sr. V.No Date Ch. No. Supplier Particulars Amount

M/s Bostan
1 17 8/8/2014 3854904 Purchase of Petrol and Deisel 55,172
Petroleum Service
M/s Bostan
2 18 8/8/2014 3854905 Purchase of Petrol and Deisel 275,700
Petroleum Service
M/s Bostan
3 14 5/9/2014 3854955 Bill Petrol and Diesel Oil 285,690
Petroleum Service
M/s Bostan
4 51 5/9/2014 689284 Bill Petrol and Diesel Oil 305,494
Petroleum Service
M/s Bostan
5 106 21/10/2014 11640158 Bill Petrol and Diesel Oil 175,195
Petroleum Service
6 107 21/10/2014 11640159 _do_ Bill Petrol and Diesel Oil 398,969
M/s Bostan Payment Diesel Oil and Petrol T.C
7 36 3/10/2014 11640107 385,865
Petroleum Service Kunri
M/s Bostan Payment Diesel Oil and Petrol T.C
8 37 3/10/2014 11640108 283,960
Petroleum Service Kunri
M/s Bostan
9 22 5/11/2014 11857613 Bill Petrol and Diesel Oil 489,025
Petroleum Service
10 23 5/11/2014 11857614 _do_ -do- 389,110
M/s Bostan
11 55 29/12/2014 11857671 Bill Petrol and Diesel Oil 398,000
Petroleum Service
12 58 29/12/2014 11857674 _do_ -do- 390,000
M/s Bostan
13 36 18/3/2015 12635041 Bill Petrol and Diesel Oil 649,480
Petrolium Service
M/s Bostan
14 14 3/4/2015 12635061 Payment Ptrol and Diesel Oil 350,000
Petroleum Service
M/s Gohar
15 15 3/4/2015 12635062 -do- 120,000
Petrolium
M/s Gohar
16 50 3/4/2015 12635099 -do- 120,000
Petroleum
M/s Gohar
17 45 7/5/2015 27645267 Bill Petrol and Diesel Oil 90,000
Petrolium
18 46 7/5/2015 27645268 _do_ -do- 160,000
M/s Bostan
19 29 4/6/2015 13967751 POL Bill 390,000
Petroleum Service
Total 5,711,660

521
 Annex-MPK3

Doubtful expenditure on Pay of Temporary Employees and Labour Charges

[Amount in Rupees]
Date of
Sr. Payee Designation Description Cheque No Amount
Payment
Deputy
Accountant, Purchase of Hand
1 1.9.15 Mr. Farooque Hussain Town Trolly Tyres, Town 43824003 10,250
Committee Committee Jhudo
Jhudo
Deputy
Accountant, Salary of Temporary
2 5.10.15 Mr. Allah Warayo Town Daily Wages Staff. 43824058 424,400
Committee Naukot- May-15
Naukot
Deputy
Accountant, Salary of Temporary
3 5.10.15 Mr. Allah Warayo Town Daily Wages Staff. 43824058 426,600
Committee Naukot- June-15
Naukot
Deputy
Accountant, Salary of Temporary
4 5.10.15 Mr. Allah Warayo Town Daily Wages Staff. 43824059 430,200
Committee Naukot- July-15
Naukot
Deputy
Accountant, Salary of Temporary
5 5.10.15 Mr. Allah Warayo Town Daily Wages Staff. 43824059 420,000
Committee Naukot- August-15
Naukot
Deputy Temporary Staff
6 2.11.15 Mr. Allah Warayo Accountant Salary/Labour 15414914 248,400
Naukot Charges Naukot
Temporary Staff
1.12.15 Deputy
Salary/Labour
7 to Mr. Allah Warayo Accountant 52395926 430,500
Charges Naukot for
10.12.15 Naukot
Sep-2015
1.12.15 Incharge Payment of Miss Bill
8 to Mr. Ali Muhammad Sanitation of Coure Car,Tractor, 52395926 28,660
10.12.15 Branch Jhudo Jeep ETC Jhudo
Purchase/Advance
11.12.15 Incharge
payment for Poision
9 to Mr. Ali Muhammad Sanitation 52395940 50,000
for Killing Dogs
14.12.15 Branch Jhudo
Jhudo

522
 [Amount in Rupees]
Date of
Sr. Payee Designation Description Cheque No Amount
Payment
Deputy Payment of Labour
10 21.12.15 Mr. Allah Warayo Accountant Charges for Sanitation 52395948 266,400
Naukot Naukot- Nov-2015
Payment of Labour
8.1.16 to Deputy Charges Sanitation
11 Mr. Allah Warayo 61844668 199,800
11.1.16 Accountant Branch Naukot, Dec-
2015
Deputy
8.1.16 to Payment of
12 Mr. Farooque Hussain Accountant 61844672 16,210
11.1.16 Telephone Bill
Jhudo
Payment of Labour
12.1.16 Incharge
Charges for Main
13 to Mr. Ali Muhammad Sanitation 61844681 97,200
Nala, Tando Bagho
21.1.16 Branch Jhudo
Road
Payment of Labour
12.1.16 Incharge
Charges for Main
14 to Mr. Ali Muhammad Sanitation 61844681 97,200
Nala, Tando Bagho
21.1.16 Branch Jhudo
Road
Payment of
18.2.16 Deputy Temporary/Daily
15 to Mr. Allah Warayo Accountant Wages for Cleaning 61844701 259,200
25.2.16 Naukot Gattar Nalla, Various
Colonies Naukot
Payment of
18.2.16 Deputy
Temporary/Daily
16 to Mr. Allah Warayo Accountant 61844702 277,500
Wages for Sanitation
25.2.16 Naukot
Naukot
Payment for Labour
Incharge
1.3.16 to Charges for Cleaning
17 Mr. Ali Muhammad Sanitation 61844710 90,600
8.3.16 of Gattar Nala Mir
Branch Jhudo
Para Jhudo
Payment for Labour
Incharge
1.3.16 to Charges for Cleaning
18 Mr. Ali Muhammad Sanitation 61844711 93,900
8.3.16 of Gattar Nala
Branch Jhudo
Khwaja Para Jhudo
15.3.16 Incharge Temporary?Labour
19 to Mr. Khalid Mehmood Sanitation Charge for Sanitation 61844721 240,400
17.3.16 Branch Naukot Branch Naukot
Deputy Payment of
20 2.12.15 Mr. Allah Warayo Accountant Temporary Staff 43824100 430,500
Naukot Salary for Sep-2015
Labour Charges for
Sewerage Line,
Sanitary
21 21.12.15 Mr. Javed Sanitation Branch 52395947 97,200
Inspector Jhudo
Town Committee
Jhudo
Total 4,635,120

