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AUDIT REPORT
ON
THE ACCOUNTS OF
GOVERNMENT OF THE PUNJAB
CIVIL WORKS
C&W, HUD & PHE, I&P, LG&CD, P&D
AND EP DEPARTMENTS
AUDIT YEAR 2007-08
AUDITOR-GENERAL OF PAKISTAN
i
PREFACE
Article 169 of the Constitution of the Islamic Republic of Pakistan read with
the Auditor-General’s (Functions, Powers, Terms and Conditions of Service)
Ordinance, 2001 requires the Auditor-General of Pakistan to conduct audit of
the accounts of the Federation, the Provinces and any authority or body
established by the Federation or a Province.
This report is based on audit of the accounts of Communication & Works
Department, Housing, Urban Development & Public Health Engineering
Department, Irrigation & Power Department, Local Government &
Community Development Department, Planning & Development Department
and Environment Protection Department, Government of the Punjab, for the
financial year 2006-07. The audit was conducted on a test check basis by the
Directorate General of Audit (Works), Lahore during 2007-08 with a view to
report significant findings to stakeholders.
The findings indicate need for adherence to the regulatory framework,
besides instituting and strengthening of internal controls to avoid recurrence
of similar type of violations/irregularities and mismanagement.
Most Audit observations included in the report were discussed with the
concerned Principal Accounting Officers in the Departmental Accounts
Committee meetings and have been finalized in the light of written responses
and discussions.
The report is submitted to the Governor of the Punjab in pursuance of Article
171 of the Constitution of the Islamic Republic of Pakistan to cause to be laid
before Provincial Assembly.
Islamabad Tanwir Ali Agha
Dated: Auditor-General of Pakistan
ii
iii
EXECUTIVE SUMMARY
Directorate General of Audit (Works) Lahore carried out audit of
Communication & Works Department, Housing, Urban Development &
Public Health Engineering Department, Irrigation & Power Department,
Local Government & Community Development Department, Planning &
Development Department and Environment Protection Department,
Government of the Punjab during 2007-08. The accounts audited relate to
the financial year 2006-07. Accounts of some formations pertaining to
previous years were also audited. Most of the Departmental Accounts
Committee directives were not implemented and there were some cases
where no reply was received at all.
The details of audit output with respect to each auditee are tabulated as under:
(Amount Rs in million)
C&W HUD&PHE I&P LG&CD P&D Environment
FAP Total
Annual
Budget 44,163.09 22,078.89 13,458.71 4,482.19 1,708.35 25.40 85,916.63
Budget
Audited 9,397.32 6,818.08 4,851.02 1,388.32 613.22 18.90 23,086.86
Advance
Paras 763 160 198 33 17 01 1,172
Proposed
Audit
Paras
418 121 176 25 14 01 755
DAC
held 02 02 03 01 01 -Nil- 9
PDPs
included
in the
report
114 45 56 11 07 01 234
PDPs
followed
through
MFDAC
304 76 120 14 07 -Nil- 521
Recovery
pointed
out
2,318.65 4,896.68 1,249.64 141.60 -Nil- -Nil- 8,606.57
Recovery
admitted 100.34 268.96 11.47 5.48 -Nil- -Nil- 386.25
Recovery
effected 37.65 4.32 6.46 0.337 -Nil- -Nil- 48.767
iv
Examination by PAC
The report has not been examined by the PAC as yet.
Key Audit Findings
The systemic issues reflected in the report are summarized as under:
a. The executing agencies awarded works without administrative
approval / technical sanctioned estimate in violation of prescribed
procedure. (Para 1.17)
b. Overpayment was made due to recording excess measurement for
payment. (Para 1.29, 2.16, 3.20)
c. Obsolete / surplus store was not timely auctioned as required under
rule. (Para 3.2)
d. The executing agencies accepted tenders at higher rates.
(Para 1.10, 2.2)
e. The dismantled / excavated material was not utilized / recovered.
(Para 1.41, 2.29, 4.2)
f. Commercialization fee and surcharge was not levied / recovered.
(Para 2.3)
g. Performance security / bond as per agreement provision was not
obtained. (Para 1.12, 2.12)
h. De-escalation for material was not recovered.
(Para 1.13, 2.8, 4.4)
i. The executing agencies could not get the works completed within
stipulated period. (Para 1.3.2, 2.23)
j. Risk and cost charges were not recovered from the defaulting
contractors.
(Para 1.35, 5.3)
v
k. Incorrect / enhanced rates were allowed in violation of government
instructions.
(Para 1.10.4, 3.7)
Recommendations
a. The prescribed requirements like administrative approval, technical
sanctions and budget need to be ensured prior to call of tender.
b. Prior approval to change in scope of work be obtained.
c. The contractual obligations should be watched at every stage of
execution.
d. Price escalation should be paid within the allocated cushion of
contingencies of estimates.
e. Time over-run should be avoided.
f. Government revenues should be immediately realized and deposited
into the treasury / public account.
g. Safeguards for timely and smooth execution of work like performance
/ indenture bond should be checked and valid bank guarantees be
accepted.
h. Dismantled material should be properly measured and deducted from
the cost of works.
i. Detailed engineering design / drawings, lab test reports etc. should be
ensured prior to commencement of works.
j. Encroachments on State land should be removed immediately.
k. Internal controls should be periodically reviewed and made capable to
forestall chances of pilferage.
l. The Principal Accounting Officers should ensure compliance of
Departmental Accounts Committee directives. The internal audit wing
should take particular care of this aspect.
vi
m. The internal audit report should be made available to the external
audit.
n. Government money should be spent prudently.
1
COMMUNICATION & WORKS DEPARTMENT
Punjab Highways and Buildings are under the administrative control of
Communication and Works Department, Government of the Punjab and
Secretary C&W Department is the Principal Accounting Officer. The main
function of the department is the development of the provincial areas by
providing basic facilities of journey to the passengers. The department
comprises Chief Engineers Buildings (North & South), Chief Engineers
Highway (North & South) and Chief Engineer District Support &
Monitoring which are the attached departments. Communication and
Works Department is primarily responsible for planning, designing,
construction, repair and maintenance of all government roads and
buildings in Punjab.
Audit for the financial year 2006-07 was conducted on test check basis
and a summary of audit results is tabulated as under:
(Amount Rs in million)
Sr.No Particulars Amount Total amount/
%age
1. Budget allocation for the financial year
2006-07
44,163.09 44,163.09
2. Total Expenditure for the financial year
2006-07
39,833.30 39,833.30
3. Audited Expenditure 9,397.32 23.6% *
4. Amount of the observations in this
report
i) Excess payment
ii) Irregular / un-authentic
iii) Un-justified payment
without T.S. estimate
iv) Undue Financial Aid
v) Loss / Doubtful / Theft
vi) Non- recovery
1,108.04
440.26
6,432.77
69.76
4,009.80
378.99
12,439.62
*. High money value sample selection criteria.
2
3
1. COMMUNICATION & WORKS DEPARTMENT
Para 1.1 Non-production of record for works - Rs 4,000.4
million
According to section 14(2) No.XXIII of Auditor-General of Pakistan’s
(Functions, Powers, and Terms & Conditions of Services) Ordinance,
2001, the officer incharge of any office or department is responsible to
provide the record for audit scrutiny.
The Chief Engineer (North), Punjab Highway Department, Lahore did not
produce relevant record i.e. tender documents, project account for
expenditure on construction, maintenance, and collection of toll, financial
modules as per annexure 15 of agreement etc. Non production of record
was a serious violation. Audit of the project accounts could not be
conducted as per best practices and government instructions in February
2008 and expenditure of Rs 4,000.4 million.
Audit pointed out non-production of record in February 2008. The
department did not furnish reply to the audit observation.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.361)
Para 1.2 Loss due to in-ordinate delay in execution of work /
manipulation in the bid/non-utilization of available
earth - Rs 3,804.4 million
As per rule 2.33 of Punjab Financial Rules Volume-I, every government
servant 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.
1.2.1 The Executive Engineer, Provincial Highway Division
Sahiwal allotted a work in October 2003 against the technical sanctioned
estimate cost of Rs 69 million. The contractor started the work at site but
was cancelled by the Secretary Communication and Works Department on
a complaint regarding rigging in tendering in December 2003. No
departmental enquiry was held to fix the responsibility. The work was
again awarded in January 2005 for Rs 83 million. Mismanagement in
project execution resulted in loss of Rs 14.0 million.
4
Audit pointed out the loss in January 2008. The department replied that
usual tender process was carried for allotment of work after due
formalities but the matter was involved in a complaint against which the
Secretary, Communication and Works, Lahore ordered for re-tendering of
the work. Accordingly, the work was reassessed and administrative
approval/technical sanctioned estimate of the work was got revised as
required under the new market rates schedule (MRS) provisions. The reply
was not acceptable because matter for rigging in tendering was not
investigated for fixing the responsibility which resulted in loss to
government.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee did not
agree with the view point of the department and directed for detailed
verification of record. No progress was shown to audit till finalization of
the report.
(DP.145)
1.2.2 The Project Director, Punjab Road Sector, Development
Project did not get executed the works on provincial roads at required pace
and resultantly prepared revised estimates in respect of provincial roads
amounting to Rs 7,869.279 million against original PC-I cost of Rs 4,080
million. Due to inordinate delay of three years in execution of work,
revised estimates were prepared resulting into loss to government for
Rs 3,789.729 million.
Audit pointed out the loss in October 2006. The project management
replied that there was critical default of one financial year between
approval of PC-I by Executive Committee of National Economic Council
(ECNEC) subject to approval by Provincial Development Working Party
(PDWP) in respect of project of having Economic Internal Rate of Return
12% or above, and loan agreement, therefore, performance evaluation
against schedule in PC-I was wrong. The reply was not acceptable as
process of selection of roads, calculation of EIRR and estimation was
required to be done before approval of PC-I for timely completion of the
project. Moreover, the PC-II was not got approved prior to
preparation/approval of PC-I in contradiction to the spirit of Government
of Pakistan, Planning & Development Division memo No.20(40)PIA.I/
PC/2007 dated 10th March, 2007.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.12-FAP)
5
1.2.3 The Executive Engineer, Provincial Buildings Division,
Gujranwala allowed a quantity 102,080 cubic feet of item “Transportation
of earth with lead of 5-mile” @ Rs 2.69 per cubic foot which was not
justified because later on, a quantity 307,452 cubic feet of item “New
earth brought from outside” was allowed @ Rs 3,692.47 per ‰ cubic feet.
If the additional earth for under floor was required then there was no need
to allow transportation of available excavated earth. Furthermore, if the
transported earth was not disposed off and was available at site then the
less quantity by 102,080 cubic feet was required to bring from outside.
This resulted in loss of Rs 651,522.
i) Transportation
=102,080 cubic feet x @ Rs 2.69 per cubic foot Rs 274,595
ii) Unjustified carriage of new earth
=102,080 cubic feet x @ Rs 3,692.47 per ‰ cubic feet Rs 376,927
Total Rs 651,522
Audit pointed out the loss in March 2008. The department replied that 12
feet earth filing was required to safeguard the floor. So it was decided that
excavated clay soil would be disposed off and earth filling would be done
with sandy soil brought from outside. The reply was not acceptable as the
project was also located in the river area of Chenab and excavated earth
was ordinary soil. Further, no extra allowance for clay/daldal was allowed.
No laboratory test report of Buildings Research Station Lahore was
produced to support that the excavated earth was not suitable for filling
under floor.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee
required the lab test report of soil and directive of the Chief Executive in
this regard or recovery within 2 weeks. Compliance of the Committee
directive was not reported to Audit till finalization of the report.
(DP.301)
Para 1.3 Loss due to higher rates/post-bid changes/non-
completion of project – Rs 2,027.9 million
As per rule 2.10(a)(i) of Punjab Financial Rules Vol-I, same vigilance
should be exercised in respect of expenditure incurred from government
revenue as a person of ordinary prudence would exercise in respect of the
expenditure of his own money.
1.3.1 The Secretary, Communication & Works Department
entered into an agreement on 30th September, 2003 with M/s LAFCO for
6
the construction of Lahore-Sheikhupura-Faisalabad dual carriageway on
BOT basis at an agreement amount of Rs 4 billion with a concession
period of 25 years. The project cost was worked out to Rs 2 billion in case
of execution by the government, from its own sources as mentioned in a
summary for the Chief Minister. (Para 2 dated 26th April, 2003). As per
financial module, the contractor would collect Rs 72.359 billion from toll
over the said period. The execution of project on BOT basis was,
therefore, uneconomical/in-appropriate and resulted into loss to
government for Rs 2,000 million.
Audit pointed out loss in February 2008. The department did not reply.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.360)
1.3.2 The Executive Engineer, Provincial Highway Division,
(DOR) Bahawalpur allotted a contract for Rs 100.2 million in June 1996
to a contractor with a completion date upto June 1999. The contractor
failed to complete the work. The contract was rescinded under clause 60 in
January 2005 and balance work had not been awarded. Expenditure of
Rs 27.9 million was incurred upto June 2002 for earth work for making
embankment and laying sub-base course. The executed work was eroded
and, therefore, expenditure incurred became infructuous.
Audit pointed out the infructuous expenditure in February 2007. The
department replied that the final measurement had been taken and sent to
quarter concerned to complete the balance work. The reply was not
acceptable because the department failed to get the work completed within
stipulated period upto June 1999. Moreover, department failed to produce
some record during local audit in June 2002. The audit of said record was
carried out as per PAC directive dated 30th November, 2005 against Draft
Para No.20(233)/2001-02. The executed work was eroded with the
passage of time and expenditure incurred had gone waste.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. The Committee did not agree
with explanation of the department and directed for probe and fact finding
inquiry within 60 days. Further, compliance and verification would be
made by the Provincial Highway Division Bahawalpur. No progress was
intimated to Audit till finalization of the report.
(DP.375)
7
Para 1.4 Allotment of BOT project at high toll rate – Rs 1,072.9
million
As per para 6 of minutes of 3rd bid evaluation committee meeting dated
21st April, 2001, the rate of toll per kilometer for motorway project (M-II
Lahore to Islamabad) was Rs 0.41 per kilometer for a car.
The Secretary, Communication & Works Department made agreement
with M/s LAFCO to charge Rs 60 from Lahore to Faisalabad for a car on
account of toll tax which comes to Rs 0.52 per kilometer (60/115).
Further, the toll was to be increased @ 5.74% per annum till the
completion of concession period of 25 years and the toll of a car upto 2028
(i.e. upto completion period) would be Rs 242 i.e. Rs 2.10 per kilometer.
Similarly, the toll rates of other vehicles were also on higher side as
compared to motorway project (M-II). Extra charging of Rs 0.11 per
kilometer (0.52-0.41) i.e. 26.82% above, resulted in extra burden on users
of the road in the shape of toll tax for Rs 1072.9 million (26.82%of
contract cost Rs 4,000.352 million).
Audit pointed out the allotment of toll collection of BOT project at higher
rates in February 2008. The department did not furnish reply to the audit
observation.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee was of
the opinion that the matter of public concern should be deliberated in
Public Accounts Committee meeting.
(DP.359)
Para 1.5 Unjustified payment of mobilization advance -
Rs 303.8 million
As per para 2.85 of Buildings & Roads Department Code, no work should
be commenced on the land not acquired for the work. As per rule 7.36 (b)
of Departmental Financial Rules, mobilization advance is admissible to
the contractor after issuance of acceptance letter.
The Project Director, Lahore Ring Road Project, Lahore allotted the works
without acquisition of land and allowed mobilization advances without
start of work at site, by the contractors. This resulted in un-justified
payment of mobilization advance of Rs 303.8 million.
8
Audit pointed out the irregularity in May 2008. The department replied
that the mobilization advances were allowed to the contractors after
issuance of acceptance letter to start the works at 10% per annum interest.
The reply was not acceptable as the works were allotted and advances
were given without acquisition of land.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.334)
Para 1.6 Loss due to allowing excess overhead charges - Rs 116.5
million
As per para (g) of notification No.RO(TECH)FD 2-3/2004 dated 2nd
August, 2004 issued by the Finance Department, 10% overhead charges
may be added in addition to 10% contractor’s profit already allowed in
rate analysis standardized by the Finance Department for purposes of
estimation. However, works shall be let out on actually tendered rates.
1.6.1 The Executive Engineer, Provincial Highway Division,
Okara added 25% overhead charges and profit in technical sanctioned
estimate against admissible limit of 20% as contractor’s profit and
overhead charges. Further, tenders were accepted keeping in view higher
rates of overhead charges and profit. Non-adherence to the instructions
issued by the Finance Department resulted in irregular approval of
technical sanctioned estimate for Rs 2,110 million involving loss on
account of additional 5% overhead charges of Rs 94 million.
Audit pointed out the loss in February 2008. The department replied that
the work was allotted as per amended administrative approval/sanction of
revised estimated cost which was within permissible limit of 4.5%. The
reply was not acceptable because 15% overhead charges were added to the
rate analysis of all items of work instead of 10% allowed by the Finance
Department. The revised administrative approval was sanctioned at
Market Rates System in October 2005 at higher rates as compared to the
notified rates of contractor quoted in October 2005.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Audit informed the
Committee that the tenders were invited on original DNIT on the basis of
TSE accorded on 18th August, 2005. Later on, the cost of DINT was
enhanced and tenders were accepted at 7.43% above. The department
9
explained that 5% extra work was added being a mega project. Revised
AA and revised TSE. And the DNIT was enhanced. The Committee was
not agreed with the view point of department and directed the department
to recover the loss within 60 days. No progress towards recovery was
shown to Audit till finalization of the report.
(DP.108)
1.6.2 The Executive Engineer, Provincial Highway Division,
Okara got technical sanction with 25% overhead charges and profit
(5% additionally added in technical sanctioned estimate amount prepared
on MRS having 20% contractor’s profit and overhead). Further, tenders
were accepted keeping in view higher rates of overhead and profit. Non-
adherence to the instructions issued by the Finance Department resulted in
irregular accord of technical sanctioned estimate for Rs 460.5 million and
extra expenditure of Rs 22.5 million.
Audit pointed out the extra expenditure in February 2008. The department
replied that the work was allotted as per amended administrative
approval/sanction of revised estimate cost which was within permissible
limit of 4.5%. The reply was not acceptable because 25% overhead
charges were added to the rate analysis of all items of work instead of 20%
allowed by the Finance Department and revised administrative approval
was sanctioned at MRS October 2005 at higher rates to compare the rates
of contractor quoted in October 2005.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Audit informed the
Committee that the tenders were invited on original DNIT on the basis of
original AA and TSE. Latter on, AA and TSE were revised and 5% extra
were added in the cost and DNIT was enhanced. The Committee was not
agreed with the departmental view point and directed to recover the extra
expenditure/loss within 60 days. No progress towards recovery was shown
to Audit till finalization of the report.
(DP.111)
Para 1.7 Non-recovery / forfeiture of bank guarantee of
mobilization advance - Rs 88.9 million
As per clause 9 of Contract Agreement, in case the contractor fails to
execute the work in accordance with the terms of contract, the security
10
offered in respect of mobilization advance shall be forfeited and credited
to government.
The Project Director, Lahore Ring Road Project, Lahore allowed
mobilization advance to contractor for the package-04 of project against
the bank guarantee of M/s Askari Commercial Bank. The contractor failed
to complete its contractual obligation. The bank guarantee was not
forfeited and credited to government as per clause-9 of notice inviting
tender of contract agreement. This resulted in non-recovery of
mobilization advance of Rs 88.9 million.
Audit pointed out the non-recovery in May 2008. The department replied
that the bank guarantee was obtained from Askari Commercial Bank,
which was a scheduled bank. The reply was not acceptable because the
work as per contract provision was incomplete. Security offered by
contractor in respect of mobilization advance was not credited to
government as per provision of contract agreement.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.332)
Para 1.8 Irregular acceptance of performance bond - Rs 81.9
million
According to clause 7 of the contract agreement and item (h) of
“Memorandum of Work” and Finance Department instructions vide
No.RO (TECH) FD-1-2/83 (VI) (P), dated 6th April, 2005, Performance
security in the form of “Bank Guarantee” equal to 10% or 5% of tender
price in case of tenders with cost exceeding Rs 25 million or Rs 50 million
should be obtained from the “Bank of Punjab” or any scheduled Bank of
Pakistan within 15 days of the receipt of acceptance letter by the
contractor.
The Executive Engineer, Provincial Road Construction Division, Lahore
accepted the Insurance/Bank Guarantees issued by North Star Insurance
Company Ltd. and Saudi Pak Commercial Bank Ltd. instead of Bank of
Punjab or any scheduled Bank of Pakistan. Acceptance of insurance
company’s guarantees instead of bank guarantees from scheduled bank
resulted in un-justified acceptance of performance security amounting to
Rs 81.9 million.
11
Audit pointed out the irregularity in August 2007. The department replied
that the notification of Finance Department making bank guarantee as
mandatory against performance security was issued on 6th April, 2005.
Thus before 6th April, 2005, the performance security issued by the
insurance company was valid. The reply was not acceptable because the
guarantee was issued on 13th May, 2006 i.e. one year after acceptance of
tender dated 2nd May, 2005 and was not covered under Finance
Department letter dated 6th April, 2005.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.8)
Para 1.9 Non-recovery of compensation for delay - Rs 80.3
million
As per clause 39 of the agreement, in the event of contractor failing to
complete the work within stipulated period, he shall be liable to pay as
compensation, an amount equal to one percent of the amount of the
contract subject to maximum of 10%.
1.9.1 The Executive Engineer, Provincial Highway Division,
Sargodha allotted the work to contractor on 13th January, 2006 with
completion period of one year. The contractor failed to complete the work
despite repeated reminders and final notices. No action under clause 39 of
the agreement was initiated against the contractor upto June, 2007 to
recover the compensation for delay in completion of work. This resulted in
non-recovery of compensation for delay amounting to Rs 28.2 million.
Audit pointed out the non-recovery in October 2007. The department
replied that the government released the funds in piece meal. The matter
of time extension had to be decided by the competent authority under
clause 37 of contract agreement. The reply was not satisfactory because
clause 37 of agreement asked for grant of extension in time in case the
contractor applied it within 30 days prior to stipulate date for completion
with detailed reasons. But the correspondence exchanged with the
contractor showed that funding was not the reason of late execution. The
Chief Engineer(s) had declared the contractor defaulter in June 2007 under
clause 60 & 61 of agreement for unsatisfactory performance. The action
under clause 60 & 61 of agreement remained incomplete. The contractor
had not applied for time extension under clause 37 of agreement.
Therefore, recovery of compensation was due.
12
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. The Committee did not agree
with the explanation / view point of the department and directed to refer
the para to the Finance Department for condonation. No compliance of the
Committee directive was made till finalization of the report.
(DP.344)
1.9.2 The Executive Engineer, Provincial Buildings Division,
Rawalpindi failed to impose 10% penalty on the delayed works. Violation
of the contract clause resulted in non-recovery of Rs 21.9 million.
Audit pointed out the non-recovery in January 2003. The department
replied that work was almost completed except false ceiling which would
be fixed on installation of High Velocity Air Conditioning (HVAC)
system in the building. The reply was not accepted as no documentary
evidence was produced.
The matter was discussed in the Departmental Accounts Committee
meeting held on 21st February, 2009 wherein the Committee pended the
para for want of recovery / compliance of previous DAC directive
regarding recovery. No compliance of the Committee directives was
reported till finalization of the report.
(DP.212)
1.9.3 The Executive Engineer, Provincial Highway Division
Faisalabad awarded a contract for Rs 161.9 million in January 2005 with
stipulated period of six months for completion. The work remained
incomplete and could not be completed upto September 2007. No action
against the contractor for delay in completion of work was initiated under
clause 39(a) for recovery of compensation @ 10% of contract price.
Moreover, price variation of Rs 13.4 million on bitumen and steel was also
paid to the contractor in the extended period although the contractor was at
fault due to non-completion of work within stipulated period. This resulted
in non-recovery of compensation for delay Rs 16.2 million and un-due
payment of price variation Rs 13.4 million.
Audit pointed out the non-recovery of compensation and undue payment
of price variation in September 2007. The department replied that shifting
of poles by WAPDA, clearance of built up area, change in scope of work
and short funding were reasons in slow progress of work. The reply was
not acceptable because the Executive Engineer/ Superintending Engineer
concerned vide his letter dated 20th and 26th June, 2007 declared the
contractor as defaulter for delay in completion of work and full funds were
available. Further, the Provincial Ombudsman on complaint of delay in
13
construction of this road also ordered the Secretary Communication &
Works Department on 18th August, 2006 to hold enquiry for inordinate
delay in completion of work and not taking timely action under the rules
against the person at fault.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
Committee that this DP was not attended by the department during
verification. The Committee directed the department to probe the matter
for non-compliance and produce complete record for detailed verification
in Audit office within 30 days. No record was produced to Audit till
finalization of the report.
(DP.337)
1.9.4 The Executive Engineer, Provincial Highway Division,
Bahawalpur awarded two contracts in March and June 1999 with a
completion dates upto July 1999 and June 2000. One work was completed
in November 1999 whereas second remained incomplete. The contractors
did not apply for grant of extension in time limit 30 days prior to the
stipulated dates of completion as per contract. No penal action under
clause 39(a) was taken to recover the liquidated damages for Rs 10.4
million. This resulted in non-recovery of Rs 10.4 million.
Audit pointed out the non-recovery in April 2007. The department replied
that in one case, due to slow progress, the contractor was declared
defaulter under clause 60 in January 2005. Action against the contractor
had been taken. The contractor had got stay order from court of Senior
Civil Judge. The reply was not acceptable because action under clause 39
was not timely initiated to recover the liquidated damages. In second case
it was replied that the para had been sent to the quarter concerned for
reply. No further reply was received.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. The Committee directed the
department to probe the matter within 30 days and further compliance be
made by the provincial highway division Bahawalpur. No progress was
shown to Audit till finalization of the report.
(DP.386)
1.9.5 The Executive Engineer, Provincial Buildings Division
Gujrat allotted two works to the two different contractors on 23rd
December, 2000 with the time period of 24 months. The works were
required to be completed on 22nd December, 2002 but the work could not
be completed even upto 30th June, 2003. Hence, the contractors were
14
liable to pay compensation @ 10% of agreed cost for delay in execution of
work. Non-completion of work within stipulated period given in the
agreement resulted into non-recovery of compensation for Rs 2.8 million.
Audit pointed out the non-recovery in March 2003. The department
replied that the funds were not provided for completion of scheme. The
reply was not acceptable because contract clause 39(a) was not
implemented for timely completion of the works. The contractors had not
applied for time extensions 30 days prior to the stipulated dates of
completion.
The matter was discussed in the Departmental Accounts Committee
meeting on 3rd September, 2006. The para was kept pending for
completion of formalities regarding extension in time otherwise recovery
from contractors within 30 days. Para was again discussed in the DAC
meeting on 12th March, 2008. No compliance on the previous
Departmental Accounts Committee directives was shown. The matter was
again discussed in the Departmental Accounts Committee meeting held
from 20th to 27th April, 2009. The Committee took the issue seriously and
directed the department to impose / recover the penalty amount within 15
days. No compliance was made till finalization of the report.
(DP.315)
1.9.6 The Executive Engineer, Provincial Buildings Division,
Gujranwala allotted a work to contractor on 9th March, 2000 with the time
period of 18 months. The same work was required to be completed on 10th
September, 2001 but the work could not be completed even upto
30th June, 2002. Hence, the contractor was liable to pay compensation
@10% of agreed cost. Non-implementation of contract clause resulted in
non-recovery of Rs 766, 990.
Audit pointed out the non-recovery in March 2003. The department
replied that the contractor had applied for time extension. The reply was
not acceptable because no action against contractor was initiated as per
contract provisions for recoveries of liquidated damages and timely
completion of work.
The matter was discussed in the Departmental Accounts Committee
meeting dated 12th March, 2008. The department explained that the work
was completed within the extended period upto 30th June, 2004. Audit
informed the Committee that as per record measurements, work was
completed on 24th December, 2004 and check measurement done by Sub
Divisional Officer on 24th June, 2006 which was not possible. Final bill
15
had not been paid. Moreover, extension/recovery of penalty as per contract
was due. The matter was again discussed in the Departmental Accounts
Committee meeting held from 20th to 27th April, 2009. The Committee
directed that Superintending Engineer Provincial Buildings Circle
Gujranwala should probe the matter within 30 days but no compliance was
reported till finalization of the report.
(DP.313)
Para 1.10 Extra expenditure due to acceptance of tender at higher
rates - Rs 57.4 million
As per para 1(ii) and 3 of Finance Department letter No.RO (TECH)
FD-2-3/85 Vol-IV dated 7th January, 1992, acceptance of tenders shall be
subject to the condition that the rates quoted and/or amount tendered are
such that, total cost of the project will not exceed the amount for which
technical sanction has been accorded by more than 4.5%. The cushion
upto 10% over administrative approval cost allowed under Delegation of
Financial Powers Rules, 1990 for technical sanction, can only be utilized
for adjustment of cost due to change in quantity, specification and scope
of work necessitated because of site conditions and in no case and under
no circumstances, it can be utilized for adjustment of premium/rates.
1.10.1 The Executive Engineer, Provincial Highway Division,
Lahore accepted a tender for Rs 466 million against the technical
sanctioned estimate cost of Rs 421.4 million (works component) i.e.
10.59% above. The tender was to be accepted within permissible limit for
Rs 440.5 million. The acceptance of tender beyond permissible limit
resulted in extra expenditure for Rs 25.5 million.
Audit pointed out the extra expenditure in January 2008. The department
replied that the requisite adjustments would be made in due course of
time. The department admitted the irregularity but no record was produced
in support of reply.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee was not
agreed with the view point of the department and required detailed
verification of record in Audit office within 15 days. No progress was
shown to Audit till finalization of the report.
(DP.244)
1.10.2 The Executive Engineer, Provincial Buildings Division,
Multan got approved technical sanction estimate at market rates for
16
Rs 170.4 million instead of rates provided in Composite Schedule of Rates
1998. The work was allotted for Rs 175.2 million on the basis of tendering
on 8th June, 2004 against the acceptable cost of Rs 159.6 million on the
basis of Composite Schedule of Rates 1998 (cost of DNIT Rs 152,720,555
+ 4.50%). Preparation of estimate at market rates in violation of said
instructions and allotment of work on item rate basis resulted in extra
expenditure of Rs 15.6 million.
Audit pointed out the extra expenditure in October 2007. The department
replied that the estimate was prepared on the basis of Composite Schedule
of Rates 1998 for Rs 159.5 million and work was put to tender. Two pre-
qualified firms participated. Lowest bid was 17.39% above the estimated
cost therefore, it was not acceptable. Due to urgency of work and being
the mega project, the Chief Engineer conveyed the government desire to
prepare the detailed estimate on market rates. Technical sanctioned
estimate for Rs 175.5 million was accorded by the Chief Engineer
accordingly. The reply was not acceptable because tenders were called
prior to accord of revised technical sanctioned estimate. Therefore
comparison for acceptance of tender was to be made with original
technical sanctioned estimate as per the Finance Department instructions
and not with revised technical sanctioned estimate amount. Further, no
sanction of Finance Department was provided for preparation of estimate
on market rates and calling of tender on item rate basis.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Audit informed the
Committee that no record was produced by the department in support of
reply. The Committee took it very serious and directed a fact finding
inquiry within one month. No progress was shown to Audit till finalization
of the report.
(DP.205)
1.10.3 The Executive Engineer, Provincial Highway Division,
Faisalabad could not award the bridges component of road construction
project (3 bridges) in February 2004 for Rs 15.9 million. Revised
administrative approval due to increased market rates for bridges
component was obtained in May 2005 for Rs 79.9 million (including
bridge component Rs 19.1 million). Two works, of three bridges were
awarded in August/September 2005 for Rs 19.6 million on the basis of
revised technical sanctioned estimate amounting to Rs 19.1 million as
0.57% and 9.6 % below and no additional performance securities were
obtained. The work for one remaining bridge on Sangla Branch Drain”
17
was awarded for Rs 5 million against the revised technical sanctioned
estimate component provision of Rs 3.818 million i.e. @ 30.15% above
against the permissible limit of 4.5% resulting excess tender approval of
Rs 977,743 (3,818,000 x 4.5% = 3,989,810 (-) 4,967,553). Award of work
for bridges component in July/September 2005 instead of November 2003
and acceptance of tender beyond permissible limit resulted in extra
expenditure of Rs 4.72 (3.13 +0.978) million.
Audit pointed out the extra expenditure in September 2007. The
department replied that the work of bridges was asking for expertise of
peculiar in nature and were awarded separately in the interest of work. The
reply was not acceptable because administrative approval of the work
including three bridges was accorded in October 2003 and road work was
technical sanctioned in November 2003. But technical sanctioned estimate
of the three bridges was accorded in June 2005. Moreover, the Secretary,
Communication & Works Department while according revised
administrative approval of the work directed to call for the explanation of
the Executive Engineer concerned for inordinate delay in putting the
bridge work into tendering which lead to cost enhancement by Rs 5.4
million. Additional security bonds for award of two bridges works below
technical sanctioned estimate were not obtained. One component was
awarded beyond permissible limit of 4.5% without obtaining approval of
Finance Department.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
committee that this draft para was not attended by the department during
verification. The Committee directed the department to probe the matter
for non-compliance and produce the complete record for detailed
verification in Audit office within 30 days. No record was produced to
Audit till finalization of the report.
(DP.336)
1.10.4 The Executive Engineer, Provincial Highway Division,
Rahim Yar Khan prepared and got approved the technical sanctioned
estimate at higher rates than provided in the MRS of 3rd quarter, 2006 for
District Rahim Yar Khan. The percentage above technical sanctioned
estimate with admissible rates of Market Rate System, came to 7.9%
instead of 4.5%. Accord of technical sanctioned estimate on incorrect rates
of Market Rate System resulted in extra expenditure of Rs 2.9 million.
Audit pointed out the extra expenditure in November 2007. The
department replied that the limit of acceptance of tender was 3.8% above
the technical sanctioned estimate which was well within the permissible
18
limit of acceptance of tender. The reply was not acceptable because
incorrect higher rates were incorporated in the technical sanctioned
estimate in violation of Finance Department instruction.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the audit informed the
Committee that department prepared and got approved the technical
sanctioned estimate at higher rates then provided in MRS of 3rd quarter
2006 for district Rahim Yar khan. The department replied that the scheme
was beyond 200 million therefore analysis is based on input rate including
10% contractor profit and 15 % overhead charges. The Committee was not
agreed with the contention of the department and directed the department
to submit a fact finding report to Audit for verification. No progress was
shown to Audit till finalization of the report.
(DP.30)
1.10.5 The Executive Engineer, Provincial Buildings Division,
Multan got approved the technical sanction estimate at market rates for
Rs 49.3 million instead of rates provided in Composite Schedule of Rates
1998. The work was allotted for Rs 49.3 million on the basis of tendering
dated 8th June, 2004. Whereas on the basis of composite schedule of rates
1998, the cost of DNIT worked out to Rs 46.6 million and the tender
acceptance amount came to Rs 49.3 million with 4.5% of admissible limit
to award the work. Preparation of estimate at market rates in violation of
said instruction and allotment of work on item rates basis resulted in extra
expenditure of Rs 2.7 million to the government.
Audit pointed out the extra expenditure in October 2007. The department
replied that the estimate was prepared on the basis of Composite Schedule
of Rates 1998 for Rs 51.4 million and work was put to tender. Two firms
participated and after preparation of comparative statement, the lowest bid
was 20.71% above the estimated cost which was not acceptable and then
on the direction of government, estimate was prepared on market rates and
allotted. The reply was not acceptable because no sanction for relaxation
of rules/instruction of the Finance Department for accord of technical
sanctioned estimate/call of tender on items rates basis instead based on
Composite Schedule of Rates 1998 was produced to audit.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Audit informed the
Committee that no record was produced by the department in support of
reply, The Committee took it very serious and directed for finding inquiry
19
within one month. No progress was shown to Audit till finalization of the
report.
(DP.204)
1.10.6 The Executive Engineer, Provincial Highway Division,
Dera Ghazi Khan evaluated the bid and awarded the work @ 3.25% above
the quoted rates of Rs 4, 162.20 per% square feet (plant pre mix
carpeting), Rs 2,710.05 per % cubic feet (sub-base course) and
Rs 3,504.33 per% cubic feet (base course) instead of the technical
sanctioned estimate rates of Rs 4,145.55 per % square feet Rs 2,597.25
per% cubic feet and Rs 3,390.26 per % cubic feet respectively. According
to technical sanctioned estimate rates with quoted premium 3.25% above,
the payable rates worked to Rs 4,282.35 per % square feet, Rs 3,500.4 per
% square feet and 2682.28 per % cubic feet for the said items. Whereas
rates of Rs 4,297.47 per % square feet, Rs 3618.22 per % cubic feet and
Rs 2,798.12 per % cubic feet were incorporated in acceptance letters and
paid to the contractor. Acceptance of tenders on incorrect rates resulted in
extra expenditure of Rs 2.2 million.
Audit pointed out the extra expenditure in November 2007. The
department replied that some of the relevant record of the works awarded
by Provincial Highway Division, Multan was to be obtained to confirm
whether some variation in percentage above DNIT amount at the time of
award was really occurred or not. After comparison of the percentage
above DNIT amount at the time of finalization of the work, recovery
would be made. But no recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that work was split into there groups having different kinds of
lead for sub base course, base course & TST but the total lead of the
groups were within the lead provided in the TSE / analysis. The
Committee directed verification of the lead of 3-Nos DNIT with reference
to the lead provided in the TSE / analysis within 7 days. No progress was
shown to Audit till finalization of the report.
(DP.130)
1.10.7 The Executive Engineer, Provincial Highway Division,
Multan got technical sanctioned estimate for Rs 12.7 million against the
administratively approved cost of Rs 10.8 million which was 17.83 %
above the approved cost against the permissible limit of 10%. The work
was awarded for Rs 13.6 million to the contractor @ 6.63% above
technical sanctioned estimate, against the permissible limit of 4.5%. Non-
20
adherence of the government instruction resulted in irregular accord of
technical sanctioned estimate for Rs 12.7 million beyond 10% limit and
extra expenditure of Rs 1.6 million to government due to acceptance of
higher tender rates.
Audit pointed out the extra expenditure in August 2007. The department
replied that the work was splitted into two groups and group-I was allotted
against partly technical sanctioned estimate amount of Rs 9.6 million and
group-II was allotted after the approval of design from Bridge Directorate
Highway Department and actual cost of bridge comes to Rs 12.7 million
against originally approved cost of Rs 10.8 million. The reply was not
acceptable because remaining work of Group-II was sanctioned for 12.7
million against the approved cost of Rs 10.8 million and allotted for
Rs 13.6 million which was beyond the permissible limit of 14.5% of
approved cost.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee did not
agree with the view point of the department and directed to probe the
matter for fact finding report. No progress was shown to Audit till
finalization of the report.
(DP.76)
1.10.8 The Executive Engineer, Provincial Highway Division,
Lahore allotted a work in April 2005 for Rs 466 million for dualization of
15 kilometer road. The work was in running stage, another work contract
allotted in same location in June 2007 against which payment of
Rs 1,165,874 vide first and final bill was allowed. In the presence of
original allotted contract, the allotment of second contract was irregular.
Therefore, the whole payment of Rs 1.2 million without technical
sanctioned estimate provision to second contractor for part of already
allotted work resulted in extra expenditure.
Audit pointed out the extra expenditure in January 2008. The department
replied that the recovery of difference of rates between M/s Way Makers
and M/s Khalid Rauf & Co. amounting to Rs 105,019 would be effected in
due course of time. The reply was not acceptable as neither the detail of
admitted recovery of Rs 105,019 was produced nor the observation was
properly replied for allotment of the second contract in presence of the
original contract. The second contract was allotted without initiating penal
action against original contractor under clause 60 & 61 of agreement.
