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Business Recorder
3 days ago
- Business
- Business Recorder
Operations of HEC and attached varsities: AGP flags Rs5.29bn malfeasance
ISLAMABAD: The Auditor General of Pakistan has flagged financial irregularities amounting to Rs5.29 billion in the operations of the Higher Education Commission (HEC) and its affiliated universities during the fiscal year 2023–24. According to the Audit Report 2024–25, the largest observation pertains to the retention of Rs4.852 billion by the HEC in its own income account instead of depositing it into the federal government's Treasury Single Account (TSA). This action constitutes a violation of Section 37(1) of the Public Finance Management Act, 2019, which mandates that revenues collected by autonomous public sector bodies under statutory powers must be routed through the TSA. Despite a formal notification from the Finance Division in January 2023 explicitly placing HEC under the TSA regime, the Commission continued managing and utilising these funds independently. Urban regions: Literacy rate elevated to 74.1pc The collections during FY 2023–24 included Rs1.13 billion from attestation and equivalence fees, Rs2.43 billion from Pakistan Education and Research Network (PERN) recoveries, Rs343 million from the Digital Library project, Rs409 million from the Education Testing Council, and Rs163 million from interest income. Audit authorities rejected HEC's justification that these funds were needed to supplement grant-in-aid allocations, asserting that compliance with the law cannot be waived based on internal financial needs. The Departmental Accounts Committee (DAC) instructed HEC to obtain formal clarification from the Finance Division regarding TSA compliance and share all related correspondence with auditors. Beyond the TSA issue, the audit revealed unauthorised disbursements totaling Rs359.617 million made to public sector universities under various development projects, without approval from the Planning Commission or its Development Working Party (DDWP). For instance, COMSATS University Islamabad received an excess of Rs58.7 million under its 'Strengthening of Academics and Research Activities' project, while Hazara University was disbursed Rs29.5 million beyond its approved allocation. Other universities also benefited from unapproved excess disbursements under HEC's Public Sector Development Program (PSDP), all without revised PC-I approvals. The audit concluded that this practice violated established Planning Commission guidelines, undermined fiscal discipline, and raised serious concerns about fund utilization and oversight. The report also uncovered procurement-related violations, with HEC spending Rs35.076 million on IT equipment under the 'Smart Universities' project without adhering to open competitive bidding procedures mandated by Rule 12(2) of the Public Procurement Rules, 2004. Laptops, servers, and other equipment were acquired using direct contracting or limited tendering, despite crossing the financial threshold that requires national advertisement. Critical documentation, such as bid evaluations, comparative statements, and advertisement records, was missing, raising concerns about non-transparency and possible favoritism in procurement processes. In a separate finding, HEC failed to recover Rs7.569 million in liquidated damages from a contractor who delayed the construction of the National Academy of Higher Education (NAHE). Although the contract included a penalty clause of one per cent per day for delays, the Commission neither imposed penalties nor issued formal notices, resulting in a direct loss to the public exchequer due to weak contract enforcement and poor project monitoring. The auditors also pointed out unauthorised foreign travel expenditures amounting to Rs4.055 million, incurred without seeking mandatory approvals from the competent authority. These expenses, related to overseas visits by HEC officials, violated internal rules governing foreign deputations. Similarly, HEC was found to have spent Rs36.878 million on office renovations and refurbishments under the NAHE and 'Strengthening of HEC' projects without preparing or securing approval for a PC-I document, as required by development project regulations. Collectively, these audit findings reveal serious violations of financial, procurement, and legal protocols by HEC and its associated institutions, calling into question the governance and oversight mechanisms within Pakistan's higher education sector. Copyright Business Recorder, 2025
Business Recorder
05-08-2025
- Business
- Business Recorder
Rs3bn financial mismanagement identified in Aviation Ministry
ISLAMABAD: Financial mismanagement exceeding Rs 3 billion has been identified in the Ministry of Aviation and its attached organisations, including the Pakistan Civil Aviation Authority (PCAA) and Airport Security Force (ASF), according to the Audit Report 2024–25. The report points to irregular contract awards, unauthorised payments, poor recordkeeping, and weak internal controls across several operations. A major portion of the losses, Rs 2.3 billion, arose from the PCAA's failure to recover long-standing dues from airlines and other stakeholders. Despite repeated audit observations in prior years, the outstanding receivables remained unpaid, highlighting ineffective enforcement mechanisms and weak follow-up from the authority. Another Rs313.6 million was noted as an irregular expenditure on account of consultancy contracts awarded without following the prescribed Public Procurement Rules (PPRA). The audit found that the PCAA hired consultants for design and supervision tasks without competitive bidding or proper approval, raising concerns about transparency and value for money. Separately, PCAA spent Rs154.6 million on procurement of equipment and services without the required sanction from the competent authority. The report also flagged unapproved advance payments and missing documentation, calling into question the compliance culture within the organisation. The ASF was also found in