523
 Annex-MPK4

Fraudulent Payment of Liabilities

[Amount in Rupees]
Supply
Sr. Cheque No Date Description Agency Date Amount
Order No.
Purchase of Hand M/S Abdul Rasheed
1. 14344165 20.10.15 942 20.9.13 99,900
Pumps Contractor
Purchase of Hand M/S Abdul Rasheed
2. 14344165 20.10.15 623 24.8.12 99,900
Pumps Contractor
Supply of PVC Pipe
M/S Abdul Rasheed
3. 14344165 20.10.15 and Motor Pump 943 20.9.13 90,000
Contractor
Complete
Purchase of Hand M/S Abdul Rasheed
4. 14344165 20.10.15 796 2.1.13 99,800
Pumps Contractor
Supply of Pipes 6" M/S Abdul Rasheed
5. 14344165 20.10.15 874 11.1.13 68,000
Dia Jidah Contractor
Surface Drain and
RCc Slabs Near
Mukhtiar Khan M/S M. Farooque
6. 14344200 3.11.15 853 11.1.13 96,916
House to Nadeem Umar Contractor
Khan House Kot
Ghulam Muhammad
Construction of CC
Plain at Bus Stand
7. 14344201 3.11.15 Dighri, Main Road M/S Irfan Contractor 639 24.8.12 55,225
City Kot Ghulam
Muhammad
Supply of Tractor
Trolly for Removal
of Garbage from M/S Ramchand
8. 171073 6.11.15 7 2.3.14 99,000
Various Places of Contractor
City Kot Ghulam
Muhammad
Supply of Tractor
Trolly for Removal
of Garbage from M/S Ramchand
9. 171073 6.11.15 945 20.9.13 59,400
Various Places of Contractor
City Kot Ghulam
Muhammad
Supply of Tractor
Trolly for Removal
of Garbage from M/S Ramchand
10. 171073 6.11.15 13 1.4.14 95,700
Various Places of Contractor
City Kot Ghulam
Muhammad

524
 [Amount in Rupees]
Supply
Sr. Cheque No Date Description Agency Date Amount
Order No.
Supply of Tractor
Trolly for Removal
of Garbage from M/S Ramchand
11. 171073 6.11.15 6 3.2.14 89,100
Various Places of Contractor
City Kot Ghulam
Muhammad
Supply of Tractor
Trolly for Removal
of Garbage from M/S Ramchand
12. 171073 6.11.15 Nil Nil 85,500
Various Places of Contractor
City Kot Ghulam
Muhammad
M/S Kashi Electric
Purchase of Electric
13. 172507 13.1.16 Store Kot Ghulam Nil 4.1.14 69,500
Material
Muhammad
M/S Kashi Electric
Purchase of Electric
14. 172507 13.1.16 Store Kot Ghulam Nil 4.2.14 60,000
Material
Muhammad
Construction of RCC
Culvert at Boota
M/S Saqib Ali
15. 15848488 1.1.16 House, Village 679 24.8.12 60,596
Contractor
Bdewall, UC
Khudaabad
Purchase of Water M/S Aijaz Hardware
16. 172504 13.1.16 Nil 10.3.14 94,000
Supply Pipes Mirpurkhas
Purchase of Material M/S Aijaz Hardware
17. 172504 13.1.16 Nil 12.4.14 93,800
for Gattar Station Mirpurkhas
Purchase of Water M/S Aijaz Hardware
18. 172504 13.1.16 Nil 10.3.14 98,000
Supply Pipes Mirpurkhas
Purchase of Material M/S Aijaz Hardware
19. 172504 13.1.16 Nil 12.4.14 96,500
SD Mirpurkhas
M/S Nizamuddin
Purchase of
20. 172505 13.1.16 Hardware Kot Nil 24.1.14 90,000
Sanitation Material
Ghulam Muhammad
Purchase of
21. 172505 13.1.16 -do- Nil 7.1.14 83,950
Sanitation Material
Purchase of
22. 172505 13.1.16 -do- Nil 24.1.14 87,850
Sanitation Material
Purchase of
23. 172505 13.1.16 -do- Nil 14.2.14 92,000
Sanitation Material
M/S K.K Paint and
Purchase of Water
24. 172506 13.1.16 Sanitary Store Kot Nil 24.3.14 89,000
Supply Pipes
Ghulam Muhammad
Total 2,053,637