21
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee directed
clarification regarding separate tender out of contingency amount of the
one and same technical sanctioned estimate from the Finance Department.
No progress was shown to Audit till finalization of the report.
(DP.240)
1.10.9 The Executive Engineer, Provincial Highway Division,
Bahawalpur provided the rates in technical sanctioned estimate more than
the rates depicted in administrative approval for some items in violation of
the Finance Department instructions dated 7th January, 1992. Resultantly
technical sanctioned estimate was accorded on incorrect rates and the
tenders accepted were @ 6.17 and 5.93% above. The accord of technical
sanctioned estimate on incorrect rates resulted in extra expenditure of Rs 1
million to government.
Audit pointed out the extra expenditure in August 2007. The department
replied that the work was technically sanctioned by the competent
authority on the basis of approved rates which were notified by the
government during the period of technical sanctioned estimate. The reply
was not acceptable because the technical sanctioned estimate was to be
accorded on the administrative approval rates basis because 10% cushion
could not be utilized for change in rates.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that work was allotted to contractor after approval by the
competent authority within permissible limit. The question for acceptance
of tender on higher rates did not hold good. The Committee did not agree
with the view point of the department and directed the department for
detailed verification / recovery by audit. No progress was shown to Audit
till finalization of the report
(DP.126)
Para 1.11 Overpayment due to non-deduction of cost of less used
bitumen - Rs 57.2 million
As per condition No.6 of Finance Department Notification vide No. RO
(TECH) FD2-3/2004 dated 2nd August, 2004; rate for item of carpeting
shall be fixed by the Chief Engineer on the basis of different percentage of
bitumen i.e. 3% to 6%. However, payment will be made to contractor as
per job mix formula or actual bitumen used in the work.
22
1.11.1 The Executive Engineer, Provincial Highway Division,
Sialkot made payment for the item “Providing/laying plant premixed
bitumen carpeting i/c compaction finishing to required camber and grade
density 2" thick complete in all respect” for 864,862 square feet @
Rs 3,055 per % square feet with 4.5% ratio of bitumen without obtaining
the job mix formula from the Road Research and Martial Testing Institute.
Non-obtaining the recommended job mix formula from the laboratory
before the execution of item resulted in overpayment of Rs 26.4 million.
Audit pointed out the overpayment in January 2008. The department
replied that as per approved job mix formula, the percentage for use of
bitumen was 4.2% to 4.8% and ratio of 4.5% was well within the range of
tolerance limit. The reply was not acceptable because the payment was
made without job mix formula. Laboratory test reports were not produced
to audit to ascertain the actual consumption of bitumen on work.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that the work was carried out as per job mix formula of another
work at Lahore allowed by the concerned Executive Engineer. The
Committee did not agree with the view point of the department and
directed to get advice from Road Research Material Institute at Lahore
regarding use of material of another work at Lahore could be utilized in
Sialkot road. No progress was shown to Audit till finalization of the
report.
(DP.230)
1.11.2 The Executive Engineer, Provincial Highway Division,
Okara made payment for the item “Providing/laying Plant Premixed
bituminous carpeting i/c compaction finishing to required camber and
grade density 2.5" thick and 2" thick complete in all respect” for
3,622,800 square feet @ Rs 3,750 per % square feet and 1,238,240 square
feet @ Rs 2,425 per % square feet respectively using bitumen with ratio
4.5% of bitumen whereas actual bitumen used in work was 3.92% as per
laboratory test report of Junior Research Officer Regional Research
Laboratory Provincial Highway Circle Lahore No.1060-A/Sd dated 17th
July, 2007. The recovery of cost of 0.58% for less use of bitumen was not
made from the contractor. Non-recovery of cost of less used bitumen
resulted in overpayment of Rs 9.8 million.
Audit pointed out the overpayment in February 2008. The department
replied in one case, that recovery would be effected from the contractor
23
but no recovery was made. In other case, it was replied that the work was
transferred to Provincial Highway Division Lahore. No further reply
received.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that the matter was sub-judice and recovery would be made if
court of law permitted. The Committee directed the department to recover
the amount within 60 days. No progress towards recovery was shown to
Audit till finalization of the report.
(DP.116)
1.11.3 The Executive Engineer, Provincial Highway Division,
Gujrat made payment for the item “Providing laying Plant Premixed
bitumen Carpeting including compaction finishing to required camber and
grade density complete in all respect” @ Rs 3,300, Rs 3,400, Rs 3,600,
and 4,900 per % square feet using bitumen with ratio 4.5%. Whereas
actual bitumen used in work was 4.1 to 4.2 % as per Laboratory Test
Report dated 28th August, 2006. The recovery of cost of 380.46 ton for
less use of bitumen was not made from the contractor. This resulted in
overpayment of Rs 4.6 million.
Audit pointed out the overpayment in December 2007. The department
replied in three (3) cases that recovery of Rs 3.8 million would be effected
from the next bill of the contractor but no recovery was made. In one case
it was replied that actual bitumen @ 4.5% was used but no documentary
evidence was provided to Audit.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit intimated that
recovery / adjustment of Rs 3,844,443 (Rs 498,336+Rs 268,292+
Rs 30,77,815) relating to para No.3, 4, 5 was verified. The Committee
reduced the para to Rs 766,482 relating to para No.6. No progress towards
balance recovery was reported till finalization of the report.
(DP.265)
1.11.4 The Executive Engineer Provincial Highway Division,
Okara made payment for the item “Providing laying Plant Premixed
bitumen Carpeting including compaction finishing to required camber and
grade density 3" thick complete in all respect” for quantity of 1,504,404sft
@ Rs 3,600 per % square feet using bitumen with ratio 4.5%. Whereas the
average ratio of actual bitumen used in 2" and 4" thick layer of asphaltic
24
base course was 3.92% according to Junior Research Officer Regional
Research Laboratory Provincial Highway Circle Lahore letter No. 101/RL
dated 28th August, 2006. The recovery for cost of 0.58% excess bitumen
was not made from the contractor. This resulted in overpayment of Rs 3.9
million.
Audit pointed out the overpayment in February 2008. The department
replied that the recovery would be effected from the next bill of the
contractor. No recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that the schemes were in progress and price variation would be
recovered on finalization of accounts. The Committee was not agreed with
contention of the department and directed to recover the amount within 60
days. No progress towards recovery was shown to Audit till finalization of
the report.
(DP.113)
1.11.5 The Executive Engineer, Provincial Highway Division,
Sialkot made payment for the item “Providing/laying Plant Premixed
bitumen Carpeting i/c compaction finishing to required camber and grade
density 2" thick complete in all respect” for 1,984,992 square feet and
1,567,200 square feet with 4.5% ratio of bitumen whereas it was to be paid
with the ratio of 4.1 % as per job mix formula recommended by the Road
Research and Material Testing Institute Lahore. Recovery of cost of 0.4 %
less use of bitumen was not made from the contractor. This resulted in
overpayment of Rs 3.9 million.
Audit pointed out the overpayment in January 2008. The department
replied that average rate of packed and bulk bitumen was adopted in the
analysis of rate for the said item. The reply was not acceptable being
irrelevant. Payment was to be made as per actual use of bitumen in the
work.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that as per job mix formula supplied by road research and
material testing institute Lahore indicated 4.4% + 0.3% tolerance = 4.1 %
to 4.7 % which was within the range of 4.1% . The committee did not
agree with the view point of the department and directed to recover the
amount within two weeks. No progress towards recovery was reported till
finalization of the report.
(DP.234)
25
1.11.6 The Executive Engineer, Provincial Highway Division,
Sahiwal made payment for an item of work “Providing/laying plant
premix carpeting 3.5" thick with Tack/Prime coat using 6% bitumen
content @ Rs 7,417.50 per % square feet. Rate of Rs 7,000 per % square
feet was quoted by contractor. Payment for said item @ Rs 3,600 per %
square feet for first layer of 2 inch thickness was allowed without approval
of job mix formula from the Director Road Research and Material Testing
Institute Lahore. Further, in all other groups of the same scheme, bitumen
@ 4.2% by weight was used as recommended by Director Road Research
and Material Testing Institute Lahore vide No.G-6/Sahiwal/2168 dated
29th April, 2006. Therefore payment of Rs 13.1 million made without
approval of job mix formula and the rate of premix carpeting @ 6% was
unjustified which involved overpayment of Rs 2.91 million.
Audit pointed out the overpayment in January 2008. The department
replied that the bitumen used in carpeting ranges between 4.2% to 4.5%
ratio of bitumen which was within tolerance limit and no recovery was
required to be made, any how, the matter of any abnormality would be
looked into, while finalizing the contract. The reply was not acceptable
because the item of carpeting was to be executed after the approval of job
mix formula from the Road Research and Material Testing Institute
Lahore. Payment was to be made as per actual use of bitumen on work as
per direction of the Finance Department.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee did not
agree with the view point of the department and directed for detailed
verification of recovery and final bill by Audit. No progress was shown to
Audit till finalization of the report.
(DP.143)
1.11.7 The Executive Engineer, Provincial Highways Division,
Okara made payment for the item “Providing/laying Plant Premixed
bituminous carpeting i/c compaction finishing to required camber and
grade density 2" thick and 4" thick complete in all respect” for 1,215,600
square feet @ Rs 3,200 per % square feet and 265,200 square feet
@ Rs 6,400 per % square feet respectively using bitumen with ratio 4.5%.
Whereas the average ratio of actual bitumen used in 2" and 4" thick layer
of asphaltic base course was 3.92% of weight according to Junior
Research Officer Regional Research Laboratory Provincial Highway
Circle, Lahore letter No.101 / RL dated 28th August, 2006. The recovery
for cost of 0.58% for less use of bitumen was not made from the
contractor. This resulted in overpayment of Rs 2.9 million.
26
Audit pointed out the overpayment in February 2008. The department
replied that the recovery would be effected from the next bill of the
contractor but no recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that the schemes were in progress and recovery on account of
less use of bitumen would be effected on finalization of accounts. The
Committee was not agreed with contention of the department and directed
to recover the amount within 60 days. No progress towards recovery was
shown to Audit till finalization of the report.
(DP.112)
1.11.8 The Executive Engineer, Provincial Highways Division,
Okara made payment for the item “Providing/laying Plant Premixed
bituminous carpeting i/c compaction finishing to required camber and
grade density 2" thick complete in all respect” for 1,846,800 square feet @
Rs 2,300 per% square feet with ratio 4.5% of bitumen. Whereas only 4.2%
bitumen was to be used by weight of mixture in the item of plant premixed
bituminous carpeting for 2" thick for 100 square feet area, according to job
mix formula for Bituminous carpeting surface course 2.5" thick as
recommended by the Director Road Research and Material Testing
Institute, Lahore vide No.2475/SWO dated 26th September, 2005. The
recovery of cost for less use of 0.3 % bitumen was not made from the
contractor. Non-recovery of cost of less used bitumen resulted in
overpayment of Rs 1.7 million.
Audit pointed out the overpayment in February 2008. The department
replied that the recovery would be effected from the next bill of the
contractor. No recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Audit informed the
Committee that admitted recovery was not effected by the department.
The Committee directed the department to effect the recovery within 30
days. No progress towards recovery was shown to Audit till finalization of
the report.
(DP.109)
1.11.9 The Executive Engineer, Provincial Road Construction
Division, Rawalpindi made payment for an item of work, “Providing and
laying plant premixed bituminous carpeting 2" thick” per% square feet for
a quantity of 314,880 square feet. The same was paid for 4.5% ratio by
27
weight of mixture. Whereas, it was to be paid with ratio of 4.1% as per
recommended ratio and rate was to be reduced for less use of bitumen.
This resulted in overpayment of Rs 326,860.
Audit pointed out the overpayment in October 2007. The department
replied that the work was in progress. The quantity/rate would be adjusted
as per job mix formula or bitumen used in the work as per results of
bitumen test and instructions displayed on website by the Finance
Department. The reply was not acceptable as adjustment of less use of
bitumen cost was not made in interim payments of contractor. Moreover,
no recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Audit informed the
committee that no recovery was made by the department. The Committee
directed the department to effect the recovery within one month. No
progress towards recovery was reported till finalization of the report.
(DP.22)
1.11.10 The Executive Engineer, Provincial Highways Division,
Jhelum made payment for the item “Providing/laying Plant Premixed
Bitumen Carpeting” i/c compaction finishing to required camber and
grade density 2" thick complete in all respect” for 348,000 Square feet @
Rs 3,151 per % square feet with 4.5% ratio of bitumen. Whereas only
4.2% bitumen was to be used by weight of mixture in the item of plant
premix bitumen carpeting for 2" thick for 100 square feet area, as per job
mix formula recommended by the Director Road Research and Material
Testing Institute Lahore vide No.G-6/Chakwal/2157 dated 13th May, 2006.
The recovery of cost of 0.3 % less use of bitumen was not made from the
contractor. Non-recovery of cost of less used bitumen resulted in
overpayment of Rs 269,780.
Audit pointed out the overpayment in November 2007. The department
replied that recovery would be made from the contractor. No recovery was
made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the view point of the
department that the job mix formula came to 4.6% instead of 4.2% was
not accepted by the Committee and directed for detailed verification from
Audit. No progress was shown to Audit till finalization of the report.
(DP.99)
28
1.11.11 The Executive Engineer, Provincial Highway Division,
Sialkot made payment for the item “Providing/laying Plant Premixed
bitumen Carpeting i/c compaction finishing to required camber and grade
density 2" thick complete in all respect” for 628,800 square feet with 4.5%
ratio of bitumen whereas it was to be paid as per job mix formula @ 4.4%
recommended by Road Research and Material Testing Institute Lahore
vide No G-6/Sialkot/1975 dated 26th June, 2006. The recovery of cost of
0.1 % for less use of bitumen was not made from the contractor. This
resulted in overpayment of Rs 209,566.
Audit pointed out the overpayment in January 2008. The department
replied that as per approved job mix formula the percentage of bitumen
was 4.1% to 4.7% and ratio of 4.5% was well within the range of
tolerance. The reply was not acceptable because department had admitted
that the bitumen contents used were 4.4% (4.1 + 4.7/2). No laboratory test
reports of actual work done were produced to verify the facts. Payment
was to be made as actual use of bitumen on the work.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that as per job mix formula, supplied by road research and
material testing institute Lahore indicated 4.4% + 0.3% tolerance = 4.1 %
to 4.7 % which was within the range of 4.1%. The Committee did not
agree with the view point of the department and directed to recover the
amount within two weeks. No progress towards recovery was shown till
finalization of the report.
(DP.231)
1.11.12 The Executive Engineer, Provincial Highway Division,
Sialkot made payment for the item “Providing/laying Plant Premixed
bitumen Carpeting i/e compaction finishing to required camber and grade
density 2" thick complete in all respect” for 460,800 square feet @
Rs 1,942 per % square feet with 4.5% ratio of bitumen. Whereas as per job
mix formula bitumen @ 4.4% was to be used as recommended by the
Senior Research Officer, Road Research and Material Testing Institute
vide No.G-6/ Sialkot/2238 dated 22nd May, 2006. The recovery of cost of
0.1% bitumen less used was not made from the contractor. Non-recovery
of cost of less used bitumen resulted in overpayment of Rs 143,447.
Audit pointed out the overpayment in January 2008. The department
replied that as per approved job mix formula the percentage of bitumen
was 4.1% to 4.7% and ratio of 4.5% was well within the range of
tolerance. The reply was not acceptable because department had admitted
29
that less ratio i.e. 4.4% (4.1 + 4.7/2) of bitumen was actually used on
work, for which recovery was to be made. Further, laboratory test reports
were also not produced to audit to verify the actual consumption of
bitumen.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.370)
1.11.13 The Executive Engineer, Provincial Highway Division,
Sialkot made payment for the item “Providing/laying Plant Premixed
bitumen Carpeting i/c compaction finishing to required camber and grade
density 2" thick complete in all respect” for 225,600 square feet @
Rs 3,000 per % square feet for each group with 4.5% ratio of bitumen.
Whereas as per job mix formula bitumen @ 4.4% was to be used as
recommended by the Senior Research Officer, Road Research and
Material Testing Institute vide No.G-6/Sialkot/2238 dated 22nd May, 2006.
Recovery of cost of 0.1 % for less use of bitumen was not made. This
resulted in overpayment of Rs 140,458.
Audit pointed out the overpayment in January 2008. The department
replied that as per approved job mix formula, the percentage of bitumen
was 4.1% to 4.7% and ratio of 4.5% was well within the range of
tolerance. The reply was not acceptable because department had admitted
that bitumen contents used were 4.4% (4.1 + 4.7/2). No laboratory test
report of actual work done was produced to verify the facts. Payment was
to be made as actual use of bitumen on the work.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that as per job mix formula supplied by road research and
material testing institute Lahore indicated 4.4% + 0.3% tolerance = 4.1 %
to 4.7 % which was within the range of 4.1%. The Committee did not
agree with the view point of the department and directed to recover the
amount within two weeks. No progress was shown to Audit till
finalization of the report.
(DP.233)
Para 1.12 Undue financial aid to contractors due to non-
submission of performance security – Rs 56.5 million
According to clause 7 of the contract agreement and item (h) of
“Memorandum of Work” and Finance Department instructions vide
No.RO(TECH) FD-1-2/83 (VI) (P), dated 6th April, 2005, Performance
30
security in the form of “Bank Guarantee” equal to 10% or 5% of tender
price in case of tenders with cost exceeding Rs 25 million or Rs 50 million
should be obtained from the “Bank of Punjab” or any scheduled Bank of
Pakistan within 15 days of the receipt of acceptance letter by the
contractor.
1.12.1 The Executive Engineer, Provincial Highway Division,
Dera Ghazi Khan awarded the works for Rs 74.7 million, Rs 238.1 million
and Rs 202.3 million to the contractors but did not obtain the performance
security in shape of bank guarantee @ 5% of contract sum. Non-adherence
to the agreement clause resulted in undue financial aid to the contractors
amounting to Rs 25.8 million.
Audit pointed out the undue financial aid to contractors in November,
2007. The department replied that the performance security was required
to safeguard the interest of government regarding execution of work and
the same was to be released after three month or final bill which ever was
earlier as per clause-7 of the contract agreement. Further, the works were
allotted in 2005-06 and the contractors had successfully performed the
contracts, therefore recovery of performance security was not justified at
this stage. The reply was not acceptable because the contracts stipulations
regarding obtaining of bank guarantees were not implemented. It required
condonation from the Finance Department.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the explanation of the
department was not accepted by the Committee and the department was
directed for condonation from Finance Department. No progress was
shown to Audit till finalization of the report.
(DP.135)
1.12.2 The Executive Engineer, Provincial Highway Division,
Rahim Yar Khan did not obtain the performance security in the form of
bank guarantee @ 5% from the contractor against the work allotted for
Rs 332.5 million within fifteen days after the allotment of work. Non-
adherence to agreement clause resulted in undue financial aid to the
contractor amounting to Rs 16.6 million.
Audit pointed out the undue financial aid to the contractor in November
2007. The department replied that the bank guarantee was available with
the department. The performance security/bank guarantee was not
produced during audit and also with reply.
31
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the audit informed the
Committee that performance security was not obtained within 15 days of
issuance of acceptance letter. The Committee directed the department to
seek condonation from Finance Department. No progress was shown to
Audit till finalization of the report.
(DP.27)
1.12.3 The Executive Engineer, 6th Provincial Buildings Division,
Lahore awarded contract for Rs 297.6 million but neither obtained the
performance security in the shape of bank guarantee @ 5% of contract
sum, nor earnest money of the contractor amounting to Rs 6.4 million was
confiscated in violation of clause-7 of contract agreement. This resulted in
non-forfeiture of earnest money of Rs 6.4 million.
Audit pointed out the non forfeiture of earnest money in January 2007.
The department replied that the work was of urgent nature and
performance of contractor was satisfactory. The period more than three
(03) months had been elapsed and performance security could not be taken
at this stage after that period. The reply was not satisfactory because
according to clause-7 of the contract, the department was bound to obtain
performance security otherwise the earnest money was to be forfeited.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee took a
serious view regarding non-obtaining of performance security and directed
to refer the case to the Finance Department for condonation after obtaining
the performance security. No progress was shown to Audit till finalization
of the report.
(DP.294)
1.12.4 The Executive Engineer, Provincial Highway Division
Multan did not obtain the performance security in the form of bank
guarantee @ 5% of contract cost of Rs 78 million within fifteen days after
the allotment of work. Non-adherence to the agreement clause resulted in
undue financial aid to the contractor amounting to Rs 3.9 million.
Audit pointed out the undue financial aid in August 2007. The department
replied that the contractor had been directed to provide the performance
security. The reply was not acceptable because the department failed to
fulfill contractual obligation. The irregularity needed condonation from
the Finance Department.
32
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee did not
agree with the view point of the department and directed to probe for fact
finding regarding performance security. No progress was shown to Audit
till finalization of the report.
(DP.77)
1.12.5 The Executive Engineer, Provincial Highway Division
Okara, allotted the work for Rs 47.2 million against the estimated cost of
Rs 50.9 million which was 7.46% below on 12th December, 2006 but did
not obtain the additional performance security in form of bank guarantee.
Non-observance of instructions issued by the Finance Department resulted
in undue financial aid to the contractor amounting to Rs 3.8 million.
Audit pointed out the un-due financial aid to the contractor in February
2008. The department replied that the work was at completion stage and
sufficient security deposit was available with the department. The reply
was not acceptable because the additional bank guarantee was not
obtained. The irregularity needed condonation from the Finance
Department.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that the work was completed and recovery of performance
security at this stage was not required. The Committee was not agreed
with the view point of department and directed to refer the case to the
Finance Department for condonation. No progress towards recovery was
shown to Audit till finalization of the report.
(DP.120)
Para 1.13 Non-recovery/overpayment due to non-deduction in
rate on account of price variation - Rs 46.4 million
As per clause 55(1) of contact agreement, where price (increase or
decrease) to the extent of 5% or more, in the price of any item takes place
after the acceptance of tender and before the completion of contract, the
amount payable/recoverable shall be adjusted to the extent of actual
variation in the cost of item concerned.
1.13.1 The Executive Engineer, Provincial Highway Division,
Faisalabad allowed the contractor to use bitumen of bulk supply (in
Bouzer) for laying of premix carpeting but did not recover the cost.
33
Further the base and current rates for bitumen were taken as Rs 17,960 and
Rs 26,950 per ton for price variation payment. Whereas those were to be
taken as Rs 19,920 (on 28th September, 2004 the date of administrative
approval) and Rs 24,700 (date of measurements in measurement book on
15th May, 2007). This resulted in unjustified payment of price variation of
Rs 14.6 million and non-recovery of Rs 7.6 million for bitumen used in
bulk supply.
Audit pointed out the non-recovery in September 2007. The department
replied that the deduction pertained to triple surface treatment work
whereas they had laid plant premixed carpeting of bulk bitumen as per
analysis of rate of premix and prime coat. The reply was not acceptable
because the department had allowed price variation showing base rate
Rs 17,960 per ton whereas web site rate was Rs 19,920. Moreover,
analysis of rate was not produced in support of reply.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee did not
agree with the view point of the department and directed to effect recovery
of difference of rate of bulk supply of bitumen and packed supply. No
progress was shown to Audit till finalization of the report.
(DP.71)
1.13.2 The Executive Engineer, 6th Provincial Building Division,
Lahore did not recover the price for de-escalation on steel/cement because
the base rates of steel and cement were reduced by the manufacturers from
Rs 42,000 per ton to Rs 38,000 per ton and from Rs 310 per bag to Rs 225,
Rs 181 and Rs 180 per bag respectively during the period of execution
from October 2006 to December 2007. Non-adherence to the agreement
clause resulted in non-recovery of Rs 7.3 million.
Audit pointed out the non-recovery in January 2008. The department
replied that recovery on account of decrease in rate of steel/cement would
be made. But no recovery made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the PDP consisting of
5 No. APs out of which recovery of Rs 61,254 regarding AP No.1709 was
verified. The remaining APs were deferred for recoveries. The para was
reduced to Rs 7.263 million. No progress was shown to Audit till
finalization of the report.
(DP.296)
34
1.13.3 The Executive Engineer, Provincial Building Division,
Gujranwala did not recover the difference of rates of cement from the
contractors because the base rates of cement were reduced during the
execution of work i.e. from June 2006 to January 2008 from Rs 228 per
bag to Rs 180 per bag and Rs 204 per bag, from Rs 310 per bag to Rs 225,
Rs 204 and Rs 181 per bag, from Rs 275 per bag to Rs 230, Rs 228,
Rs 225, Rs 204 and Rs 180 per bag and from Rs 280 per bag to Rs 225
and Rs 181 per bag respectively as per input rates issued by the Finance
Department. Non-adherence to the agreement clause resulted in non-
recovery of Rs 4.9 million.
Audit pointed out the non-recovery in March 2008. The department
replied that either the recovery had been effected or would be effected in
next running bills. No recovery was got verified from audit.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. As regard AP No. 1722, the
recovery of Rs 1.799 million was verified. The recovery of remaining APs
was directed to effect within 30 days. The para was reduced to Rs 3.108
million. No progress towards recovery was shown to Audit till finalization
of the report.
(DP.311)
1.13.4 The Executive Engineer, 5th Provincial Building Division,
Lahore did not recover the difference of rates of cement from the
contractor because the base rates was reduced from Rs 310 and Rs 280 per
bag to Rs 275, Rs 228, Rs 225 and Rs 204 per bag during the period of
execution of work from August 2006 to June 2007 as per input material
rates displayed on the Finance Department web site for Lahore District.
Non-adherence to the agreement clause resulted in non-recovery of Rs 3.5
million.
Audit pointed out the non-recovery in December 2007. The department
replied that the recovery, if due, would be effected at the time of
finalization of the contractor’s account. But no recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
informed the Committee that the recovery was not made because the
works were in progress. The Committee directed the department to effect
the recovery within one month. No progress towards recovery was shown
to Audit till finalization of the report.
(DP.293)
35
1.13.5 The Executive Engineer, Provincial Road Construction
Division Rawalpindi did not recover the amount of price variation on
account of decrease in base rates of cement from Rs 280, Rs 275 and
Rs 260 per bag to Rs 235, Rs 228 and Rs 205 per bag and steel from
Rs 39,000 and Rs 40,200 to Rs 34,200 per ton during execution of work
from April 2006 to July 2007 to the extent of 5% or more issued by the
Finance Department. This resulted in non-recovery of Rs 3.4 million.
Audit pointed out the non-recovery in October 2007. The department
replied that neither the contractor was made payment on account of
increase in prices of bitumen and steel nor their decrease in prices was
adjusted. Necessary variation i.e. increase/decrease would be adjusted in
accordance with notified rates by the competent authority. The reply was
not acceptable because variations i.e. decrease in price of cement to the
extent of 5% or more was not made in running bills of the contractor.
The matter was discussed again in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee
accepted the recovery of Rs 438780 effected by the department and
reduced the amount of para to Rs 3,001,543. The Committee also directed
the department to effect the balance recovery within 30 days. No
compliance towards balance recovery was reported till finalization of the
report.
(DP.24)
1.13.6 The Executive Engineer, Provincial Highway Division,
Jhelum did not recover the price de-escalation on cement because the base
rates of cement were decreased by the manufacturers from Rs 5,840 and
Rs 5,600 per ton to Rs 4,000 and Rs 3,900 per ton respectively during the
period of execution from October 2006 to June 2007. Non-adherence to
the agreement clause resulted in non-recovery of Rs 3 million.
Audit pointed out the non-recovery in November 2007. The department
replied that recovery on account of decrease in rate of cement would be
made. But no recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
Committee that the department made the price variation statement on the
basis of rates notified by the Chief Engineer Building. The Committee did
not agree with the departmental view point and directed to effect recovery
on the basis of rates issued by the Finance Department. No progress was
shown to Audit till finalization of the report.
(DP.97)
36
1.13.7 The Executive Engineer, Provincial Highway Division,
Dera Ghazi Khan could not recover the price de-escalation on cement
because the rate of cement was decreased by the manufacturers from
Rs 310 per bag and Rs 292 per bag to Rs 190 per bag during the period of
execution of work. Non-adherence to the agreement clause resulted in
non-recovery of Rs 4.4 million.
Audit pointed out the non-recovery in November 2007. The department
replied that the record of the schemes was being thrashed out and recovery
on account of decrease in the rate of cement above 5% would be effected.
No recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein regarding para No.169,
the amount was reduced to Rs 600,217 by the Committee. The department
explained that the Para No. 176 for Rs 710484 was transferred to
provincial Highway Division Muzafargarh. The para No.177 was reduced
to Rs 10,49,078 and the para No.178 was reduced to Rs 448,031 by the
Committee after verification by the Audit. Overall DP amount was
reduced to Rs 20,97,326. No progress towards verification of the balance
amount was shown to Audit till finalization of the report.
(DP.46)
1.13.8 The Executive Engineer, Provincial Highway Division,
Gujranwala did not recover the difference of rates of cement and bitumen
from the contractor because the rates of cement were reduced during the
period of execution i.e. October, September, August 2006, May, July,
August 2007 to February 2008 from Rs 310 per bag and Rs 275 per bag to
Rs 204 per bag, Rs 225 per bag and Rs 275 per bag respectively and
bitumen from Rs 30.20 per kilogram to Rs 27.90 per kilogram as per input
material rates issued by the Finance Department. Non-adherence to the
agreement clause resulted in non-recovery of Rs 2 million.
Audit pointed out the non-recovery in February 2008. The department
replied that the adjustment in price variation would be carried out in next
bill of contractor. But no recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee
accepted the recovery of Rs 384,595 and reduced the para to Rs 1.698
million with the direction to effect the balance recovery within 2 weeks.
No progress towards balance recovery was shown to Audit till finalization
of the report.
(DP.270)
37
1.13.9 The Executive Engineer, Provincial Highway Division,
Mianwali did not recover the difference of rates of cement from the
contractor because the rates were reduced from Rs 292 per bag to Rs 180,
Rs 228, Rs 225 and Rs 275 per bag during the period of execution of work
from January 2006 to October 2007 as per rates displayed on the Finance
Department web site for Mianwali District. Non-adherence to the
agreement clause resulted in non-recovery of Rs 2 million
Audit pointed out the non-recovery in November 2007. The department
replied that after completion of project, the increase/decrease would be
calculated and recovered accordingly. The reply was not acceptable
because recovery from each contractor’s payment was required. The due
recovery as per agreement was not made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Audit informed the
Committee that admitted recovery was not made by the department. The
Committee directed the department to effect the recovery within one
month. No progress towards recovery was shown to Audit till finalization
of the report.
(DP.346)
1.13.10 The Executive Engineer, Provincial Building Division,
Sahiwal did not recover the price de-escalation on cement because the
base rate of cement was decreased from Rs 310 per bag to Rs 182 per bag
during the period of execution from January 2007 to September 2007.
Non-adherence to the agreement clause resulted in non-recovery of Rs 1.8
million.
Audit pointed out the non-recovery in December 2007. The department
replied that the recovery would be made from the contractor on
finalization of work after adjustment of price variation. But no recovery
made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee directed
detailed verification of statement/recovery amounting Rs 145,629 from
M.B regarding AP No.1639, 1642, 1645, 1647 & 1651. The department
stated that these paras were transferred to the Executive Engineer,
Provincial Building Division, Lodhran alongwith relevant record and no
record of these paras was produced. The Committee took a serious view
and directed record for verification by Audit. No progress was shown to
Audit till finalization of the report.
(DP.182)
38
1.13.11 The Executive Engineer, Provincial Building Division,
Gujrat did not recover the difference of rates of cement from the
contractor because the base rate of cement was reduced during the period
of execution i.e. March 2005 to August 2006 from Rs 310, Rs 292, Rs 280
and Rs 185 per bag to Rs 275, Rs 228, Rs 225, Rs 185 and Rs 175 per bag
respectively as per input material rates issued by the Finance Department.
Non-adherence to clause-55 of agreement resulted in non-recovery of
Rs 1.6 million.
Audit pointed out the non-recovery in December 2007. The department
replied that no formal notification of price of cement had been issued since
1996, so the allowance for escalation/de-escalation could not be adjusted.
The reply was not acceptable because the rate was decreased by more than
5% as per material input rate displayed on website of Finance Department.
The matter was discussed in the Departmental Accounts Committee
meeting held on 21st February, 2009 wherein the Committee deferred the
para for recovery/adjustment. No compliance of the Committee directive
was reported till finalization of the report.
(DP.168)
1.13.12 The Executive Engineer, Provincial Building Division,
Sahiwal did not recover the price de-escalation on mild steel bars and
cement because the base rates of both items were decreased by the
manufacturers from Rs 35,200 per ton and Rs 292 per bag to Rs 32,200
per ton and Rs 185 per bag respectively during the period of execution of
work from August 2006 to November 2007. Non-adherence to the
agreement clause resulted in non-recovery of Rs 905,794.
Audit pointed out the non-recovery in January 2008. The department
replied that the recovery of price variation would be made at the time of
completion of contract. But no recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that the Para was transferred to the Executive Engineer,
Provincial Building Division, Lodhran alongwith relevant record. No
record was produced by the department for verification. The Committee
took a serious view and directed record verification within fifteen days.
No progress was shown to Audit till finalization of the report.
(DP.176)
39
1.13.13 The Executive Engineer, Provincial Highway Division,
Mianwali did not recover the difference of rate of cement because the base
rate was reduced from Rs 292 per bag to Rs 170, Rs 180, Rs 225 and
Rs 275 per bag during the period of execution of work from January 2006
to October 2007 as per rates displayed on the Finance Department web site
for Mianwali District. Non-adherence to the agreement clause-55(I)
resulted in non-recovery of Rs 892,296.
Audit pointed out the non-recovery in November 2007. The department
replied that after completion of project increase/decrease would be
calculated and recovery would be effected. The reply was not acceptable
because recovery was due in each payment to contractor. Undue financial
benefit was given to contractor.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee was not
agreed with the explanation of the department and directed to effect
recovery within one month. No progress towards recovery was shown to
Audit till finalization of the report.
(DP.348)
1.13.14 The Executive Engineer, Provincial Building Division,
Faisalabad did not recover the difference of rate of cement from the
contractor because the base rates of cement were reduced during the
period of execution i.e. July 2006 to June 2007 from Rs 310, Rs 290 and
Rs 225 per bag to Rs 275, Rs 225, Rs 170 and Rs 228 per bag as per input
material rates issued by the Finance Department. Non-adherence to
agreement clause resulted in non-recovery of Rs 766,043.
Audit pointed out the non-recovery in August 2007. The department
replied that the price variation of concerned item would be made in the
next running bill of the contractor accordingly. No recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee did not
accept the view point of the department regarding non-issuance of rate of
Javadan cement Karachi and directed to effect recovery within 30 days.
No progress towards recovery was reported till finalization of the report.
(DP.209)
1.13.15 The Executive Engineer, Provincial Highway Division,
Faisalabad did not recover the difference of rate of cement from the
contractor because the rate of cement was reduced during the period of
40
execution of items pertaining to cement from Rs 275 per bag to Rs 170,
Rs 180 and Rs 225 per bag as per input rates displayed on web site for
Faisalabad District. Non-adherence to agreement clause resulted in non-
recovery of Rs 758,060.
Audit pointed out the non-recovery in September 2007. The department
replied that necessary adjustment would be made in the next bill of the
contractor. But no recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee did not
agree with the view point of the department and directed to recover the
amount of price variation within 30 days. No progress towards recovery
was shown to Audit till finalization of the report.
(DP.49)
1.13.16 The Executive Engineer, Provincial Building Division,
G.O.R. Lahore did not recover the price de-escalation on cement from the
contractors due to decrease in the base rates of cement from Rs 310 per
bag to Rs 180 per bag i.e to the extent of 5% or more, during the period of
execution from May 2006 to October 2007 as per input material rates
displayed by the Finance Department through website. Non-adherence to
the agreement clause resulted in non-recovery of Rs 479,397.
Audit pointed out the non-recovery in March 2008. The department
replied that the recovery would be made from the contractor but recovery
was not made.
The matter was discussed in the Departmental Accounts Committee
meeting held on 21st February, 2009 wherein no record was produced by
the department. The Committee deferred the para for recovery /
adjustment. No compliance of the Committee directive was reported till
finalization of the report.
(DP.217)
1.13.17 The Executive Engineer, Provincial Highway Division,
Sargodha did not recover the difference of rate of cement from the
contractor because the base rate was reduced from Rs 310 per bag to
Rs 175 and Rs 228 per bag during the period of execution of work from
February 2007 to April 2007 as per rates displayed on the Finance
Department website for Sargodha District. Non-adherence to agreement
clause resulted in non-recovery of Rs 474,955.
41
Audit pointed out the non-recovery in October 2007. The department
replied that actual recovery of items where rates had been decreased by
more than 5% would be adjusted. No progress toward recovery was shown
to audit.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. The Committee was not
satisfied with the explanation of the department and directed the
department to effect recovery of Rs 474,955 within 15 days. No progress
towards recovery was shown to Audit till finalization of the report.
(DP.343)
1.13.18 The Executive Engineer, Provincial Building Division,
Rawalpindi did not recover the difference of rates of cement from the
contractor because the base rate of cement was reduced during execution
i.e. from 29th May, 2006 to March, 2007; from Rs 310 per bag to Rs 275,
Rs 237 and Rs 205 per bag as per input rates issued by the Finance
Department. Non-adherence to agreement clause resulted in non-recovery
of Rs 440,970.
Audit pointed out the non-recovery in August 2007. The department
replied that the price variation of cement was not allowed on the basis of
website. The base price of cement for variation was to be taken on the
rates notified by the Secretary Communication and Works Department
through the Chief Engineer concerned as per Finance Department letter
No.RO(Tech)FD-1-2/82 (vi)(p) dated 6th April, 2005. The reply was not
acceptable as technical sanctioned estimate rates were approved on the
basis of input material rates issued by the Finance Department and the
market rates of cement during execution was decreased by more than 5%.
Hence recovery was to be made.
The matter was discussed in the Departmental Accounts Committee
meeting held on 21st February, 2009 wherein the department promised to
effect the recovery. No compliance of the Committee directive was
reported till finalization of the report.
(DP.69)
1.13.19 The Executive Engineer, Provincial Highway Division,
Rawalpindi paid price variation of bitumen on base rate of Rs 20,454 per
ton instead of admissible rate of Rs 22,410 per ton notified by the Chief
Engineer at the time of tendering. Incorrect application of base rate
resulted in overpayment of Rs 141,241.
42
Audit pointed out the overpayment in September 2007. The department
replied that in the same bill not only the price variation of bitumen had
been paid but the price variation of cement was also made which was
Rs 76,754 less then the admissible amount. Thus the recovery of
Rs 64,487 was made from the contractor’s security. The reply was not
acceptable being irrelevant. Incorrect base rate for calculation of price
variation of bitumen was applied which resulted in overpayment to
contractor.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. The Committee was not agreed
with the contention of the department and reduced the para to Rs 76754
and directed to effect balance recovery or detail record verification for
adjustment of price variation be produced to audit within 15 days. No
compliance of the Committee directive was made till finalization of the
report.
(DP.106)
Para 1.14 12 Nos. lost measurement book involving expenditure
without audit – Rs 44.7 million
As per instruction No. 18 printed on preface of measurement book, in case
a measurement book is lost, an immediate report should be made of the
facts of the case forwarded to the government together with the
explanation of all parties concerned or responsible for the loss.
