Auditor general’s report declares appointment of SMBB Chair director illegal

Financial irregularities reportedly committed by KU management, officials managing chair’s affairs also identified

The Sindh Director General Audit in his special report declared illegal the appointment of Shaheed Mohtarma Benazir Bhutto (SMBB) Chair’s director, claiming the incumbent director did not have the required experience to hold the post.

The chair was established at the University of Karachi in 2008 to conduct researches and publish books concerning the political struggle and vision of slain prime minister Benazir Bhutto.

The report of the audit, conducted in January 2017, was issued from the CM House, on Wednesday. The auditor general (AG) in his report, conducted for the centre for the years 2009 to 2016, found the appointment of the incumbent director, Sahar Gul Bhatti, against the rules.

The report says that an advertisement for the post, dated January 18, 2015, was found but there was no list of number of applicants or shortlisted candidates, neither a notification was issued by the selection committee.

Sahar Gul Bhatti was shortlisted but did not have the 15-year teaching or research guidance experience mentioned in the advertisement. “It seems as an undue favour was given to the candidate, whereas Shuja Ahmed (competitor of Sahar Gul Bhatti) held a Masters and PhD degree from London and had over 15 years experience as required in the advertisement,” the report states.

The main objectives of the audit were to review the chair's performance against the intended objectives, to assess whether the chair was managing affairs with due regard to economy and efficiency and to review compliance of applicable rules, regulations and procedures. The audit was conducted in accordance with the INTOSAI Auditing Standards.

During a review of the accounts of the director, SMBB Chair and convention centre of the University of Karachi for the period 2015-16, it was observed that a construction supervision contract worth Rs7.936 million was awarded to M/s Shahzad Associates.

However, the contract was to cost Rs5.290 million as per phase I, but it was provided at an excess amount of Rs2.646 million without the approval of a competent forum. The AG has recommended conducting a detailed inquiry into the matter. 

The audit report further states that funds worth Rs6.150 million were drawn from the assignment’s account and deposited into the university’s account to avoid a lapse of funds, which is illegal.

An advance payment of Rs1.876 million was made on account of purchase of fixed assets to the suppliers, as a work order was issued on June 14, 2015 without a contract agreement being signed, the report maintains.

Moreover, procurement ID was not displayed on the Sindh Public Procurement Regulatory Authority’s (SPPRA) website due to non-compliance of procurement rules, no inspection reports of the items were found to have been audited by the committee.

It was further observed that the director was offered and paid a lump sum package of Rs160,000 per month, totalling Rs1.92 million on account of salary during the period of June 2015 to June 2016 without the approval of the varsity’s syndicate/senate. On the other hand, the previous director was obtaining a salary of Rs130,000 per month for which no approval was found.

The report stated the director was appointed on a fixed salary of Rs160,000 per month for a period of two years and claimed to have not been given any other facility, however, contrary to this, Rs0.150 million were drawn on account of personal vehicle and cellular phone use.

The report recommends the expenditure so incurred seems unauthorised and should be recovered.

The audit report found that endowment fund of Rs25.00 million was received by the directorate of SMBB Chair and that investments and expenditure would be made from the profit earned on the investments.

However, Rs3.03 million were utilised from the endowment fund as per the statement submitted to the auditing team which shows a balance of Rs21.968 million out of Rs25.00 million. The auditor recommended recovery of the funds so drawn.

The report further states that construction work worth Rs263 million was awarded to a contractor for the convention centre and other allied facilities meant to be established as part of the chair. The constructor, the report states was an ineligible contractor as per evaluation criteria of the prequalification document.

The report states that NITs of Rs60.759 million was awarded to the consulting contractor but the procurement IDs were withheld due to non-compliance of SPP Rules, 2010. The payment was released without fulfilling the requirements, thus, payment made without fulfilment of procedures of procurement was unauthorised.

Furthermore, an expenditure of Rs0.287 million was incurred on account of printing and publication through splitting up upon the same dates to avoid open tender; expenditure so incurred could not be authenticated.

The audit report says that in the scheme titled ‘Construction of Benazir Bhutto Chair and allied facilities’, an expenditure of Rs1.86 million was incurred under the head of contingency which included a professional video camera worth Rs60,000 and other items but no other tender was floated for this, hence, amounted to a breach of rules.

The auditor raised objection over around Rs25 million being drawn and paid to a contractor on account of mobilisation advance, prior to the awarding of the contract and obtaining 10 percent bank guarantee; the 10 percent guarantee was obtained before issuance of mobilisation advance cheque.  

The report also states that a vehicle was purchased for Rs788 million during a ban without the approval of the chief minister. Also, approval of external bill for advance payment was not found to have been audited.