525
 Annex-MPK5

Non-Production of Record
[Rupees in Million]
Sr. Year Name of office Description Amount
Personal files of Officer and Officials. 0
1 2014-15 District council Mirpurkhas
Service Books of Officials. 0
2 2015-16 T.C Nangarparkar Development Record 18.27
Taxes 0.5
Fees 1.172
Rent and Sale of Plots on rental/Advance Basis 0.17
Charges 0.12
Transfer on A/C of OZT Share 269.616
3 2015-16 T.C nangarparkar
Transfer on A/c of UC OZT Share 0.939
Public Health Staff Pay/VDA 0.04
Bank Profit 0.005
Capital Income 1.465
On Going and Closing Balance 46.676
Personal files / service books. 0
Copy of tenancy agreements / contracts of property. 0
4 2015-16 T.C Digri Bank Statements. 0
List of unserviceable items. 0
Copy of revised budget 2015-16. 0
2014-15 Jhuddo Complete Record 169.503
Personal Files of Officers and Service Books of Staff 0
Cheque, Income Tax, Call Deposit, Tender, Security
Deposit, Work, Property Register, stock/Dead Stock
0
register, Liveries and Consumable articles Registers
etc.
176 Contractor Case Files out of 206, and asome
0
measurement Books excluding List attached
Auction Files 0
List of Machinery and Equipment’s 0
5
2015-16 Jhuddo List of Water Supply/Disposal Schemes and List of
0
Electric Motors and Diesel Engines
Detail of New appointments if any 0
Detail of Staff/Officers transferred and posted here
0
from other Councils
List of Property Quarters, Banglows and Plots etc. 0
Detail of Trade License Issued/Renewed and
0
Recovery and Arrears
Tenant Agreements of Shops/Other Property. 0
Previous Audit Report. 0
Personal Files of Officers and Service Books of Staff 0
Income Tax, Call Deposit, Tender, Security Deposit,
6 2015-16 Kot Ghullam Muhammad
Work register, Property Register, stock/Dead Stock 0
register, Liveries, Loan Register and Consumable

526
 [Rupees in Million]
Sr. Year Name of office Description Amount
articles Registers etc.
Auction Files 0
List of Machinery and Equipment’s 0
List of Water Supply/Disposal Schemes and List of
0
Electric Motors and Diesel Engines
Detail of New appointments if any 0
Bank Statements along with list of Bank Accounts 0
Detail of Trade License Issued/Renewed and
0
Recovery and Arrears Position
Previous Audit Report 0
Total 508.476

527
 ANNEXES
SHAHEED BENAZIRABAD DIVISION

528
 Annex-SBA1
Doubtful Payment on account of Earth Filling

[Amount in Rupees]
S.No V.No Cheque date To whom paid Details Amount
Earth filling shahbaz colony 40
1 74 359746 10.8.15 Shahid & co, nil/21.6.15 100,000
trolly @ 2500
Earth filling shahbaz colony 40
2 364 378241 29.12.15 Shahid & co 100,000
@ 2500
Earth filling shahbaz colony 40
3 262 371573 10.11.15 Shahid & co 100,000
@ 2500
EF Wapda colony by pass 40@
4 265 371574 11.11.15 Shahid & co 100,000
2500
5 263 371573 10.11.15 Shahid & co EF Zaunr Colony 40@2500 100,000
EF Nawabshah road near zero
6 261 371573 10.11.15 Shahid & co 100,000
point
EF Nawabshah road near zero
7 260 371573 10.11.15 Shahid & co 100,000
point
8 259 371572 9.11.15 Shahid & co EF Shahbaz Colony 100,000
9 258 371572 9.11.15 Shahid & co EF Bukhari muhalla disposal 100,000
10 257 371572 9.11.15 Shahid & co EF Sachal colony 100,000
EF main NS road near wheat
11 559 383844 22.4.16 Shahid & co 97,500
research
Sub Total 1,097,500
Cheque register
12 104 768 7.9.15 Shahid & co EF shahbaz colony 100,000
13 367 378243 29.12.15 Shabir Ahmed EF green belt P-B 89,100
14 368 378243 29.12.15 Shabir Ahmed EF green belt P-B 88,031
15 387 378257 12.1.16 Shahid & co EF 40 trolly 100,000
16 387 378257 12.1.16 Shahid & co EF 40 trolly 100,000
17 462 378294 16.2.16 Shabir Ahmed EF Azeem colony 90,000
18 463 378294 16.2.16 Shabir Ahmed do Sachal colony 90,000
19 464 378294 16.2.16 Shabir Ahmed do Shahbaz colony 90,000
20 466 378295 17.2.16 Shabir Ahmed do Shahbaz colony 45,000
21 467 378296 17.2.16 Syed Ahsan Ali EF Imam bargah 89,757
22 468 378296 17.2.16 Syed Ahsan Ali EF Imam bargah 44,880
23 472 3782300 25.2.16 Shabir Ahmed EF shahbaz colony 88,000
24 473 3782300 25.2.16 Shabir Ahmed EF shahbaz colony 87,000
25 474 3782300 25.2.16 Shabir Ahmed EF shahbaz colony 87,000
26 475 3782300 25.2.16 Shabir Ahmed Earth filling 85,000
27 524 383827 31.3.16 Shabir Ahmed EF P.A 89,820
28 525 383827 31.3.16 Shabir Ahmed do P-B 89,820
29 526 383827 31.3.16 Shabir Ahmed do P-c 89,820
30 527 383828 1.4.16 Shabir Ahmed SD/EF office park P-A 89,820
31 528 383828 1.4.16 Shabir Ahmed do P-B 89,820