The Executive Engineer, 6th Provincial Buildings Division Lahore lost 12
measurement books involving record entries of work done for Rs 44.7
million by a Sub-Engineer of division on 25th September, 2007. Despite
the laps of considerable period neither measurement books were traced out
nor any action against the person at fault was taken. Audit of work done of
measurements recorded in said measurement books could not be carried
out. This resulted in lost of 12 No.MBs involving expenditure of Rs 44.7
million without audit.
Audit pointed out irregularity in January 2008. The department replied
that the bag containing measurement books fell down from the motorcycle
of the sub-engineer on his way to home. The First Investigation Report
regarding the missing measurement books were lodged with police and
also advertised in the newspaper. No progress was reported by the police.
However, efforts were made to recover the measurement books. The reply
was not acceptable because the measurement books were the most
important record of payment and should always be kept in safe custody in
43
office. Reasons why the Sub-Engineer was taking the measurement books
to his home were also not explained. No departmental action against the
official concerned was intimated.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
informed that the inquiry was under process. The Committee directed the
department to complete the inquiry within 30 days under intimation to
audit. Compliance of the Committee directive was not reported to audit till
finalization of the report.
(DP.297)
Para 1.15 Loss due to non-recovery of cost of blasted material Rs
20.2 million
Cost of the surplus stone for 13.8 million cft quantity was to be recovered
@ Rs 300/- % cft from the contractor as per condition No.6 of the
acceptance letter.
The Executive Engineer, Provincial Highway Division, Mianwali paid an
item of work “Excavation of hard/medium rock” for 11,084,862 cubic
feet. Out of which 4,358,055 cubic feet quantity of stone was shown used
in work. But cost of surplus stone for 6,726,807 cubic feet was not
recovered as per provision of acceptance letter. This resulted in non-
recovery of Rs 20.2 million.
Audit pointed out the non-recovery in November 2007. The department
replied that the quantity of cutting rock was not hard rock but consisting of
different type of material like hard rock, soft rock, and slate shale etc. The
revised estimate of project was in the process for revised administrative
approval and technical sanctioned estimate. The reply was not convincing
because the amount of recovery was mentioned in acceptance letter hence
revision of estimate would not prevail over contract provision as per note-I
below rule 7.28 of Departmental Financial Rules.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that a committee had already been constituted by the C&W
department to resolve the issue/matter. The Committee directed for
findings of the committee with the request to expedite the proceedings. No
progress was shown to audit till finalization of the report.
(DP.345)
44
Para 1.16 Undue payment of compound interest - Rs 19.7
million
Section 6, 17(4) and 34 of the Land Acquisition Act, 1894 provides that in
case of urgency, the provincial government through no such award has
been made, take possession of land needed for public purpose. When the
amount of such compensation (award) is not paid on or before taking
possession of land, the collector shall pay the amount awarded with
interest thereon @ 8% per annum from the time of taking possession until
it shall have been so paid.
The Land Acquisition Collector, Punjab Highway Department, Lahore and
Ring Road Project, Lahore allowed the payment of interest w.e.f. 31st
October, 2002 and 15th September, 2003 to the land affectees instead of
w.e.f. 15th August, 2006, 18th November, 2006 and 10th May, 2007. The
dates of notification issued under section 17(4) and 6 of Land Acquisition
Act 1894 for urgent taking over possession of 80 kanal @ Rs 100,000 (1st
case), Rs 25,000 & Rs 10,000 (Residential), Rs 80,000 & Rs 20,000
(Commercial) and Rs 4,000 (Agriculture) for second case. This resulted in
undue payment of interest for Rs 19.7 million.
Audit pointed out the undue payment in July 2007. The department did not
reply.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.367)
Para 1.17 Irregular award of works - Rs 16.75 million
As per para 2.61 and 2.82 of Buildings & Roads Department Code, tender
should always be invited after the estimates have been technically
sanctioned and contract documents have been approved. No work shall be
commenced unless administrative approval by competent authority is
given and proper detailed design and estimate have been sanctioned.
1.17.1 The Executive Engineer, Provincial Highway Division,
Gujranwala called and opened the tenders for Rs 404.2 million without
getting technical sanctioned estimate. Administrative approval of work
was accorded in November 2006 and technical sanctioned estimate was
accorded for Rs 408.9 million in January 2007 and work was allotted on
Market Rate System (MRS) of 1st quarter 2007 instead of 4th quarter 2006.
Delay in calling/opening tender without T.S. estimate resulted in extra
expenditure of Rs 4.8 million.
45
Audit pointed out extra expenditure in February 2008. The department
replied that the tenders were called on urgent basis and after obtaining
approval of the DNIT well before the opening date of tenders. The
acceptance was issued after technical sanctioned estimate. The reply was
not acceptable because the tenders were called and opened without
technical sanctioned estimate, further delay in accord of technical
sanctioned estimate also caused for revision of MRS rates of first quarter
2007 instead of rates of 4th quarter of 2006 which caused acceptance of
tender at higher rates.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. The Committee directed the
department to probe the matter for irregularities and financial loss within
30 days. No progress was shown to Audit till finalization of the report.
(DP.224)
1.17.2 The Executive Engineer, Provincial Machinery
Maintenance Division, Rawalpindi incurred expenditure of Rs 3.6 million
without prior technical sanctioned estimate of the work. Further ex-post-
facto sanction of estimate to annual running of premix plant was accorded
by the Executive Engineer instead of obtaining sanction from the Finance
Department. Disregard of the government instructions resulted in irregular
expenditure of Rs 3.6 million.
Audit pointed out the irregularity in December 2003. The department
replied that sanction was accorded in the best interest of the government to
avoid audit observation. The reply was not acceptable because expenditure
was incurred in violation of para 2.82 of Buildings & Roads Department
Code.
The matter was discussed in the Departmental Accounts Committee
meeting held on 14th May, 2008. The Committee directed the department
to get the technical sanctioned estimate verified by the Audit. No
compliance was made. The matter was discussed again in the
Departmental Accounts Committee meeting held from 20th to 27th April,
2009. The Audit informed the committee that the department did not
produce the TSE for verification in compliance of previous Committee
directive. The department explained that TSE would be produced for
verification within 2 weeks. No compliance of the Committee directive
was made till finalization of the report.
(DP.321)
46
1.17.3 The Executive Engineer, Provincial Highway Division
Bahawalpur (DOR Bahawalnagar) called the tender in May 1995 against
DNIT cost of Rs 24.5 million without prior availability of administrative
approval/technical sanctioned estimate (administrative approval accorded
in November 1995 and technical sanctioned estimate in March 1996).
Tender was accepted for Rs 28.7 million i.e. 16.94% above the amount put
to tender of Rs 24.5 million of the permissible limit of 4.5% amounting to
Rs 25.6 million [i.e Rs 24.5 million + (Rs 24.5 x 4.5% above)]. Higher
tender rates received in May 1995 were accepted by comparing prevailing
rates of March 1996. This resulted in irregular calling / acceptance of
tender for Rs 28.7 million, indicating loss of Rs 3 million (Rs 28.7 million
– Rs 25.6 million).
Audit pointed out the irregularity in February 2007. The department
replied that the acceptance letter issued by the competent authority was
within the permissible limit of 4.5%. The estimated cost for the road in
question was Rs 27.4 million and acceptance letter amount was Rs 28.7
i.e. 4.4% above. The reply was not acceptable because DNIT of work to
be done was Rs 24.5 million in May 1995 and contractor’s rates for
Rs 28.7 million. No administrative approval/technical sanctioned estimate
was available on the tender opening dates. The department had compared
the higher tendered rates of May 1995 with the amended administrative
approval/technical sanctioned estimate accorded on the prevailing rates of
March 1996. Tender was to be accepted on the amount put to tender in
May 1995 and not with rates of March 1996. The department should
obtain condonation sanction from the Finance Department for calling of
tender without administrative approval/technical sanctioned estimate
besides recovery of loss.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. District Officer Road Bhawal
Nagar stated that relevant record of para was not transferred to that
formation from Provincial Highway Division Bahwalpur. The Committee
directed to provide relevant record to Audit for compliance within one
month. No progress was shown to Audit till finalization of the report.
(DP.371)
1.17.4 The Executive Engineer, Provincial Machinery
Maintenance Division, Lahore called the tender on 15th April, 2006 for
Rs 2.5 million without administrative approval/technical sanctioned
estimate and acceptance letter issued for Rs 2.9 million which was 18%
above the unsanctioned estimate against the permissible limit of 4.5%.
47
Later on, the estimate for Rs 2.4 million was sanctioned on 31st August,
2006. This resulted in irregular award/execution of work for Rs 2.9
million.
Audit pointed out the irregularity in August 2007. The department replied
that the quantity of work was not defined by the client department and
tender was invited on the basis of quantities shown in administrative
approval. At site, the scope of work was altered/ changed by the client
division, so the second acceptance letter was issued on the basis of
technical sanctioned estimate and not on the basis of administrative
approval. The reply was not acceptable because the committed irregularity
was not covered under any rule and also resulted in non-transparent
tendering due to undefined work.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. The Committee did not agree
with the explanation of the department and directed that irregularity stands
established and requires condonation sanction from the Finance
Department. No progress was shown to Audit till finalization of the report.
(DP.87)
1.17.5 The Executive Engineer, Provincial Machinery
Maintenance Division, Lahore called the tenders / awarded the work
without administrative approvals and technical sanctioned estimates.
Further, the accepted tenders were beyond the permissible limit of 4.5% of
technical sanctioned estimates accorded after award of works. Irregular
award of contracts for Rs 22 million resulted in loss of Rs 1.7 million to
government.
Audit pointed out loss due to irregular allotment of work in August 2007.
The department replied that the division was performing its role as a task
force to execute and complete the urgent/emergent works of the
department in a tight schedule of time frame. All those works were carried
out under the express directions of the government i.e. Secretary to
Government and at the time of execution, all the concerned departments
were aware of the facts. This division accepted the work to the entire
satisfaction of the client rather the balance funds were still awaited to clear
the liabilities. The department admitted the irregularities. The work could
be awarded/ executed without technical sanctioned estimate/administrative
approval and fund in emergent cases only in the manner prescribed in para
2.89(2) of Punjab Public Works Department Code and para 2.82(2) of
Buildings & Roads Department Code. No such express order of competent
authority under para 2.89(2) or 2.82(2) ibid were issued to execute the
48
work without fulfillment of codal formalities. Further, the tenders were
accepted beyond permissible limit of 4.5% over the technical sanctioned
estimate. The department may obtain condonation sanction from the
Finance Department and also make good loss sustained from those
responsible.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. The Committee did not agree
with the explanation of the department and directed that irregularity stands
established and requires condonation sanction from the Finance
Department. No compliance of the Committee directive was made till
finalization of the report.
(DP.86)
1.17.6 The Executive Engineer, Provincial Machinery
Maintenance Division, Lahore awarded the contract in April 2007 without
prior approval of technical sanctioned estimate. The tender was accepted
for Rs 6.5 million @ 18.2% above the estimate costing Rs 5.5 million
which was accorded in May 2007 after contract was awarded. As per
above instruction the admissible amount of acceptance was to be Rs 5.7
million. This resulted in irregular award of work of Rs 6.6 million and
excess acceptance of tender at higher rate by Rs 750,000.
Audit pointed out the irregular award of work in August 2007. The
department replied that the quantities of work were not properly defined
by the client division and tenders were invited on the basis of quantities
shown in administrative approval. On ground, the scope of work was
altered / changed by the client division at a number of times, so the
acceptance was issued on the basis of technical sanctioned estimate. The
department had admitted the irregularity which depicted that the work was
allotted without any transparent tendering process which led to loss to
government and irregular award of work.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009. The Committee did not agree
with the explanation of the department and directed that the irregularity
stands established and requires condonation sanction from the Finance
Department. No compliance of the Committee directive was made till
finalization of the report.
(DP.72)
49
Para 1.18 Short recovery on account of tender fee – Rs 15.7
million
As per Communication & Works Department notification No.SOB (II)-2-
11-178-11 dated 3rd September, 1997, Government of the Punjab re-fixed
price of tender documents at rate 0.030% of the cost of work involved.
The Secretary, Communication & Works Department issued the bid
document to the contractors on charging tender fee @ Rs 2,000 per set
from 12 bidders against the admissible rate of Rs 1.3 million (0.030% of
the tendered amount i.e Rs 4,376 million) for one set for one bidder. This
resulted in short recovery of tender fee for Rs 15.7 million (i.e Rs 1.3
million x 12) for twelve sets for twelve bidders.
Audit pointed out the short recovery in February 2008. The department
neither furnished the reply to the audit observation nor defended advance
para inspite of availability of the record.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.356)
Para 1.19 Loss due to non obtaining of bank guarantee – Rs 10
million
The Executive Engineer, Provincial Highway Division, Bahawalpur
awarded a contract for Rs 100 million in June 1996 with a completion
period of three years. Performance bond as per item (h) of Memorandum
read with clause 7 of contract for Rs 10 million was not obtained from
contractor. The contractor left the work incomplete. The contract was
rescinded under clause 60 and performance bond could not be forfeited in
favour of government. This resulted in loss of Rs 10 million.
Audit pointed out the loss in April 2007. The department replied that the
then Executive Engineer was murdered in 2000. The copy of para was sent
to the then Divisional Accounts Officer to explain the reason of non-
recovery of performance bond. The reply was not acceptable because the
contract stipulation in time was not implemented which resulted in loss.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein department explained
that the required security of the work in the shape of the bank guarantee
50
was not obtained by the Executive Engineer of that time. Now he has been
expired. The Committee directed the department to obtain condonation
from the Finance Department and further compliance should be made by
the Provincial Highway Division Bahawalpur. No progress was shown to
audit till finalization of the report.
(DP.376)
Para 1.20 Non-recovery of utility charges - Rs 9 million
As per clause 10.2.1 of concession agreement, the Road Built and
Operating Company (RBOC) shall be responsible for all cost and expense
associated with the removal or diversion of public utilities currently
existing in the right of way and services ancillary thereto such as sui-gas,
electricity, water, sewerage and telecommunication including coaxial
cable and optic fiber facilities required for the work.
The Executive Engineer, Provincial Highway Division Sheikhupura paid
Rs 9 million to WAPDA, Sui-gas and PTCL for removal of their
installations in June 2002. Removal of installations was the responsibility
of the contractor (M/s LAFCO). No recovery from the contractor was
made whose tender was received in April 2002. This resulted in non-
recovery of Rs 8.973 million.
Audit pointed out the non-recovery in February 2008. The department did
not reply to the audit observation.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.352)
Para 1.21 Unjustified payment of slush/daldal allowance beyond
contract specification - Rs 6.9 million
Item No.106 (a) of contract specification (Vol II Item No. 106.3.1)
provides that when the contractor is directed to excavate un-suitable
material below the surface of original ground in full areas, the depth to
which these unsuitable materials are to be removed will be determined by
the Engineer. The contractor shall schedule his work in such a way that
authorized cross-sections can be taken before and after the material has
been removed.
1.21.1 The Executive Engineer, Provincial Road Construction
Division, Lahore allowed an amount of Rs 6.7 million for extra allowance
for slush/daldal/dewatering which was covered under item “Excavation of
51
un-suitable or surplus material” and “Removal or diversion of water.”
Further neither it was provided in original estimate nor any provision of
“Extra allowance for slush/daldal” existed in contract specification
(Vol-II). The payment for “Extra allowance for slush/daldal” resulted in
unjustified payment of Rs 6.7 million.
Audit pointed out the unjustified payment in August 2007. The department
replied that the item “excavation of unsuitable common material” did not
cover the removal of slush/daldal/dewatering so the authority approved the
non-BOQ rate. The reply was not acceptable because the fourth (4) para of
item No.106.2 (Construction requirement) of contract specification clearly
depicted that the rate of excavation of unsuitable material included the
cost of unsuitable material to be removed below standing water level. No
provision existed in agreement/technical sanctioned estimate for this
payment. The rate approved later on, by the Superintending Engineer was
not in confirmity with contract provision.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.5)
1.21.2 The Project Director, Lahore Ring Road Project allowed
the quantity 27,020.36 cubic meter of item “Compaction of natural
ground” in those reaches where other item “Excavation of unsuitable
material” was also paid. In the presence of item “excavation of unsuitable
material”, the payment for item “Compaction of natural ground” was not
admissible. This resulted in unjustified payment of Rs 155,524.
Audit pointed out the unjustified payment in September 2007. The
department replied that the work had been measured and paid as per work
done at site and technical sanctioned estimate. The work was verified by
the consultant. The reply was not acceptable because the payment for item
of compaction of natural ground was not admissible on the area where the
excavation of unsuitable material was removed as per contract
specification.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report
(DP.19)
52
Para 1.22 Non-recovery of income tax – Rs 6.8 million
As per section 151(1)(c) of Income Tax Ordinance 2001 read with Central
Board of Revenue letter No. 4(2)@WHT/91-PI dated 27th December,
2004, income tax on interest income is recoverable @ 20%.
1.22.1 The Land Acquisition Collector, Punjab Highway
Department, Lahore and Ring Road Project, Lahore paid land
compensation of Rs 71.9 million along with 8% compound interest for
Rs 22.8 million. The recovery of with holding tax at source @ 20% due
under section 151 of Income Tax Ordinance, 2001 on 8% compound
interest was not made from the land affectees and remitted to Income Tax
Department. This resulted in non-recovery of Rs 4.6 million.
Audit pointed out the non-recovery in July 2007. The department did not
reply the observation. Audit stressed to effect the recovery of Income Tax.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.366)
1.22.2 The Executive Engineer, 5th Provincial Buildings Division,
Lahore made payment to the contractor without deduction of income tax
@ 6%. This resulted in non-recovery of Rs 1,845,551.
Audit pointed out the non-recovery in December 2007. The department
replied that according to the section 153(5) of the Income Tax Ordinance
2001, the income tax was not to be deducted from an importer of goods
who himself was the contractor in the same work. The reply was not
acceptable because as per clarification of Central Board of Revenue dated
12th December, 2006 that tax might be deducted on payment made on
account of services incidental to the installation of lift/imported items and
their maintenance.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
committee that deduction of income tax was not got verified from Audit.
The Committee directed the verification of deduction of income tax in the
measurement book regarding record entry of installation item. Compliance
of the Committee directive was not reported to audit till finalization of the
report.
(DP.291)
1.22.3 The Executive Engineer, Provincial Buildings Division
Rawalpindi made payment to the contractor on account of mobilization
53
advance for Rs 7.221 million but did not recover income tax from the
payable amount. Further, interest on mobilization advance was short
recovered. Non-adherence to the rule resulted in non-recovery of
Rs 320,464.
Audit pointed out the non-recovery in January 2003. The department
replied that deduction of income tax from advances would defeat the
purpose of advance payment. However, it was being deducted from the
running bills of the contractor for work done. The reply was not
convincing as income tax and interest was not recovered as per rules.
The matter was discussed in the Departmental Accounts Committee
meeting held on 14th February, 2008 wherein it was decided to effect
recovery within 30 days. The matter was again discussed in the DAC
meeting held on 20th to 27th April, 2009 wherein the Committee directed
for strict compliance of previous directive dated 14.02.2008 and got
verified from Audit within a week. Compliance of the Committee
directive was not reported to Audit till finalization of report.
(DP.299)
Para 1.23 Overpayment due to allowing higher rates than
provided in the Market Rates System / T.S.Estimate –
Rs 6.7 million
According to para 7.28 (1) of Departmental Financial Rule, if the contract
agreement does not specify the rates to be paid for the several classes of
work or supply, but merely states that the estimated rates, or a certain
percentage below or above them, will be allowed, it should be seen that
the standard rates adopted are those of the sanctioned estimate which was
in force at the time the agreement was executed, or, if the agreement was
preceded by a tender, on the date the tender was assigned by the
contractor. Subsequent sanctions to original or revised estimates have no
effect on the terms of such an agreement.
1.23.1 The Executive Engineer, Provincial Highway Division,
Faisalabad paid rates of Rs 2,365.01 per % cubic feet each in three
contracts against the admissible rates of Rs 800, Rs 1400 and Rs 960 per
% cubic feet for item of work “Excavation in ordinary soil for making
embankment with all lead and lifts”. Allowing of excess rates resulted in
overpayment of Rs 3.2 million.
Audit pointed out the overpayment in September 2007. The department
replied that during the course of execution, the required quantity of earth
could not be available due to built up area. So the earth was to be carted
54
from ½ mile, which was incorporated in revised technical sanctioned
estimate. The reply was not acceptable because rates provided in revised
technical sanctioned estimate had no effect on contract rates. Contract
rates were with all leads and lifts therefore no revision of rates were
required on the plea of non-availability of earth at site of work. Further,
Executive Engineer’s letter dated 16th June, 2006 addressed to the
Superintending Engineer described that Irrigation Department did not
allow the excavation of earth in the vicinity of canal but the said reply
disclosed the location existed in built up areas.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee was not
agreed with the explanation of the department and directed to probe the
matter for recovery of overpayment. No progress was shown to Audit till
finalization of the report.
(DP.153)
1.23.2 The Executive Engineer, Provincial Buildings Division,
Multan allowed payment for local transportation from port to site of work,
loading un-loading, placing on foundation for machinery of HVAC system
@ Rs 1.7 million per lot under Pt-II of the bill whereas as per additional
condition, the contractor was responsible for making arrangements for
loading, local transportation from port to site, unloading at site and safe
storage being cost covered in respective items for supply and installation.
Non-adherence to provision in technical sanctioned estimate resulted in
overpayment of Rs 1.7 million.
Audit pointed out the overpayment in October 2007. The department
replied that the local transportation of imported equipment was agreed to
be paid to contractor as per approval of the scheme and technical
sanctioned estimate which was done by the contractor. The reply was not
acceptable because the contractor was responsible for making
arrangements for loading, local transportation from port to site, unloading
at site and safe storage as per technical sanctioned estimate and clause
84(f) (6) at page 63 of agreement.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
Committee that the payment was made in violation of agreement clause.
The department explained that detailed estimate was technically
sanctioned and payment was made as per provision of T.S Estimate. The
Committee was not agreed with the view point of the department and
55
directed to get the record verified from Audit within 15 days. No progress
was shown to audit till finalization of the report.
(DP.207)
1.23.3 The Executive Engineer, Provincial Buildings Division,
Sahiwal made the payment of certain items at higher rate than approved in
the technical sanctioned estimate and accepted. Non-adherence to the
technical sanctioned estimates provisions resulted in overpayment of
Rs 1.01 million.
Audit pointed out the overpayment in January 2008. The department
replied that the recovery of Rs 574,430 would be made from the
contractors. But no recovery was made. Further, for balance amount of
Rs 436,558, it was replied that the rates were correctly paid as earth was
brought from three miles lead. The reply was not acceptable because, the
lead of one mile was provided in technical sanctioned estimate/contract
agreement, and the rates given in contract were required to be paid.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that the para had been transferred to Provincial Building
Division Lodhran. The Committee showed its displeasure on the statement
of the department and directed to get the detailed verification of record
within 15 days. Compliance of the Committee directive was not reported
to audit till finalization of the report.
(DP.180)
1.23.4 The Executive Engineer, Provincial Buildings Division,
Gujrat made payment for an item pacca brick work in foundation and
plinth with (1:6) cement sand mortar @ Rs 7,738/40 per % cubic feet
against the rate of Rs 4,216/89 per % cubic feet provided in the technical
sanctioned estimate. Payment of incorrect rate resulted in overpayment of
Rs 758,146.
Audit pointed out the overpayment in December 2006. The department
replied that the payment was made as per Market Rate System in July
2005 of district Gujrat. The reply was not acceptable because payment was
to be made as per provided rates in technical sanctioned estimate plus
admissible premium.
The matter was discussed in the Departmental Accounts Committee
meeting held on 2nd March, 2008 wherein the department was asked to
produce the rough cost estimate/original technical sanctioned estimate/
comparative statement to check the percentage accepted above with rate of
56
Rs 7,738 per% cubic feet and calculation made in technical sanctioned
estimate. The matter was again discussed in the Departmental Accounts
Committee meeting held from 20th to 27th April, 2009 wherein Audit
informed the Committee that the department did not produce any record in
the light of previous DAC directive. The Committee took the serious view
and directed the department to produce the complete record within 15
days. Compliance of the committee directive was not shown to audit till
finalization of the report.
(DP.314)
1.23.5 The Executive Engineer, Provincial Buildings Division,
Gujranwala allowed inadmissible item “Plain cement concrete (1:4:8) @
Rs 8,413.08 per% cubic feet and Rs 8,050.80 per % cubic feet in
foundation of walls and columns in different groups of work without
provision in technical sanctioned estimate. As per acceptance letter
admissible item “Plain cement concrete (1:6:12) @ Rs 5,302.33 per%
cubic feet and Rs 5,301.83 per % cubic feet was payable to contractor.
This resulted in unjustified payment of Rs 335,931.
Audit pointed out the unjustified payment in March 2008. The department
replied that the recovery would be made in next bill. But no recovery was
made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee directed
for probe regarding recovery of difference of rates on revised technical
sanction estimate and final bill. No progress was reported till finalization
of the report.
(DP.310)
Para 1.24 Unjustified payment due to allowing cost of dykes
beyond contract specification - Rs 5.7 million
As per item No. 100.5 “Removal or Diversion of Water” under chapter
“Earthwork” of adopted specification (Volume-II), the contractor shall
provide necessary facilities for dewatering and for draining or diverting
water course when necessary for the protection of the work.
The Executive Engineer, Provincial Road Construction Division, Lahore
allowed an item “Construction of Dyke” (Coffer-dams) for Rs 5.7 million
which was not provided in estimate prepared under specification
(Volume-II) because the cost of this item was covered in the bid price of
other earthwork items and allied activities. This resulted in unjustified
payment of Rs 5.7 million.
57
Audit pointed out the unjustified payment in August 2007. The department
replied that out of total length of 1,900 meter of project, 1,250 meter
passed through wide pond. Prior construction of dyke was inevitable. The
same was approved by the competent authority on recommendation of the
consultant. The reply was not agreed because the contractor submitted his
bid price keeping in view the site conditions. Payment on account of
earthen dyke was not justified separately as it was covered in the rate of
other items.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.94)
Para 1.25 Non-recovery of imbalance rate – Rs 5.5 million
As per notification issued by Finance Department vide No. RO (TECH)
FD 1-2/83-VI dated 29th March, 2005, the final cost of tender/payment
shall be the same percentage above/below the amount of revised
sanctioned estimate as were at the time of approval of the tender to
pre-empt excess payment.
1.25.1 The Executive Engineer, Provincial Highway Division
Dera Ghazi Khan accepted the tender @ 4.45% above technical sanctioned
estimate amount and payment for Rs 67.6 million was allowed to the
contractor which was 8.21% above. The recovery of difference percentage
between quoted and actual paid amount, on the executed work, was not
made. Non-compliance of the instructions issued by the Finance
Department resulted in non-recovery of Rs 2.8 million.
Audit pointed out the non-recovery in November 2007. The department
replied that some of the relevant record of the works awarded by
Provincial Highway Division, Multan was to be obtained to confirm
whether some variation in percentage above D.N.I.T amount at the time of
award was really occurred or not. After comparison of the percentage
above D.N.I.T amount and at the time of finalization of the works would
be recovered but no recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the audit informed that
the non-physical items which were not floated in DNIT were paid just to
balance the premium at final stage. The department explained that these
items could not be provided in DNIT as these were provided in rate
analysis of concerned items. The Committee was not agreed with the view
58
point of department and directed the department to refer the case to
Finance Department for condonation and complete record may be got
verified from audit. No progress was shown to audit till finalization of the
report.
(DP.43)
1.25.2 The Executive Engineer Provincial Highway Division,
Multan accepted the tender @ 4.45% above technical sanctioned estimate
amount and payments for Rs 55.4 million were allowed to the contractor
which was 8.60% above technical sanctioned estimate amount. The
recovery due to difference between quoted percentage and actual paid was
not effected. Non-compliance of instructions issued by the Finance
Department resulted in non-recovery of Rs 2.1 million.
Audit pointed out the non-recovery in August 2007. The department
replied that the recovery would be made at finalization of work. The reply
was not acceptable because the tender percentage should have been
maintained in interim payments to the contractor.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee did not
agree with the view point of the department and directed to probe the
matter regarding unbalance rates within 9 months. No progress was shown
to audit till finalization of the report.
(DP.39)
1.25.3 The Executive Engineer Provincial Highway Division
Dera Ghazi Khan accepted the tender @ 3.75% above technical sanctioned
estimate. Payment for Rs 24.3 million was allowed to the contractor which
was 5.927% above technical sanctioned estimate amount. The recovery of
difference of quoted percentage and actual paid amount for the executed
work was not made. Non-compliance of the instructions issued by the
Finance Department resulted in non-recovery of Rs 620,958.
Audit pointed out the non-recovery in November 2007. The department
replied that some of the relevant record of the works awarded by
Provincial Highway Division, Multan was to be obtained to confirm
whether some variation in percentage above D.N.I.T amount at the time of
award was really occurred or not. After comparison of the percentage
above DNIT at the time of finalization of the work would be recovered but
recovery was not made.
59
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee did not
agree with the view point of the department and pended the para and
directed the department to get condonation of the irregularity from FD for
enhancement of DNIT. No progress was shown to Audit till finalization of
the report.
(DP.47)
Para 1.26 Loss on account of incorrect approval of bill of
quantities - Rs 5 million
As per Finance Department letter No. RO (Tech) 1-2/83-VI dated 29th
March, 2005, the bill of quantities to be attached with tender documents
should be based upon technical sanctioned estimate.
The Executive Engineer, 6th Provincial Buildings Division, Lahore
provided higher rates in DNIT as compared to rates sanctioned in the
technical sanctioned estimate of the work. Against the excess rates
mentioned in the DNIT, contractors quoted their own higher rates and
received payment thereof. Provision of incorrect rate in tender document
resulted in loss of Rs 5 million.
Audit pointed out the loss in January 2008. The department replied that
the contention of audit was not correct. The rates provided in DNIT were
according to technical sanctioned estimate rates. The reply was not
satisfactory because the rates provided in DNIT were higher than the rates
of technical sanctioned estimate as was evident from record.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the committee did not
agree with departmental explanation and stated that non-fiscal provision
like contingency, overhead, lump sum provision premium etc. cannot be
included in the works outlay put to tender which was agreed. However,
listening explanation by the department, the Committee directed to get the
revised parallel estimation verified & recovery if any be effected. No
progress was reported till finalization of the report.
(DP.295)
Para 1.27 Non-recovery of renewal/enlistment fee – Rs 4.8 million
As per Communication & Works Department Notification No.SOB (11)
2-78 Volume-II dated 15th July, 2000, the Chief Engineer is empowered
for enlistment/renewal of category ‘B’ contractors subject to payment of
required fee by the contractor/applicant.
60
The Chief Engineer, Punjab Buildings Department (South) Lahore
renewed/enlisted 113 contractors without receipt of prescribed fees during
the years 2004-07 and its accountal in cash book/payment into treasury.
This resulted in non-recovery of Rs 4.8 million.
Audit pointed out the non-recovery in July 2007. The department replied
that the enlistment/renewal letters were issued to the contractors with the
direction to deposit the fees including penalty etc. with any Executive
Engineer of South zone within 30 days, otherwise enlistment/ renewal
would automatically be cancelled. The copies of government receipt of
fees deposited by those contractors during 2006-07 were available. The
reply was not convincing because the enlistment/renewal fee was to be
recovered at source and accounted for in its cash book. Recovery made
was not on record.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
Committee that the department effected the recovery of Rs 1,400,500. The
Committee reduced the para amounting to Rs 3.405 million with the
direction to effect the balance recovery and got it verified from Audit.
Compliance of the Committee directive was not reported to Audit till
finalization of the report.
(DP.283)
Para 1.28 Non-recovery of hire charges of machinery & deposit
work – Rs 4.5 million
As per rule 7.130 of Departmental Financial Rules, no expenditure should
be incurred in excess over deposit and without prior receipt of funds from
client department/agency and hire charges of machinery should be
recovered in advance as per para 4.16 of Public Works Department Code.
The Executive Engineer, Provincial Machinery Maintenance Division,
Lahore failed to recover the hire charges of machinery let out to different
formations and also allowed payment in excess over deposits without
obtaining full funds from the client department. This resulted in
non-recovery of Rs 12.4 million for hire charges and payment excess over
deposits.
Audit pointed out the non-recovery in August 2007. The department
replied that it was a routine practice to execute most of the deposit works
without advance payment and after completion of task, the dues were not
61
cleared by the sister division. The department had admitted the irregularity
which may be taken up at high level.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that an amount of Rs 7.968 million from other department were
received and same had been accounted for in cash book / monthly account
and was also verified by audit. The Committee reduced the para to Rs 4.87
million and directed to effect the balance recovery at the earliest. No
progress was shown to audit till finalization of the report.
(DP.13)
Para 1.29 Overpayment due to excessive measurement and
inadmissible payment for dressing of earth – Rs 2.9
million
Equal quantity of regular excavation in trenches and its backfilling with
better fill material and item of asphaltic base course and prime coat was to
be paid as per provision of technical sanctioned estimate. Further, no
dressing of unsuitable excavated earth was required at site for which no
payment was admissible.
The Executive Engineer, Provincial Highway Division, Okara made
payment for item of earthwork “Regular excavation dressed” and its
disposal for 4,202,420 cubic feet and “Providing/laying Premix Plant
carpeting 2" thick layer” for 1,238,240 square feet against which the
payment for items of “Filling with better fill material” was paid for
4,485,995 cubic feet and “Providing/laying Prime coat with 10 lbs
Bitumen” for 1,257,520 square feet which was not justified because equal
quantities of those items were to be paid as per provision of technical
sanctioned estimate. Moreover, payment of Rs 626,819 for dressing and
disposal of earth available from item of “Regular excavation dressed” was
allowed. Dressing of the disposed off earth with one mile lead was not
required. Excessive measurements and undue payment for dressing of
disposed off quantity of earth resulted in overpayment of Rs 2.9 million.
Audit pointed out the overpayment in February 2008. The department
replied that the recovery of cost of better fill material of Rs 2.3 million
would be made from the contractor whereas the item of prime coat was
paid at lesser side than the area of carpeting. The reply was not acceptable
because the item of prime coat quantity was to be allowed according to
62
paid quantity of laying of premix carpeting as per provision of technical
sanctioned estimate. Further no recovery of promised amount was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that the matter was sub-judice and recovery would be made if
court of law permitted. The Committee directed the department to recover
the amount within 60 days. No progress towards recovery was shown to
Audit till finalization of the report.
(DP.117)
Para 1.30 Extra expenditure due to application of incorrect
rate – Rs 2.6 million
As per Para (ii) of Finance Department notification No. RO (TECH) FD
18-23/2004 dated 21st September, 2004, the rate analysis for the item rate
(non standardized) shall be prepared by the Executive Engineer clearly
giving the specifications of the material used and approved by the
competent authority to accord technical sanction (not below the rank of
the Superintending Engineer) before the work is undertaken.
The Executive Engineer, Provincial Buildings Division, Bahawalpur made
payment for an item of work “Fabrication of TOR steel G-60” for 398,945
kilogram @ Rs 6,267.60 per % kg as non-standardized item against
estimated rates of Rs 6,200 per % kilogram plus 1.09 % above as per input
material/labour rate of October 2005. Whereas the actual estimated rate
worked out to Rs 5,543.02 per% kilogram. The payable rate with quoted
premium worked out Rs 5,603.44 per% kilogram. The preparation of
incorrect rate for item of fabrication of TOR steel resulted in extra
expenditure of Rs 2.6 million.
Audit pointed out the extra expenditure in September 2007. The
department replied that the analysis of rate for the item calculated by audit
was not correct and the payment was made at correct rate of Rs 6,200
per% kilogram. The reply was not agreed because the rate worked out by
Audit was based on the input material/labour rate placed at Finance
Department web site for Rahim Yar Khan District for the month of
October 2005. Similar rates had been calculated and issued by the Finance
Department vide No.RO(TECH)FD-6-3/2006 dated 17th February, 2007 to
the Superintending Engineer, Provincial Buildings Circle, Faisalabad.
63
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
Committee that the department did not produce record in support of reply.
The Committee took a very serious view and directed the department to
produce the complete record for detailed verification within one month in
Audit office. No progress was shown to audit till finalization of the report.
(DP.190)
Para 1.31 Overpayment due to allowing extra rate in violation of
specification - Rs 2.5 million
As per provision of section 411-10 read with section 411.2 of
Specification for Roads and Bridges Construction 1971, all material
excavated shall be unclassified paid for as regular excavation regardless
the material encountered. It shall include the excavation and disposal of
muck, clay, rock or any other material that is unsuitable in its original
position within the limits of road way limit. It shall also include any
excavation done below sub-grade level to remove unsuitable material. It
shall be measured in its original position generally by the method of
average and areas. All measurement for regular excavation shall be by
volume and include full compensation for all costs.
The Executive Engineer, Provincial Highway Division, Faisalabad paid
two extra items of work “Earth work in ashes derbies unsuitable material
undressed disposal lead up to 2 km for 1,759,479 cubic feet @
Rs 2,089.62 per ‰ cubic feet for removal of unsuitable material from
roadway. Whereas the rate of Rs 700 per ‰ cubic feet was admissible for
the said purpose as per item 5 of contract / BOQ and section 411.2 &
411.10 of Specification for Roads and Bridges Construction 1971.
Payment of undue extra items resulted in overpayment of Rs 2.5 million.
Audit pointed out the overpayment in September 2007. The department
replied that during the currency of execution certain changes in scope of
work emerged which necessitated the provision of extra item. The reply
was not satisfactory because as per agreement and specification, the item
of "Regular excavation” for removal of unsuitable material was
admissible. No extra payments for said purposes were admissible keeping
in view available item of regular excavation in contract / bill of quantity.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
Committee that undue items were allowed for excavation of unsuitable
64
material and its disposal due to which extra amount was paid. Audit
further informed the committee that no record was produced. The
Committee directed the department to probe the matter for
non-compliance and effect recovery within 15 days. No progress was
shown to audit till finalization of the report.
(DP.335)
Para 1.32 Overpayment due to inadmissible price variation on
Petroleum, Oils, and Lubricants - Rs 2.5 million
As the Finance Department notification vide No.R.O (Tech) F.D.1-2/83
(VI) (P) dated 6th April, 2005, for price variation on POL, no price
variation on POL was admissible in the agreements conducted prior to
notification i.e 6th April, 2005.
1.32.1 The Executive Engineer, Provincial Highway Division,
Okara allowed the price escalation on POL against the work which was
allotted on 4th March, 2005 on the basis of tender dated 16th December,
2004. The violation of instructions issued by the Finance Department
dated 6th April, 2005 resulted in overpayment of Rs 1.3 million.
Audit pointed out the overpayment in February 2008. The department
replied that the price variation paid on POL would be recovered from the
next running bill of the contractor but no recovery was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
Committee that price variation was paid on inadmissible item i.e. POL.
The department explained that the firm had been declared defaulter in
term of clause 39 by the Chief Engineer (North) Zone. The Security had
been forfeited. Now the recovery was not possible. The Committee was
not agreed with the view point of the department and directed the
department to recover the amount within 30 days. No progress towards
recovery was shown to audit till finalization of the report.
(DP.115)
1.32.2 The Executive Engineer, Provincial Road Construction
Division, Lahore allowed an amount of Rs 1.2 million as price escalation
for POL without provision in the agreement. This resulted in overpayment
of Rs 1.2 million.
Audit pointed out the overpayment in August 2007. The department
replied that the price variation was allowed as per agreement. The reply
65
was not acceptable because no provision in agreement existed for price
variation on POL.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.90)
Para 1.33 Overpayment due to incorrect/double measurements -
Rs 2 million
All payments for work or supplies based on the quantities recorded in the
measurement book. It is incumbent upon the persons taking measurements
to record the quantities clearly and accurately as per rule 7.17(b) of
Departmental Financial Rules.
