Monday September 26, 2022

Rs1bn financial irregularities in GDA detected

August 13, 2022

PESHAWAR: The Auditor General of Pakistan has detected serious irregularities in the affairs of Galiyat Development Authority (GDA) causing a loss of more than Rs1 billion to the national exchequer.

The financial embezzlement included the illegal purchase of luxury and unnecessary vehicles for officers of GDA, overpayments and suspicious payments, misuse of funds, irregularities and illegal benefits to tenants.

The audit report 2020-21 exposed the negligence, weaknesses, and lack of financial control of the Galiyat Development Authority officers.The KP government had appointed Ehsan Mani, a close aide of former Prime Minister Imran Khan, as the chairman of the GDA authority in 2017. His first term ended in 2019 but he was reappointed in 2020 and still holds the office.

During the 2020-21 audit of Galiyat Development Authority, it was revealed that the agreement for the leasing of additional cottages Nathiagali, secretariat cottage Nathiagali, and Raees Khana was renewed before the expiry of the first agreement.

In the fresh agreement, the tenant was given undue favour as the rent will increase at 7 percent annually instead of 15 percent in contrast of the preceding agreement. The decrease in the rate of annual increase of rent is not justifiable on the ground that the tenant has made additional construction.

The audit is of the view that the financial benefit of the additional construction would already have been availed by the (Lessee) in the shape of additional revenues from the additional building for an extended period. A decrease in the rate of enhancement of rent is unjustifiable and against the lease TORs and the original agreement.

The reduction in the annual increase in rent for 20 years (15 years plus extendable to five more years) will result in a decrease in the total rental income of Rs491.830 million.

It was observed that the agreement for the leasing Retreat House and Vindia Cottage was renewed before the expiry of the first agreement. In the fresh agreement, the annual increase of the rent was 7 percent instead of 15 percent as mentioned in the original agreement. The decrease in the rate of annual increase was not justifiable because terms and conditions favorable to GDA were changed. The reduction (from 15% to 7%) of the annual increase in rent for 20 years resulted in a decrease in the total rental income of Rs319.811 million.

Similarly, it was noticed that the government had approved ADP No. 666/180051(2018-19) titled development approval of the ADP included Rs93.800 million for the purchase of new machinery for snow debris clearance and vehicles for surveillance concurred.

However, the funds incurred on the purchase of vehicles that were not covered in the ADP nor concurred by the finance department. Furthermore, the snow debris/clearance and surveillance-related machinery and vehicles were also not purchased according to the approval granted. The important machinery of the scheme was snow blowers but only one was purchased with delay i.e. in March 2021 while not a single small snow blower was purchased.It is important to mention that a single Cab pickup worth Rs4 million was approved; However, Vego worth Rs5.4 million was purchased.

The report said that buying expensive vehicles were illegal. Furthermore, the GDA has violated government policy by allotting illegal vehicles to its officers. A grade 20 officer was provided with a 2694 cc vehicle instead of a 1300 cc vehicle and a grade 18 officer with a 2359 cc vehicle instead of a 1000 cc vehicle. The audit report further revealed that the GDA bought four batteries for shuttle vehicles worth Rs11.4 million for which an open competitive bidding procedure was not adopted.

The comparative statement and other documents were not available. This makes the procurement process doubtful and unjustified in the absence of open competitive bidding.


    Outstanding report sir Arshad commented a month ago

    Outstanding report

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