529
 [Amount in Rupees]
S.No V.No Cheque date To whom paid Details Amount
32 529 383828 1.4.16 Shabir Ahmed do P-C 89,820
33 530 383828 1.4.16 Shabir Ahmed do P-D 89,820
34 637 383885 7.6.16 Shahid & co EF 30 trolly 85,500
35 638 383885 7.6.16 Shahid & co EF 40 trolly shahbaz colony 90,000
36 639 383885 7.6.16 Shahid & co EF 40 trolly sachal colony 90,000
37 652 383891 8.6.16 Shabir Ahmed EF Zaunr colony 99,500
38 661 383897 13.6.16 Shahid & co EF shahbaz colony 90,000
39 662 383897 13.6.16 Shahid & co EF Zaunr colony 90,000
40 663 383897 13.6.16 Shahid & co EF 86,400
Sub Total 2,533,908
Gr& Total 3,631,408

Annex-SBA2

Non-Production of Record

[Rupees in Million]
Sr. Name of Formation Amount
1 Town Committee Daur, (Complete) -
2 Municipal Committee, Moro, District Naushahro Feroze -
3 Town Committee, Kandiaro, District Naushahro Feroze -
4 Town Committee, Naushahro Feroze, District Naushahro Feroze -
5 Town Officer, Town Committee, Mehrabpur, District Naushahro Feroze -
6 Town Officer, Town Committee, Mehrabpur, District Naushahro Feroze
7 Town Committee Sakrand District Shaheed Benazirabad 5.537
8 Town Committee Kazi Ahmed District Shaheed Benazirabad -
9 Municipal Committee, Sanghar (Complete) -
10 Municipal Committee, Sinjhoro (Complete) -
11 Municipal Committee, Nawabshah -
12 Municipal Committee Shahdadpur 84.255
Total 89.792

Non-Production of Supporting Record of POL expenditure

[Rupees in Million]
Sr. Name Of Office Para Amount
1. Municipal Committee, Moro 7 9.903
2. Town Committee, Kandiaro 12 7.024
3. Town Committee, Bhirya 5 3.632
4. Town Committee, Naushehro Feroze 6 5.058
5. Town Committee, Mehrabpur 7 6.587

530
 [Rupees in Million]
Sr. Name Of Office Para Amount
6. Town Committee, Sakrand 4 5.028
7. Town Committee, Kazi Ahmed 2 4.377
8. Municipal Committee Nawabshah 9 18.499
9. Municipal Committee Shahdadpur 10 9.821
10. Municipal Committee Tando Adam 9 11.311
Total 81.240

Annex-SBA3

Non-Revision of Rent of Government Property

[Amount in Rupees]
Yearly
Allowed Yearly Rent
No. Mly: Rent Due Demanded Difference
Name of Shopping No. of No. of
Sr. of Total Rate on revised by the to be
Centre Shops Rooms
Flats per rates for Municipality recovered
Shop all shops from all
Shops
Municipal Committee, Nawabshah (AIR Para-7)
1 Cloth Market 124 --- --- 124 2500 3,720,000 240,305 3,479,695
2 Tayaba Shopping Centre 77 --- 19 96 2000 2,304,000 498,651 1,805,349
3 Mohni Bazar 14 --- 28 42 2000 1,008,000 209,292 798,708
4 Jam Sahb Market 39 --- --- 39 2000 936,000 229,584 706,416
5 Noor Market 8 --- --- 8 2000 192,000 29,568 162,432
6 Semi Chakra No.01 82 --- --- 82 2000 1,968,000 269,172 1,698,828
7 Semi Chakra No.02 84 1 --- 85 2000 2,040,000 284,194 1,755,806
8 Fire Brigade Shopping 16 --- 29 45 2000 1,080,000 279,974 800,026
9 Liaquat Market No.02 98 17 --- 115 2500 3,450,000 768,086 2,681,914
10 New Liaquat Market 30 --- --- 30 2500 900,000 35,363 864,637
11 Madni Shopping Centre 156 --- --- 156 2000 3,744,000 737,229 3,006,771
12 Phatak Road 60 --- --- 60 2000 1,440,000 202,966 1,237,034
13 Old Sabzi Mandi 37 --- --- 37 2000 888,000 205,329 682,671
14 P.M.C Road 11 --- 2 13 2000 312,000 100,968 211,032
15 Sabeel Market 18 --- -- 18 2000 432,000 80,978 351,022
Syed Ghulam Rasool
16 17 --- -- 17 2000 408,000 372,204 35,796
Shah
17 Liaquat Market No.01 81 17 --- 98 2500 2,940,000 482,559 2,457,441
18 Neelam Shopping Centre 12 --- --- 12 2000 288,000 113,124 174,876

531
 [Amount in Rupees]
Sr. Name of Shopping No. of No. of No. Total Allowed Yearly Yearly Difference
19 Abdul Qadir Park 7 --- --- 7 2000 168,000 16,824 151,176
20 Tanga Stand 13 --- --- 13 2000 312,000 71,928 240,072
21 Gur Market 21 --- --- 21 2000 504,000 116,063 387,937
22 Deaf and Dump 9 --- --- 9 2000 216,000 59,538 156,462
23 Baldia Shopping Centrre 16 0 --- 16 2000 384,000 161,316 222,684
Total 1030 35 78 1143 48000 29,634,000 5,565,215 24,068,785