1.33.1 The Executive Engineer, Provincial Highway Division,
Faisalabad measured and paid 2" thick plant premixed bitumen carpeting
for 54,200 square feet. But subsequently measured 1½" thick carpeting
over the area of 2" as 64,100 square feet. In this way excess area of 9,900
square feet (64,100-54,200) for Rs 56,400 square feet was measured
which resulted in overpayment of Rs 1 million to the contractor.
Audit pointed out the overpayment in September 2007. The department
replied that wearing course was laid in the exact proportion of base course.
The reply was not acceptable because the quantity of 1½" laid over 2"
thick was to be same. But measurement recorded 9,900 square feet more
than first layer.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
Committee that no record was produced by the department for
verification. The Committee took it very serious and directed the
department to produce the record for detailed verification within 30 days.
No progress was shown to audit till finalization of the report.
(DP.155)
1.33.2 The Executive Engineer, Provincial Highway Division,
Gujranwala had to raise the portion of road at RD 154-176 of main work.
The item “Sub-base course” was allowed / laid in the widened portion on
both sides at RD 130-176 containing the raising portion. Later on, the item
“Sub-base course” was again allowed in RD 154-176 for raised portion.
So the laying of sub-base course at RD 154-176 in widened portion
resulted in overpayment of Rs 533,858.
66
Audit pointed out the overpayment in February 2008. The department
replied that the error would be rectified while recording overall
measurements of the work. The department admitted the overpayment but
could not get it verified.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the committee was not
agreed with the explanation of the department and directed for probing the
matter within 30 days. No progress was shown to Audit till finalization of
the report.
(DP.225)
1.33.3 The Executive Engineer, Provincial Highway Division,
Lahore measured and allowed a quantity 1,541,750 cubic feet of item
“Earth work for making embankment” at RD 32+00-47+00 (RHS) and RD
32+00-47+00(LHS) on 7th June, 2005 in 2nd running bill but later on, in 4th
running bill, another item “Uprooting stumps” for quantity of 1186
number was allowed at same RDs. This was not justified because the earth
work embankment was already allowed in those reaches. The amount for
uprooting stumps after laying of earthen embankment in the same reaches,
stood unjustified payment of Rs 225,340.
Audit pointed out the unjustified payment in January 2008. The
department replied that the quantity of earth work was allowed against the
provision of 3,675,464 cubic feet upto 4th running bill and total length RD
320 – 479 which was yet to be finalized. However, the uprooting stumps
were cleared and paid fully and completely. The reply was not acceptable
as the uprooting stumps were paid at the site wherein the earth was laid
already.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee directed
the department to verify the record showing the record entries of earth
work embankment after record entry of uprooting of stumps. No progress
was shown to audit till finalization of the report.
(DP.247)
1.33.4 The Executive Engineer, Provincial Highway Division,
Gujranwala allowed the item “Providing and laying base course” at left
side RD 120-130 without laying sub-base course and regular excavation.
The execution of quantity for 6,000 cubic feet of base course without
regular excavation and without prepared surface with sub-base course
resulted in overpayment of Rs 217,800.
67
Audit pointed out the overpayment in February 2008. The department
replied that laying of sub-base course was not recorded and omitted
erroneously which would be got regularized through overall
measurements. The department accepted the overpayment to contractor
but no recovery thereof was made.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the committee was not
agreed with the explanation of the department and directed for probing the
matter within 30 days. No progress was shown to audit till finalization of
the report.
(DP.219)
Para 1.34 Loss due to incorrect preparation of rates – Rs 1.9
million
As per para (c) of notification issued by Finance Department vide No. RO
(TECH) FD 2-3/2004 dated 2nd August, 2004, the Chief Engineer on the
basis of input rates fixed by Finance Department shall fix the rate of each
item of work for rough cost estimates for administrative approval and
detail estimate for technical sanction and placed them on website.
1.34.1 The Executive Engineer, Provincial Highway Division,
Dera Ghazi Khan allowed payment @ Rs 4,257.72 per % square feet for
Group-I and @ Rs 4,297.47 per % square feet for Group-III for items of
work for 2-1/2" thick with 4% ratio of bitumen against estimated rate of
Rs 4,147/55 per % square feet. Further, the rates analysis for said items
was prepared with higher rate for cost of crushed stone @ Rs 2825 per %
cubic feet against Rs 1,600 per % cubic feet as per input material rates.
Accordingly, admissible rate came to Rs 4217/87 per % square feet for
2.5” thick (2.5x1634/04 + 3.25%). Incorrect adoption of material rate in
technical sanctioned estimate for tendering resulted in extra expenditure of
Rs 1.5 million.
Audit pointed out the extra expenditure in November 2007. The
department replied that some of the relevant record of the works awarded
by Provincial Highway Division, Multan was to be obtained to confirm
whether some variation in percentage above Draft Notice Inviting Tender
amount at the time of award was really occurred or not. After comparison
of the percentage above, Draft Notice Inviting Tender at the time of
finalization of the works would be recovered. The reply was not tenable
being irrelevant.
68
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the para was discussed
in detail wherein the department explained that the rate of crush stone paid
to the contractor. Due to non-production of PC-I to the Committee, the
Committee directed the department to get detailed verification of original
PC-I. No progress was shown to audit till finalization of the report.
(DP.131)
1.34.2 The Executive Engineer, Provincial Highway Division,
Sargodha while preparing analysis of rate of an item of work “P/L Plant
Premixed Bituminous Carpeting” the input rate of bitumen was provided
@ Rs 28,775 per ton in the analysis of rate instead of admissible rate of
Rs 27,150 available in 3rd quarter, 2006. Excess rate provided in the
analysis of rate resulted in loss of Rs 389,386.
Audit pointed out the loss in October 2007. The department replied that
the competent authority had allowed the rate of Rs 28,775 for bitumen
packed in the analysis of rate. The reply was not satisfactory because the
rates of Rs 30,400 and Rs 27,150 per ton were for packed and bulk
bitumen in third quarter of 2006. Therefore, the application of rate for
Rs 28,775 was incorrect. No documentary evidence for price variation
payment was provided for verification of rates applied.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee was not
agreed with the explanation of the department and directed to refer the
issue to Finance Department for clarification / advice. No progress was
shown to audit till finalization of the report.
(DP.341)
Para 1.35 Non-forfeiture of security – Rs 1.7 million
Clause 60 and 61 of agreement are dependent upon each other and would
be operated simultaneously. Revision of contract (rescinding of the
contract) is subject to a certificate that action under clause 3(c) (now
clause 61(a) of agreement was not possible as there are no dues of the firm
or any of its partner in the department for effecting recovery (i.e. risk and
cost) and has been removed from the approved list of the department in
accordance with the conditions laid down in enlistment letter as per Law
and Parliamentary Affairs Department Letters No DP-15(119)/2001/
400/392/C dated 25th October, 2001 and No. FD(D-11) 3(5)81 volume-II
dated 6th February, 1990.
69
The Executive Engineer, Provincial Highway Division, Bahawalpur
awarded a contract for Rs 100.2 million in June 1996 with a completion
date of June 1999. The contractor executed the work for Rs 27.9 million
upto June 2002 and failed to complete the balance work. The contract was
rescinded under clause 60 in January 2005 without invoking clause 61 as
per Law and Parliamentary Affairs letter 25th October, 2001 and Finance
Department letter dated 5th February, 1990, for completion of balance
work on defaulting contractor’s risk and cost. Contractor’s security deposit
of Rs 1.7 million was not forfeited under clause 60 of the agreement. The
contractor was not removed from the approved list of the department as
per provision of enlistment letter. Despite the above, the balance work was
not awarded to any contractor. This resulted in irregular rescinding of
contract and non-forfeiture of security deposit of Rs 1.7 million.
Audit pointed out the non-forfeiture of security deposit in April 2007. The
department replied that forfeited security deposit could not be credited to
government due to suspension of order of the Divisional Officer by the
court of Senior Civil Judge. The reply was not convincing because
contract clauses 60 and 61 were not simultaneously invoked for rescinding
the contract. The contractor was not black listed as per condition of the
enlistment letter. The contractor’s security deposit was not timely forfeited
and credited to government revenue.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
Committee that the contract was rescinded under clause 60 but the laying
security of contractor worth Rs 1.725 million was not forfeited. The
department explained that the action of forfeiture of security was in
process in the meantime the contractor filed suit against departmental
action. Now the case was in court of law. The Committee directed the
department to probe the matter and conduct fact finding inquiry. Further,
compliance should be reported by the Executive Engineer Provincial
Highway Division Bahawalpur. No progress was shown to Audit till
finalization of the report.
(DP.378)
Para 1.36 Non-auction of scrap material – Rs 1.6 million
As per para 4.40 of Public Works Department Code, the auction of store
should be made on book value nearer to market rates after getting sanction
of survey report from the competent authority.
70
The Executive Engineer, Provincial Highway Division, Faisalabad
obtained scrap material (steel) as a result of dismantling of Global
Transaction Services bus stand in September 2004, but the same was not
auctioned, although a period of about three years had been elapsed. This
resulted in non-auction of scrape material amounting to Rs 1.6 million.
Audit pointed out the non-auction of scrap in September 2007. The
department replied that the survey report of material was in process of
approval. Auction would be made as and when the survey report would be
approved. The reply was not tenable because a considerable period of
about three years had been elapsed and the material was being deteriorated
with the passage of time.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit informed the
Committee that neither the department auctioned the scrap material nor
produced any record for verification. The department explained that the
process of auction of scrap material was in pipe line. The Committee
directed the department to expedite the process of auction and got it
verified by audit. No progress was shown to audit till finalization of the
report.
(DP.156)
Para 1.37 Overpayment due to allowing extra rate - Rs 1.4 million
As per Finance Department letter No.R.O (TECH) FD 11-47/2004 dated
24th February, 2005, item of reinforced cement concrete work i.e. item No.
5(a) of Composite Schedule of Rates 1979 (page 52) includes rate of
reinforced cement concrete in any shape and design.
The Executive Engineer, Provincial Buildings Division, Multan accepted
the tender rate for an item of work “Reinforced Cement Concrete in roof
slab, beams, column, lintels, girders and other structural members laid in
situ or pre-cast etc. in required shape and design complete in all respect”
without horizontal shuttering type ‘C’ ratio 1:2:4 @ Rs 100 per cubic feet
which was measured and paid upto 13th running bill. This rate was
changed to Rs 113 per cubic feet with the reason for involvement of some
change in design of reinforced cement concrete work requiring more side
shuttering. No change in rate was due as tendered rate was accepted for
reinforced cement concrete work in required shape and design as per
Finance Department letter dated 24th February, 2005. Incorrect
enhancement of rate resulted in overpayment of Rs 1.4 million.
71
Audit pointed out the overpayment in October 2007. The department
replied that the design of R.C.C. footing was received from consultant
after allotment of work and footings of column were designed in the shape
of conical prism which required much more side shuttering. In original
technical sanctioned estimate, rate of Rs 100 per cubic feet was provided
expecting the straight running feet footing but after receipt of design and
as per requirement of structure, the rate of Rs 113 per cubic feet was
prepared and approved by the Chief Engineer and cleared by the Planning
and Development Department Lahore in revised approval. The reply was
not convincing because the original rate of Rs 100 per cubic feet was for
reinforced cement concrete work in required shape and design hence no
rate revision was due as per Finance Department letter dated 24th
February, 2005.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee was
agreed with the view point of audit and directed the department to recover
the amount with upto date consumption of R.C.C quantities within 30
days. No progress towards recovery was shown to Audit till finalization of
the report.
(DP.198)
Para 1.38 Unjustified payment for use of material from
unspecified quarry/below specified work - Rs 1.1
million
As per clause 10 of the Agreement, the contractor shall execute the whole
and every part of the work both as regards material and otherwise in every
respect in strict accordance with specification.
The Executive Engineer, Provincial Highway Division, Sargodha allotted
the work “Widening/improvement of road work” to a contractor from
kilometer 0 to 15.12 kilometer (Group-I) to a contractor for Rs 35.403
million in January 2005 with a completion period of six months. The work
remained incomplete upto March 2006 and the contractor received
payment for Rs 24 million upto 13th running bill. No action for delay in
completion and non execution of balance work for Rs 11.403 million was
initiated under clause 39, 60 and 61 of the agreement but the new contract
had been executed in January 2006 to another contractor (M/s Nazir &
Co.) for Rs 282 million for execution of work from kilometer 0 to 46 at
higher rates including the reach of 0-15.10 kilometer (already awarded).
This resulted in unjustified expenditure of Rs 1.1 million.
72
Audit pointed out the unjustified expenditure in October 2007. The
department replied that during execution of work at site, the private land
owners of the adjoining area of one side of road refused to surrender their
land for widening of road. Resultantly, it was decided to widen the road
one side 4 feet instead of 2 feet on both sides. As such, there was minor
saving of work executed by M/s Al-Farooq & Co. and no such work was
executed by other contractor i.e. Nazir & Co. The reply was not acceptable
because cost of balance work Rs 11.4 million was not minor. The
department had awarded the second contract from kilometer 0-46 included
already awarded work of 0-15.1 kilometer. The balance work of contract
of 0-15.1 kilometer was to be completed from the original contractor but
was got done from second contractor at higher rates. The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the Committee was
not agreed with the view point of the department and directed to probe the
matter of financial loss within one month. No progress was shown to audit
till finalization of the report.
(DP.340)
Para 1.39 Overpayment due to incorrect application of rate- Rs 1
million
As per Addendum and Corrigendum No. 5 to Market Rates Volume-III,
Part-II applicable w.e.f. 1st March, 2005, the rate of item No 13(a) (iii)
Chapter No 16 (Providing/Weaving GI wire netting for wire crate) was
revised to Rs 1, 391.30 per % square feet from Rs 2, 426.15 per % square
feet, vide Finance Department No. RO (TECH) FD.2-3/2007 dated 1st
January, 2007
The Executive Engineer, Provincial Highway Division, Dera Ghazi Khan
allowed rates of Rs 2426.15 per % square feet and Rs 2600 per % square
feet to two contractors for the items of work” Providing/Weaving G.I.
Wire netting for wire crates” with G.I. Wire of approved size (including
sewing and partition to make crates) against the admissible rates of
Rs 1,391.30 and Rs 1,491.06 per% square feet respectively as per
addendum and corrigendum No. 5. Incorrect application of rates resulted
in overpayment of Rs 1 million.
Audit pointed out the overpayment in November 2007. The department
replied that some of the relevant record of the works awarded by
Provincial Highway Division, Multan was to be obtained confirmity
73
whether some variation in percentage above D.N.I.T amount at the time of
award was really occurred or not. After comparison of the percentage
above D.N.I.T amount at the time of finalization of the works, would be
recovered. The reply was not tenable being irrelevant.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein Audit intimated that
department had not made the recovery. The department explained that
recovery would be made in next running bill of contractor. The Committee
directed the department to get verification of recovery. No progress was
shown to audit till finalization of the report.
(DP.132)
Para 1.40 Premature release of security deposit – Rs 1 million
Clause 50 of the contract agreement provides that security of the work was
to be released after one year of the completion of project.
The Executive Engineer, Provincial Highway Division, Okara made
payment to the Executive Engineer, Machinery Maintenance Division,
Lahore for hire charges of machinery used by the contractor from his
security deposit during execution of work. Payment out of contractor’s
security deposit was not due because it could be released one year after
completion of work. Non-adherence to the agreement clause resulted in
premature release of security deposit of Rs 1 million.
Audit pointed out the issue in February 2008. The department replied that
the work was transferred to Provincial Highway Division, Lahore. No
further reply was received.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that the balance work of contractor was carried out by the
provincial MM division Lahore in accordance to clause 43(4) of
agreement and payment was made from security deposit of contractor. The
Committee was not agreed with the view point of the department and
directed the department to recoup the security from claim of contractor in
next running bill. No progress was shown to audit till finalization of the
report.
(DP.121)
74
Para 1.41 Loss due to non-adjustment of blasted material -
Rs 749,541
As per technical sanctioned estimate, 50% stone obtained from blasting of
hard rock was to be used as base course after blasting and breaking into
specified size of base course with 20% stone screening @
Rs 2,154 per% cubic feet.
The Executive Engineer, Provincial Highway Division, Dera Ghazi Khan
allowed payment for excavation in hard rock requiring blasting and
disposal upto 50 feet lead including dressing and leveling to designed
section complete in all respect for 112,184 cubic feet @
Rs 2,500 per % cubic feet instead of utilization of 50% blasted material as
base course as per provision of estimate. Disposal and non-utilization of
available material resulted in loss of Rs 749,541 (683,991 + 65,550) to
government.
Audit pointed out the loss in November 2007. The department replied that
blasted material was spread over vast area and it was not possible to
collect and reuse the blasted material. The reply was not convincing
because blasted material was to be used as per provision in the technical
sanctioned estimate to save the government from loss.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the department
explained that 50% ballasted stone could not be used due to being
unsuitable. Audit informed that no evidence in support of its reply was
produced. Committee directed to probe into the matter within 30 days. No
progress was shown to audit till finalization of the report.
(DP.129)
Para 1.42 Non-recovery of secured advance - Rs 629,096
As per letter issued by the C&W Department, Government of the Punjab
vide No. SOR III (C&W)2-14/1997 dated 29th May, 1997, under normal
circumstances the secured advance has to be recovered within three
months.
The Executive Engineer, Provincial Buildings Division Rawalpindi
granted secured advance for Rs 3,013,500 to the contractor in January
2003 for hollow pipes but failed to recover within three month. This
resulted in non-recovery of Rs 629,096.
75
Audit pointed out the non-recovery in December 2003. The department
replied that the adjustment on account of secured advance would be made
on utilization of material. The reply was not satisfactory because recovery
of secured advance was outstanding despite elapse of a period of five
years.
The matter was discussed in the Departmental Accounts Committee
meeting held on 14th February, 2008. The department was directed to
recover the advance within 30 days alongwith finalization of the accounts
of the contractor. The matter was discussed in the Departmental Accounts
Committee meeting held from 20th to 27th April, 2009 wherein the
Committee directed strictly for compliance report of previous directive
dated 14.02.2008 may be made & got verified from Audit within a week.
No compliance of the Committee directive was made till finalization of
the report.
(DP.300)
Para 1.43 Non-recovery of professional tax – Rs 565,000
As per Public Accounts Committee directive dated 11th August, 2004,
recovery of professional tax is to be made from contactor.
The Chief Engineer, Punjab Buildings Department (South), Lahore
enlisted/renewed the enlistment of contractor of category ‘B’ without
recovery of professional tax. This resulted in non-recovery of Rs 565,000.
Audit pointed out the non-recovery in July 2007. The department replied
that it was duty of the Executive Engineer / Divisional Accounts Officer
concerned to see that recovery of professional tax was being made
regularly. The reply was not convincing because professional tax recovery
was a departmental responsibility as per PAC directive. It should have
been watched at the time of renewal/enlistment of the contractor or
through the Executive Engineer concerned.
The matter was discussed in the Departmental Accounts Committee
meeting held from 20th to 27th April, 2009 wherein the contention of the
department i.e to recover the professional tax was not the responsibility of
the Chief Engineer’s office, was not accepted by the Committee and
directed the department that at the time of renewal / enlistment, the
professional tax may be recovered.
(DP.282)
76
Para 1.44 Overpayment for allowing inadmissible item -
Rs 325,280
As per remarks No. 1 against item No. 10 of Chapter “Surface rendering”,
the item “Plaster under soffit” shall be applicable to buildings meant for
human habitation. It shall not be admissible on godown, cycle stands,
garages etc.
The Executive Engineer, Provincial Buildings Division, Rahim Yar Khan
at Lahore allowed a quantity of 34,748 square feet of item “Cement
Plaster under soffit” in basement site meant for parking stand, garages etc.
This resulted in overpayment of Rs 325,280.
Audit pointed out the overpayment in February 2008. The department
replied that it was a very prestigious building and would be used by the
VVIP. The cafeteria, mosque and staff offices were also located in
basement due to which the ceiling of basement was plastered. Moreover,
the work was carried out as per estimate and bill of quantities. The reply
was not convincing because no site was exempted. The area of mosque
and cafeteria could be deleted. Provision made in technical sanctioned
estimate was violation of instructions given in Market Rate System and
required special sanction from Finance Department otherwise recovery
was to be made.
The department did not convene the DAC meeting despite best efforts
made by this office till finalization of the report.
(DP.57)
77
HOUSING, URBAN DEVELOPMENT & PUBLIC HEALTH
ENGINEERING DEPARTMENT
HUD & PHE Department is the administrative department of Rawalpindi
Development Authority, Gujranwala Development Authority, Faisalabad
Development Authority, Lahore Development Authority, Multan
Development Authority, Punjab Housing and Town Planning Agency, and
Punjab Public Health Engineering Department. The secretary HUD &
PHE Department is the principal accounting officer. The functions of
HUD & PHE Department are controlled under the Rules of Business 1974
and the Punjab Development of Cities Act 1976.
Functions: HUD & PHE Department, Government of the Punjab
mainly deals with matter of housing, physical planning, public health
engineering and formulation of environmental policies.
Audit for the financial year 2006-07 was conducted on test check basis
and a summary of audit results is tabulated as under: (Amount Rs in million)
Sr.
No
Particulars Amount Total amount /
%age
1. Budget allocation for the financial year
2006-07
I- Public Health Engineering Deptt
II- Development Authorities
III- Punjab Housing and Town Planning
Agency
3,832.76
17,945.53
300.60
22,078.89
2. Total Expenditure for the financial year
2006-07
I- Public Health Engineering Deptt
II- Development Authorities
III- Punjab Housing and Town Planning
Agency
2,315.70
10,566.48
87.74
12,969.92
3. Audited Expenditure
I- Public Health Engineering Deptt
II- Development Authorities
III- Punjab Housing and Town Planning
Agency
-
2,315.70
4,441.39
60.99
6818.08
4. Amount of the observations in this report
i) Excess Payment
ii) Irregular / un-authentic
iii) Undue Financial Aid
iv) Loss / Doubtful / Theft
v) Non-recovery
2.85
6.58
4.33
77.05
245.93
336.74
*. High money value sample selection criteria.
78
79
2. HOUSING, URBAN DEVELOPMENT & PUBLIC HEALTH
ENGINEERING DEPARTMENT
Para 2.1 Non-recovery of cost of land/plot from GEPCO -
Rs 81.8 million
As per letter No.GDA/EM/159 dated 25th July, 2007, the Gujranwala
Development Authority, Gujranwala was required to recover the cost of
the land of plot allotted to the Gujranwala Electric Power Company.
The Director Estate Management, Urban Development Wing, Gujranwala
Development Authority, Gujranwala did not recover the cost of plot
No.565-A, Model Town, Gujranwala from the Gujranwala Electricity
Power Company (GEPCO). It resulted into non- recovery of Rs 81.8
million.
Audit pointed out the non-recovery in December 2007. The Authority
replied that proceeding for recovery from GEPCO was under way.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein audit informed the
Committee that the authority failed to recover the cost of plot from
GEPCO. The department explained that the proceeding for recovery from
GEPCO was underway. The Committee directed that the matter be taken
up by the Administrative Department with the Chief Executive of
GEPCO. No progress was intimated till finalization of the report.
(DP.22)
Para 2.2 Loss due to award of work above permissible limit of 4.5% over technical sanctioned
estimate - Rs 75.5 million
As per para 2 (ii) of the preface of Delegation of Financial Powers Rules
1990, the acceptance of tender shall be subject to the condition that the
rates quoted or amount tendered are such that the total cost of the project
will not exceed the amount for which technical sanction was accorded by
more than 4.5%.
The Director Engineering, UD Wing FDA, Faisalabad awarded a work for
Rs 821 million against technical sanctioned estimate of Rs 713.4 million
which was 15.08% above the amount of technical sanctioned estimate.
Acceptance of tender beyond the permissible limit of 4.50% over TSE
resulted in loss of Rs 75.5 million.
80
Audit pointed out the loss in December 2007. The Authority replied that
FDA Governing Body accorded revised administrative approval. The
reply was not acceptable as work was awarded on higher side from the
original technical sanctioned estimate. Moreover, technical sanctioned
estimate was revised on the basis of higher quoted rates of the contractor.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein audit informed the
Committee that the work for Rs 821.031 million was got executed against
the TSE amount of Rs 713.432 million which was 15.080% above the
estimated cost. The department could not justify this position in support of
his action. The Committee directed the department to refer the matter to
the Finance Department for clarification within 15 days. No progress was
reported to Audit till finalization of the report.
(DP.100)
Para 2.3 Non-recovery of commercialization fee - Rs 66
million
As per policy issued by the Secretary Housing Urban Development &
Public Health Engineering Department, Government of the Punjab, vide
No.SO(D-II) 5-2/81/ Vol-II dated 2nd July, 2001, existing/unauthorized
commercialization may be regularized by the commercialization
committee on payment of the prescribed commercialization fee @ 20% of
value of urban land based on valuation table prepared under the Stamp Act
1899 and 10% surcharge.
2.3.1 The Deputy Director, PHATA Sub-Region, Multan did not
recover the commercialization fee from various allottees of plots of
various housing schemes. This resulted in non-recovery of Rs 31.6
million.
Audit pointed out the non-recovery in August 2007. The Authority
admitted the recovery of Rs 1.8 million. In case of balance recovery of
Rs 30.7 million, Authority admitted that commercial activity was being
performed in some areas & notices were served to them to close the
commercial activity and in some areas a fresh survey was being made to
check the commercial activities. The reply was not agreed as the
commercial activities were being performed in these areas evident from
the report of Excise & Taxation Officer (ETO) Khanewal but the Agency
did not take concrete steps to realize commercialization fee.
The matter was discussed in the Departmental Accounts Committee
meeting held on 14th May, 2009 wherein the audit informed the
81
Committee that the department got verified the recovery of Rs 891,090
which has been verified by Audit. The Committee settled (para No.3). The
para was reduced to Rs 31.6 million. No progress was reported till
finalization of the report.
(DP.37)
2.3.2 The Deputy Director, PHATA Sub Region, Jhang did not
recover the commercialization fee from the owners of plots/houses of
different schemes who were using their properties for commercial
purposes/activities. The Authority neither stopped commercial activities
nor recovered the commercialization fee plus 10% surcharge from them.
This resulted in non-recovery of Rs 22 million.
Audit pointed out the non-recovery in November 2007 but the Authority
did not reply.
The matter was discussed in the Departmental Accounts Committee
meeting held on 14th May, 2009 wherein the audit informed the committee
that the department failed to recover the commercialization fee. The
Committee pended the para for detailed verification within 15 days. No
progress was reported till finalization of the report.
(DP.59)
2.3.3 The Deputy Director, PHATA Sub-Region, Sahiwal did not
recover the commercialization fee from the owners/allottees of building
plots housing schemes. This resulted in non-recovery of Rs 9.8 million.
Audit pointed out the non-recovery in August 2007. The Authority
admitted that some properties were being used as partially commercial and
some fully commercial but their commercialization fee could not be
assessed as commercial policy was ceased by govt. of the Punjab. The
commercialization fee would be recovered after restoration of new policy.
The reply of the department was not tenable as the cases were for the
period when the commercialization policy was operative.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.36)
2.3.4 The Director Town Planning, Urban Development Wing,
MDA, Multan did not recover commercialization fee and surcharge
82
thereon from owners of three residential plots being used for commercial
purpose without prior approval of the Authority. This resulted in non-
recovery of commercialization fee for Rs 2.2 million.
Audit pointed out the non-recovery in January 2008. The Authority replied
that actual fee would be recovered. The reply was not agreed as no
concrete steps for recovery were taken by the Authority.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein Audit informed that MDA,
Multan could not recover the commercialization fee and surcharge from
the owners of three plots being used for commercial purpose. The
department explained that the cases of two Nos. plots were under trial in
the court of law and in other case, efforts were being made to recover the
commercial fees. The Committee pended the para for effective follow up.
The para was again discussed in detail in the Departmental Accounts
Committee meeting held on 14th May, 2009 wherein the audit informed
the Committee that complete record was not produced by the department
during verification. The department explained that due to shortage of time,
complete record could not be produced. However all record is available
and would be produced for verification. The Committee pended the para
for detailed verification within 15 days. No progress was conveyed till
finalization of the report.
(DP.10)
2.3.5 The Director Town Planning, Urban Development Wing,
MDA, Multan allowed three residents of khewat No.1068/1060 to utilize
twenty one (21) marlas for commercial purpose whereas extra fourteen
(14) marlas over and above the allowed area of 21 marlas were also being
used for commercial activities. This resulted in non-recovery of
commercialization fee of Rs 415,800.
Audit pointed out the non-recovery in January 2008. The Authority replied
that the owners of plots had submitted separate building plans and
commercialization fee would be recovered. The reply was not agreed as
the property was already under commercial use but no concrete steps for
the recovery of dues were taken by the Authority.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein Audit informed the
Committee that the department could not recover the Commercialization
fees and 10% surcharges for the areas of 14 marals. The department
83
explained that efforts were being made to effect the recovery. The para
was deferred by the Committee for want of recovery. No progress was
intimated till finalization of the report.
(DP. 11)
Para 2.4 Non-recovery of aquifer, water and sewerage charges
from commercial/industrial users - Rs 32.5 million
According to Punjab Gazette Notification No.2190/DDR (D)/WASA/FDA
/2006 dated 12th December, 2006 issued under The Punjab Development
of Cities Act 1976, the Agency was required to recover the aquifer, water
and sewerage charges from commercial/industrial users at the prescribed
rates.
The Director Revenue and Recovery, WASA FDA, Faisalabad did not
recover aquifer, water and sewerage charges from the commercial/
industrial users of above mentioned facilities. This resulted in non-
recovery of Rs 32.5 million.
Audit pointed out the non-recovery in August 2007. The Agency admitted
recovery in principle and further replied that an amount of Rs 19.3 million
had already been included in the previous year. The reply with regard to
repetition of recovery was not tenable because no documentary evidence
in support of reply was produced.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein Audit informed the
Committee that DP No.25 for the year 2005-06 and DP No.1 for the year
2006-07 as mentioned in the department reply was not produced to audit
for verification. The recovery statement was produced to Audit but the
Agency could not justify the recovery made with reference to audit
observation. The department also failed to justify that the amount of
previous DPs was included in the amount of this DP No. 80 for the year
2007-08. The Committee deferred the para for detailed verification. No
progress towards compliance of the Committee directive was intimated till
finalization of the report.
(DP.80)
Para 2.5 Non-recovery of fine/penalty - Rs 14 million
According to Para 1 of section II read with para 12 (iii) of section IV of
Building Regulations, LDA Lahore, every prospective builder shall
construct building in strict accordance with the requirements of building
84
regulations, and the Authority may impose penalties for violation of the
provisions of these regulations at such rates and in such manner as are
specified.
2.5.1 The Director Town Planning, Urban Development Wing
LDA, Lahore did not recover the penalty imposed due to construction of
buildings in violation of building plan. During site visit of commercial
buildings, it was pointed out that some land lords had constructed
buildings in deviations of approved plan but the Authority did not recover
the penalty from the defaulters. This resulted in non-recovery of Rs 13.6
million.
Audit pointed out the non-recovery in November / December 2007. The
Authority did not reply.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.116)
2.5.2 The Director Town Planning, Urban Development Wing
LDA, Lahore did not recover the penalties from the owners of the
buildings constructed in deviation of approved building plan. During site
visits it was reported that the owners of house No.60 Block, A-I Johar
Town and 78 Rachna Block Allama Iqbal Town, Lahore had constructed
and completed their houses in deviation of building plans approved by the
Authority. The Directorate did not recover the penalty amounting to
Rs 158,885 and Rs 303,800 respectively from the defaulter owners. This
resulted in non-recovery of Rs 462,685.
Audit pointed out the non-recovery in November / December 2007. The
Authority did not reply.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.120)
Para 2.6 Non-recovery of lease money - Rs 7.7 million
In terms of clause 2 and 5 of the lease agreement made between the LDA
and the tenants of Godown/ Bays underneath the Data Nagar Over Head
Bridge, Badami Bagh Lahore, the lessees shall pay lease money on or
85
before 10th of January each year in advance and lessor has right either to
cancel the lease agreement or to accept payment with penal interest @
17.50 % P.A. on delayed amount, if lessee failed to deposit the lease
money within stipulated time.
The Director Estate Management, Urban Development Wing LDA,
executed four lease agreements for bay No. 8,10,11, and 12 under Data
Nagar Over Head Bridge Badami Bagh, Lahore in May 1992. But the
lessees did not deposit the lease money even after lapse of considerable
period. The Authority neither recovered the rent alongwith penal charges
nor cancelled the allotment and re-auctioned the property. This resulted in
non-recovery of lease money of Rs 7.7 million.
Audit pointed out the non-recovery in 2007 but the department did not
reply.
The matter was discussed in detail in DAC meeting held on 14th May,
2009 where in audit informed the Committee that department has not
recovered the amount of lease. The department explained that an amount
of Rs 3,330,416 had been recovered. The balance amount would be
recovered after decision of court as the matter is in the court of law. The
Committee pended the para for verification of recovered amount and
directed the department and pursue the matter in court of law and effect
the balance recovery.
(DP.113)
Para 2.7 Less-recovery due to excessive use of area than
provided in agreements - Rs 7.5 million
According to clause I (A) of agreements made on 14th January, 2005 and
20th December, 2006 between WASA, FDA Faisalabad, Telenor Pakistan,
PVT Limited Company and Pakistan Mobilink PVT Limited, the Water
and Sanitation Agency was supposed to rent out 1400 sft areas of WASA
over head reservoirs at various sites in Faisalabad to the companies for
installation of telephone accessories.
The Director Water Resource, WASA FDA, Faisalabad rented out areas of
1400 sft at different locations of WASA over head water reservoirs to the
Telenor and Mobilink companies for the installation of radio base stations
and base transceiver stations in Faisalabad. The companies were utilizing
areas of 3753.92 sft against the agreed area of 1400 sft. The Agency could
not recover the rent of excessive areas of 2353.92 sft under the use of the
companies. This resulted in less-recovery of Rs 7.5 million.
86
Audit pointed out the less-recovery in October 2007. The Agency replied
that lump sum amount was realized from the companies which was much
more than the rent of the area. The reply was not relevant as recovery of
rent of additional area which was being utilized by the companies must be
recovered separately in addition to lump sum rent as pointed out by the
Deputy Director (WR), WASA FDA, Faisalabad.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the department admitted
the recovery. The para was kept pending by the Committee to verify the
admitted recovery by audit within 15 days. No progress towards recovery
was shown till finalization of the report.
(DP.85)
Para 2.8 Overpayment due to non-recovery of price variation on
account of decrease in cost of cement - Rs 6 million
According to clause -55 of contract agreement, if any variation (increase
or decrease) to the extent of 5% or more in prices of any item mentioned
in sub clause -2 takes place after the acceptance of tenders and before the
completion of contract, the amount payable under the contract shall be
adjustable to the extent of actual variation in the cost of the item
concerned and base price shall be price prevalent in the month in which
the last day of submission of tenders fall.
2.8.1 The Executive Engineer, Public Health Engineering
Division, Rawalpindi measured and paid quantities of different items of
works in which cement was consumed from July 2006 to June 2007 but
recovery due to decrease in price of cement(more than 5%) was not
effected from the contractors. Non-adherence to agreement clause resulted
in overpayment of Rs 5.6 million to the contractors.
Audit pointed out the overpayment in September 2007. The department
replied that rate for item was paid as provided in technical sanctioned
estimate. The reply was not tenable because the department was to deduct
the amount of price variation as per clause of contract agreement.
The matter was discussed in the Departmental Accounts Committee
meeting held on 14th May, 2009 wherein the audit informed the committee
that department has not effect the recovery of price variation. The
Committee also pended the para for recovery with in 30 days. No progress
subject to recovery was reported till finalization of the report.
(DP.42)
87
2.8.2 The Executive Engineer, Public Health Engineering
Division, Sialkot called/accepted tenders in 4th quarter, 2006 with base
rate of cement Rs 225 per bag. The cost/price of cement was decreased
during 1st quarter, 2007 to Rs 175 per bag. The department did not effect
recovery on account of price variation of cement consumed during the
quarter. Non-recovery of price variation resulted in overpayment of
Rs 221,880 to the contractor.
Audit pointed out the overpayment in December 2007. The department
replied that according to clause-55, no price adjustment was allowed as
government had not issued any notification in this regard. The reply was
not tenable because input rates on website were being notified by
government on quarterly basis.
The Departmental Accounts Committee meeting held on 14th May, 2009
wherein the audit informed the committee that department has not effect
the recovery of price variation. The Committee pended the para for
recovery with in 15 days. The para was kept pending. No progress was
reported till finalization of the report.
(DP.45)
2.8.3 The Director Engineering, Urban Development Wing,
Rawalpindi Development Authority, Rawalpindi made payment without
recovery of price variation due to decrease in cost of cement. The base rate
of cement in September 2006, at the time of tender, was Rs 275 per bag.
This was reduced for more than 5% in subsequent quarters during which
cement was consumed. Non-adherence to agreement clause resulted in
overpayment of Rs 139,795 to the contractor.
Audit pointed out the overpayment in October 2007. The Authority replied
that payment was made as per tendered / accepted rates. The reply was not
agreed because recovery was required to be made in accordance with
provision of agreement clause.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the Committee directed the
department again to effect the recovery and got verified form Audit within
(30) days. No progress towards recovery was intimated till finalization of
the report.
(DP.7)
88
Para 2.9 Non-recovery on account of advertisement taxes on
Daewoo Buses - Rs 5.9 million
As per rule 4.7 (1) of Punjab Financial Rules vol-I, it was the primary duty
of the department/ Authority to watch that all revenue due to the
government was correctly and promptly assessed, realized and credited to
accounts.
Parks and Horticulture Authority, Lahore did not recover the dues of the
Authority on account of tax on publicity on public service transport, at the
rate prescribed by the Authority from the Daewoo buses for the period
from 2004-07. This resulted in non-recovery of advertisement taxes of
Rs 5.5 million. Moreover, the campaign was also floated on other local
city buses i.e. New Khan, Niazi, Makks and Metro but no recovery was
made from these transport companies.
Audit pointed out the non-recovery in October 2007. The Authority
replied that Rs 264,000 were recovered from M/s Daewoo on 25 buses
during the year 2006-07 and Authority had issued notices to other bus
companies to pay the due taxes but they had refused to pay. The reply of
the Authority was not convincing as Daewoo Company was running 77
buses and actual area of one bus was 720 sft. The recovery at the rates
prescribed by PHA notifications and as per actual area 720 sft per bus
came to Rs 5.5 million w.e.f January 2004 to December 2007. The amount
of para might enhance if the calculation of city bus service of other
companies was made.
The matter was discussed in detail in DAC meeting held on 14th May,
2009 where in audit informed the Committee that department has not
recovered the amount which was required to be recovered from Daewoo
and other companies buses on account of advertisement charges. The
department explained that partial recovery has been made which would be
got verified from audit. The Committee pended the para for detailed
verification of recovery within the 3 days. No progress was intimated till
finalization of the report.
(DP.79)
Para 2.10 Non-receipt of performance security valuing - Rs 4.9
million
According to clause 7 of contract agreement read with item (b) of
memorandum of work, the contractor was required to provide performance
89
security in the form of bank guarantee @ 10% of the accepted tender price
within 15 days of receipt of acceptance letter.