[Amount in Rupees]
Monthly Yearly
Monthly Period in
Sr. Name of Tenant Rent Difference Recovery
Rent Due Months
Fixed Due
Municipal Committee, Nawabshah (AIR Para-8)
Baldia Shopping Center (18 Rooms)
1 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
2 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
3 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
4 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
5 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
6 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
7 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
8 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
9 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
10 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
11 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
12 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
13 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
14 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
15 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
16 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
17 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
18 Khalida Parveen W/O Khalil Channa 5,000 200 4,800 12 57,600
Sub Total 90,000 3600 86,400 12 1,036,800
Unauthorised Occupied heavy disesl
Generator in Premises of Municipality
19 without any Payment of Monthly Rent 9,000 0 9,000 24 216,000
(Approx from 2 years before) Space
6x6 Sft @ Rs. 50 /Sf/per day
Grand Total 99,000 3,600 95,400 1,252,800

532
 [Amount in Rupees]
Town Committee, Sakrand (AIR Para-17)
S. No Details Rent per month
1 UBL bank building Nawab Shah road 3,000

Annex-SBA4

Unauthorized Operation of Bank Accounts

[Amount in Rupees]
Balance as
Sr. Bank Name Account No Title of A/c on
30.6.2016
1 Allied Bank Ltd 10003052200057 Security Deposit 932.32
2 Allied Bank Ltd 10003052200063 General Fund 414,748.09
3 Allied Bank Ltd 10003504400017 ADP 137,353.34
4 Allied Bank Ltd 10003052220028 General Fund 12,769.30
5 United Bank Ltd 21401040295 General Fund 12,513.00
6 United Bank Ltd 21401040305 Security Deposit 375.00
7 United Bank Ltd 21401040477 PHED Salary 777,700.00
8 United Bank Ltd 214010138850 Awami Colony 679,336.05
9 United Bank Ltd 21410142460 Katchi Abadi 1,425,983.19
10 United Bank Ltd 21410143579 SD Katchi Abadi 23,597.29
11 United Bank Ltd 2141057347 ADP 1,499.00
12 United Bank Ltd 2141066570 ADP 15,020.00
13 United Bank Ltd 21410122817 General Fund 87,290.11
Total 3,589,117

533
 Annex-SBA5

Unauthorized Excess Staff without Approval from Competent Authorities

[Amount in Rupees]
No of
No of Total
No of Sanctioned Difference Difference Total Average
No of Sanctioned Current Gross
Current Posts of of of Daily Difference Excess
Current Amount Posts of Amount Working Amount
Sr. Month Daily Daily Regular Wages of Excess Expenditure
Regular Paid Regular Paid Staff Paid
Wages Wages Staff Staff (Col Staff (Col (Col
Staff Staff in (Col 3 + (Col 4 + 7)
staff Staff in (Col 3-5) 6-8) 11+12) 10/9*13)
Budget 6)
Budget
1 2 3 4 5 6 7 8 9 10 11 12 13 14
1 Jul-15 NA NA NA NA NA NA NA NA NA NA NA NA
2 Oct-15 514 8,058,298 504 149 1,234,614 147 663 9,292,912 10 2 12 168,198
3 Nov-15 514 8,062,622 504 149 1,234,614 147 663 9,297,236 10 2 12 168,276
4 Dec-15 514 8,207,576 504 149 1,234,614 147 663 9,442,190 10 2 12 170,899
5 Jan-16 511 8,203,231 504 149 1,234,614 147 660 9,437,845 7 2 9 128,698
6 Feb-16 512 8,155,542 504 149 1,234,614 147 661 9,390,156 8 2 10 142,060
7 Mar-16 510 8,573,423 504 149 1,341,000 147 659 9,914,423 6 2 8 120,357
8 Apr-16 NA NA NA NA NA NA NA NA NA NA NA NA
9 May-16 503 8,461,362 504 149 1,341,000 147 652 9,802,362 2 2 30,069
10 Jun-16 503 8,445,396 504 149 1,341,000 147 652 9,786,396 2 2 30,020

Total 66,167,450 10,196,070 76,363,520 51 16 67 958,576

Annex-SBA6

Unauthorized Occupation of Government Property

Town Committee, Mehrabpur

Sr. Name of Property Area of Property Remarks
Open Plot in Deh Langrichi Taluka Unauthorized Occupied by
1 About 9 Acres
MehrabpurNear Graveyard Plot Mehrabpur Private Persons
2 Water Supply Plot About 3.5 Acres -do-
3 Sakhani Disposal Ward-11 around 4 Acres About 3 Acres -do-
4 Naka Building Near Railway Station Building -do-
5 Naka Building Sialabad Road Building -do-
6 Main Gate Halani Road Naka Building -do-
Town Committee Sakrand
1 Old rest House Driver, DC office SBA Court case
Occupied by HESCO
2 Naka Building Nawab Shah road HESCO
without any rent

534
 ANNEXES
SUKKUR DIVISION

535
 Annex-Suk1

Suspicious cheques payment without description in Cash Book

(Amount in Rupees)
Municipal Committee, Kotdiji [Para no. 12]
S# Cheque # Date Payment Description Amount
1 432937 18.12.2014 M/s Zahid Shah Govt: Contractor Nil 650,000
2 432935 22.12.2014 M/S Muhammad Hassan Govt: Contactor Nil 402,414
3 432944 24.12.2014 M/s Shuja Muhammad Shah Nil 300,000
4 432942 26.12.2014 M/s Muhammad Wassan Govt: Contractor Nil 344,000
5 432939 05.01.2014 M/s Ahsanullah Larik Nil 220,484
6 432940 05.01.2014 M/s Ahsanullah Larik Nil 300,000
7 432945 05.01.2014 M/s Ghulam Hyder Govt: Contractor Nil 100,000
8 432971 06.01.2015 M/s Zahid Shah Govt: Contractor Nil 293,000
9 432972 06.01.2015 M/s Khadim and Company Nil 700,000
10 432974 06.01.2015 M/s Shuja Muhammad Shah Nil 500,000
11 432975 06.01.2015 M/s Khadim and Company Nil 520,000
12 432976 06.01.2015 M/s Allah Dito Govt Contractor Nil 200,000
13 432977 06.01.2015 M/s Shuja Muhammad Shah Nil 300,000
14 435223 04.01.2015 M/s Khadim and Company Nil 700,000
15 435224 04.01.2015 M/s Khadim and Company Nil 555,000
16 435226 04.01.2015 M/s Allah Dito Govt Contractor Nil 300,000
17 436231 14.02.2015 M/s Khadim and Company Nil 512,000
18 435235 17.02.2015 M/s Firdous Shah Govt: Contractor Nil 631,600
19 435257 10.03.2015 M/s Khadim and Company Nil 500,000
20 435258 10.03.2015 M/s Khadim and Company Nil 300,000
21 435256 12.03.2015 M/s Firdous Shah Govt: Contractor Nil 400,000
22 435259 12.03.2015 M/s Firdous Shah Govt: Contractor Nil 300,000
23 435266 12.03.2015 M/s Firdous Shah Govt: Contractor Nil 500,000
24 435267 12.03.2015 M/s Shuja Muhammad Shah Nil 400,000
25 435273 17.03.2015 M/s Firdous Shah Govt: Contractor Nil 300,000
26 435274 25.03.2015 M/s Khadim and Company Nil 850,000
27 466681 02.04.2015 M/s Khadim and Company Nil 400,000
28 435282 02.04.2015 M/s Khadim and Company Nil 300,000
29 435276 03.04.2015 M/s Zahid Shah Govt: Contractor Nil 186,607
30 466654 06.04.2015 M/s Allah Dito Govt Contractor Nil 500,000
31 466655 06.04.2015 M/s Shuja Muhammad Shah Nil 500,000

536
 (Amount in Rupees)
Municipal Committee, Kotdiji [Para no. 12]
S# Cheque # Date Payment Description Amount
32 466656 06.04.2015 M/s Allah Dito Govt Contractor Nil 500,000
33 435283 09.04.2015 Nil Nil 308,000
34 466664 16.04.2015 M/s Zahid Shah Govt: Contractor Nil 510,000
35 435263 16.04.2015 M/s Ahsanullah Larik Nil 120,886
36 466666 30.04.2015 M/s Khadim and Company Nil 600,000
37 466697 15.05.2015 M/s Khadim and Company Nil 500,000
38 466698 15.05.2015 M/s Khadim and Company Nil 480,000
39 468811 28.05.2015 M/s Allah Dito Govt Contractor Nil 210,000
40 468833 04.06.2015 M/s Allah Dito Govt Contractor Nil 450,000
41 468834 04.06.2015 M/s Allah Dito Govt Contractor Nil 300,000
42 468835 04.06.2015 M/s Shuja Muhammad Shah Nil 450,000
43 468836 04.06.2015 M/s Shuja Muhammad Shah Nil 300,000
44 468837 05.06.2015 M/s Zahid Shah Govt: Contractor Nil 400,000
45 468838 05.06.2015 M/s Zahid Shah Govt: Contractor Nil 500,000
46 468841 22.06.2015 Nil Nil 50,000
47 438412 22.06.2015 M/s Inaytullah Nil 500,000
48 438421 25.06.2015 M/s Shuja Muhammad Shah Nil 200,000
49 438425 25.6.2015 M/s Zahid Shah Govt: Contractor Nil 175,000
Total 19,518,991

537
 Annex-Suk2
Suspected misappropriation on account of POL
(Amount in Rupees)
Municipal Committee, Rohri [Para no. 04, 05]
S# Vehicle Name Liters Avg: Rate Amount Recovery Difference
Tractor Messy 240 8090 105 849,450 - -
Tractor Trolly 5680 105 596,400 - -
Tractor Belaras 8645 105 907,725 - -
1 Fire Brigade Master 6740 105 707,700 - -
Fire Brigade Mazda 9118 105 957,390 - -
Fire Brigade ISUZU 9800 105 1,029,000 - -
Electric Master 8295 105 870,975 - -
Sub Total 56368 5,918,640 292,600 5,626,040
Tractor Messy 240 8090 110 889,900 Same Vehicles were 889,900
handed over to
2 Tractor Trolly 5680 110 624,800 624,800
NSUSC in 2009
Sub Total 13770 110 1,514,700 - 1,514,700
Grand Total 70138 7,433,340 - 7,140,740