2.10.1 The Executive Engineer, Public Health Engineering
Division, Lahore awarded work ‘Extension urban water supply scheme at
Sheikhupura City” vide No.1450-55/E dated 5th August, 2006 to the
contractor and made payment up to 18th running bill but failed to obtain
performance security valuing Rs 3.2 million . Non-receipt of performance
security of Rs 3.2 million put the government interest at risk.
Audit pointed out the non-receipt in August 2007. The department replied
that 2% earnest money and security @ 5 &10% was deposited by the
contractor which was sufficient. The reply was not relevant because
deduction of security from payments made/earnest money could not be
linked with performance security.
The Departmental Accounts Committee meeting held on 14th May, 2009
wherein the audit informed the committee that department has not
attended the audit during verification and no one came from division in
discussion. The Committee took it very serious and directed the
department to call the explanation of the Executive Engineer, PHE
Division, Lahore for non-compliance of SDAC meeting. The Committee
also pended the para for detailed verification. No progress was reported till
finalization of the report.
(DP.76)
2.10.2 The Director Planning and Design, WASA Faisalabad
Development Authority, Faisalabad did not obtain the performance
security bond amounting to Rs 1.7 million from various contractors to
whom the works for Rs 16.4 million were awarded on extraordinary below
percentages. No action against the contractors was initiated under the said
clauses. Non-adherence to contract clause / instructions and non-receipt of
performance security of Rs 1.7 million put the Agency’s interest at risk.
Audit pointed out the non-receipt in September 2007. In first case, the
Agency stated that detail reply would be submitted after verification of
record. In second case, the Agency replied that the relevant letter of
Finance Department was not in their knowledge. The reply in both cases
was not agreed as it was obligation of the Agency to secure its interest by
obtaining performance security.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the Committee reduced the
para from Rs 1.715 million to Rs 1.342 million after verification (i.e
90
Rs 1.715 million - Rs 227,281- Rs 147,000) and directed the Agency to
get condonation of the irregularity from the administrative level/Board.
(DP.73)
Para 2.11 Non-recovery of demolition charges - Rs 4.2 million
As per para 15 (i & ii) of section IV of building regulations LDA, in the
event of non-compliance with the requisition as made under the
regulation, any officer authorized by the Authority shall be competent to
order in writing cessation of work or order demolition of such construction
which may contravene any of the provisions of these regulations and
expenses thereof shall be paid by the owner.
The Director Town Planning, Urban Development Wing, LDA Lahore
paid huge amount for demolition of Ahsan Tower constructed on plot
No.43-A industrial area Gulberg-II Lahore. The Authority did not recover
the expenditure incurred on demolition from the defaulter owner of the
Tower. This resulted in non-recovery Rs 4.2 million.
Audit pointed out the non-recovery in November/December 2007. The
Authority did not reply.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.119)
Para 2.12 Non-recovery of fees / fine / penalties - Rs 3.1 million
According to para 12 (i) & (iii) of section IV of Building Regulations
LDA, the Authority shall charge scrutiny fee of building plans required to
be submitted under these regulations and other matters arising during the
disposal of plans or in course of its construction, in such manner as may
be fixed from time to time.
The Director Town Planning, Urban Development Wing LDA, Lahore did
not recover the scrutiny fee from the owners of the buildings. The
Directorate raised the demand under the heads fees/fines/penalties against
various persons, during the financial year 2006-07 but they did not deposit
the requisite amount. The Authority did not take steps for the recovery of
out standing dues. This resulted in non-recovery of Rs 3.1 million.
91
Audit pointed out the non-recovery in November/December 2007. The
Authority did not reply.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.118)
Para 2.13 Non-recovery of rent and non-renewal of lease
agreement - Rs 2.9 million
The lease agreement made between WASA Faisalabad Development
Authority, Faisalabad and Mobilink on 20th December, 2006 was expired
w.e.f 31st December, 2006. The WASA authorities were required to renew
the agreement and receive enhanced rate of rent from the lessees.
The Director Water Resource, WASA FDA, Faisalabad rented out the
over head reservoirs at four sites to Mobilink Company for base
transceiver stations. The lease agreements were expired on 31st December,
2006. The Agency neither renewed the lease agreements nor received rent
for the period from 1st January, 2007 to 31st December, 2007 from the
lessees. This resulted in non-recovery of Rs 2.9 million.
Audit pointed out the non-recovery in October 2007. The Agency
admitted recovery of rent and explained that the Agency intended to
double the rates as compared to previous year, thus the renewal of
agreement could not be finalized.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the Audit informed the
Committee that the Agency neither renewed the lease agreement nor
received rent for the period from 1st January 2007 to 31st December, 2007
from the lessees so far. The Committee deferred the para for detailed
verification of recovery plus 10% increase within (15) days. Compliance
of the Committee directive was not intimated till finalization of the report.
(DP.84)
Para 2.14 Non-recovery on account of cost of excess area of plots - Rs 2.9 million
As per condition No. 12 of terms and conditions of auction of commercial
/residential plots in Area Development Schemes and other Housing
schemes in Punjab, “if the plot sold is found to measure more or less than
92
the area advertised, the total price of the plot shall proportionally be
increased or decreased as the case may be at the rate of the accepted bid”.
The Deputy Director, Punjab Housing and Town Planning Agency
(PHATA), Sub-region, Faisalabad did not recover cost of excessive area
of plots of various Area Development Schemes (ADS) in Faisalabad. The
Authority advertised and auctioned plots of various categories to the
bidders. While handing over the physical possession of plots, the cost of
excess over auctioned area was not recovered from the allottees. This
resulted in non-recovery of Rs 2.9 million.
Audit pointed out the non-recovery in January 2008. The Authority replied
that the allottees had deposited the amount but they did not provide copies
of challans of payment. Further, it was pointed out that the notices were
being issued to the allottees for depositing outstanding amount. The reply
was not convincing as it based on presumption.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the department
reiterated its previous stand. The contention of the department was not
accepted by the Committee and directed for probe within 15 days. The
para was again discussed in DAC meeting held on 14th May, 2009 where
in the audit informed the committee that!
A) the department failed to recover the cost of excess areas of the
plots at market rate. The Committee pended the (part-a) of the
para for recovery of excess areas of plots.
B) no progress has been made by the department. The Committee
take serious view and directed for early recovery.
C) the department got verified from photocopies of the challans.
The Committee directed the department for detailed verification of
recovery from original challan. Para was kept pending for record
verification. No progress was reported till finalization of the report.
(DP.106)
Para 2.15 Non-recovery of rent of open spaces of restaurants
Rs 2.4 million
As per item No.11 of terms and conditions of lease of open spaces in
Hockey Stadium, Madina Town, Faisalabad, advance rent should be paid
by the tenants on yearly basis.
93
The Director Estate Management, Urban Development Wing, FDA
Faisalabad rented out the open spaces of Hockey Stadium, Madina Town
Faisalabad to various tenants for food business purposes. The Authority
did not recover the rent of open spaces in advance as per lease agreement
since 01.09.2005. This resulted in non-recovery of rent of Rs 3.7 million.
Audit pointed out the non-recovery in November 2007. The Authority
replied that the matter related to the Director Admn. and the detailed reply
would be given after getting the record from the concerned directorate.
The matter was discussed in the Departmental Accounts Committee
meeting held on 14th May, 2009 wherein the department explained that
amount of Rs 1,232,848 was recovered and was got verified from audit
during verification. The Committee reduce the para to Rs 2,432,247 and
directed the department to recover the balance amount with in 7 days and
got it verified from audit. The para was kept pending.
(DP.103)
Para 2.16 Overpayment due to excessive measurement - Rs 2.1
million
As per condition 10 of the estimate sanctioned technically by the Chief
Engineer, PHE Department (South Zone) Lahore vide memo No.69-A-3-
830/P&D dated 21st December, 2006, payment of dismantling and
restoration of brick pavement and road metalling and P.C.C in street shall
be made after its personal verification by the Engineer in-charge and
quantity shall not be exceeded than the provision of technical sanctioned
estimate. 2.16.1 The Executive Engineer, Public Health Engineering
Division, Sargodha paid for providing/laying of PVC pipes of different
dias either measured in excess of the provided length or without its
provision in the revised technical sanctioned estimate. This resulted in
excess payment of Rs 1.3 million.
Audit pointed out the excess payment in August 2007. The department
replied that no work was executed beyond the provision of revised
technical sanctioned estimate. The reply was not convincing because the
measurements were made and paid in excess of the revised technical
sanctioned estimate.
The para was discussed in detail in DAC meeting held on 14th May, 2009
wherein the audit informed the committee that the department measured
and paid the excess quantity of PVC pipe of different dia over and above
94
the provision of revised technical sanctioned estimate. Moreover the
record entries in measurement book were recorded without mentioning the
exact location. The department explained that the paid quantities are
within the revised T.S. Estimate. The Committee did not accept the view
point of the department and directed the department to probe the matter at
Administrative level within 15 days. The para was kept pending. No
progress was reported till finalization of the report.
(DP.90)
2.16.2 The Executive Engineer, Public Health Engineering
Division, Lahore made payment to the contractor for the quantities of
items of work “Earth filling watering, ramming from out side lead 5 miles
and 2 miles” respectively without provisions / more than provisions of
technical sanctioned estimate/acceptance letter. Allowing payment with
out provision, excessive quantities without prior approval of the competent
authority resulted in overpayment of Rs 483,218.
Audit pointed out the overpayment in August 2007. The department
replied that payment of the said items was made after getting approval
from the Superintending Engineer. The reply was not satisfactory because
approval was required to be obtained from the authority that accorded
administrative approval and technical sanctioned estimate. Further, with
the enhancement of quantity of earth, the department also enhanced the
lead from 2 miles to 5 miles.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.46)
2.16.3 The Director Building, Urban Development Wing, LDA,
Lahore executed and made payment for an item of work “RCC 1:1-1/2:3
for deck slab” for the width of 93.5 feet and depth of 3.68 inches and 4.5
inches against the width of 57.5 feet and depth of 3 inches provided in
A.A/technical sanctioned estimate. The excessive measurements than
design resulted in overpayment of Rs 299,081.
Audit pointed out the overpayment in July 2007. The Authority replied
that consultants recommended 3 inches additional RCC slab to strengthen
the existing deck slab. When the wearing course was removed, it was
found that lot of undulations existed in the deck slab which were
previously covered in the asphalt layer. As such to maintain a smooth
level and grade, the Authority had to execute the work as per survey
95
carried out. The reply was not agreed as the Authority was not allowed to
execute any excessive works with out prior approval of the competent
authority.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the department explained
that measurement of 93.5 feet was the length (longitudinal distance) from
expansion joint to expansion joint. The explanation was not accepted by
the Committee. The Committee directed the department to take up the
matter with Buildings Research Station, Lahore for opinion regarding
width & length and fact finding report be probed at the level of
Administrative Department within 15 days. Compliance of the Committee
directive was not reported till finalization of the report.
(DP.29)
Para 2.17 Non-recovery of cost of land/development charges from
the inhabitants of katchi abadies - Rs 1.9 million
According to policy regarding katchi abadies issued by the Director
General, Katchi Abadies and Urban Improvement, Government of the
Punjab, LG&RD Development Department Lahore vide No.DG (KA&UI)
ADM/1-140/98 dated 27th March, 2002, the recovery of government dues
from the dwellers of katchi abadies Faisalabad on account of cost of land
and development charges were to be made at prevailing rates.
The Director Katchi Abadies, UD Wing FDA, Faisalabad failed to recover
the cost of land and development charges from the dwellers of various
katchi abadies. This resulted in non-recovery of Rs 1.9 million.
Audit pointed out the non-recovery in November 2007. The department
admitted the recovery. Audit stressed for early recovery.
The matter was discussed in the Departmental Accounts Committee
meeting held on 14th May, 2009 wherein the Committee was not agreed
with the view point of department regarding recovery position and
directed the department to produce the survey reports for verification
along with detail record of recovered amount. The para was kept pending.
(DP.104)
Para 2.18 Irregular expenditure on account of removal of Melba,
Plantation charges - Rs 1.7 million
According to clause 14 of part-III of Parks and Horticulture Authority,
Lahore notification No.DG/PHA/PS/4/99/153 dated 29th April, 1999, if the
96
mulba found placed in the green areas/ parks etc. and green verges are not
properly maintained as per specified requirement, the Authority shall
undertake development/up-keeps and recover from the owner/occupants
all development charges.
2.18.1 Parks & Horticulture Authority, Lahore made payment on
account of removal of mulba from various verges/ green belts and up
keeping of parks/verges and plantation there in and did not recover the
said amount from the owners/occupants. Secondly, heavy payments had
been made for the purchase of plants despite the authority had its own
nurseries. This resulted in irregular expenditure of Rs 1.4 million (Rs 0.1
million + Rs 1.3 million)
Audit pointed out the irregular expenditure in August 2007. The Authority
replied that constant request were made from the citizens of vicinity
regarding deplorable condition of Parks and it was done/removed after
observing codal formalities through press. The reply was not satisfactory,
because as per PHA Notification, the recovery of mulba was due from the
owners/occupants. Further, the Authority did not produce stock registers
of any nursery to verify the kinds of plants available in nursery and
purchased from out side nurseries.
The matter was discussed in detail in DAC meeting held on 14th May,
2009 where in audit informed the Committee that department has not
made the admitted recovery. The Committee directed the department to
recover the amount with in 10 days and got it verified from audit. The para
was kept pending.
(DP.23)
2.18.2 Parks & Horticulture Authority, Lahore did not recover the
development charges (removal of mulba and plantation etc) of the verges/
green belts/ parks in the areas Jinnah Colony Samanabad and Gilgishit
Colony from the inhabitants of the areas. The Authority developed verges
& parks and made payment to the contractors but did not recover the
expenditure incurred on this account from the owner of the houses and
shops as were required. This resulted in irregular expenditure of
Rs 287,055.
Audit pointed out the irregular expenditure in August 2007. The Authority
replied that constant request made from the citizens of the vicinity
regarding deplorable condition of Parks, the work was done after
97
observing codal formalities through press. The reply was not satisfactory.
As per PHA instructions, the recovery was due from the owner/occupants.
The matter was discussed in detail in DAC meeting held on 14th May,
2009 where in audit informed the Committee that department made
irregular payment for removal/clearance of Malba. The Committee
directed the department to recover the amount with in 7 days and got it
verified from audit. The para was kept pending.
(DP.18)
Para 2.19 Overpayment due to final payment at higher percentage
than that of bid – Rs 1.4 million
According to clarification issued by the Finance Department vide
No.R.O(Tech) F.D 1-2/83-vi dated 29th March, 2005, the final cost of
tender / payment would be the same percentage above / below the amount
of revised sanctioned estimate as was at the time of approval of the
tenders.
2.19.1 The Director Construction-I, WASA Faisalabad
Development Authority, Faisalabad accepted tenders and awarded various
works at different percentages above the estimated costs and made final
payments to the contractors at the higher percentages than that of bid/
acceptance letters. This resulted in overpayment of Rs 738,058 to the
contractors.
Audit pointed out the overpayment in August 2007. The Agency replied
that the minor increases or decreases of quantities were approved by the
competent authority. The total amount paid was covered in technical
sanctioned estimate. The reply was not acceptable as the Agency was to
pay at the same above/below percentages at which the works were
awarded.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the department explained
that the minor increase or decrease of the quantities was approved by the
competent authority. The total amount paid was covered in the technical
sanctioned estimate. The Committee was not convinced due to non-
production of record to audit for verification and deferred the para for
detailed verification in main office within a week. Compliance of the
Committee directive was not intimated till finalization of the report.
(DP.75)
98
2.19.2 The Director Construction-II, WASA Faisalabad
Development Authority, Faisalabad accepted tenders and awarded various
works at different percentages above the estimated costs and made final
payments to the contractors at the higher percentages than that of
bid/acceptance letters. This resulted in overpayment of Rs 476,594 to the
contractors.
Audit pointed out the overpayment in September 2007. The Agency
replied that the minor increases or decreases of quantities were approved
by the competent authority. The total amount paid was covered in
technical sanctioned estimate. The reply was not agreed as the Agency
was not allowed to pay at higher percentages than that of agreed at the
time of award of work.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the department explained
that the payment was made as per site condition/ agreement. The
Committee deferred the para for detailed verification in audit office within
(10) days. Compliance of the Committee directive was not made till
finalization of the report.
(DP.89)
2.19.3 The Deputy Director, PHATA Sub-Region, Jhelum
accepted tenders at 1.994% above the estimated cost/rates but the
contractor was paid at the rate of 2.598% above the estimated cost rates
upto 6th running bill. Allowing of high percentage against the permissible
rate resulted in undue benefit of Rs 159,898 to the contractor.
Audit pointed out the undue benefit in November 2007. The Agency
replied that change occurred due to variation in quantities of different
items which was approved by the competent authority. The reply was not
agreed because as per Finance Department instructions, final cost would
be the same %age above on revision of estimate as at the time of
acceptance of the tender.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.62)
99
Para 2.20 Execution of below specification work costing - Rs 1.2
million
As per technical sanctioned estimate accorded vide No. CE/LDA/101
dated 15th February, 2007, the Authority was required to use 8 Lbs. steel
in each cft of deck slab RCC 1:1/2:3 in the work of “Strength Evaluation
and Rehabilitation of Data Nager Overhead Bridge”.
The Director Buildings, Urban Development Wing LDA, Lahore got
executed an item of work R.C.C. 1:1/1/2:3 for deck slab in the work
“Strength Evaluation and Rehabilitation of Data Nager Overhead Bridge”
and used steel 5.75 Lbs instead of 8 Lbs per cft as per provision of
technical sanctioned estimate. This resulted in execution of below
specification work costing Rs 1.2 million.
Audit pointed out the execution of below specification work in July 2007.
The Authority replied that keeping in view the depleted condition of the
bridge and direction received from the Chief Minister Punjab, the lump
sum provision of 8 Lbs per cft of steel was made for strengthening of deck
slab. Later on, the consultants (University of Engineering & Technology,
Lahore) provided the structural design and drawings and work was carried
out accordingly. The reply was not tenable because the technical estimate
was sanctioned after finalization of drawing and design and change in
design could not be made without approval of the sanctioning authority.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the department explained
that work was carried out according to the specification/drawing by the
consultant i.e. UET, Lahore which was not accepted by the Committee.
The Committee showed deep concern and directed to obtain the report of
Building Research Station (as a third party) to authenticate the load
bearing strength of the structure. Compliance of the Committee directive
was not reported till finalization of the report.
(DP.27)
Para 2.21 Overpayment due to incorrect measurement of thickness of
bricks – Rs 1.2 million
According to remarks against item No.19 chapter 18 (road and road
structure) of Market Rates System of October 2005, the thickness of bricks
for an item of work “Providing/laying dry bricks in pavement” was
required to be measured and paid as 0.364′.
100
The Director Roads, Urban Development Wing LDA, Lahore measured
and paid 0.375′ thickness of bricks in item of work “dry bricks in
pavements” instead of 0.364′. This resulted in overpayment of Rs 1.2
million.
Audit pointed out the overpayment in August 2007. The Authority replied
that the bricks used in the brick pavement were of standard size 4″ x 4.5″ x
3″. The reply was not agreed as the Authority was required to measure and
pay the thickness of bricks in accordance with the instructions of the
Finance Department.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the department explained
that they used brick for brick pavement of standard size which was not
agreed by the Committee and after detailed discussion, the department
admitted the recovery and promised to get it verified by Audit.
Compliance of the Committee directive was not shown to Audit till
finalization of the report.
(DP.32)
Para 2.22 Non-recovery of building period penalty - Rs 1.1
million
According to HUD & PHE Department notification No.SO(D-11)
HP&EP/2-3192 dated 19th October, 1993, no waiver of surcharge/penalty
shall be allowed by any authority and approval of extension in building
period and deviation in plan shall only be allowed with surcharge.
2.22.1 The Deputy Director, Punjab Housing and Town Planning
Agency Sub-Region, Multan did not recover the building period penalty
from 12 allottees who did not construct buildings within the stipulated
period. This resulted in non-recovery of Rs 804,000.
Audit pointed out the non-recovery in August 2007. The Authority
admitted the recovery of Rs 180,000. For balance recovery of Rs 624,000,
Authority replied that completion certificates were being issued to some
allottees after fulfilling the codal formalities & some areas were exempted
from building period penalty. The reply was not acceptable as admitted
recovery was not realized. Further waiver/ exemption from building period
penalty was not allowed.
The Departmental Accounts Committee meeting held on 14th May, 2009
wherein the audit informed the committee that no progress regarding
101
recovery has been made by the department. Only notices issued to
concern. The Committee pended the para for record verification. No
progress was reported till finalization of the report.
(DP.38)
2.22.2 The Director Estate Management, Urban Development
Wing FDA, Faisalabad did not recover the penalty from the allottees of
Millat Town Faisalabad who did not construct their buildings within
stipulated period. This resulted in non-recovery of Rs 600,192.
Audit pointed out the non-recovery in August 2007. The Authority
admitted recovery and stated that notices had been issued to the defaulter
allottees to deposit the outstanding amount.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the Audit intimated the
Committee that actual part recovery of Rs 4,87,716/- against the part
pointed out recovery of Rs 347,551 (i.e. Rs 287,078 + Rs 60,473)
recovered by the department was verified. The Committee reduced the
para to Rs 252,648 (i.e. Rs 600,192 – Rs 287,071 – Rs 60,473). No
progress towards balance recovery was reported till finalization of the
report.
(DP.83)
Para 2.23 Non-recovery of cost of excess area over entitlement -
Rs 990,940
In terms of para 1(i & ii) of the office order No ADD/LDA/ 132 dated 28th
May, 2001, the Director concerned shall work out the price of excess area
upto three marlas of allotted / exempted residential plots @ 40% above the
DC’s current evaluation table and in case of commercial and residential
plots sold in auction during last ten (10) years, auction rates shall be
charged for the excess area upto three marlas. The Director Town Planning, Urban Development Wing LDA, Lahore did
not recover the price of excess area upto three marlas from the owners of
the commercial / residential plots. The Directorate sanctioned building
plan and revised building plan of 2-H Gulshen-e-Ravi, 74- Rachna Block
Allama Iqbal Town, 4-D and 14-E Civic Center Faisal Town, Lahore in
1984, 1990 and 1993. As per technical reports, the owner of the plots were
in possession of excess areas of 552 sft, 200 sft and 146 sft ( commercial)
respectively, in excess of ownership entitlement but the Authority did not
recover the cost of excess area. This resulted in non-recovery of
Rs 990,940.
102
Audit pointed out the non-recovery in December 2007. The Authority did
not reply.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.117)
Para 2.24 Overpayment due to allowing undue / imbalance rates -
Rs 580,037
Re-handling of total quantity of 1,928,183 cft earth work for different
leads, according to provision of agreement/estimate and rates were agreed
as tabulated below:
Sr. No. Lead up to Quantity Cft Rate agreed Rs % o cft
(i) 50' 101767 Rs 495
(ii) 300' 195554 -do-
(iii) 500' 477789 250
(iv) 1000' 1153073 -do-
Total 1928183
The Deputy Director, Punjab Housing and Town Planning Agency,
Jhelum measured and paid quantity of 2799124 cft on account of
re-handling of earth up to the lead 50' & 300' at the rate of Rs 495/ per % o
cft instead lower rates at leads agreed as above. The payment of total
quantity of earth at higher rates resulted in overpayment of Rs 580,037 to
the contractor.
Audit pointed out the overpayment in November 2007. The Agency
replied that during execution of work at site, quantity of filling was
increased and cutting decreased and earth was available within lead of 50'
& 300'. The variation was approved by the competent authority. The reply
was not tenable because leads provided in estimate / agreement was based
on surveys of site. Secondly, the rates quoted/agreed were irrational. Rates
of lesser leads were higher as compared to rates of higher lead. The
imbalance / irrational rates indicated that government interest had not been
watched at the time of execution and payment.
The para was discussed in detail in DAC meeting held on 14th May, 2009
wherein the committee was not agreed with the explanation of the
department and after detail discussion the para was pended for probe by
the Chief Engineer (North) within 10 days. The para was kept pending. No
progress was reported till finalization of the report.
(DP.16)
103
Para 2.25 Loss on account of non-recovery of last installment of
gate entry of Gulshen-e-Iqbal park - Rs 497,000
As per clause 2 of the agreement made between Parks and Horticulture
Authority and Muhammad Jamil S/o Muhammad Aslam (lessee) on
account of running gate entry, the lessee was required to pay in four equal
quarterly installments i.e. Rs 1.1 million each, 1st installment before
commencement of the agreement and other three before 7th of August,
November, 2002 and February 2003. The lessee was also required to
provide a revolving bank guarantee for Rs 1.1 million (equal to one
installment) from any Schedule Bank in favour of the lessor. As per clause
3 of the agreement, if the lessee fails to pay the installment amount by due
dates, the bank guarantee will be encashed by the lessor for adjustment
against the unpaid installment amount due against the lessee. In that case,
the lessee shall provide a fresh bank guarantee before the due date of next
installment. Bank guarantee should remain valid till the expiry of the
agreement.
Parks and Horticulture Authority, Lahore did not recover/adjust a part of
the last installment from the contractor. The gate entry of Gulshen-e Iqbal
park Lahore was leased out to the contractor for the period from 7th May,
2002 to 6th May, 2003 at quarterly rent of Rs 1.1 million. The contractor
did not pay a part of 4th and last quarterly installment. This resulted in loss
of Rs 497,000 to the Authority.
Audit pointed out the loss in August 2007. The Authority replied that
efforts were being made for recovery under Land Revenue Act. The reply
was not convincing because the said amount could not be
recovered/adjusted as the Authority did not obtain the revolving bank
guarantee of Rs 1.1 million of any Schedule Bank from the contractor in
violation of the above agreement.
The matter was discussed in detail in DAC meeting held on 14th May,
2009 where in audit informed the Committee that department has failed to
recover the last installment of gate entry of Gulshan-e- Iqbal Park Lahore.
The department explained that efforts were being made for recovery under
land Revenue Act. The Committee was not agreed with the explanation of
the department and directed the department to recover the amount
immediately and also directed to call the explanation of concern project
director for non-obtaining the revolving bank guarantee of Rs 1,100,000
from contractor and non-recovery of last installment at time. The para was
kept pending.
(DP.69)
104
Para 2.26 Non-forfeiture of security deposit - Rs 477,818 and non-
execution of balance work - Rs 4.3 million
Clause 60&61 of the contract agreement provides that in case contractor is
not executing the work in accordance with the contract or is persistently or
flagrantly neglecting to carry out his obligations under the contract, the
engineer-incharge may rescind the contract and the security deposit of the
contractor shall stand forfeited, and such work should be done at the risk
and cost of the contractor.
The Project Director, Punjab Community Water Supply & Sanitation
Project, awarded the work to a contractor with date of commencement as
28th July, 2004 and date of completion as 27th November, 2005. The
contractor did not complete the work within stipulated period and was
served with eighteen (18) letters/notices up to 23rd November, 2005. The
contractor was liable to forfeiture of security deposit amounting to
Rs 477,818 and execution of balance work worth Rs 4.331 million was to
be done at risk and expense of the defaulting contractor. Non-adherence to
the contract provision resulted in non-forfeiture of security deposit
amounting to Rs 477,818 and non-execution of balance work for Rs 4.331
million.
Audit pointed out the issue in March 2006. The project management
replied that the matter regarding action under the terms of contract had
been recommended and was under process. The reply was not agreed as
considerable period of 15 months had been elapsed since stipulated date of
completion and only 44% and 51% progress was achieved by the
contractor. The contractor was required to be proceeded under the
governing clauses of the contract agreement.
The matter was discussed in the Departmental Accounts Committee
meeting held on 13th March, 2007. The Committee directed to expedite the
completion of work and keep the para pending for further action towards
imposition of penalty/rescission of contracts. No further progress was
reported till finalization of the report.
(DP.10-FAP)
Para 2.27 Loss to government due to encroachment – Rs 450,000
As per clause 13 to 17 of terms & conditions of auction in Housing &
Physical Planning scheme read with para 7 of HUD and PHE Department,
Government of the Punjab notification No.SO(D-II)2-7/2002 dated 1st
November, 2002, the allottee will not sub-divide the plot & shall not
105
change the use for which it was allotted. Otherwise, his allotment will be
cancelled and in case of encroachment the committee may allow sale of
plots in special circumstances at market rate plus 10% for sale through
private treaty.
The Deputy Director Sub-Region, Punjab Housing and Town Planning
Agency, Sahiwal could not cancel the plot No5-6/3 & got vacated the plot
No.7/3 from the encroacher. The owner of the shop No.5-6/3 in Tariq Bin
Ziad Colony encroached shop No.7/3 and merged all the three shops into
one unit and got installed tower of Mobilink Company over there with out
approval of the department and without payment of shop No.7/3. This
resulted in loss of Rs 450,000.
Audit pointed out the loss in August 2007. The department replied that
notices were served to the allottee as well as Mobilink Company to
remove the installation of tower. The reply was not convincing because
the department was required to cancel the shop No. 5-6/3 and also to get
vacate the encroachment i.e shop No. 7/3.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.58)
Para 2.28 Loss due to non-utilization of available earth -
Rs 423,210
In terms of item 11 of chapter No. 17.1 (A) regarding “Excavation &
Embankment” (Earth Work General) of specification for excavation of
works, if cutting and filling were being done simultaneously all suitable
material obtained from excavation shall be used in filling.
The Deputy Director, Punjab Housing and Town Planning Agency Sub-
Region, Layyah did not utilize the available earth as a result of excavation
of RCC sewer and water supply lines and paid for the filling of earth,
brought from two miles lead, in embankment for road. This resulted in
overpayment of Rs 423,210.
Audit pointed out the overpayment in January 2008. The department did
not reply.
106
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.35)
Para 2.29 Overpayment due to allowing higher rates - Rs 359,644
As per undertaking of the contractor mentioned in acceptance letter
No.1451-55/E date 5th August, 2006, the department was supposed to pay
to the contractor at the estimated rates as the contractor had withdrawn the
quoted above percentage i.e. 4.5% above the estimated rates.
The Executive Engineer, Public Health Engineering Division, Lahore
made payment to the contractor at 4.5% above the estimated/market rates.
The contractor tendered rates 4.5% above the estimated rates and agreed to
work at estimated rate. Later on, in his undertaking the contractor
withdrew the percentage of 4.5 tendered over and above the estimated
rates. Instead of making payment on rates agreed upon as per undertaking,
the department made payment at the rates originally tendered by the
contractor. Non-reduction of rates as agreed resulted in overpayment of
Rs 359,644 to the contractor.
Audit pointed out the overpayment in August 2007. The department
submitted interim reply stating that the reply would be given after detailed
scrutiny of record.
The Departmental Accounts Committee meeting held on 14th May, 2009
wherein the audit informed the Committee that department has not
attended the audit during verification and no one came from division in
discussion. The Committee took it very serious and directed the
department to call the explanation of the Executive Engineer, PHE
Division Lahore for non compliance of SDAC meeting. The Committee
also pended the para for detailed verification. No progress was reported till
finalization of the report.
(DP.63)
Para 2.30 Excess payment due to irregular measurement -
Rs 197,000
As clarified by the Communication & Works Department, Government of
the Punjab vide No.PAC(C&W) 17-6/90 dated 28th October, 1997, the
deficiency in the sub base course should be removed before laying the
107
base course. Similarly, deficiency in thickness of base course should be
improved before applying Triple Surface Treatment.
The Director Roads, Urban Development Wing LDA, Lahore measured
and paid an item of work “Earth work making embankment etc” to the
extent of 43089cft. After providing/laying of sub-base course and base
course the overall quantities of earth work making embankment were
again measured as 47190 cft. by increasing the breadth and depth of the
item of work. This resulted in excess payment of Rs 197,000.
Audit pointed out the excess payment in August 2007. The Authority
replied that the payment was made as per technical sanctioned estimate.
The reply was not agreed as the re-measurement and payment for earth
work embankment after laying of sub-base course and base course was
irregular.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein the Audit informed that the
department increased the quantity of item of earth work by increasing the
breadth & depth after laying subsequent item. The department explained
that the payment was made as per TSE. The Committee did not agree with
the departmental contention and kept the para pended for detailed
verification regarding cross section and record entries. Compliance of the
Committee directive was not made till finalization of the report.
(DP.30)
Para 2.31 Loss due to purchase of bleaching powder at higher rate
– Rs 184,678
According to rule 2.10 of Punjab Financial Rules Vol-I, same vigilance
should be exercised while making expenditure from government money as
a person of ordinary prudence would exercise for spending money from
his own pocket.
The Director Water Resources, WASA FDA, Faisalabad purchased
bleaching powder for store from various contractors/suppliers at rate of
Rs 43.50 per kg whereas ex-factory rates inclusive of all taxes of the
bleaching powder of Sitara Chemicals Industries Faisalabad were in the
range of Rs 20 to Rs 25 per kg, during the year 2006-07 which was almost
half of the rates of the supply for the said item. Purchase of bleaching
powder from suppliers @ Rs 43.50 kg instead of @ Rs 20 per kg to Rs 25
per kg from manufacturer resulted in loss of Rs 184,678.
108
Audit pointed out the loss in October 2007. The Agency replied that
purchase of bleaching powder was made through contractor after
necessary sanction from the Competent Authority. The reply was not
convincing as ex-factory rate, including all taxes, of bleaching powder
during August 2006 was Rs 20610 per metric ton whereas in the analysis
produced for verification the base rate, exclusive of all taxes, was taken as
Rs 23500 per matric ton, Moreover, the analysis of rate revealed that two
(2) trucks were required for transportation of 1000 kg (1-M-Ton)
bleaching powder whereas the receipts of the manufacturers and sales tax
invoices revealed that more than 1000 kg (1-M-Ton) bleaching powder
was transported on one truck which revealed that analysis of rate was
prepared on higher side.
The matter was discussed in the Departmental Accounts Committee
meeting held on 23rd December, 2008 wherein para dealt with loss to the
agency due to purchase of bleaching powder from the supplier at rate Rs
43.50 per kgs instead from “Sitara Chemicals Industries “Faisalabad at
rate Rs 20 to 25 per Kgs. The department neither produced the record as
mentioned in its fresh reply shown in working paper nor justified the issue
in question. The Committee deferred the para for detailed verification in
main audit office within seven (7) days.
(DP.81)
109
IRRIGATION & POWER DEPARTMENT
Punjab Irrigation and Power Department was established in the sub-
continent in 1854 for the purpose of administrative control over the
Irrigation System. The Punjab Irrigation System was divided into six field
zones and each field zone is controlled by a Chief Engineer with the
assistance of the Superintending Engineer. They are assisted by the
Executive Engineers and Sub-Divisional Officers etc. The Divisional
Engineer is the basic accounting unit assisted by a Divisional Accounts
Officer. The main functions of the department are:
i) Operation and upkeep of irrigation system of the province;
ii) Planning, prioritization and implementation of maintenance of
works through approved operation and maintenance works
plans and under third party top supervision;
iii) To optimize the use of water resources in the province by
equitable distribution of irrigation water supplied through canal
outlets;
iv) Assessment of water rates based on actual field inspections by
revenue staff of the department; and
v) Implementation of the development programme portfolio and
foreign aided projects;
Audit for the financial year 2006-07 was conducted on test check basis
and a summary of audit results is tabulated as under:
(Amount Rs in million)
Sr.No Particulars Amount Total amount /
%age
1. Budget allocation for the financial year
2006-07
13,458.71
13,458.71
2. Total Expenditure for the financial year
2006-07
11,964.30
11,964.30
3. Audited Expenditure 4,851.02 40.5% *
4. Amount of the observations in this
report
i) Excess payment
ii) Irregular / un-authentic
iii) Un-justified payment
without T.S. estimate
iv) Loss / Doubtful / Theft
v) Non- recovery
8.35
193.12
227.80
191.40
52.63
673.3
*. High money value sample selection criteria.
110
111
3. IRRIGATION & POWER DEPARTMENT
Para 3.1 Expenditure incurred in excess over deposits - Rs 227.8
million
As per rule 7.30 of Departmental Financial Rules, no deposit work should
be under-taken by Divisional Officer without prior approval of
administrative head of the department concerned and no expenditure
should be incurred in excess over deposit.
The Executive Engineer, River Diversion Division, Basira incurred excess
expenditure on deposit works than the amount received in advance and
placed the amount in Misc. PW Advances as recoverable from sister
Public Works Davison. This resulted in incurring of expenditure in excess
over deposits for Rs 227.8 million.
Audit pointed out the excess expenditure in September 2007. The
department replied that the same observation was already taken by Audit
in 2000-01. The reply was not agreed as the observation of such kind was
not taken in the previous Audit Reports.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008. The divisional representative
explained that the construction of Ghazi Ghat bridge complex was
undertaken by both Irrigation and Highway departments as deposit work
for the period from 1980-84. During this period expenditure in question
was incurred in excess of deposit received and placed in P.W Misc.
advances pending adjustment on receipt of funds. The requisite funds had
not yet been received and the amount was still lying unadjusted. However,
no record was got verified by the department in support of reply. The
Committee was not convinced and desired explanation for non-verification
of record and kept the para pending for verification of record by Audit
within 30 days. No compliance of the Committee directive was reported
till finalization of the report.
(DP.36)
Para 3.2 Non-auction of unserviceable material - Rs 191.4 million
According to para 4.35 and 4.37 of Buildings & Roads Department Code,
surplus store be evaluated at the end of each financial year and put to
auction as per laid down procedure.
112
3.2.1 In Central Store Division, (Irrigation Branch Mughalpura
Lahore), 586 number tubewells amounting to Rs 165.2 million were
declared surplus/unserviceable and approval of the same was accorded by
the Superintending Engineer Mechanical Circle, Lahore but the material of
the tubewells was not put to auction. Non-adherence to the codal
procedure resulted in non-auction of unserviceable material for Rs 165.2
million.
Audit pointed out the non-auction in February 2008. The department
replied that the said material would be auctioned shortly and results of
auction would be got verified by Audit.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein it was explained that 586
Nos. tube wells had been declared surplus vide Secretary I&P
No.SO(T&M)10-11/2000(PT-1)TM/C-S, dated 03.04.2007. The list of
surplus equipment/machinery along with reserve price fixed by the
Committee had been approved by the competent authority. The Committee
advised the administrative department to complete the auction process
within 90-days. No progress towards auction was reported till finalization
of the report.
(DP.57)
3.2.2 The Executive Engineer, Excavator Division, Faisalabad
neither used nor auctioned the unserviceable/surplus material lying in the
store since long. Non-auction of unserviceable/surplus material resulted in
loss of Rs 16.2 million.
Audit pointed the loss in October 2007. The department replied that the
auction of unserviceable/surplus material of obsolete model machinery
was under process of auction. The reply was not acceptable because no
concrete efforts in this regard were shown to audit.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the division reiterated its
previous reply. The Committee advised to complete the auction process
within 90-days.The administrative department was to take up the matter.
No compliance of the Committee directive was reported till finalization of
the report.
(DP.72)
113
3.2.3 The Executive Engineer, Bhalwal irrigation workshop
Division did not auction the unserviceable material available with the
division. This resulted in non-auction of material for Rs 10 million.
Audit pointed out the non-auction in July 2007. The department replied
that process of auction of unserviceable material was already taken up
with the higher authorities and auction would be held in due course of
time after approval of the competent authority. The reply was not tenable
as no auction was held till date.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the division explained that
survey report was sanctioned by the Secretary I&P department Lahore
vide dated 16th February, 2004. The material was put to auction three
times but reserve price could not compete the bid. A lot of time had been
elapsed. The Committee directed that auction procedure be got expedited
keeping in view latest instructions of the department over the issue within
90 days. No compliance of the Committee directive was reported till
finalization of the report.