Annex-Suk3
Suspicious payment of salary bills
(Amount in Rupees)
Municipal Committee, Kotdiji [Para no. 11]
S # Cheque # Date Bank Description Amount
1 435249 2.3.2015 NBP Ranipur Payment of Salary, Union Council Jhando Mashakh 346,856
2 435250 2.3.2015 MCB Kumb Salary Bill not attached 95,983
3 3593021 2.3.2015 Sindh Bank Khp Payment of Bill of Salary TMA Office Kot Diji 322,039
4 435236 2.3.2015 NBP Kotdiji Payment of Bills of Salary Sub-Office Kotdiji 517,453
5 435237 2.3.2015 NBP Kotdiji Payment of Salary Town Committee Kumb 1,351,187
6 435238 2.3.2015 NBP Kotdiji Payment of Salary TMA Kotdiji 241,147
7 435239 2.3.2015 NBP Kotdiji Payment of Salary Town Committee Kotdiji 646,017
8 435240 2.3.2015 NBP Kotdiji Payment of Salary Union Council Mohbat Wah 196,348
9 435242 2.3.2015 NBP Gambat Payment of Salary Town Committee Fakirabad 548,412
10 435243 2.3.2015 NBP Kotdiji Payment of Pension Town Committee Kumb 283,332
11 435244 2.3.2015 NBP Kotdiji Payment of Pension Town Committee Kotdiji 395,963
12 435245 2.3.2015 NBP Kotdiji Payment of Salary Sub-Office Kumb 350,895
13 435246 2.3.2015 NBP Kotdiji Salary of Sub-office Fakirabad 183,013
14 435247 2.3.2015 NBP Kotdiji Payment of Salary of Defunct TMA Kotdiji 393,906
15 435248 2.3.2015 NBP Kotdiji Payment of Salary Regular Employees 659,706
Total 6,532,257

538
 Annex-Suk4

Non-Production of Record

[Amount in Rupees]
Sr. AIR Para Name of Formation Year Amount
1. 01 Sukkur Municipal Corporation 2015-16 -
2. 01 ----------do---------- 2014-15 -
3. 01 Municipal Committee, Rohri 2015-16 252,247,750
4. 01 Town Committee, Pano Akil 2015-16 192,360,036
5. 01 Town Committee, Saleh Pat 2015-16 131,366,228
6. 02 Municipal Committee, Gambat 2015-16 79,809,000
7. 01 Municipal Committee, Knngri 2015-16 -
8. 02 ----------do---------- 2015-16 9,486,5000
9. 01 Town Committee, Nara 2015-16 -
10. 03 ----------do---------- 2015-16 55,385,000
Total 806,033,014

Non-Production of Supporting Record of POL

[Rupees in Million]
Sr. Name of formation Para Year Amount
1 MC Khairpur 5 2015-16 1.036
2 MC Gambat 3 2015-16 6.646
3 MC Kingri 5 2015-16 6.695
4 TC Faiz Ganj 3 2015-16 10.488
5 TC Nara 4 2015-16 8.258
6 TC Pano Akil 14 2014-15 6.638
7 TC Saleh Pat 4 2014-15 7.293
8 TC Kotdiji 8 2014-15 9.188
9 CMO Kingri 12 2014-15 2.363
Total 58.605

539
 ANNEXES
LARKANA DIVISION

540
 Annex-LRK1

Suspected misappropriation on purchase/supply of vehicles, machinery and

equipment
[Amount in Rupees]

Chief Municipal Officer, Municipal Committee, Jacobabad (Para no. 08)

Sr. Date of Name of Item Newly Approximately Total

Supplier Name Quantity
No Supply Purchased Cost Amount
M/s Pacific Enterprises,
1 July,2015 Messay MF-240 11 500,000 5,500,000
Quetta
M/s Pacific Enterprises,
2 July,2015 Messay MF-385 2 700,000 1,400,000
Quetta
M/s Pacific Enterprises,
3 July,2015 Belarus Russian-510 4 900,000 3,600,000
Quetta
M/s Pacific Enterprises,
4 July,2015 Suzuki 5 500,000 2,500,000
Quetta
M/s Pacific Enterprises,
5 July,2015 Jack Trolley 10 200,000 2,000,000
Quetta
M/s Pacific Enterprises,
6 July,2015 Water Tank 1 200,000 200,000
Quetta
M/s Pacific Enterprises,
7 July,2015 Loader 2 600,000 1,200,000
Quetta
M/s Pacific Enterprises,
8 July,2015 Front Blade 2 200,000 400,000
Quetta
M/s Pacific Enterprises, Bromer Roads
9 July,2015 2 300,000 600,000
Quetta Sweeper
M/s Pacific Enterprises,
10 July,2015 Plough 2 100,000 200,000
Quetta
M/s Pacific Enterprises, Tractor with Water
11 July,2015 1 800,000 800,000
Quetta Boozer for Spray
M/s Pacific Enterprises, Ravi Pick Up with
12 July,2015 5 700,000 3,500,000
Quetta Hydraulic Trolley
M/s Pacific Enterprises, Vibrators Dewatering
13 July,2015 5 200,000 1,000,000
Quetta set 2.5" x 3"
M/s Pacific Enterprises, Vibrators Dewatering
14 July,2015 5 300,000 1,500,000
Quetta 3x4 "
M/s Pacific Enterprises, Diesel Engine
15 July,2015 3 150,000 450,000
Quetta Dewatering Set 16 HP
M/s Pacific Enterprises,
16 July,2015 Wheel Barrow 100 10,000 1,000,000
Quetta
Total Rs. 6,360,000 25,850,000