(DP.35)
Para 3.3 Unjustified expenditure due to non carriage of stone
from nearest quarry - Rs 63.6 million As per Finance Department notification No.RO(Tech.) FD-2-3/2004 dated
2nd August, 2004, material from nearest approved quarry shall be used.
However, if rate of the finished product from other quarry is cheaper than
lowest rate shall be used.
The Executive Engineer, Development Division, Mandi Bahauddin made
payment for 12,283,069 cft quantity of carriage of pitching stone from
Sikhanwali/Tarki quarry with average lead of 92 KM to 155 KM to site of
works. The nearest approved quarry i.e. Baghanwala quarry was at a
distance of 50 KM and the department could have easily managed at least
50% quantity of total quantity i.e.6,141,534 cft stone required at site from
this quarry. Non-procurement of stone from nearest quarry resulted in
unjustified expenditure of Rs 63.6 million.
Audit pointed out the unjustified expenditure in January 2008. The
department replied that Baghanwala quarry had very limited capacity to
manufacture stone. The reply was not acceptable because non-availability
certificate was not sought from Baghanwala quarry regarding non-
availability of stone.
114
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008. The department reiterated its
previous stance and added that as per contract agreement of Baghanwala
quarry for the period 01/7/03 to 30/6/06, quarry contractor was required
manufacturing of 882,000 cft stone to meet with the requirements of UJC
Jhelum / Gujrat / Khanki Head - Works / Small Dams Division Jhelum /
Chakwal / Rasul Head-Works Division Rasul etc. The Committee directed
that detailed verification of the following documents be got made from
audit within 15-days otherwise recovery be effected: -
1. Capacity of Baganwala quarry.
2. Prescribed procedure for manufacturing of stone of desired
grade.
3. Stock condition of Sikhanwala quarry.
4. NOC alongwith availability status of stone at Baghanwala quarry
and other documents.
Compliance of the Committee directive was not made till finalization of
the report.
(DP.77)
Para 3.4 Non-achievement of targets due to unauthorized
retention of deposits - Rs 51.1 million
As per rule 2.2 of Punjab Financial Rules Volume-I, unexpended amount
was required to be surrendered in time.
The Executive Engineer, Irrigation Workshop Division, Bhalwal did not
utilize an amount received on account of deposits from the Executive
Engineer, Sadqia Canal Division, Bahawal Nagar and the Executive
Engineer, Mughalpura Workshop Division, Lahore in 06/2004. This
unspent amount was not surrendered to govt. for utilization on other
development works. This resulted in non-achievement of targets due to
unauthorized retention of deposits available with the division worth
Rs 51.1 million
Audit pointed out the issue in July 2007. The department replied that
funds were received at belated stage while sanction to the estimate was
under process. The reply was not convincing as the amount in question
was forthcoming as deposits received since 06/2004. Neither it was
utilized nor surrendered.
115
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein no record was
produced by the Division. It was directed that in detailed verification be
got completed within 15-days from audit office failing with followed by
disciplinary action against the Division. No compliance of the Committee
directive was reported till finalization of the report.
(DP.121)
Para 3.5 Unauthentic stock balances due to non-submission of
stock returns – Rs 38.2 million
As per rule 6.17 and 6.28 of Punjab Financial Rules, half yearly stock
returns were required to be submitted by the sub-divisional officer and as
per rule 5.11 of Departmental Financial Rules, reserve stock limit was also
to be approved by the competent authority.
3.5.1 The Executive Engineer, Bhakkar Canal Division, Bhakkar,
depicted the balance of Rs 12.8 million in Form PWA-29 stock account
but detail of stock was neither available with the division nor half yearly
stock return was submitted to authenticate the availability of stock. Non-
conducting of physical verification of stock and non-maintenance of stock
returns as per reserve stock limit resulted in unauthentic stock balances for
Rs 12.8 million.
Audit pointed out the unauthentic stock balance in November 2007. The
department replied that stock was transferred from other sister divisions.
The reply was not substantial because all the stock was now property of
the division.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the XEN Bhakkar Canal
Division took the stance that the material in question had been purchased
for flood protection to meet with the emergency during flood season and
to safeguard the Irrigation system. The material so purchased had been
taken on stock register. Viewpoint of the department was not agreed by
the Committee and it was directed that the department would initiate the
inquiry proceedings against the delinquents for not preparing the stock
returns in time. No compliance of the Committee directive was reported
till finalization of the report.
(DP.58)
116
3.5.2 The accounts record maintained in Q.B. Link Division,
Farooqabad showed a balance of stock valuing Rs 10.5 million but neither
the stock returns were showing the balance nor physical verification of
stock was made. This resulted in unauthentic stock balances of Rs 10.5
million.
Audit pointed out the unauthentic stock balance in August 2007. The
department replied that case of shortage of stone had already been taken
up by Audit during 2001-2002. The reply was not acceptable because
balance was taken from the June 2007 account and also no steps for re-
coupment of shortage of stone were reported.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein as per DAC directive dated
12th August, 2006 inquiry was already under process with the SE,
Drainage Circle, Faisalabad. The Committee decided that the awaited
inquiry report be got submitted within 15-days otherwise disciplinary
proceedings would be initiated against the inquiry officer. No compliance
of the Committee directive was reported.
(DP.25)
3.5.3 The Executive Engineer, CBDC Division, Lahore depicted
the balance of Rs 8.8 million in stock account (form PWA-29) but neither
detail of stock was available (as no transaction was recorded against it) nor
half yearly stock return was submitted to authenticate the availability of
stock. Non-conducting of physical verification of stock and non-
maintenance of stock return as per reserve stock limit resulted in
unauthentic stock for Rs 8.8 million.
Audit pointed out the unauthentic stock balance in July 2007. The
department replied that the Division was very old and stock was lying
since long. Efforts were being made to clear the amount of stock. The
reply was not acceptable because department neither prepared half yearly
stock returns nor assessed the net value of stock by making physical
verification of stock as per prevailing market rates.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the department
explained that the amount of stock was falling since very long period and
efforts were being made to clear the amount of stock. The Committee kept
the para pending for physical verification, preparation of survey report to
see whether it was surplus material or not, sent to the disposal Committee
117
within 60 days and results / actions thereof be got verified from Audit. The
compliance of the Committee directive was not reported till finalization of
the report.
(DP.137)
3.5.4 The Executive Engineer, Upper Chennab canal Division,
Gujranwala showed the stock valuing Rs 6.1 million under grant-9 and 37
in stock account form PWA 29 for the month 6/2007 but no stock
returns/stock paper showing the quantity and value of stock was available.
Non-maintenance of stock returns, its physical verification and latest value
of articles resulted in unauthentic stock of Rs 6.1 million.
Audit pointed out the unauthentic stock balances in January 2008. The
department replied that the concerned sub-divisions were directed to
undertake the physical verification as per prescribed rules. The reply was
not agreed because neither stock returns nor sanction to reserve stock limit
and value account were produced to audit to verify the stock balance.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the reply of the
division was not found convincing. The Committee directed that a probe
may be completed within a period of 30-days, and for fixing
responsibilities against the delinquents. The compliance of the Committee
directive was not reported till finalization of the report.
(DP.167)
Para 3.6 Non-recovery/adjustment of amount placed in Misc.
P.W Advances on account of retrenchments / losses –
Rs 23 million
As per rule 5.7 and 5.14 of Departmental Financial Rules read with Article
54 to 57 of Account Code Vol-III, the head Misc. P.W. Advances is of
temporary nature which should be cleared as early as possible by
adjustment / recovery in cash or transfer to the work.
3.6.1 The Executive Engineer River Division, Basira did not
adjust / recover the amount placed in Misc. P.W Advances on account of
retrenchments/ losses. This resulted in non-recovery/adjustment of Rs 11
million.
Audit pointed out the non-recovery/adjustment in September 2007. The
department replied that the observation was already taken up by Audit in
AIR 2000-01. The reply was not tenable because no such observation was
already taken up.
118
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the department
explained that the actual amount of Rs 10.966 million were related to
other heads which were inadvertently kept under the head losses. The
contention was not accepted by the Committee and directed for detailed
probe within one month. No compliance of the Committee directive was
reported till finalization of the report.
(DP.160)
3.6.2 The Executive Engineer, Lahore Drainage Division, Lahore
did not recover an amount of Rs 7.2 million from the officers / officials
lying recoverable against them in the Misc. P.W Advances on the basis of
different reasons. Non-adjustment of Misc. P.W Advances resulted in non-
recovery of Rs 7.2 million.
Audit pointed out the non-recovery/adjustment in July 2007. The
department replied that the correspondence was being made to
recover/adjust the amount placed in Misc. P.W Advances. The reply was
not satisfactory as no strenuous efforts were made/shown to Audit for
adjustment since 2003.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the Division explained that
these amounts were outstanding since 1955-99. The concerned
officers/officials had been asked for arranging funds to adjust the
outstanding amounts. The para was discussed at length and it was decided
that the details of journeys performed by the field officers, out turns
prepared, vetted log books by the competent authority be collected and if
found in order, additional funds be asked from the Finance Department for
adjustment of these amounts otherwise recovery should be made. No
compliance of the Committee directives was reported till finalization of
the report.
(DP.71)
3.6.3 The Executive Engineer Balloki Sidhnai Link Division did
not adjust / recover the amount placed in Misc. P.W. Advances against
various Divisions. This resulted in non-recovery/adjustment of Rs 4.3
million.
Audit pointed out the non-recovery/adjustment in October 2007. The
department replied that the amount pertained to old period i.e. 1965 to
2004 and efforts were being made to recover/adjust the outstanding
balance. The reply was not tenable as no recovery/adjustment was made so
far.
119
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the department
explained that outstanding amount pertained to the old period that was
1965 to 2004 and no current items included. However, recovery of
Rs 2,301 against the pointed out recovery of Rs 4.263 million was got
verified from audit. The Committee kept the para pended for detailed
probe within 30 days. The compliance of the Committee directive was not
reported till finalization of the report.
(DP.129)
3.6.4 The Executive Engineer, Lower Jhelum Canal Kirana
Division, Sargodha did not adjust amount placed in P.W Misc. Advances
against some officers on account of non-closing of manufacture account.
This resulted in non-recovery/adjustment of amount for Rs 506,069.
Audit pointed out the non-recovery in August 2007. The department
replied that recovery was being pursued. The reply was not tenable as no
recovery was reported so far.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein after verification of record
and recovery effected, the amount of the para was reduced to Rs 458,212.
For the balance amount, it was decided by the Committee that the log
books as well as details of journeys performed by field officers be
collected and got verified from Audit within 15 days. In case, the journeys
performed were in order, the case be referred to the Finance Department
for regularization. No compliance of the Committee directive was reported
till finalization of the report.
(DP.15)
Para 3.7 Excess payment due to application of incorrect rate –
Rs 16 million
As per Finance Department addendum & corrigendum No.5 to Market
Rate System Vol-III, Part-II dated 1st March, 2004 w.e.f. 1st March, 2005
for District Khushab, rate for 6" mesh & 8 SWG wire crate was reduced.
3.7.1 The Executive Engineer, Khushab Irrigation Division,
Mianwali made payment for 6" mesh 8 SWG wire crates @ Rs 2,350
per% sft. instead of at reduced rates of Rs .1,416.05 per% sft. Application
of incorrect higher rate and non-adherence to the Finance Department
instructions resulted in excess payment of Rs 7.3 million.
120
Audit pointed out the excess payment in January 2008. The department
replied that rates were accepted on item rates basis and A&C referred
above did not apply in that case. The reply was not convincing because the
department should have adopted the A&C rates in technical sanctioned
estimate and proportionately reduced the item rates.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein The Committee was
not convinced with the explanation and advised that requisite clarification
be sought from the FD. The case would be processed by the Division
concerned within 15 days. The para was kept pending. The compliance of
the Committee directive was not reported till finalization of the report.
(DP.112)
3.7.2 The Executive Engineer, Layyah Canal Division, Layyah
calculated rates and made payment for wire crates of different sizes by
taking rate of G.1.wire as Rs 2,416.25 per hundred square feet instead of
Rs 1,381.40 per hundred square feet. Rate of Rs 600 and Rs 900 per
number wire crates of 32 square feet with 12 cubic feet capacity, 42 square
feet with 18 cubic feet capacity were paid instead of admissible rate of
Rs 442.05 and Rs 580.18 per number respectively. The payment of excess
rates resulted in an overpayment of Rs 4.7 million.
Audit pointed out the overpayment in October 2007. The department
replied that the contractor quoted the rates on the basis of Market Rate
System (MRS) of January 2006 of District Layyah. The reply of the
department was not satisfactory because the corrected rates of the said
item were to be paid as per direction of the Finance Department w.e.f.
1st March, 2005.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the Division intimated that
the tenders for work were received on 26th April, 2006 and the contractor
quoted rate of providing and weaving GI Wire netting with approved size
including siding and partition to make crate i.e. with rates Rs 600 for 12cft
capacity and Rs 900 for 18 cft while the rate of crates as per approved
MRS of District Layyah from 1st April to June 2006 were Rs 773.20 for
12cft and Rs 1,014.83 for 18-cft wire crates. Audit informed the
Committee that the rates were reduced by the Finance Department vide
A&C No.5. The Committee referred the case to the Finance Department
for necessary advice. The para was kept pending for seeking clarification
121
within one month. The compliance of the Committee directive was not
reported till finalization of the report.
(DP.21)
3.7.3 The Executive Engineer, Small Dams Division, Chakwal
made payment for item of work “Providing & weaving G-I wire netting
for wire crates (6” mesh & 8” SWG) @ Rs 3,000 per hundred square feet
instead of Rs 1,401.20 per hundred square feet as per addendum and
corrigendum referred above. The payment of excess rate of Rs 1,598.80
per hundred square feet over and above the admissible rate resulted in
overpayment of Rs 1.6 million
Audit pointed out the overpayment in January 2008. The department
replied that the contractor was paid as per his tendered rate. The reply was
not tenable because payment was not made as per addendum and
corrigendum issued by the Finance Department.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein The Committee
decided that the clarification from F.D be sought at the earliest. The para
was kept pending. The compliance of the Committee directive was not
reported till finalization of the report.
(DP.125)
3.7.4 The Executive Engineer, Punjnad Headworks Division,
paid rate of item G.I. wire netting mesh 6” SWG 8 @ Rs 2,416.25 per
hundred square feet instead of 1,406.15 per hundred square feet. This
resulted in overpayment of Rs 1.2 million.
Audit pointed out the overpayment in November 2007. The department
replied that the A&C No.5 was issued on 1st March, 2007 by the Finance
Department whereas the estimate was sanctioned technically by the
competent authority on 29th December, 2006 and the work was allotted on
5th February, 2007. The reply was not tenable because the observation was
regarding payment made at excess rate in violation of the Finance
Department instructions applicable w.e.f. 1st March, 2005.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the division explained
that the A&C No.5 was issued on 1st March, 2007 by the Finance
Department whereas the estimate was sanctioned by competent authority
dated 29th July, 2006. The works were allotted/ executed and completed on
dated 5th February, 2007 and 10th March, 2007. Audit intimated that the
122
Finance Department categorically stated the effect of date of reducing the
rate. The Committee decided that clarification from Finance Department
be sought. The compliance of the Committee directive was not reported
till finalization of the report.
(DP.109)
3.7.5 The Executive Engineer, Bhakkar Irrigation Division,
Bhakkar made payment for item of work “Providing and Weaving
Galvanized Iron wire (G.I. wire) netting for wire crates with G.I. wire of
approved size including siding and partition to make crates 6" mash 8
SWG wire” @ Rs 2,450.90 per hundred square feet instead of admissible
rate of Rs 1,416.05 per hundred square feet. This resulted in overpayment
of Rs 766,214.
Audit pointed out the overpayment in November 2007. The department
replied that the rate was paid as per provision in the technical sanctioned
estimate. The reply was not tenable because the rate was not paid as per
addendum and corrigendum issued in this regard.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 where-in the Executive Engineer
Bhakkar Canal Division pleaded that the rate of crates & SWG Wire @
2,450.90 per hundred square feet was paid according to the technical
sanctioned estimate by the Chief Engineer, Sargodha. Audit informed the
Committee that the said rate had already been reduced by the Finance
Department vide A&C No.5. It was decided by the Committee that the
case be referred to the Finance Department for necessary advice. No
compliance of the Committee directive was reported till finalization of the
report.
(DP.13)
3.7.6 The Executive Engineer, Burala Division, Lower Chenab
Canal (East) Faisalabad paid Rs 1,775.40 per hundred square feet instead
of admissible rate of Rs 1,115.40 per hundred square feet for item of work
“providing and weaving Galvanized Iron Wire (G.I.Wire) netting for wire
crates of approved size including siding and partition to make crates 6”
mash 10 SWG”. The payment of excess rate resulted in overpayment of
Rs 452,740.
Audit pointed out the overpayment in September 2007. The department
replied that the rate of item of work in question was paid as per provision
in the technical sanctioned estimate. The reply was not agreed because the
rate for item of work was to be paid as per instructions issued by the
Finance Department.
123
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 where-in the Division explained
that the rates for item of work “providing weaving GI wire netting for wire
crates of approved size including siding and partition to make crates was
correctly paid @ Rs 1,775.40 per hundred square feet as depicted in the
Market Rates System (MRS) 1st quarter 2007 relating to District Toba Tek
Singh. Audit informed the Committee that the said rate had already been
reduced by the Finance Department vide A&C No.5. The Committee
referred the case to the Finance Department for necessary advice within
one month. No compliance of the Committee directive was reported till
finalization of report.
(DP.22)
Para 3.8 Non-receipt of gate and gearing system - Rs 13.7 million
As per rule 6.9 of Departmental Financial Rules, all material received
should be examined, counted, measured or weighed as the case may be
when delivery is taken by the store keeper or the sectional officer
concerned.
The Executive Engineer, Ahmadpur Canal Division, Ahmadpur paid
Rs 13.705 million to the Executive Engineer Development Division No.II,
Multan, for manufacturing and installation of gate and gearing system of
Abbasia Canal. The Executive Engineer, Development-II, Multan did not
install machinery. This resulted in non-receipt of gate & gearing system of
Rs 13.7 million.
Audit pointed out the non-receipt of material in January 2008. The
department did not reply to the audit observation.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the department
explained that Rs 13.7 million was made on 12th May, 2007 to the
Executive Engineer Development Division No.II, Multan through cheque
who intimated the Executive Engineer Ahmad Pur (East) Canal Division
on 20th June, 2007 that funds were received late from your end. On
1st June, 2007, 2nd June, 2007 and 19th June, 2007 tender were invited but
no tender was received. The Committee pended the para for detail probe
within 30 days. The compliance of the Committee directive was not
reported till finalization of the report.
(DP.146)
124
Para 3.9 Irregular expenditure due to change in specification of
work - Rs 10.2 million
Clause 10 of the contract agreement provides that the contractor shall
execute the whole and every part of work in the most substantial and work
like manner and both as regards material and otherwise in every respect in
strict accordance with specification. The work executed by the contractor
shall also conform to design and drawings.
The Executive Engineer, Development Division, Mandi Baha-ud-Din
made payment for construction of 5 Nos. cattle ghats made of stone
masonry. The cattle ghats were required to be made of brick masonry as
per PC-I / estimated provision. Change of specification without prior
approval of the competent authority resulted in irregular expenditure of
Rs 10.2 million.
Audit pointed out the irregular expenditure in January 2008. The
department replied that cattle ghats with stone masonry were constructed
on recommendation of consultants and these changes were incorporated in
variation orders. The reply was not satisfactory as neither variation
statement was got approved nor the drawings were revised.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the department reiterated
its previous reply. The Committee directed that the Chief Engineer,
Sargodha be requested to submit a probe report within 60-days, keeping in
view the original estimates of 5-Nos. cattle ghats and the change of
specifications. No compliance of the Committee directive was reported till
finalization of the report.
(DP.76)
Para 3.10 Non-adjustment of suspense – Rs 9.8 million
According to para 6.16(vi) of Punjab Budget Manual, the suspense head is
of temporary character and all transactions there under should be removed
either by payment or by book adjustment. The amount of credits should be
equal to the amount of debits and effect of suspense should be nil.
3.10.1 The Executive Engineer, Dera Ghazi Khan Construction
Division, Dera Ghazi Khan incurred an expenditure of Rs 5.8 million
against the provision of suspense funds of Rs 4.4 million. As such Rs 14
million was incurred in excess of the suspense budget. This resulted in
non-adjustment of Rs 14 million.
125
Audit pointed out the non-adjustment of suspense in October 2007.
Department admitted the Audit observation & said that on receipt of
further budget in the next financial year the adjustment would be made.
Departmental reply was not agreed because liability of Rs 1.355 million
was created to be paid in the next financial year without availability of
funds which was against codal rules.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein The Committee
directed that verification of form No.27 pertaining to flood fighting plan,
stock purchased stock adjusted be got completed from audit office within
15-days. No compliance of the Committee directive was reported till
finalization of the report.
(DP.104)
3.10.2 The Executive Engineer, Rahim Yar Khan Canal Division,
Rahim Yar Khan did not equalize the amount of debit and credit at the end
of financial year i.e. on 30th June, 2006 (Rs 1.3 million + Rs 3 million) due
to incurring of expenditure from suspense head without allocation of
funds. This resulted in non-adjustment of expenditure of Rs 4.3 million.
Audit pointed out the non-adjustment of expenditure in December 2007.
The department replied that due to serious erosion/direct hit of river Indus
on J-Head spur, the stone and trangers were procured and taken on stock
register. During any emergency at J-head spurs, the material would be
issued and credit would be given to proper head. The reply was not
convincing because reserve stock was procured without allocation of
funds.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the division explained that
the expenditure had been incurred after fulfilling all codal formalities i-e
sanction of reserve stock limit accorded by the Chief Engineer,
Bahawalpur dated 21st February, 2006 and estimate technically sanctioned
by authority vide SE, RYK dated 17th March, 2006. The stone had been
issued to flood protection works and credit given under proper head of
account. The Committee directed that the details of debits and credits there
against at the end of 30th June, 2006 be got verified, based on entries of
Form PWA 29 from Audit Office, Lahore within a period of 7days. No
compliance of the Committee directives was reported till finalization of
the report.
(DP.65)
126
3.10.3 The Executive Engineer, Kot Adu Canal Division, Kot Adu
showed a balance of Rs 2.8 million under suspense head as debit in the
monthly account for 6/07 against the credit of Rs 950,589. Non-
equalization of debit & credit resulted in non-adjustment of Rs 2.8 million.
Audit pointed out the non-adjustment in November 2007. The department
stated that reply would be given after thorough verification of record.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the explanation
submitted by the department was not found convincing and it was desired
by the Committee that probe be got completed within a period of 30-days
by the Administrative Department. No compliance of the Committee
directive was reported till finalization of the report.
(DP.139)
3.10.4 The Executive Engineer, Development Division No.1,
Sidhnai incurred expenditure of Rs 2.2 million from suspense head in the
month of June 2006 out of which Rs 934,571 was adjusted. This resulted
in non-adjustment of expenditure for Rs 1.3 million.
Audit pointed out the non-adjustment in December 2007. The department
replied that reserve stock of quantity of 8.00 lacs cft had been granted by
the Chief Engineer. The stock was to be maintained for emergency, so the
balance was unavoidable. The reply was not tenable because the balance
of debits and credits had not been equalized as per above codal procedure.
Further, the expenditure was incurred without allocation of funds.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein it was pleaded by the
division that as per reserve stock for quantity 8.50 lac Cft. Stone had been
granted by the CE, Multan dated 9th October, 2006. The stock was to be
maintained on any emergency so the balance was unavoidable. The
Committee was not convinced with the explanation submitted and directed
that probe be got completed over the issue by deputing a responsible
officer from the Administrative Department within 30 days. No
compliance of the Committee directive was reported till finalization of the
report.
(DP.143)
Para 3.11 Irregular expenditure due to execution of items not
provided in PC- I/estimate - Rs 8.5 million
Clause 10 of the contract agreement provides that the contractor shall
execute the whole and every part of work in the most substantial and work
127
like manner and both as regard material and otherwise in every respect in
strict accordance with specification. The work executed by the contractor
shall also conform to the design and / or drawings.
The Executive Engineer, Development Division, Mandi Baha-ud-Din
made payment on account of certain items of work which related to
construction of new building rather than rehabilitation works against the
provisions in the PC-I / estimate. Execution of such items of work not
provided in the PC-I / estimate resulted in irregular expenditure of Rs 8.5
million.
Audit pointed out irregular expenditure in January 2008. The department
replied that owing to heavy rains, the office buildings were badly damaged
and after inspection of buildings, the Superintending Engineer/Project
Manager decided that instead of rehabilitation of building, new office
building be constructed. The reply was not convincing as technical
sanctioned estimate was not got revised and the work started without
seeking prior approval of the competent authority.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the position explained
by the department was not accepted by the Committee and directed to
refer the case to Finance Department for condonation after detailed probe.
The compliance of the Committee directive was not reported till
finalization of the report.
(DP.126)
Para 3.12 Irregular expenditure due to execution of excessive
quantity - Rs 2.8 million
Clause 10 of the contract agreement provides that the contractor shall
execute the whole and every part of work in the most substantial and
workman like manner and both as regard, material and otherwise in every
respect in strict accordance with specification. The work executed by the
contractor shall also conform to the design and/or drawings.
The Executive Engineer, Development Division, Mandi Baha-ud-din
made payment for 26980 No, bamboos having size 10 feet to 12 feet long
with 2½” to 5” dia under “Staunching bamboos” against the estimated
provision of 1461 Nos only. This resulted in irregular expenditure of
Rs 2.8 million.
128
Audit pointed out the irregular expenditure in January 2008. The
department replied that work was executed as per actual requirements and
excess quantities were incorporated in variation order for seeking approval
of the competent authority. The reply was not acceptable as no variation
statement was got approved till now.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 where in the division explained that
while preparation of scheme/estimate, the length of bamboos was
considered as per sounding in the running water at various intervals.
During execution of work it was observed that mostly the bamboos having
length 10-12’ were required at site. So keeping in view the exact site
situation, the bamboos of 10-12' were utilized as per actual of site
conditions. The Committee took a notice that the number of killa bushing
was 1,400 and why these had been enhanced to 26,980. The para was kept
pending with the directions that a fact finding report be conducted and
report submitted to Department/Audit within 30-days. No compliance of
Departmental Accounts Committee directives was reported till finalization
of the report.
(DP.45)
Para 3.13 Overpayment due to tampering of tender documents -
Rs 2 million
Clause 9 (iv) of agreement provides that if it is found that the tenderer has
not entered any unit rate and amount against any of the pay items of the
bid (i.e. above or below), the Engineer incharge shall fill in the blank by
noting the word “NIL” in such blank at the time of opening of the tender.
Such pay items shall deem to be covered by the rates of other items.
Further, as per clause of agreement, no correction shall be permissible in
the rate or amount of the bid schedule or in the tendered price after the
opening of the tender.
The Executive Engineer, Lower Bari Doab Canal Division, Okara paid
premium 42.50% on Building portion, 25% on public Health Work, 20%
on electric work and 42.5% on all other items whereas the contractor had
not quoted any premium on the above mentioned items. This resulted in
overpayment of Rs 2 million.
Audit pointed out the overpayment in August 2007. The department
replied that the contractor quoted above premium in the bid schedule of
group-I but unfortunately he did not mention any percentage in group-II. It
was just a pen mistake. The Superintending Engineer presumed as the
contractor had quoted rate mentioned on tender form group-II above from
129
Composite Schedule of Rates 1998 because in group No.1 contractor had
mentioned rate already above from Composite Schedule of Rates 1998.
The reply was not acceptable because the contractor did not mention any
rate as premium on Composite Schedule of Rates 1998, above so he did
not deserve benefit on presumption of the Superintending Engineer and
statement of contractor. Hence, the amount was to be recovered from the
contractor/person at fault.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th and 17th February, 2009 wherein during discussion of
para, serious financial irregularities were appeared and accordingly, it was
directed by the Committee that inquiry of the case be got conducted by the
Administrative Department within a period of 30-days. The compliance of
the Committee directive was not reported till finalization of the report.
(DP.106)
Para 3.14 Non-recovery / adjustment due to non-adjustment of
stock - Rs 1.9 million According to para 6.16 (vi) of Punjab Budget Manual, Misc. P.W
advances is of a temporary character which should be cleared either by
actual recovery or by adjustment during the same financial year.
The Executive Engineer, Chakbandi Division, Lahore did not
adjust/recover the amount placed in Misc. P.W. Advances against various
officers due to non-adjustment of stock during the fiscal year 2000-2001.
This resulted in non-recovery/adjustment of Rs 1.9 million.
Audit pointed out the non-recovery / adjustment in October 2007. The
department replied that payment was made as per directives of the Chief
Engineer, Lahore Zone to avoid contempt of court. The reply was not
acceptable as no progress towards recovery / adjustment was made.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 where in the division explained that
the following two works were executed during flood of 1995 but could not
be paid due to non-availability of funds: -
1. Protecting apron of spur RD:224/L BRBD link to face the flood of
July 1995 (flood fighting) Rs 1.4 million.
2. Constructing stone stud at RD:4,000 of shank bund with tractor
trollies hired through contractor Rs 478,258.
130
The contractor filed civil suit and court awarded decree. The appeal of
department was not accepted even in Supreme Court of Pakistan against
the decree. The payment was made to the contractor as per direction of the
Chief Engineer, Lahore Zone dated 28th June, 2001 to avoid the contempt
of court. The adjustment would be made as soon as funds received. The
view point of the department was not accepted by the Committee and it
was directed that the details of para 2.89 of PWD Code invoked be got
rechecked. The Administrative department was advised to get complete a
probe by responsible officer and furnish to the Finance Department for
condonation within 60-days. No compliance of Committee directives was
reported till finalization of report.
(DP.83)
Para 3.15 Overpayment due to measuring excessive quantity -
Rs 1.9 million
As per Finance Department letter No. FD (D-11)10(3)90 dated June 1991,
the cost, scope and specifications of a scheme involving material
deviations from the original proposal once approved can not be modified
without prior approval of the authority competent to grant administrative
approval.
The Executive Engineer, Punjnad Headworks, Punjnad allowed quantity
of 992,862 square feet instead of actual admissible quantity of 905,148
square feet for the item of work “Providing weaving G.I. wire netting for
16779 Nos. wire crates having capacity of 27 cft (3x3x3) as per record
entry/including siding & partition to make crate with 8 SWG 4” mesh
(16779 x 54). The payment of excessive quantity of 87,714 square feet
resulted in overpayment of Rs 1.9 million
Audit pointed out the overpayment in November 2007. The department
replied that till 4th running bill, the quantum of stone i.e. 475,062 cft was
carried and wire netting 992,862 sft was procured at site. The stone
453,045 cft was filled in wire crates, by consuming 906,089 square feet
wire netting. The balance wire netting 86,773 square feet and stone 24,072
cft was still lying at site. The actual requirement for the successful
completion of work was 498,581 cft stone which was decreased by 45,536
cft at that time. Later on, a quantity 45,536 cft was carried and by
including balance stone lying at site 24,072 cft was filled in wire crates at
site and thus the entire crates were consumed. The reply was not
acceptable because as per last paid bill 453,045 cft stone was filled and
dumped (453,045 / 27) in 16,779 Nos. wire crates having capacity of 27
131
cft. each. This became 16,779 Nos. crates for 906,089 sft wire netting
whereas the department paid 992,862 sft. Hence, 86,772 sft wire netting
was paid in excess and not lying at site for further utilization as
department could not produce stock register.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the division produced the
record of payments 4th running bill and 5th & final bill regarding the work
restoration of damage J-Head spur at RD:36+700 upstream Punjnad. After
discussion over the para as well as verification completed by audit, it was
decided by the Committee that probe would be conducted by
Superintending Engineer, Mailsi Canal Circle, Multan. The report would
be received within a period of 60-days. No compliance of committee’s
directives was reported till finalization of report.
(DP.95)
Para 3.16 Unjustified payment due to non-dressing of earthwork -
Rs 1.7 million
If any part of the work is being insufficiently consolidated, earth work
shall be stopped till the consolidation is done to the satisfaction of the
Engineer-in-charge. If the contractor fails to carry out specified
compaction, the Engineer-in-charge may either add labour at the
contractor’s expenses or take over the whole or part of consolidation and
do it departmentally.
The Executive Engineer, River Diversion Division, Basira made payment
on account of 1086037 cft earth work excavation outside borrowpit as
undressed. Further payment on account of dressing was not made showing
that earth work was insufficiently consolidated. This resulted in unjustified
payment of Rs 1.7 million.
Audit pointed out the unjustified payment in September 2007. The
department replied that work executed by the contractor was found below
specification. He was also stressed upon to carry out dressing but he did
not turn up and his accounts were being finalized by forfeiting withheld
amount of Rs 308,608 alongwith forfeiture of 10% security amounting to
Rs 165,000. The reply was not acceptable as no progress towards
withholding of amount and forfeiture of security deposit was shown so far.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the divisional
representative pleaded that the running payment of work executed at site
132
was made to the contractor without dressing. In fact the dressing made by
the contractor but was not found satisfactory during course of execution of
the work. As such, the payment amounting to Rs 308,668 was withheld in
1st running bill. Thereafter, on rectification of defects and proper dressing,
the overall measurements were done and the withheld amount was
released in 2nd and final bill. However, the Committee desired that the
facts finding report be produced to Audit after vetting by the Executive
Engineer Operation, Dera Ghazi Khan Zone within 60-days. Further
action be taken on receipt of recommendations of the officer deputed &
detailed verification of record in audit office. No compliance of the
Committee directives was reported till finalization of the report.
(DP.38)
Para 3.17 Unjustified expenditure due to hire charges of private
pickups / Dallas – Rs 1.5 million
As per rule 2.10(a)(1) of Punjab Financial Rules Vol-I, same vigilance is
to be exercised by government servant in respect of expenditure incurred
from government revenue as a man of ordinary prudence will exercise in
respect of expenditure incurred from his own money.
3.17.1 The Executive Engineer, Upper Chenab Canal Division,
Gujranwala made payment on account of hire charges of private
pickups/Dallas for patrolling of Beldars at canal bank to prevent the theft
of canal water in the presence of government vehicles provided to each
sub division. The incurring of expenditure on hire charges of Private
Pickups / Dallas had resulted in unjustified expenditure of Rs 836,475.
Audit pointed out the unjustified expenditure in January 2008. The
department replied that private Pickups/Dallas was hired for transportation
of beldars for removal of unauthorized pipes etc. The reply was not
acceptable because the division had itself a large number of vehicles and
beldars were deployed in each section specifically for watch & ward to
prevent the theft of canal water.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 where in it was pleaded that
Gujranwala Irrigation Division was one of the highest canal operation and
maintenance division of Irrigation Department. In peak flow season, the
rate of water theft cases risen multiple, in the shape of installing syphon,
pipes, Z-shaped pipes installing concrete pipes under surface of canal
banks. For removal of theft of water through pipes heavy strength of
manpower was required on the spot for prompt action etc. Therefore, pick-
133
ups were hired for the purpose explained. The Committee was not
convinced with departmental explanation and directed that a probe be
conducted by the Chief Engineer, Lahore within 30 days. No compliance
of DAC directives was reported till finalization of the report.
(DP.27)
3.17.2 The Executive Engineer, Upper Chenab Canal Division,
Sheikhupura made payment on account of hire charges of Private Pickups
and Dallas for patrolling of Beldars on canal banks to control the theft of
water in the division. This resulted in unjustified expenditure for
Rs 703,416.
Audit pointed out the unjustified expenditure in December 2007. The
department replied that expenditure was incurred after obtaining sanction
by the competent authority and the private vehicles were used to carryout
the staff and police to prevent the theft of water. The reply was not
acceptable because the divisional and sub-divisional vehicles should be
used to watch and ward the canal banks as million of rupees in budget
were allocated for official vehicles. The separate payment for hiring was
quite unjustified.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the Executive Engineer
UCC division Sheikhupura. The provision also existed in approved work
plan 2006-07. The Committee advised that the details of vehicles may be
collected and the journeys performed during the days involved may be got
verified from audit office. The para was kept pending for detailed
verification of record/probe by the Administrative Department.
(DP.59)
Para 3.18 Non-recovery due to non-execution of work - Rs 1
million
Clause 10 of the contract agreement provides that the contractor shall
execute the whole and every part of work in most substantial and
workman like manner both as regards to material and otherwise according
to specification.
The Executive Engineer, Shahpur LJC Division, Sargodha awarded the
work on certain rates quoted by the contractor. The contractor in bill No.II
& III offered to execute the items as free of cost. The contractor executed
the items mentioned in bill No.1 upto Rs 9.3 million against contract
amount of Rs 9.3 million but did not execute the items offered to be
134
executed without any cost in bill No. II & III. In 2nd case items valuing
Rs 479,667 relating to bill No. 2, 3, 4 were also not executed. Non-
adherence to the clause of agreement and non-execution of items free of
cost resulted in non-recovery of Rs 1 million.
Audit pointed out the non-recovery in February 2008. The department
replied that work relating to bill No.II & III were carried out by the
contractor and entered in the measurement book and in other case (2nd)
work would be completed on risk and cost of the original contract. The
reply was not acceptable because terms and conditions of the contract
agreement were neither adhered to nor progress thereof was got verified
from the Audit.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the division pleaded that
the executed work (construction of outlets) had been recorded in the MB
No. 1366 and final bill passed against Vr: No.19 dated 16th June, 2008
(Miani sub division). During verification of record, it was revealed that on
finalization of bill, the amount had gone into minus. The Committee was
of the view that why the bill had gone into minus, the details be got
checked from audit office and if the recovery is established, that be
effected within 30-days positively. The record of work “lining of Jhalpha
sub Minor” was not submitted during verification. It was intimated that the
contractor had failed to complete the remaining work; hence an amount of
Rs 99422 (estimated cost if removing items) had been recovered from the
security deposit of the contractor. The para was kept pending for
verification of record & probe by the Chief Engineer within 15 days. No
compliance of committee’s directives was reported till finalization of
report.
(DP.32)
Para 3.19 Overpayment due to measuring excessive quantity of
earth work - Rs 943,387
As per rule 2.33 of Punjab Financial Rules Volume-I, every government
servant should realize fully and clearly that he will be held personally
responsible for any loss sustained by govt. through his fraud and
negligence.
The Executive Engineer, Development Division No.II, Balloki paid for
item excavation in foundation and borrowpit earth work 10,081,004 cft
against which the item of work ramming of earth work behind retaining
135
wall was paid 9,595,304 cft. The measurement of excessive 485,700 cft of
borrowpit earth work resulted in an overpayment of Rs 943,387. (485700
x 2039 %0 - 4.76% tender rate).
Audit pointed out the overpayment in August 2007. The department
replied that the quantity of excavation of borrowpit outside earth work was
equal to ramming of earth work. The reply was not acceptable because the
department shown on the quantity of excavation of earth work 10,081,004
cft whereas as per last paid bill a quantity of ramming of earth work was
paid for 9,595,304 cft.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein The department
reiterated its previous stands. The Committee deferred the para for
detailed probe. The compliance of the Committee directives was not
reported till finalization of the report.
(DP.134)
Para 3.20 Overpayment due to excessive measurement of earth -
Rs 651,201
According to rule 2.10(a)(1) of Punjab Financial Rules Volume-I (PFR),
same vigilance is to be exercised while incurring expenditure from Govt.
Revenue as a person of ordinary prudence would exercise in respect of the
expenditure of his own money.