541
 Annex-LRK2

Suspected Misappropriation on account of POL

Date Voucher No Cheque No Vehicle No Amount

21.7.2014 76 11197293 SB Car GL-4820 17,580
10.10.2014 48 277128 NBP Car GL-4820 48,512
4.12.2014 38 277139 NBP Car GL-4820 38,675
21.1.2015 97 36553507 ABL Car GL-4820 34,596
16.2.2015 39 11773970 SB Car GL-4820 22,652
10.3.2015 25 11773982 SB Car GL-4820 21,496
17.4.2015 99 36553526 ABL Car GL-4820 30,244
14.5.2015 42 12674795 SB Car GL-4820 18,456
11.6.2015 117 12674817 SB Car GL-4820 31,084
Sub Total 263,295
21.7.2014 77 11197293 SB Car GS-5703 39,035
1.8.2014 42 11197315 SB Car GS-5703 47,419
Sub Total 86,454
21.7.2014 75 11197293 SB CSI Motor Cycle 6,690
1.8.2014 40 11197315 SB CSI Motor Cycle 6,672
10.10.2014 47 277128 NBP CSI Motor Cycle 6,672
4.12.2014 36 277139 NBP CSI Motor Cycle 4,875
21.1.2015 96 36553507 ABL CSI Motor Cycle 5,268
16.2.2015 19 11773970 SB CSI Motor Cycle 6,541
10.3.2015 22 11773982 SB CSI Motor Cycle 3,645
17.4.2015 100 36553526 ABL CSI Motor Cycle 5,103
14.5.2015 43 12674795 SB CSI Motor Cycle 4,614
11.6.2015 122 12674817 SB CSI Motor Cycle 4,614
Sub Total 54,694
Grand Total 404,443

542
 Annex-LRK3
Non-Production of Record

[Rupees in Million]
Sr. Name of Formation Para Year Amount
1 Municipal Commissioner, MC Larkana 1 2015-16 443.669
2 Municipal Commissioner, MC Larkana 21 2014-15 37.940
3 Chief Municipal Officer, MC Ratodero 1 2015-16 -
4 Chief Municipal Officer, MC Kamber 1 2015-16 -
5 Chief Municipal Officer, MC Kamber 2 2015-16 100.602
6 Chief Municipal Officer, MC Shahdadkot 1 2015-16 5.847
7 Chief Municipal Officer, MC Shahdadkot 2 2015-16 130.225
8 Chief Municipal Officer, MC Shikarpur 1 2015-16 -
9 Town Officer, Town Committee, Garhi Yasin 1 2015-16 -
10 Chief Municipal Officer, MC Jacobabad 1 2015-16 -
11 Chief Municipal Officer, MC, Jacobabad 1 2014-15 -
12 Chief Municipal Officer, MC Thull 1 2015-16 -
13 Chief Municipal Officer, MC Kandhkot 1 2015-16 3.983
14 Chief Municipal Officer, MC Kashmore 1 2015-16 2.224
Town Officer, Town Committee, Garhi Khero 1 2015-16 -
Total 724.490

Non-Production of Supporting Record of POL

[Rupees in Million]
Sr. Name of Formations Para # Year Amount
1 Chief Municipal Officer, MC, Shikarpur 14 2014-15 6.377
2 Town Officer, Town Committee, Khanpur 8 2014-15 4.856
3 Chief Municipal Officer, MC, Jacobabad 23 2014-15 4.641
4 Chief Municipal Officer, MC Jacobabad 13 2015-16 7.408
5 Town Officer, Town Committee, Garhi Khero 3 2015-16 1.597
6 Chief Municipal Officer, MC Kandhkot 6 2015-16 7.526
7 Chief Municipal Officer, MC Kashmore 11 2015-16 8.320
8 Chief Municipal Officer, MC, Shahdadkot 1 2014-15 9.983
9 Chief Municipal Officer, MC Kamber 6 2015-16 1.447
10 Chief Municipal Officer, MC Shahdadkot 5 2015-16 2.469
11 Chief Municipal Officer, MC Shikarpur 11 2015-16 1.921
12 Town Officer, Town Committee, Garhi Yasin 4 2015-16 14.540
13 Town Officer, Town Committee, Khanpur 4 2015-16 5.740
Total 76.825

543
 Annex-LRK4

Unjustified excess expenditure on account of POL

[Amount in Rupees]
Total POL Consumed Sr. No of Slips issued by
Sr. Name of Vehicle Type of POL Name of POL Supplier
in Litters during FY POL Supplier
1 Master 4560 Diesel Book-1, 6551 - 6596 M/s Al Abbass Filling
Station Jacobabad
Book-2, 9151 - 9194
Book-3, 5552 - 5588
2 Tractor for Spray 3390 Diesel Book-1, 18910 - 18997 Do
3 Tractor UC-5 3500 Diesel Book-I, 36606 - 36692 Do
4 Tractor UC-2 3010 Diesel Book-I, 23109 - 23184 Do
5 Tractor UC-4 3200 Diesel Book-I, 34305 - 34386 Do
6 Tractor Blade 4860 Diesel Book-I, 19303 - 19400 Do
Book-2, 6151-6184
7 Loader 5000 Diesel Book-I, 1603 - 1698 Do
Book-2, 5402 - 5437
8 Master Fort Land 4450 Diesel 89 Slips Do
F/B
530 Super
9 HINO F/B 2600 Diesel 52 Slips Do
Total 34570 Diesel Rs. 110 Per Litter 3,802,700
530 Super Rs. 100 Per Litter 53,000
POL Consumed for Officials Cars and Motor Cycle of CSI during the year 404,443
Total Rs. 4,260,143
POL Drawn in Expenditure Statement 8,496,996
Difference Excess
4,236,853
Drawn

544