The Executive Engineer, Burala Division Lower Chenab Canal (East),
Faisalabad measured and paid item of work “borrowpit excavation
undressed lead 100 feet” for a quantity of 556,221 cft for the work
concrete lining of Kanya feeder. The same quantity was to be compacted
at 90% maximum modified American Association of State Highway and
Transportation Organization (AASHTO) dry density whereas the
compaction of earth was paid for a quantity of 321,776 cft which means
that 244,445 cft earth was excessively borrowed than requirement. The
excessive borrow of earth resulted in an overpayment of Rs 651, 201.
Audit pointed out the overpayment in September 2007. The department
replied that the quantity in question i.e. 244,445 cft related to bank filling
and its compaction was withheld by the consultant. The reply was not
tenable because as per technical sanctioned estimate, the whole quantity of
earth work should have been compacted and record entry showed that the
said quantity was borrowed for filling the canal and was also not withheld.
136
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the department
explained that the quantity of 244445 cft was related to bank filling and its
compaction was with held by the consultant. The contention of the
Department was not accepted. The para was kept pending for detail
effecting recovery within 30 days. The compliance of the Committee
directives was not reported till finalization of the report.
(DP.165)
Para 3.21 Non-receipt of earnest money while accepting tenders –
Rs 624,000
Clause 14 of the agreement provides that no tender without earnest money
shall be entertained. The earnest money amount calculated @ 2% of the
estimated cost of the work shall be in the form of deposit at call shall be
received as mentioned.
The Executive Engineer, Western Bar Division, Thingi entertained the
tenders of the two works “concrete lining minor 2.4 RD” package-I&III of
a distributary without receiving earnest money through call deposit. This
resulted in non-receipt of earnest money Rs 624,000 (Rs 267,000 +
Rs 357,000).
Audit pointed out the non-receipt of earnest money in September 2007.
The department replied that at the time of opening of tender, the contractor
presented bank draft in support of call deposit. After detailed discussion
with chairman of tendering committee, it was decided to accept bank draft.
The bank draft was sent to National Bank of Pakistan Vehari alongwith
challan which was not acknowledged by the bank. In due course of time,
the contractor executed the work and submitted his bill for payment. The
department deducted Rs 267,000+Rs 357000 from his running bill. The
reply was not acceptable because the tenders were accepted without
receipt of earnest money.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the Executive Engineer
Western Bar Division intimated that at the time of tendering process, the
contractor presented bank drafts in support of call deposits. After detail
discussion, the tendering committee directed to accept bank drafts. The
bank drafts were sent to National Bank of Pakistan, vehari alongwith
challans for clearance which were not cleared by the bank. The
department, however, deducted Rs 624,000 from 6th running bill of the
137
contractor paid vide Vr.No.1 dated 1st November, 2006 which was equal
to the amount of earnest money. The viewpoint of the department was not
accepted by the Committee. The para was kept pending with the directions
that action should be taken against the contractor for black listing and
departmental action be initiated against the then Executive Engineer for
not abiding the financial discipline at that time. No compliance of
Committee directives was reported till finalization of the report.
(DP.2)
Para 3.22 Excess payment due to non-deduction of shrinkage -
Rs 516,138
As per chapter earth work of Market Rate System, 10% deduction for
shrinkage from the bank measurement when the earth work is done by
manual labour, was required.
The Executive Engineer, Muzaffargarh Canal Division, Muzaffargarh did
not deduct 10% shrinkage from 2,273,971 cft earth work quantities
brought from outside borrowpit dressed lead upto one mile. This resulted
in overpayment of Rs 741,810.
Audit pointed out the excess payment in September 2007. The department
replied that mode of measurement was adopted as “borrowpits
excavation” rather than bank measurement hence shrinkage was not
required. The reply was not acceptable because as per specification
No.17.1 to 17.5 measurement of deadman or any other distinct mark was
not shown which provide basis for recording the borrowpit measurements,
whereas no measurement on account of deadman or any distinct mark was
found recorded in measurement books to ascertain height of borrowpits.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the divisional
representative explained that as verified from the record entries, the mode
of measurement adopted for earthwork was barrowpits excavation rather
than bank measurement. Although 100-feet tape had been used, but it was
not presumed that it was bank measurement. The measurements had been
recorded in widths and depth of the pits which showed that it was clear
borrowpits measurement. Necessary certificate to the fact that no deadman
was left in borrowpits had been received. The version of the department
was not accepted by the Committee & directed that the recovery @ 4% be
made and got verified by Audit. The para was deferred. No compliance of
DAC directives was reported till finalization of the report.
(DP.43)
138
Para 3.23 Non-forfeiture of earnest money - Rs 493,000
Clause 15 of the contract agreement provides that the successful tenderer
will be required to enter into a contract and to commence the work within
the time specified in the memorandum of work. Should the successful
tenderer refuse or fail for any reason to commence the work within the
time specified in the memorandum of work, it should constitute a just
cause for the annulment of the award and in the event of such annulment,
the entire earnest money shall be forfeited to government as compensation
for such default as described.
The Executive Engineer, Eastern Bar Division, Pakpattan awarded the
work concrete lining of 2-I/3-L minor RD 0 to 36,800 (tail) to M/s
Al-Memar Associate on 31st May, 2006 vide No.1232/151-W. The work
was to be started w.e.f. 6th June, 2006 i.e. within 7 days after issuance of
acceptance letter. The contractor did not start the work upto 3rd July, 2006
as evident from the Executive Engineer’s letter No.1484/Package File
dated 3rd July, 2006 which was against the contractual obligations and
resulted in non-forfeiture of earnest money of Rs 493,000.
Audit pointed out the non-forfeiture of earnest money in September 2007.
The department replied that the contractor did not start the work up till 3rd
July, 2006. The contractor shifted his camp at site during the month of
June 2006 and started the work on 5th July, 2006 as evident from his
memo No. Nil dated 5th July, 2006 addressed to the concerned Executive
Engineer under the circumstances, the forfeiture of earnest money was
neither required nor justified. The reply was not tenable as the department
had admitted that the work was not started by due date as required under
acceptance letter.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the department
reiterated its previous stand. The Committee was not convinced with the
explanation submitted and directed that in detailed verification of record
be got completed from main audit office Lahore. The para was kept
pending for detailed verification within 15 days. The compliance of the
Committee directives was not reported till finalization of the report.
(DP.118)
Para 3.24 Overpayment due to application of incorrect rate -
Rs 475,186
According to provision of Market Rate System (MRS) 2005, rate of
Rs 148.73 per cft for Reinforced Cement Concrete (RCC) in roof slabs,
139
beams, column, lintels, girders and other structural member laid in situ or
precast type “C” 1:2:4 is applicable where both kind of shuttering i.e.
horizontal as well as vertical shuttering is involved.
The Executive Engineer, Development Division, Mandi Baha-Ud-Din
made payment for 5,325,114 cft RCC in roof, slabs, girders, columns,
lintels and other structural members type (C) 1:2:4 @ Rs 148.73 p.cft.
This quantity included a quantity of 14,584.58 cft RCC work ratio 1:2:4
which was casted on ground involving single shuttering i.e. horizontal
shuttering only. Hence, payment was to be made @ Rs 116.15 per cft
instead of Rs 148.73 per cft. Application of incorrect rate resulted in
overpayment of Rs 475,186.
Audit pointed out the overpayment in January 2008. The department
replied that rate for RCC slabs, beams, columns lintels & girders and other
structural member type “C” was paid correctly as it involved both kind of
shuttering. The reply of the department was not acceptable because rate of
Rs 148.73 per cft was payable when R.C.C. work was executed involving
both kind of shuttering. Whereas out of total concrete work i.e. 5,325,114
cft, a quantity of 14,584 cft RCC on account of concrete, beams, girders
and other structural member was casted on ground which involved
horizontal shuttering only. This also stand proved from the fact that same
quantity of RCC work was paid for lifting and placing pre-cast concrete
girders and other structural members on bridge.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the Executive Engineer
Development Division Mandi Bahauddin explained that as per item No.6
(a) e.g RCC roof slabs beams columns lintels girders and other structural
members laid in site or precast laid in position or pre-stressed member cost
in site complete in all respects (1:2:4) which clearly depicts that concrete
beams lintels, girders and other structural members laid in site or precast
pertains to this items. Hence, question of application of incorrect rate did
not arise and there was no excess payment what so ever involved in the
para. After discussion over the para, the Committee directed that complete
record as per verbal explanations be furnished to audit within 60-days for
necessary verification otherwise recovery as pointed out be effected. No
compliance of the Committee directives was reported till finalization of
the report.
(DP.78)
140
Para 3.25 Unauthorized payment due to non inclusion of an item
of work - Rs 399,383
An item of work “extra for wet earth” was not included in the original
technical sanctioned estimate approved by the Chief Engineer, Irrigation
Multan Zone, Multan.
The Executive Engineer, Development Division No.1, Sidhnai paid an
item of work “extra for wet earth” without provision in technical
sanctioned estimate and approval of competent authority i.e,
Superintending Engineer before execution of work. This resulted in
unauthorised payment of Rs 399,383.
Audit pointed out the unauthorized payment in November 2007. The
department replied that the item of wet earth was mentioned in the
technical sanctioned estimate approved by the competent authority. The
reply was not acceptable because the technical sanctioned estimate
produced by the department did not show any provision of said item.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the recovery during
discussion was admitted by the department. The para was kept pending for
verification of admitted recovery by Audit within 30 days. The
compliance of the Committee directive was not reported till finalization of
the report.
(DP.149)
Para 3.26 Overpayment due to change of distance approved in
technical sanctioned estimate - Rs 394,667 As per Finance Department letter No. FD(D-11)10(3)/90 dated 16th June,
1991, no cost, scope and specification of a scheme involving material
deviation from the original proposal once approved can be changed
without prior approval of authority competent to grant technical
sanctioned estimate and administrative approval.
The Executive Engineer, Ahmadpur Canal Division, Ahmadpur paid an
item of work “Filling earth work excavation in ashes sand, soft soil & silt
clearance undressed lead upto 3 miles” against the provision of 200' lead
in the Technical Sanctioned Estimate. The lead once approved in
Technical Sanctioned Estimate could not be changed. The increase in lead
from 200 feet to 15,840 feet (3 x 5,280) in violation of instructions
resulted in overpayment of Rs 394,667.
141
Audit pointed out the overpayment in January 2008. The department did
not furnish the reply up till now.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein the recovery during
discussion was admitted by the department. The para was kept pending for
verification of admitted recovery by Audit within 30 days. The
compliance of the Committee directives was not reported till finalization
of the report.
(DP.110)
Para 3.27 Unjustified payment due to execution of unapproved
item - Rs 337,271
As per estimate sanctioned by the Chief Engineer Irrigation Zone,
Sargodha vide No.1666/1-W dated 10th June, 2004, the items of extra for
wet earth and slush or daldal was sanctioned subject to site verification by
the Superintending Engineer before execution of items to see whether the
wet earth and slush or daldal existed or not at site of work.
The Executive Engineer, Lower Jhelum Canal Development Division,
Sargodha executed the item, “Extra for wet earth and slush or daldal”, and
withheld the amount, whereas the site of work was not physically
inspected/verified by the Superintending Engineer before execution of
these items to see whether the wet earth and slush daldal existed or not at
sites of work. These items were got executed at site without approval of
the Superintending Engineer. This resulted in unjustified payment of
Rs 337,271.
Audit pointed out the unjustified payment in August 2007. The department
replied that payment on this account was not yet made. The reply was not
acceptable because the items were got executed at site and amount was
withheld. The Superintending Engineer approval was still not sought
whereas measurements for extra for slush / daldal were recorded without
physical verification/inspection of site by the Superintending Engineer.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the division explained that
the audit calculated Rs 337271 on account of extra allowance for wet &
slush earth work in the work i-e rehabilitation of Southern branch
RD:0+000 RD:53+000 (Package A,B &C). The observation of audit was
erroneous as the wet & slush allowances had not been paid in these works.
The works had been finalized; the payment on account of wet and slush
142
allowance had not been made. The viewpoint of the concerned division
was not agreed by the Committee and it was decided that recovery of Rs
337,271 be effected from the next running bill and its accountal be got
verified from the audit office. The compliance of the Committee directives
was not reported till finalization of the report.
(DP.84)
Para 3.28 Unjustified payment due to execution of re-handling of
earth and extra for puddling of earth work without
any excavation of earth work - Rs 270,886
The items of work “rehandling and puddling of earth work was sanctioned
in the revised technical sanctioned estimate without its allied items such as
excavation borrowpit outside or loading/unloading of berm cutting etc.
The Executive Engineer, Ahmadpur Canal Division, Ahmad Pur paid the
item of work re-handling of earth and extra for puddling earth work
without execution of its allied item such as excavation borrowpit from out
side, loading/unloading berm cutting etc. and the place of re-handling viz
bed, slope, bank or dowel or outside the canal was not mentioned in the
measurement book. This resulted in unjustified payment of Rs 270,886.
Audit pointed out the unjustified payment in January 2008. The
department did not reply.
The matter was discussed in the DAC meeting held on 16th & 17th
February, 2009 wherein The department explained that the item of earth
work in soil lead 100 ft to 2750 ft, quantity of 287,743 cft (250,077 cft +
37,666 cft) was completed and paid and then the job sand filling,
re-handling of earth and pudding was made to fill the hollow reaches. The
contention of the department was not accepted by the Committee and
directed for detail probe within 30 days. The compliance of the Committee
directive was not reported till finalization of the report.
(DP.145)
Para 3.29 Overpayment due to allowing higher rates - Rs 270,813
As per provision of Market Rate Schedule, rate for earth work excavation
in irrigation channels through excavation drainage lines and condition (dry
wet, slush and under water) includes rate of de-watering.
143
The Executive Engineer, Drainage Division, Mandi Bahauddin made
payment for 427,420 cft earth work excavation of drains, irrigation
channels through excavator drainage lines and condition (dry wet slush
under water including dewatering / bailing out water @ Rs 1,240 per%o
cft. No measurement on account of de-watering was recorded. Hence, the
rate was to be reduced by Rs 633/60 on account of dewatering / bailing out
water at site. Non-reduction of rate resulted in overpayment of
Rs 270,813.
Audit pointed out the overpayment in January 2008. The department
replied that payment was made as per technical sanctioned estimates. The
reply was not acceptable because rate of excavation in drains etc, includes
rate of dewatering / bailing out water whereas no record measurement on
account of dewatering / bailing out water was made available, hence, rate
was to be reduced accordingly.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the division pleaded that
the work was executed by departmental machinery and payment was made
according to rates approved for bed clearance of drains of all type soil @
Rs 1,240 per % cft approved by the Superintending Engineer, Machinery
circle, Lahore (competent Authority) so no separate measurement was
made for wet & slush. The para was kept pending by the Committee with
the direction that if the item of dewatering got executed / measured in the
M.B then the para would be settled if not existed in the MB, recovery
would be effected. The verification was to be done within a week. The
compliance of the Committee directive was not reported till finalization of
the report.
(DP.47)
Para 3.30 Overpayment due to allowing excessive rate -
Rs 267,293
As per Bid Schedule approved by the competent authority, contractor
quoted rate of Rs 960 per% cft for earth work excavation from outside
borrowpit lead 1,000 feet.
The Executive Engineer, Development Division No.II, Balloki made
payment for 498,494 cft. earth work excavation from outside borrowpit
lead 1000 feet @ Rs 1,496.20 per%o cft against the contractor’s quoted /
accepted rate of Rs 960 per %o cft. Application of incorrect rate resulted
in overpayment of Rs 267,293.
144
Audit pointed out the overpayment in August 2007. The department
replied that the item of work “earth excavation from outside borrow pit
lead 200 feet + ramming of earth work behind retaining wall paid with
lead upto 1,000’ as provided in the technical sanctioned estimate. As per
related measurement book, the rate of Rs 1,496.20 per %o cft paid was
correct and item of earth work 200 feet lead was incorrectly written in the
voucher. No overpayment was involved. The reply was not agreed because
as per record measurements rate for earth work lead 200 feet + ramming
cft worked out to Rs 1,032.15 per%o cft instead of Rs 1,496.20 per%o cft.
As per acceptance letter, payment was to be made @ Rs 960.20 per %o cft
as item earth work lead 200 feet + ramming did not exist.
The matter was discussed in the SDAC meeting held on 16th & 17th
February, 2009 wherein the version of the department was not accepted
and deferred the para by the Committee to probe the matter within 30
days. The compliance of the Committee directive was not reported till
finalization of the report.
(DP.117)
Para 3.31 Overpayment due to execution of the items of work
without provision in technical sanctioned estimate -
Rs 247,551
As per Finance Department letter No.FD(D-11)10(3)90 dated 16th June,
1991, no cost, scope and specification of a scheme involving material
deviation from the original proposal once approved, can not be modified
without prior approval of the authority, competent to grant administrative
approval.
The Executive Engineer, Central Bari Doab Canal (CBDC) Division,
Lahore executed and paid the item cement plaster 1:4 ratio and earth work
borrowpit undressed lead upto 100 feet without provision in the technical
sanctioned estimate. Execution of items without provision resulted in
overpayment of Rs 247,551.
Audit pointed out the overpayment in July 2007. The department replied
that cement plaster was executed in 1:3 ratio as measured and paid in the
MB. Further, the item of earth work was sanctioned in the revised
estimate. The reply was not acceptable because the department did not
show the provision of cement plaster 1:4 and earth work in the estimate.
The matter was discussed in the DAC meeting held on 16th & 17th
February, 2009 wherein the department explained that the work was
executed as per TSE. The Audit informed the Committee that recovery of
145
enhanced lead was not made from the contractor. The Committee directed
the department to work out the recovery of enhanced lead and got verified
from Audit within 30 days. The compliance of the Committee directive
was not reported till finalization of the report.
(DP.136)
Para 3.32 Overpayment due to allowing quantities, not provided
in the technical sanctioned estimate - Rs 243,870
Clause 10 of contract agreement provides that the contractor shall execute
the whole and every part of the work, in the most substantial and workman
like manners and both as regard material and otherwise in every respect in
strict accordance with the specification.
The Executive Engineer, Rajanpur Canal Division, Rajanpur got executed,
measured and paid the quantities of earth work in those RDs which were
not included in technical sanctioned estimate. This resulted in
overpayment of Rs 243,870.
Audit pointed out the overpayment in October 2007. The department
replied that no excess payment over sanctioned estimate was made. The
reply was not convincing because the work was not executed as per
X-sections of estimate which means that department executed lesser
quantities in other reaches to keep the whole quantities within the
technical sanctioned estimate.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the divisional
representative explained that the quantity of earth measured in MB No. 4/5
page 5-A at RD: 7,000-8,000, 5 x 100 x (25+85) 2x12=330,000cft. There
was no excess of earthwork quantity as recorded in the TS estimate. In
RD: 7-8 the reach level was 5000ft and at RD:8-9, it was 1000ft but it was
sanctioned in detailed technical sanction estimate as 7,500 to 9,000 =
1,500ft. The version of department was not agreed by Audit and
accordingly it was decided by the Committee that recovery of Rs 243,870
be effected from the contractor within 60-days. The compliance of the
Committee directive was not reported till finalization of the report.
(DP.12)
Para 3.33 Overpayment due to allowing excessive lead -
Rs 192,384
As per provision of para 334 of Public Works Department Code, record
entries/measurement provides basis for making payment on account of
work done by the contractor.
146
The Executive Engineer, Muzaffargarh Canal Division, Muzaffargarh
allowed payment for 421,213 cft carriage of stone lead of 150 miles last 5
miles katcha upto 6th running bill. However, in the 7th running bill, the
payment was made for last 38 KM katcha. This resulted in overpayment of
Rs 192,384.
Audit pointed out the overpayment in September 2007. The department
replied that cutting of 38 KM to 5 KM was made by some culprits. The
reply was not agreed because upto 6th running bill, record measurements
for carriage of stone were made by taking last 05 miles as katcha
allowance in a total lead of 150 kilometer. The extra payment made on
account of last 38 kilometer katacha was also not justified as its
measurement for last five kilometers were recorded as katacha hence lead
in the next bills could not be changed. The matter was discussed in the SDAC meeting held on 16th & 17th
February, 2009 wherein the department explained that the lead of 38 km
from 5 km was changed by some culprit / writing changed by lead pencil.
The Committee directed to effect the recovery and get verified from the
audit within 30 days. The compliance of the Committee directive was not
reported till finalization of the report.
(DP.122)
Para 3.34 Overpayment due to allowing excessive/inadmissible
quantity of earth - Rs 192,013
As per technical sanctioned estimate, the quantity of the earth work
borrow pit excavation undressed lead upto ½ mile for diversion and the
quantity of compaction of earth work should be equal.
The Executive Engineer, R.Y Khan Canal Division, R.Y. Khan paid an
item of work borrowpit excavation undressed lead upto ½ mile for
diversion for a quantity of 598270 cft but its compaction was paid for a
quantity of 1,164,850 cft. The payment of excessive compaction resulted
in overpayment of Rs 192,013.
Audit pointed out the overpayment in December 2007. The department
replied that as per detail of quantity (earth work), the provision was made
as 1,466,750 cft but incorrectly, the quantity of 610,750 cft was brought in
the abstract of cost. The payment was made as per work done basis and
necessary correction would be made in the revised estimate. The reply was
not agreed because quantity of outside borrowpit and its compaction
should be equal to the technically sanctioned estimate.
147
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the division pleaded that
the revised estimate had been prepared and submitted to the
Superintending Engineer, Rahim Yar Khan dated 13th June, 2008 for
arranging sanction from competent authority. The Committee was not
convinced with the explanations submitted and observed that the variation
order was without any competent authority. Directions were issued to
effect the recovery of Rs 192,013 from the next running bill and its
verification be got completed from main Audit Office, Lahore within one
month. The compliance of the Committee directive was not reported till
finalization of the report.
(DP.66)
Para 3.35 Overpayment due to allowing excessive rate -
Rs 175,402
As per acceptance letter, the rate of item of work “pacca brick work other
than building in 1:3 ratio cement sand mortar” was admissible @ Rs 5,425
per % cft.
The Executive Engineer, L.B.D.C. Division, Khanewal paid rate of
Rs 5800 per % cft of the item of work pacca brick work 1:3 cement sand
mortar instead of admissible rate of Rs 5,425 per % cft. This resulted in
overpayment of Rs 175,402.
Audit pointed out the overpayment in November 2007. The department
replied that the rate of Rs 5,425 % cft pertained to the quantity of 2,253.64
cft recorded at page 138-164 of M.B. 1035 for the item “ pacca brick work
1:3 cement sand mortar executed for construction of out-lets which had
erroneously been paid at rate Rs 5800. The recovery of Rs 8451 would be
effected. As regard to the balance quantity of 49,031.36 cft pacca brick
work other than building upto 10’ height ratio 1:3 cement sand mortar
pertained to the construction of bridge / falls etc. and the correct rate of
Rs 5800 had been applied / paid. The reply was not agreed because the
record entries were made as “pacca brick work other than building 1:3
cement sand mortar” without indicating the height of 10’ feet in
M.B.No.1051 page 47, 50, 53, 57, 61, 66, 68, 71, 74, 98, 133, 135, 139,
142 than the rate Rs 5,800 per% cft paid was incorrect.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein the division pleaded that
the contractor had quoted two different rates of Rs 5,425 and Rs 5,800 for
100 cft for the two items i-e pacca brick work other than building 1:3
148
cement sand mortar and pacca brick work other than building in 1:3
cement sand mortar upto 10” height “depicted in the bid schedule. The
rate of Rs 5,425 pertained to the quantity of 2,253.61 (1591.69 + 661.92)
recorded at page 138 – 164 of MB 1035 for the item “Pacca brick work
1:3 cement sand mortar” executed was erroneously paid @ Rs 5,800. The
recovery of Rs 8451/18 (5800 -5425 = 375 x 2253.64/100) had been made
in 15th & final bill vide Vr: 3 Jia dated 24th July, 2008. As regards the
balance quantity of 49031-36 cft pacca brick work other than building
upto 10ft height in 1:3 cement sand mortar” pertains to the construction of
bridges / falls etc and correct rate of Rs 5,800 had been applied/paid. The
contention of department was not accepted. The Committee decided that
the amount should be recovered within 60 days. The compliance of the
Committee directive was not reported till finalization of the report.
(DP.69)
Para 3.36 Excess payment due to execution of excessive quantities
- Rs 135,660
As per provisions of technical sanctioned estimate, quantities for
“providing and laying crush stone bajri under pitching having size 1/2 inch
to 1/8 inch” were to be equal to the quantities of, “providing and laying
crush stone bajri under pitching having size 1/2 inch to 1 ½ inch”.
The Executive Engineer, Upper Jhelum Canal Division, (UJC) Gujrat
made payment 30,530 cft of “providing and laying crush under pitching
1/8” to 1-1/2” whereas its allied item “providing and laying crush ½” to
2-1/2” was paid to the extent 35,052 cft. This resulted in excess payment
of Rs 135,660.
Audit pointed out the excess payment in December 2007. The department
replied that quantity was paid as per provision of technical sanctioned
estimate. The reply was not acceptable because bajri of both sizes were
laid on same area / dimension and these quantities were to be equal to each
other as provided in the technical sanctioned estimate.
The Departmental Accounts Committee meeting held on 16th & 17th
February, 2009 wherein it was pleaded by the Executive Engineer, Gujrat
that a quantity of 35052 Cft for “Providing & laying crush size ½ to 1 ½”
was paid to the contractor which was correct and as per T.S estimate. The
para was kept pending for clarification from the consultant regarding
usage of bajri on banks. Audit was of the opinion that the laying of loose
149
bajri on banks without structural strength was the wasteful expenditure.
Compliance of the committee directives was not reported till finalization
of the report. (DP.123)
Para 3.37 Overpayment due to allowing excessive quantity of
extra wet earth - Rs 123,335
As per Market Rate System, the Superintending Engineer will sanction the
quantity of extra wet earth work after visit of the site.
The Superintending Engineer, sanctioned 4,63,759 cft for extra wet earth
whereas the Executive Engineer, Lower Bari Doab Canal, Sahiwal made
payment for the item as 730,721 cft. This resulted in overpayment of
Rs 123,335.
Audit pointed out the overpayment in October 2007. The department
replied that estimate was submitted to the competent authority for
technical sanction with tentative figures of item 15% extra wet length
work (463,760) and 65% extra for slush. During the course of sanction of
the estimate, X-sections were drawn after observing actual field data and
quantities for wet earth 731,035 cft (i.e. 23.6%) was executed. The work
was executed as per estimate technically sanctioned by the competent
authority, and measurements were made and paid accordingly. The reply
was not acceptable because the extra wet earth was assessed by the
Superintending Engineer in first instance as 15% and also approved by
him. The Chief Engineer was not competent to increase the quantity
without consent of the Superintending Engineer as directed in the MRS.
The revised technical sanction was accorded after execution of work
which was not acceptable as the quantity of wet earth/slush, daldal could
only be measured before execution of the work.
The matter was discussed in the SDAC meeting held on 16th & 17th
February, 2009 wherein the contention of the department was not accepted
by the Committee and directed to effect the recovery within 30 days. The
compliance of the Committee directive was not reported till finalization of
the report.
(DP.111)
Para 3.38 Unauthorized / irregular expenditure due to non-
utilization of budget - Rs 123,329
As per para 13.1(a) of Punjab Budget Manual, the disbursing officers are
directly responsible for the expenditure incurred against the funds allotted
to them.
150
The Executive Engineer, Kalabagh Headworks Division, Daud Khel
utilized office contingencies (Grant No.A03202-establishment budget) on
repair works under Grant No.PC 221009/A 13401 Main Canal and
D 21009/A 13501/C Main embankment. Non-utilization of establishment
budget for repair work resulted in unauthorized/irregular expenditure of
Rs 123,329.
Audit pointed out the unauthorized/irregular expenditure in January 2008.
The department replied that due to paucity of funds under relevant head,
the payment out of Executive contingency was charged to Main Canal
with the approval of the Superintending Engineer, Thal Canal Circle,
Mianwali. The reply was not acceptable because expenditure was incurred
irregularly.
The matter was discussed in the Departmental Accounts Committee
meeting held on 25th September, 2008 wherein it was replied that due to
paucity of funds under head “contingency” payments were made with the
approval of the Superintending Engineer, Thal canal circle in the work
plan for the year 2006-07. The Committee was not convinced with the
explanation submitted, as the Superintending Engineer was not competent
to issue approval for utilization of Commodities & Services funds under
head main canals & embankments. It was decided by the Committee to
keep the para pending asking the Executive Engineer, Kalabagh H/Works
Division, Daud Khel to explain his position for not attending the SDAC
meeting. It was further directed to submit the case to Irrigation and Power
department within 30-days alongwith fixing responsibility for the
irregularity committed. Then the case be referred to the Finance
Department for necessary condonation. No compliance of the Committee
directives was reported till finalization of the report.
(DP.17)
Para 3.39 Unjustified payment due to overlapping of item -
Rs 104,849
According to para 2.10(a)(i) of Punjab Financial Rules Volume-I, same
vigilance is to be exercised by the Public Officer while incurring
expenditure from govt. revenue as a person of ordinary prudence would
exercise in respect of the expenditure of his own money.
The Executive Engineer, Irrigation Division, Kasur made payment on
account of concrete lining of canal RD 13,500 – 25,000. Further, berm
cutting to the extent of 71,720 cft was also paid for Rs 104,849 for the
same RD. Making payment on account of berm cutting on such RDs
which had already stood concrete lined resulted in unjustified payment of
Rs 104,849.
151
Audit pointed out the unjustified payment in December 2007. The
department replied that in the RD 12,500 – 25,500 the item of earth work
excavation in ashes, sand soft soil or silt clearance undressed lead 50’ was
executed instead of berm cutting. The reply was not acceptable because
record entry on measurement book No.2,025 page-68 was made for berm
cutting which clearly indicated the execution of item against the provision
of technically sanctioned estimate.
The matter was discussed in the Departmental Accounts Committee
meeting held on 16th & 17th February, 2009 wherein The XEN, Kasur
division was not appeared in the meeting. The Committee directed that
explanation of XEN Kasur be called. Further, revised departmental reply
was submitted by the division. The Committee directed to probe the matter
within 30 days. The compliance of the Committee directive was not
reported till finalization of the report.
(DP.174)
152
153
LOCAL GOVERNMENT & COMMUNITY DEVELOPMENT
DEPARTMENT
The Local Government and Community Development Department
comprises attached department of Director General LG&CD, Punjab
Local Government Board, and Director General Katchi Abadis. The
LG&CD Department administers the affairs of devolved institutions i.e
District Government, Tehsil/Town Municipal Administrations, and Union
Councils. At provincial level, the department is directly responsible for the
execution of Tameer-e-Punjab Programme being sponsored by the
provincial legislators. The Director General LG&CD through his field
formations executes the development schemes of Tameer-e-Punjab/Chief
Minister Accelerated Programme and Community Uplift Programme
which fall under the audit jurisdiction of Director General Audit Works
Lahore. The primary responsibility of the department is to develop the
rural area of the Punjab.
Audit for the financial year 2006-07 was conducted on test check basis
and a summary of audit results is tabulated as under:
(Amount Rs in million)
Sr.No Particulars Amount Total amount
/ %age
1. Budget allocation for the financial year
2006-07
4,482.19
4,482.19
2. Total Expenditure for the financial year
2006-07
2,515.9
2,515.9
3. Audited Expenditure 1,388.32 55.18% *
4. Amount of the observations in this
report
i) Excess payment
ii) Irregular / un-authentic
iii) Un-justified payment
without T.S. estimate
iv) Loss / Doubtful / Theft
v) Non- recovery
0.72
0.66
45.22
0.84
1.59
49.03
*. High money value sample selection criteria.
154
155
4. LOCAL GOVERNMENT & COMMUNITY
DEVELOPMENT DEPARTMENT
Para 4.1 Unauthorized payment in excess of provision in PC–I
- Rs 45.2 million
As per para 2.86 of Buildings & Roads Department Code, no change in
design, quality and scope of work can be made without prior approval of
the competent authority.
The Project Director, Southern Punjab Basic Urban Services Project,
Lahore incurred an expenditure of Rs 93.683 million against provision in
PC-I for Rs 48.456 million on account of land acquisition and
compensation in Tehsil Municipal Administration Kot Adu and Tehsil
Municipal Administration Jampur up to 30th June, 2006. This resulted in
unauthorized payment of Rs 45.227 million in violation of above codal
provisions.
Audit pointed out the unauthorized expenditure in October 2006. The
project management replied that the increase in expenditure was due to
price escalation over the years. The component wise expenditure on the
project as a whole had not exceeded and Tehsil Municipal Administration
wise expenditure would be got regularized in the revised PC-I if the total
expenditure on the project increased beyond 15% of the approved cost.
The reply was not acceptable as increase in cost against land acquisition
component was substantial i.e. almost 100% and as such required revision
of PC-I and administrative approval.
The matter was discussed in the Departmental Accounts Committee
meeting held on 24th April, 2007. Audit stressed to get the excess
expenditure regularized from competent forum. The Committee decided to
keep the para pending. No further progress towards revision of PC-I/
regularization was reported to Audit till finalization of the report.
(DP.13-FAP)
Para 4.2 Loss due to non-utilization / recovery of dismantled
material - Rs 848,289
As per item No 9, chapter 18 of Specification for Execution of Works
Vol –I, the dismantled material was the property of the government and as
such, it was required to be reused / adjusted or accounted for accordingly.
156
The Assistant Director, Local Government & Community Development,
Pakpattan did not reuse the available dismantled material (brick
pavement). In the execution of work “Metalled Road”, the department
dismantled bricks pavement for quantities of 59,300 sft and 41,450 sft (for
two works) out of which only 11,700 sft and 24,525 sft were shown
utilized. Instead of reusing the available material 64,525 sft with labour
rate only, the department laid new material as sub-base course of stone
aggregate. This resulted in loss of Rs 848,289
Audit pointed out the non-recovery in September 2007. The department
replied that the work was executed by the District Officer Road and he
was requested to furnish detailed reply.
The matter was discussed in the Departmental Accounts Committee
meeting held on 28th May, 2009 wherein the Committee expressed his
displeasure upon the non attendance of DO Roads Pakpattan and directed
to effect the pointed out recovery upto 30th June, 2009. No compliance of
the Committee directive was reported till finalization of the report.
(DP.19)
Para 4.3 Excess payment due to irregular measurement -
Rs 843,975
As per Communication & Works Department instructions vide
No.PAC(C&W) 17-6/90 dated 28th October, 1997, the deficiency in the
sub-base course should be removed before laying the base course.
Similarly, deficiency in thickness of base course should be improved
before applying triple surface treatment. 4.3.1 The Assistant Director, Local Government & Community
Development, Rajanpur measured and paid an item of work “Earthwork
making Embankment etc” to the extent of 159,120 cft. and 82,000 cft (for
two works). After providing/laying of sub-base course and base course the
overall quantities of earthwork making embankment was again measured
as 334,180 cft and 200,900 cft by increasing the breadth and depth of the
item of work. This resulted in excess payment of Rs 366,512.
Audit pointed out the excess payment in December 2007. The department
did not reply.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.13)
157
4.3.2 The Assistant Director, Local Government & Community
Development, Lodhran measured and paid an item of work “Earthwork
making embankment etc” in various works. After providing / laying of
sub-base course and base course the overall quantities of earth work
making embankment were again measured by increasing the breadth and
depth of the item of work. This resulted in excess payment of Rs 294,000
Audit pointed out the excess payment in October 2007. The department
replied that the payment was made as per estimate. The reply was not
acceptable as the re-measurement of the hidden item was not allowed after
the execution of subsequent item over it.
The matter was discussed in the Departmental Accounts Committee
meeting held on 28th May, 2009 wherein the departmental contention was
not agreed and the Committee directed to probe the matter for excess
payment with in 30 days. No compliance of the Committee directive was
reported till finalization of the report.
(DP.15)
4.3.3 The Assistant Director, Local Government & Community
Development, Muzzafargarh measured and paid an item of work
“Earthwork making embankment etc” to the extent of 228,300 cft. After
providing/laying of sub-base course and base course, the overall quantities
of earthwork making embankment was again measured as 278,820 cft by
increasing the breadth and depth of the item of work. Further, the
department did not deduct the quantity of camber and slope. This resulted
in overpayment of Rs 183,463.
Audit pointed out the excess payment in November 2007. The department
stated that detailed reply would be furnished on its receipt from the DO
Roads.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.17)
Para 4.4 Overpayment due to non-recovery of price variation on
account of decrease in cost of cement and steel –
Rs 730,909
According to clause 55 of contract agreement read with condition No. 2 of
acceptance letter, any variation (increase or decrease) to the extent of 5%
158
or more in the price of any item mentioned in sub-clause (2) takes place
after the acceptance of tenders and before completion of contracts, the
amount payable under the contract shall be adjustable to the extent of
actual variation in the cost of item.
4.4.1 The Tehsil Municipal Administration, Attock being
executing Agency of the Assistant Director, Local Govt. & Community
Development, Attock called / opened tenders on 24th June, 06 for the
execution of works under Tameer-e-Punjab Programme. The base rate of
cement for District Attock was Rs 310 per bag. The rates were decreased
more than 5% in subsequent quarters during which cement was consumed
but the recovery on account of price variation was not made from the
contractor. Non-adherence to agreement clauses resulted in overpayment
of Rs 346,565 to the contractor.
Audit pointed out the overpayment in October 2007. The agency stated
that the detailed reply would be submitted in due course of time.
The matter was discussed in the Departmental Accounts Committee
meeting held on 28th May, 2009 wherein the department admitted the
recovery. The Committee directed the department to effect recovery and
get it verified by Audit prior to 30th June, 2009. No compliance of the
Committee directive was reported till finalization of the report.
(DP.1)
4.4.2 The Assistant Director, Local Govt. & Community
Development, Nankana Sahib awarded various works in December 2006
when the base rate of cement was Rs 225 per bag. The input rate of grey
cement of Nankana Sahib District was reduced to Rs 180 per bag in 1st
quarter of 2007, during which the cement was consumed. The variation in
rate of cement was more than 5% but price variation was not recovered.
This resulted in overpayment of Rs 280,185 to the contractor.
Audit pointed out the overpayment in October 2007 but the department
did not reply.
The matter was discussed in the Departmental Accounts Committee
meeting held on 28th May, 2009 wherein the department stated that the
schemes of Tamir-e-Punjab programme were being executed as per
amount of administrative approval and no cushion over AA amount and
TSE was permissible. There were restrictions upon utilization of
contingency amount of TSE for price escalation adjustment. Hence, the
159
decrease or increase in price was not possible in LG&CD department.
Audit apprised the Committee that the financial rules and standard
agreements were equally applicable to LG&CD department. After
discussion, the Committee directed the department to review the case with
reference to guideline / modalities of Tamir-e-Punjab programme and
effect recovery as pointed out by Audit upto 30th June, 2009. No
compliance of the Committee directive was reported till finalization of the
report.
(DP.5)
4.4.3 The District Officer Roads, Rawalpindi, being executing
Agency of Assistant Director, Local Government & Community
Development, Rawalpindi received / accepted tenders in December 2005
with the base rate of steel Rs 42,200 per ton. The price of steel was
reduced for more than 5% in subsequent quarters in which steel was
consumed but recovery on account of price variation was not made from
the contractor. Non-adherence to agreement clause resulted in
overpayment of Rs 104,159.
Audit pointed out the overpayment in August 2007. The department
replied that reply would be submitted on receipt of detailed reply from
Works & Services Department as work was got executed through them.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.20)
Para 4.5 Unjustified payment due to allowing sub-base course
item in hard rock/shingle surface - Rs 729,270
As per para 2.22 (I) of Buildings & Roads Department Code, the estimates
should always be prepared in detail as this ensures that the officer who is
responsible has given proper consideration to the requirements of the
work.
The Assistant Director, Local Government & Community Development,
Jhelum paid for item of works providing/laying sub-base course shingle
etc. in the same reaches where cutting of hard rock and shingle gravel was
measured and paid. Whereas there was no need for providing/ laying sub-
base course as the excavation in rock was made to design section and thus
natural surface was consisted of hard rock / shingle. This resulted in
unjustified payment of Rs 729,270.
160
Audit pointed out the unjustified payment in November 2007. The
department stated that detailed reply would be submitted on the receipt of
reply from executing agency i.e. TMA Sohawa.
The executive view point could not be incorporated so far in the para due
to non-convening of SDAC meeting by the department despite best efforts
made by this office till finalization of the report.
(DP.21)
Para 4.6 Non-recovery of increased rent - Rs 530,253
Clause 6 of agreement made between Local Government & Community
Development Department, Rajanpur and lessees / tenants of nine shops,
the amount of monthly rent, on the expiry of first three years, will be
increased @ 10% every year.
The Assistant Director, Local Government & Community Development,
Rajanpur did not recover the rent at increased rates. The department leased
out nine shops adjacent with the office to nine different tenants at the
monthly rent of Rs 1,000 each with effect from October 1996. The
department was required to recover the rent at the rates enhanced by 10%
per annum with effect from October 1999 but it continued to receive the
same at the original rate. This resulted in non-recovery of rent of Rs
530,253.
Audit pointed out the recovery in December 2007. The department did not
reply.
The matter was discussed in the Departmental Accounts Committee
meeting held on 28th May, 2009 wherein the Committee directed the
department to effect the pointed out recovery within 30 days. No
compliance of the Committee directive was reported till finalization of the
report.
(DP.16)
Para 4.7 Overpayment due to allowing unnecessary carriage on
tuff tiles - Rs 152,499
As per input rates of material for Market Rates System for the 3rd quarter,
2006, the rate of tuff tiles 60 mm thick of Izhar Ltd, for District Jhang,
was Rs 32 per sft.
The Assistant Director, Local Government & Community Development,
Jhang sanctioned technical estimate and made payment for tuff tiles @
161
Rs 52 per sft considering it as non-schedule items for the execution of two
works. The rate was enhanced due to inclusion of undue carriage from
Lahore to Jhang whereas the Finance Department had notified the input
rates of Rs 32 per sft tuff tiles for District Jhang. The input rates of the
item for district Jhang issued by the Finance Department revealed that the
same was available in the City. The payment of unnecessary carriage
resulted in overpayment of Rs 152,499.
Audit pointed out the overpayment in October 2007. The department
replied that dealer of Izhar Ltd. available at Jhang, only booked order for
supply and carriage charges were to be borne by the customer. The reply
was not acceptable as the Finance Department had notified the input rate
of the item categorically for District Jhang.
The matter was discussed in the Departmental Accounts Committee
meeting held on 28th May, 2009 wherein the department admitted the
recovery. The Committee directed the department to effect recovery and
get it verified by Audit prior to 30th June, 2009. No compliance of the
Committee directive was reported till finalization of the report.
(DP.2)
162
163
PLANNING & DEVELOPMENT DEPARTMENT
Planning & development department is the administrative department of
Cholistan Development Authority, Barani Area Development Authority, Dera
Ghazi Khan Rural Development Project, and Bahawalpur Rural Development
Programme. The Cholistan Development Authority was established under the
Development of Cities Act, 1976. The functions of the Authority are as under:
i) To provide means of irrigation & irrigational channels.
ii) To provide drinking water for human being & cattle.
iii) To carry out extensive ground water survey to locate sweet water
points & sinking of wells & tubewells for drinking & irrigation
purpose.
iv) To provide the facilities of road, parks, live stock farms, dairy farms,
sheep farms, poultry farms etc.
v) Arrangements for the marketing of the produce and goods of
Cholistan.
vi) To promote tourism & establishment of recreational parks, holiday
camps & villages.
Audit for the financial year 2006-07 was conducted on test check basis and a
summary of audit results is tabulated as under:
(Amount Rs in million) Sr.
No
Particulars Amount Total amount /
%age
1. Budget allocation for the financial year 2006-07
Foreign Aided Projects:
I- DGK RDP
II- BRDP
III. Cholistan Development Authority
454.29
130.32
1123.74
1708.35
2. Total Expenditure for the financial year 2006-07
Foreign Aided Projects:
I- DGK RDP
II- BRDP
III. Cholistan Development Authority
a- Capital Account
b- Revenue Account
c- Other Fund
454.12
96.50
548.38
358.20
271.50
1728.68
3. Audited Expenditure
Foreign Aided Projects:
I- DGK RDP
II- BRDP
III. Cholistan Development Authority
454.12
96.50
62.60
613.22
35.4%
4. Amount of the observations in this report
i) Excess Payment
iii) Loss / Doubtful / Theft
iv) Overpayment / Non-recovery
0.85
12.8
11.00
24.65
*. High money value sample selection criteria.
164
165
PLANNING AND DEVELOPMENT DEPARTMENT
Para 5.1 Non-recovery due to non-adjustment of bitumen -
Rs 9.9 million
Clause 30 of the contract agreement provides that the value of material /
store supplied to the contractor shall be deducted from the sums due or to
become due to contractor.
Cholistan Development Authority did not recover the cost for 398.5419
metric ton bitumen issued to the different contractors. This resulted in
non-recovery of Authority’s dues amounting to Rs 9.9 million.
Audit pointed out the non-recovery in September 2006. The Authority
replied that recovery was in process.
The matter was discussed in the Departmental Accounts Committee
meeting held on 19th March, 2009. Audit informed the Committee that the
bulk storage of bitumen by the Authority was irregular as it was the
responsibility of the contractor to arrange bitumen from National Oil
Refinery Karachi as per agreement and government instructions. After
listening view points of both departments, the Committee pended the para
to get verified the consumption of bitumen with reference to indents and
stock register by Audit within 15 days. No compliance of the Committee
directives was made till finalization of the report.
(DP.4)
Para 5.2 Wasteful expenditure due to non-execution of left over
works - Rs 6.6 million
As per acceptance letters issued by Project Management, contractors were
bound to complete the works within stipulated period and award of works
were subject to observance of financial regulations and terms & conditions
of contract.
The Project Director, Bahawalpur Rural Development Project,
Bahawalpur awarded four road works at an agreed cost of Rs 50.4 million
to various contractors in December 2002, October 2003, July 2004 and
September 2004 with stipulated period of completion as 165 days, 500
days, 180 days and 150 days respectively. The contractors just executed
the works costing of Rs 31.2 million and did not execute balance works
costing Rs 19.2 million. The project management, subsequently
terminated the contracts due to failure of the contractors but had not got
166
executed the balance works despite lapse of considerable period.
Termination of contract due to default of the contractors and
non-execution of balance work within reasonable time due to laxity of
management resulted in wasteful expenditure of Rs 31.2 million.
Audit pointed out the wasteful expenditure in September 2007. The
department replied that the Project authorities were trying to get the works
complete. The reply was not acceptable because it was the responsibility
of management to get the works completed within stipulated period and no
concrete steps were taken for timely execution of left-over works.
The matter was discussed in the Departmental Accounts Committee
meeting held on 11th February, 2008. Department explained before the
Committee that the works had been re-tendered and would be restarted
after release of funds from Finance Department. Audit demanded the
decisions taken against defaulting contractors, which were not shown to
Audit. The Committee directed the department to produce PC-I and policy
decision for re-tendering. No further progress was reported so far. The
matter was again discussed the Departmental Accounts Committee
meeting held on 19th March, 2009. The department explained that out of 4
works, 3 works were taken up duplicate by Audit. The para was reduced to
Rs 6.6 million by the Committee by deleting those three works from draft
para. No further progress was reported till finalization of the report.
(DP.4-FAP)
Para 5.3 Loss to government due to non-execution of left over
works at risk and cost of original defaulting contractors
- Rs 6.2 million
As per clause 60 and 61 of contract agreement, in case the contractor
failed to fulfill his obligations as per contract, either the contract would be
rescinded and his security deposit be forfeited to government or balance
work would be executed at the risk and cost of the defaulting contractor.
The recovery of risk and cost charges would be made from the defaulting
contractor. Clause 60 and 61 are interdependent and would be operated
simultaneously as per Law & Parliamentary Affairs Department letter
No.OP-15(119)/2001/400/392/C dated 25th October, 2001.
The Project Director, Bahawalpur Rural Development Project,
Bahawalpur rescinded the contracts of four works due to default/failure of
the contractors to complete the works within stipulated period. The left
over works costing Rs 13.6 million were re-estimated for Rs 19.8 million.
167
No penal action including forfeiture of security deposits or recovery of
risk and cost from the original defaulting contractor was taken by the
management. Non-adherence to the agreement clauses resulted in loss of
Rs 6.2 million.
Audit pointed out the loss in September 2007. The department replied that
previous estimates were prepared on the basis of market rates and now
left-over works would be completed on rates given on website of Finance
Department and the cost over-run was un-avoidable due to changes in
rates. The reply was not acceptable as timely execution of works was the
responsibility of contractor and due vigilance was not exercised by the
management to watch the interest of government by applying risk and cost
clauses of the contract / agreement.
The matter was discussed in the Departmental Accounts Committee
meeting held on 11th February, 2008. The department explained that the
works had been re-tendered and would be restarted after release of funds
form Finance Department. Audit demanded the decision taken against
contractor which was not produced. The Committee directed the
department to produce PC-I and policy decision for re-tendering. No
further progress was reported so far. The matter was again discussed the
Departmental Accounts Committee meeting held on 19th March, 2009.
The Audit stated that the recovery was required to be effected for
differential of cost in completion of works. The Project Management
intimated that efforts for recovery from performance security of the
contractor were being made. The Committee directed to expedite the
process of recovery and its verification by Audit. No compliance of the
Committee directives was reported till finalization of the report.
(DP.1-FAP)
Para 5.4 Excess payment due to allowing inadmissible escalation
- Rs 677,886
As per clause 55(8) of standard contract agreement for execution of works,
no escalation shall be allowed to the contractor in respect of the period
extended for the completion of the work due to his own fault.
The Project Director, Bahawalpur Rural Development Project,
Bahawalpur allowed escalation to the contractor due to price variations in
various items even after the expiry of extended period for the completion
of work. The contractor was granted extension in time up to 30th June,
2005 but he could not complete the work even within the extended period.
168
Total escalation allowed to the contractor was Rs 745,484 whereas
admissible escalation up to extended period was Rs 67,598. Escalation
beyond extended period was not admissible as the contractor could not
complete the work due to his own fault. Non-adherence to contractual
obligations resulted in excess payment of Rs 677,886 to the contractor.
Audit pointed out the excess payment in December 2006. The department
replied that time extension was granted after justification of the argument
of the contractor with the condition that rate of escalation would freeze on
7th October, 2005. As per clause 70(8) Vol-II of tender document, the
escalation would be paid up to approved date of extension but the project
management froze the escalation approximately 6 months before such
date, in a shape of penalty to the contractor. The reply was not acceptable
as freezing the escalation for only a part of the revised extended period
was undue favour to the contractor and no record/ justification for further
extension was shown. Moreover, the penalty in the shape of freezing the
date also indicated the fault of contractor for completion of work in the
extended period for which the escalation was not permissible.
The matter was discussed in the Departmental Accounts Committee
meeting held on 9th April, 2007 and again on 11th February, 2008 wherein
it was decided to defer the para for verification of record by Audit. No
further progress was reported to Audit till date. The matter was again
discussed the Departmental Accounts Committee meeting held on 19th
March, 2009. After listening view points of the department and Audit, the
Committee directed the department to refer the para to Finance
Department for advice. No compliance of the Committee directives was
reported till finalization of the report.
(DP.2-FAP)
Para 5.5 Overpayment due to change of rates in final bill -
Rs 622,862
In terms of serial No. 2 & 3 of acceptance letter bearing No. CDA-2003/
Dev/ 202 dated 28th October, 2003, the rate of items “sub-base course”
and “base course” were approved as Rs 2,681 & Rs 2,589 %cft
respectively.
Cholistan Development Authority made payment for the items “sub-base
course” and “base course” @ Rs 2,681 & Rs 2,589 per %cft respectively,
in accordance with the acceptance letter, up to 8th running bill. Whereas in
9th and final bill these items were paid @ Rs 2,861 and Rs 3068 per% cft
against the rates agreed upon This resulted in overpayment of Rs 622,862.
169
Audit pointed out the overpayment in September 2006. The authority
replied that insertion of reduced rates in the acceptance letter was typing
mistake. The reply was not tenable. The contractor had accepted the said
rates up to 8th running bill and for 9th and final bill and submitted all his
claims regarding the typing mistake.
The matter was discussed in the Departmental Accounts Committee
meeting held on 19th March, 2009. After listening view points of the
department and Audit, the Committee kept the para pending for detailed
probe within 30 days. No compliance of the Committee directive was
reported till finalization of the report.
(DP.92)
Para 5.6 Non-recovery due to non-adjustment of de- escalated
rate of steel and cement - Rs 480,622
As per clause 55 of the contract agreement for execution of work, where
any variation (increase or decrease) to the extent of 5% or more in the
price of any of the item mentioned in sub-clause (2) takes place after the
acceptance of tender and before completion of contract, the amount
payable under the contract shall be adjustable to the extent of actual
variation in the cost of the item concerned.
The Project Director, DG Khan Rural Development Project, DG Khan did
not adjust the downward variation in the price of steel and made payment
to the contractor @ Rs 40,200 per ton (base price of steel at the time of
award of contract) instead of applicable reduced rate of Rs 34,200,
Rs 34,700 and Rs 38,200 (during the execution of works) as required
under contractual provision. Due to non-adherence to agreement clause,
the contractor was overpaid for Rs 480,622.
Audit pointed out the non-recovery in December 2006. The department
replied that two types of steel i.e Grade 40 and grade 60 were used. A
recovery of Rs 110,527 was made against Grade 40 steel and no such
recovery was required on Grade 60 steel being a non-scheduled item. The
reply was not satisfactory as price variation clause was equally applicable
on scheduled and non-scheduled items and no evidence in support of
stated recovery was produced to Audit.
The matter was discussed in the Departmental Accounts Committee
meeting held on 2nd April, 2008. The Committee directed the management
to reconcile the effected recoveries and effect the due recovery from
170
non-scheduled item. The matter was again discussed in DAC meeting held
on 7th April, 2009 wherein the Project Director in the context of last DAC
meeting informed that no price variation has been paid on non-scheduled
items. The rates quoted by the contractor for 60 Grade steel is also non-
scheduled item as approved by the Chief Engineer, Highway Punjab in the
approved estimates. Being non-scheduled item, no price variation is to be
paid on either side. The due recovery as per schedule item has already
been made and accordingly audit para was reduced to Rs 370,095
(480,622 – 110,527 = 370,095). The audit authority on the other hand
viewed that price variation on non-schedule (based on schedule) shall also
be paid accordingly. The recovery may be effected from the contractor
against non-scheduled items. After detail discussion it was decided to refer
the case to the Finance Department, to get opinion whether price variation
clause was applicable on the non-scheduled items quoted by the contractor
in the bid schedule or otherwise. Para was kept pending by the Committee
and will be decided in the light of the opinion from the Finance
Department. No further progress was reported to audit till finalization of
the report.
(DP.7-FAP)
Para 5.7 Excess payment due to irregular measurement -
Rs 173,063
As per clarification of Communication & Works Department Government
of the Punjab, vide No.PAC(C&W) 17-6/90 dated 28th October, 1997, the
deficiency in the sub-base course should be removed before laying the
base course. Similarly, deficiency in thickness of base course should be
improved before applying Triple Surface Treatment.
The Executive Engineer, Cholistan Development Authority, Bahawalpur
measured and paid an item of work “Earth Work Making Embankment
etc” to the extent of 845,295 cft, from RD-00 to 16,400, in the running
bill. The quantity of the same item in same reach increasing the depth of
the embankment was measured for 981,402 cft when the road was black
topped. This resulted in excess payment of Rs 173,065.
Audit pointed out the excess payment in November 2007. The Authority
replied that the position shall be watched before finalization of work. The
reply was not acceptable as measurement and payment for earthwork
embankment after completion of the road is against the clarification ibid.
171
The matter was discussed in the Departmental Accounts Committee
meeting held on 19th March, 2009 wherein the department admitted the
recovery. The Committee directed to effect the admitted recovery within
30 days and got it verified by the Audit. No compliance of the Committee
directive was reported till finalization of the report.
(DP.93)
172
173
ENVIRONMENT PROTECTION DEPARTMENT
Kasur Tannery Pollution Control Project is being administered by the
Environment Department, Government of the Punjab and its Secretary is
the Principal Accounting Officer of the project. The project is a foreign
aided and in its operation and maintenance phase. Its office is located at
kasur. The main objective of the project is to treat the tanneries released
waste water and its recycling for beneficial purposes.
Audit for the financial year 2006-07 was conducted on test check basis
and a summary of audit results is tabulated as under:
(Amount Rs in million)
Sr.No Particulars Amount Total amount /
%age
1. Budget allocation for the financial year
2006-07
25.40
25.40
2. Total Expenditure for the financial
year 2006-07
18.90
18.90
3. Audited Expenditure 18.90 100% *
4. Amount of the observations in this
report
i) Overpayment / Non-
recovery
8.70
8.70
*. High money value sample selection criteria.
174
175
6. ENVIRONMENT PROTECTION DEPARTMENT
Para 6.1 Less-collection of share for operation and maintenance
of the Project from sponsors - Rs 8.7 million
As per provision of PC-I of the project, Kasur Tannery Waste
Management Agency is responsible for operation and maintenance of the
Kasur Tannery Pollution Control Project for the first five years to be
sponsored by the under mentioned sharing agencies.
1. Government of the Punjab 20%
2. District Government Kasur 15%
3. Tehsil Municipal Administration Kasur 15%
4. Tanneries Association 50%
The project management, Kasur Tanneries Pollution Control Project,
Kasur (KTWMA) collected a sum of Rs 6.58 million from Tehsil
Municipal Administration Kasur and Tanners Association Kasur against
due share of Rs 15.28 million on account of operation and maintenance of
the project during the year 2005-06. This resulted in less-collection of
Rs 8.7 million from the users /sponsors.
Audit pointed out the less-collection to the project management in
September 2006. The project management replied that Tehsil
Administration and Tanners Association were reluctant to provide their
share properly and the matter would be discussed at higher level.
The reply was not acceptable as concerted efforts were required to be
made at appropriate level for early collection of due share to save the
government to bear the extra cost of operation and maintenance. The
matter was reported to the Principal Accounting Officer in October 2006
but no reply / further progress towards collection of share from the users
was received till finalization of the report.
(DP.14)
176
177
COMMENTS ON INTERNAL CONTROLS
Internal controls are the set of rules, regulations, technical memos, policy
instructions and standard operating procedures which have been
prescribed by the departments/organizations for efficient operation &
economical development activities in the domain of works affairs.
The management of Communication & Works Department, Housing,
Urban Development & Public Health Engineering Department, Irrigation
& Power Department, Local Government & Community Development
Department, Planning & Development Department and Environment
Protection Department, Government of the Punjab could not ensure the
enforcement of adequate Internal Controls within their organizational
set up. The consequential effects of financial indiscipline for Rs 13,532.04
million due to loose internal control systems are depicted in the audit
report in hand.
The departments /organizations failed to place adequately the Internal
Audit Wing in their management set up and enforce upto the mark
working of internal controls in their working environment. Hence, audit
emphasizes to enhance the effective role of internal audit system in the
managerial set up of these departments/organizations and independent
internal audit wing should be established directly reporting to the Principal
Accounting Officers through Audit Committees.
Significant issues included in this report are as under: -
1 The project implementation involves documentation and
estimation of the projects. Provisions of cost estimate, cost sharing
formula, installment schedule, rates, special conditions &
incentives and remedial measures are the ingredients of project
planning and management. There were twenty (20) instances of
breach of inbuilt internal controls having cost effect of Rs 1,120.81
million in project management which have been highlighted in the
report for the consideration of stakeholders.
2 For effective financial management, certain internal controls like
prompt receipt & deposit into the treasuries, revision of
premium/interest, risk safeguards, timely utilization of the funds
and rational human resource management are to strive for
achieving the organizational objectives economically and
efficiently. Thirty-four (34) cases of loose financial management
have been depicted in the report costing Rs 640.62 million.
178
3 The prior approval of the authority/forum mandated to accord
administrative approval for allowing subsequent changes in the
scope and design of the works is a significant laid down
internal control for the executing agency. Eleven (11) cases of
abrupt changes in design/scope of works leading to audit
observations of Rs 6,705.79 million have been highlighted in
the report.
4 The Bill of Quantity is the basis for fair tendering and acceptance of
contracts. The violation of Bill of Quantities has financial repercussion
upon the cost of works and tentamount undue favour to the contractors.
Six (6) cases of Rs 74.09 million were reported wherein Bill of Quantities
were violated.
5 Proper maintenance of record and adherence to laid down procedures
are the control measures to pre-empt chances of theft, pilferage and loss of
government property. Twenty-five (25) cases of Rs 4,291.89 million have
been mentioned wherein government interest was not taken care of
because of laxity in implementation of management controls.
6 Rules, regulations and procedures are means for timely realization
of government dues and incurring expenditure. One hundred and
thirty eight (138) issues amounting Rs 698.84 million of
overpayment and non-recovery have been included in the report
where regularity, assessment and control measures were not
followed.
179
LIST OF ABBREVIATIONS USED
A&C Addendum & Corrigendum
AA Administrative Approval
AP Advance Para
B&R Buildings & Roads
BOQ Bill of Quantities
BOT Build Operate & Transfer
CE Chief Engineer
Cft Cubic Feet
Cum Cubic Meter
DAC Departmental Accounts Committee
DFR Departmental Financial Rules
DNIT Draft Notice Inviting Tender
DOR District Officer Revenue
DP Draft Para
DPC Damp Proof Course
ECNEC Executive Committee on National Economic Council
FD Finance Department
FDA Faisalabad Development Authority
GDA Gujranwala Development Authority
GI Galvanized Iron
I&P Irrigation & Power
JMF Job Mix Formula
LBDC Lower Bari Doab Canal
LDA Lahore Development Authority
LJC Lower Jhelum Canal
MB Measurement Book
MDA Multan Development Authority
180
MFDAC Memorandum for Departmental Accounts Committee
MRS Market Rate System
NOC No Objection Certificate
P/L Providing and Laying
PAC Public Accounts Committee
PCC Plain Cement Concrete
PDP Proposed Draft Para
PDWP Provincial Development Working Party
PFR Punjab Financial Rules
PHA Parks & Horticulture Authority
PHATA Punjab Housing & Town Planning Agency
POL Petrol Oil & Lubricants
PTCL Pakistan Telecommunication Company Limited
PW Public Works
RBOC Road Built Operate Company
RCC Reinforced Cement Concrete
RD Reduced Distance
RDA Rawalpindi Development Authority
Rft Running Feet
SE Superintending Engineer
Sft Square Feet
SWG Standard Weight Gauge
TSE Technical Sanctioned Estimates
TST Triple Surface Treatment
UJC Upper Jhelum Canal
WASA Water & Sanitation Agency
XEN Executive Engineer
181
Appendix
MEMORANDUM FOR DEPARTMENTAL ACCOUNTS COMMITTEE
1. COMMUNICATION & WORKS DEPARTMENT
Sr.No PDP No Subject Amount Rs
in million
1. 349 Irregular award of work 4,000.4
2. 354 Non-examination of project a/c 4,000.3
3. 357 Non obtaining approval of debt equity
ration from competent authority 4,000.3
4. 369 Non-Mutation the Title of land 2675.0
5. 93 Unjustified acceptance of tender 542.6
6. 358 Irregular award of work 347.8
7. 333 Non-deduction of compensation 294.4
8. 256 Irregular calling of tender 115.7
9. 249 Unjustified Payment 107.7
10. 351 Excess provision agreement 102.0
11. 383 Irregular award of work &
Overpayment 100.2
12. 75 Loss to Govt. 90.6
13. 350 Non-obtaining operation &
maintenance 70.0
14. 41 Irregular award of work 53.5
15. 290 Non Recovery 51.3
16. 364 Unjustified payment 48.1
17. 48 Below specification of work 36.7
18. 187 Irregular Payment 34.1
19. 56 Unjustified Payment 28.4
20. 368 Short Recovery 28.1
21. 122 Loss to Govt. 23.4
22. 365 Unjustified expenditure 21.1
23. 18 Excess Payment 17.8
24. 363 Unjustified payment 17.4
25. 17 Excess Payment on a/c of non-reuse of
dis. material 17.0
26. 157 Loss to Govt. 15.0
27. 62 Non Recovery 12.2
28. 288 Non Recovery 12.2
29. 263 Excess Payment 11.7
30. 110 Non Recovery 11.1
31. 273 Unjustified Payment 9.5
32. 139 Un due financial aid to contractor 8.8
33. 178 Unjustified payment 8.6
182
34. 21 Irregular Payment 8.1
35. 353 Short Recovery 8.1
36. 118 Non recovery 8.0
37. 85 Irregular expenditure 7.6
38. 379 Irregular award of contract 7.4
39. 73 Irregular acceptance of tender 6.9
40. 102 Non Recovery 6.2
41. 167 Unjustified payment 6.2
42. 50 Irregular Payment 5.8
43. 92 Unjustified payment 5.6
44. 200 Loss to Govt. 5.5
45. 60 Non Recovery 5.2
46. 265 Overpayment 4.6
47. 78 Non Recovery 4.5
48. 271 Excess Payment 4.5
49. 287 Non Recovery 4.5
50. 114 Non recovery 4.4
51. 269 Overpayment 4.4
52. 387 Non Recovery 4.4
53. 164 Excess Payment 4.2
54. 61 Non Recovery 3.9
55. 120 Un due financial aid to contractor 3.8
56. 305 Overpayment 3.7
57. 169 Unjustified payment 3.5
58. 138 Un due financial aid to contractor 3.4
59. 134 Un due financial aid to contractor 3.3
60. 29 Un-due financial aid 3.2
61. 142 Overpayment 3.0
62. 58 Unjustified Payment 2.9
63. 237 Excess Payment 2.6
64. 202 Non recovery 2.5
65. 248 Non Recovery 2.5
66. 148 Overpayment 2.4
67. 9 Excess allotment of work 2.3
68. 64 Irregular Payment 2.3
69. 96 Excess Payment 2.3
70. 159 Non Recovery 2.3
71. 55 Unjustified Payment 2.2
72. 317 Irregular expenditure 2.2
73. 51 Non Recovery 2.0
74. 229 Overpayment 2.0
75. 252 Excess Payment 2.0
76. 83 Non-Recovery 1.9
77. 218 Excess Payment 1.9
183
78. 330 Un authorized expenditure 1.9
79. 128 Unjustified payment 1.8
80. 355 Non Recovery 1.8
81. 146 Non Recovery 1.7
82. 171 Overpayment 1.7
83. 59 Non Recovery 1.6
84. 292 Unjustified Payment 1.6
85. 326 Unjustified Payment 1.6
86. 52 Overpayment 1.5
87. 151 Non forfeiture of earnest money 1.5
88. 160 Overpayment 1.5
89. 228 Non Recovery 1.5
90. 266 Non Recovery 1.5
91. 38 Non-Recovery 1.4
92. 1 Excess Payment 1.3
93. 33 Loss 1.3
94. 323 Unjustified Payment 1.3
95. 331 Unjustified Payment 1.2
96. 81 Loss 1.1
97. 119 Un due financial aid to contractor 1.1
98. 193 Non Recovery 1.0
99. 195 Non Recovery 1.0
100. 236 Undue Payment 1.0
101. 272 Excess Payment 1.0
102. 324 Non Recovery 1.0
103. 183 Non Recovery 0.9
104. 316 Overpayment 0.9
105. 374 Overpayment 0.9
106. 74 Overpayment 0.8
107. 184 Non Recovery 0.8
108. 339 Overpayment 0.8
109. 4 Overpayment 0.7
110. 66 Non Recovery 0.7
111. 104 Overpayment due to double record
entries 0.7
112. 185 Non Recovery 0.7
113. 7 Excess Payment 0.6
114. 91 Excess Payment 0.6
115. 196 Overpayment 0.6
116. 261 Excess Payment 0.6
117. 274 Excess Payment 0.6
118. 362 Undue payment of interest 0.6
119. 16 Overpayment 0.5
120. 20 Unjustified Payment 0.5
184
121. 31 Overpayment 0.5
122. 68 Non Recovery 0.5
123. 89 Unjustified expenditure 0.5
124. 216 Overpayment 0.5
125. 226 Excess Payment 0.5
126. 284 Undue Payment 0.5
127. 322 Extra Expenditure 0.5
128. 377 Irregular Expenditure 0.5
129. 14 Non-Recovery 0.4
130. 23 Overpayment due to incorrect
application of base rate 0.4
131. 95 Excess Payment 0.4
132. 150 Overpayment 0.4
133. 188 Non Recovery 0.4
134. 192 Non Recovery 0.4
135. 199 Loss to Govt. 0.4
136. 280 Excess Payment due to allowing excess
quantity 0.4
137. 306 Overpayment 0.4
138. 318 Extra Expenditure 0.4
139. 380 Overpayment 0.4
140. 10 Excess Payment 0.3
141. 32 Non-Recovery 0.3
142. 34 Overpayment 0.3
143. 63 Non Recovery 0.3
144. 98 Over payment 0.3
145. 197 Loss to Govt. 0.3
146. 214 Un-authorized exp. 0.3
147. 222 Excess Payment 0.3
148. 235 Overpayment 0.3
149. 238 Overpayment 0.3
150. 325 Excess Payment 0.3
151. 329 Unjustified Payment 0.3
152. 384 Non Recovery 0.3
153. 2 Overpayment 0.2
154. 15 Payment with out record entry in MB 0.2
155. 35 Overpayment 0.2
156. 36 Short Recovery 0.2
157. 42 Irregular division of contingencies 0.2
158. 54 Non forfeiture of security deposit 0.2
159. 65 Non Recovery 0.2
160. 67 Non Recovery 0.2
161. 149 Non Recovery 0.2
162. 154 Overpayment 0.2
185
163. 158 Overpayment 0.2
164. 162 Overpayment 0.2
165. 170 Overpayment 0.2
166. 179 Overpayment 0.2
167. 201 Overpayment 0.2
168. 211 Non Recovery 0.2
169. 227 Non Recovery 0.2
170. 245 Excess Payment 0.2
171. 254 Excess Payment 0.2
172. 258 Overpayment 0.2
173. 262 Excess Payment 0.2
174. 275 Overpayment 0.2
175. 276 Overpayment 0.2
176. 277 Overpayment 0.2
177. 302 Excess Payment 0.2
178. 304 Non Recovery 0.2
179. 312 Non Recovery 0.2
180. 327 Excess Payment 0.2
181. 342 Non Recovery 0.2
182. 3 Excess Payment 0.1
183. 6 Overpayment 0.1
184. 11 Excess Payment 0.1
185. 44 Overpayment 0.1
186. 53 Excess Payment 0.1
187. 70 Excess Payment 0.1
188. 100 Overpayment due to non deduction of 0.1
189. 127 Overpayment 0.1
190. 152 Overpayment 0.1
191. 163 Un justified payment 0.1
192. 177 Overpayment 0.1
193. 181 Non Recovery 0.1
194. 203 Overpayment 0.1
195. 206 Loss to Govt. 0.1
196. 220 Excess Payment 0.1
197. 221 Excess Payment 0.1
198. 223 Excess Payment 0.1
199. 241 Overpayment 0.1
200. 278 Overpayment 0.1
201. 279 Overpayment 0.1
202. 281 Overpayment 0.1
203. 286 Excess Payment 0.1
204. 298 Non Recovery 0.1
205. 307 Overpayment 0.1
206. 308 Overpayment 0.1
186
207. 309 Overpayment 0.1
208. 319 Non Recovery due to imbalance rate 0.1
209. 320 Overpayment 0.1
210. 347 Overpayment 0.1
211. 372 Overpayment 0.1
212. 373 Short Recovery 0.1
*. 92 PDPs have been resolved / settled after compliance / discussion.
187
MEMORANDUM FOR DEPARTMENTAL ACCOUNTS COMMITTEE
2. HOUSING AND URBAN DEVELOPMENT / PUBLIC
HEALTH ENGINEERING DEPARTMENT
Sr.No DP No. Subject Amount Rs
in million
1 1 Excess payment 0.265
2 2 Loss 1.54
3 6 Short recovery 0.195
4 12 Irregular grant 7.4
5 13 Un-authorized payment 1.7
6 14 Over payment 0.119
7 15 Un-authorized payment 2.7
8 17 Less recovery 0.103
9 19 Irregular grant 13.8
10 20 Non recovery 5.00
11 21 Loss due to theft 0.547
12 24 Less deposit 3.6
13 25 Less recovery 0.314
14 26 Doubtful adjustment 11.795
15 28 Over payment 0.172
16 31 Execution of below 2.732
17 33 Non recovery 0.614
18 34 Non recovery 0.156
19 39 Over payment 0.181
20 40 Extra expenditure 0.207
21 41 Non deduction 0.294
22 43 Un-authorized payment 0.463
23 44 Non imposition 6.7
24 47 Loss 0.076
25 50 Over payment 0.113
26 51 Over payment 1.333
27 52 Loss 0.115
28 53 Over payment 0.073
29 54 Over payment 0.343
30 56 Over payment 0.080
31 57 Over payment 0.599
32 60 Loss 0.088
33 61 Non recovery 1.564
34 64 Over payment 0.222
35 65 Irregular award of work 56.00
36 67 Irregular grant 2.662
37 68 Irregular grant 11.455
38 71 Irregular payment 6.445
188
39 72 Irregular grant 9.53
40 77 Over payment 0.189
41 78 Over payment 0.104
42 82 Irregular expenditure 1.5
43 86 Non recovery 0.312
44 87 Irregular purchase 4.449
45 91 Un-justified payment 2.859
46 94 Non recovery 1.373
47 95 Non recovery 0.164
48 96 Non-forfeiture 0.216
49 97 Undue financial aid 20.170
50 98 Non recovery 0.192
51 99 Over payment 0.572
52 101 Loss 0.432
53 102 Non recovery 1.110
54 105 Loss 1.798
55 107 Excess payment 0.888
56 108 Non recovery 1.267
57 109 Non recovery 0.248
58 110 Un authorized 8.782
59 111 Over payment 0.582
60 112 Over payment 0.710
61 114 Over payment 0.167
62 115 Over payment 0.240
63 120 Non recovery 0.463
*. 13 Proposed Draft Paras (PDPs) have been resolved / settled after
compliance / discussion.
189
MEMORANDUM FOR DEPARTMENTAL ACCOUNTS COMMITTEE
3. IRRIGATION & POWER DEPARTMENT
S. No. DP No. Subject Amount Rs in
million
1. 1 Doubtful payment 2.5
2. 3 Unauthorized payment 0.872
3. 4 Over payment 0.232
4. 5 Over payment 4.6
5. 8 Over payment 0.315
6. 9 Non recovery / adjustment 0.686
7. 11 Irregular expenditure 0.265
8. 14 Non recovery 2.7
9. 16 Over payment 0.145
10. 18 Non recovery 0.760
11. 19 Over payment 0.419
12. 20 Over payment 0.152
13. 23 Over payment 2.170
14. 24 Over payment 1.882
15. 26 Unadjusted expenditure 6.748
16. 29 Less recovery 0.853
17. 30 Unjustified payment 0.221
18. 31 Over payment 0.155
19. 33 Over payment 0.264
20. 34 Irregular expenditure 0.850
21. 37 Over payment 0.108
22. 40 Non recovery 0.127
23. 41 Non crediting 0.697
24. 42 Over payment 0.565
25. 44 Excess payment 1.4
26. 46 Irregular award of work 30.1
27. 48 Unjustified expenditure 0.549
28. 49 Irregular expenditure 0.444
29. 50 Over payment 3.6
30. 51 Over payment 2.3
31. 52 Irregular expenditure 0.991
32. 54 Non crediting of contractor 3.793
33. 56 Unauthentic payment 0.113
34. 60 Over payment 0.398
35. 68 Over payment 1.1
36. 70 Over payment 2.071
37. 73 Non recovery 0.218
38. 74 Non clearance 3.2
39. 75 Undue benefit 3.372
190
40. 79 Unjustified payment 1.007
41. 80 Extra expenditure 0.388
42. 81 Extra expenditure 1.262
43. 85 Over payment 0.296
44. 86 Over payment 0.114
45. 87 Unjustified payment 1.747
46. 88 Non clearance of suspense 0.880
47. 89 Unauthentic payment 99.676
48. 90 Blockage of Govt. money 2.633
49. 93 Non adjustment 0.509
50. 94 Over payment 0.724
51. 97 Blockage of Govt. money 12.5
52. 98 Over payment 0.207
53. 99 Unjustified retention 5.786
54. 101 Over payment 0.210
55. 102 Unauthentic payment 18.751
56. 103 Unjustified retention 61.408
57. 105 Over payment 0.383
58. 107 Unjustified payment 0.973
59. 113 Unauthentic payment 0.403
60. 115 Undue financial benefit 2.128
61. 116 Over payment 1.251
62. 119 Over payment 0.318
63. 124 Loss 2.939
64. 127 Non recovery 0.951
65. 130 Irregular expenditure 3.090
66. 131 Unauthorized 1.227
67. 132 Non adjustment 0.742
68. 133 Irregular purchase 0.772
69. 138 Excess payment 0.325
70. 140 Non recovery 1.476
71. 141 Non clearance 0.367
72. 144 Over payment 0.105
73. 147 Over payment 0.331
74. 148 Loss to Govt. 0.565
75. 150 Irregular payment 0.939
76. 151 Irregular payment 1.262
77. 152 Irregular payment 0.120
78. 154 Irregular adjustment 0.420
79. 155 Irregular adjustment 0.143
80. 156 Excess payment 0.694
81. 157 Excess payment 0.522
82. 159 Non crediting 1.040
83. 161 Irregular payment 0.972
191
84. 162 Irregular expenditure 1.165
85. 163 Non recovery 0.381
86. 166 Non crediting 6.376
87. 168 Non accountal 0.145
88. 169 Over payment 0.176
89. 170 Over payment 0.465
90. 171 Over payment 0.433
91. 172 Over payment 0.750
92. 173 Over payment 0.224
93. 9 FAP Non recovery of liquidated
damages
4.806
94. 8 FAP Unjustified payment 4.992
*. 26 Proposed Draft Paras (PDPs) have been resolved / settled after
compliance / discussion.
192
193
MEMORANDUM FOR DEPARTMENTAL ACCOUNTS COMMITTEE
4. LOCAL GOVERNMENT & COMMUNITY DEVELOPMENT
DEPARTMENT
S. No. DP No. Subject Amount Rs in
million
1 3 Over payment 0.057
2 7 Excess payment 0.063
3 8 Non production of record 1.613
4 10 Unauthorized expenditure 0.901
5 12 Non production of record 2.596
6 14 Loss 0.168
7 18 Excess payment 0.098
8 22 Unauthentic payment 2.14
*. 6 Proposed Draft Paras (PDPs) have been resolved / settled after
compliance / discussion.
194
195
MEMORANDUM FOR DEPARTMENTAL ACCOUNTS COMMITTEE
5. PLANNING AND DEVELOPMENT DEPARTMENT
Sr.No DP.No Subject Amount Rs in
million
1 6 Un-authorized expenditure 14.1
2 5(FAP) Over payment 0.426
3 1 Non recovery 0.175
4 3(FAP) Short recovery 3.7
5 2(Cholistan) Excess payment 0.210
6 5(Cholistan) Over payment 0.119
*. 01 Proposed Draft Paras (PDPs) have been resolved / settled after
compliance / discussion.
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