violation of financial rules. An expenditure of Rs45.8 million was incurred on procurement of vehicles and uniform items without proper tendering procedures. Moreover, ASF did not maintain inventory records, making physical verification and accountability difficult. In another para, Rs125 million was paid as rent to a private landlord for an ASF camp without documentation to prove space utilisation or rental agreement terms. The auditors noted that the lease extension and increased payments lacked legal vetting. The audit also noted issues in asset management. Several properties and pieces of equipment purchased by the PCAA and the ASF were not recorded in fixed asset registers, increasing the risk of misuse or loss without traceability. Despite the repeated nature of such audit findings over the years, the concerned departments failed to provide adequate responses or rectification plans. In many cases, Departmental Accounts Committee (DAC) meetings were not held, and no accountability measures were initiated. The audit report calls for strict adherence to financial regulations, recovery of outstanding dues, and fixing responsibility on officials involved in bypassing procurement and approval procedures. It also recommends enhancing internal audit functions within the ministry and its entities to prevent recurrence. Copyright Business Recorder, 2025
Business Recorder
04-08-2025
- Business
- Business Recorder
7th NFC Award: ‘Centre deducts Rs87.87bn annually without AGP certification'
ISLAMABAD: Despite the passage of over 15 years since the 7th NFC Award was enacted, the federal government continues to deduct Rs 87.871 billion annually in collection charges on notional basis without the legally required certification from the Auditor-General of Pakistan (AGP), according to the Audit Report 2024–25. Audit report on the accounts of federal government (civil) audit year 2024-25 cited Clause 2(a) of the Distribution of Revenues and grants in-aid order, 2010: that the net proceeds mean, in relation to any tax, duty or levy, the proceeds thereof reduced by the cost of collection as ascertained and certified by the AGP. The management of the Finance Division distributed an amount of Rs 4.928 trillion as National Commission Award to the provinces and deducted Rs. 87.871 billion as one percent collection charges during 2023-24. Finance minister urges population as key criterion in NFC Award formula Finance Division was deducting one percent as collection charges amounting to Rs87.871 billion on national basis and did not have actual amount of collection charges, which was against clause 2(a). No proof for ascertaining and certifying the collection charges from the AGP was produced to audit. Sources within the Ministry of Finance admit that since the NFC Award was implemented in 2010, the issue of uncertified deductions has remained unresolved. 'It's been 15 years, yet the Finance Division has failed to obtain the AGP's certification, and the Public Accounts Committee (PAC) has not taken decisive action to enforce compliance,' a senior official acknowledged. The management replied that the Finance Division deducted one percent of the divisible pool of taxes as collection charges pursuant to the recommendation of the 7th NFC Award. The accounts of the Federation are submitted to the Auditor General of Pakistan for certification by the AGPR. During certification of collection charges so determined by the Auditor General it would be adjusted accordingly. Furthermore, the NFC transfers for the fiscal year 2023-24 have already been reconciled with the provincial finance departments, AGPR sub offices and AG offices. The Provincial governments have no objection on this account. The reply of the management is not tenable because collection charges need to be deducted after determination and certification of the AGP. Afterwards, the amount needs to be disbursed to the provinces, which was not done by the Finance Division. Audit maintained that non-deduction of actual collection charges was irregular, besides, it was an essential requirement of the Order to get the collection charges determined and certified by the AGP. Auditors flagged this deduction as irregular and unsupported, noting that no certified cost breakdown or approval from the AGP was provided for verification. Despite repeated observations in past audit cycles, this critical requirement remains unfulfilled. The DAC in its meeting held on 13th January 2025, directed the Finance Division to take up the matter with the AGP for the purpose. Audit recommended that necessary requirement of the Distribution of Revenues and Grants–in-aid Order, 2010 regarding certification and ascertainment of deduction charges by AGP, be complied with. Further, record of collection charges be provided to Audit for verification. Copyright Business Recorder, 2025
Business Recorder
02-08-2025
- Business
- Business Recorder
Communication ministry & NHA projects: FY25 audit uncovers over Rs5.29bn malfeasance
ISLAMABAD: The Audit Report 2024–25 has uncovered over Rs5.29 billion in financial irregularities and procedural violations in the Ministry of Communications and its key agency, the National Highways Authority (NHA), across various highway infrastructure projects. The highest irregularity, amounting to Rs2.51 billion, was found in the irregular award of work without approval of PC-I. The audit observed that the NHA initiated construction work on certain packages without the necessary planning approval, violating rules under the Planning Commission and the Public Procurement Regulatory Authority (PPRA). This raised questions about both transparency and compliance with federal development guidelines. Another glaring discrepancy involved the loss of Rs551.87 million in Package-1 of the Hakla–DI Khan Motorway, where the work was prematurely awarded before acquiring the required land. The project faced long delays due to land acquisition issues, pushing up costs and causing disruption to the overall CPEC Western Route timeline. NHA projects: Ministry releases Rs56bn, parliamentary panel told In a related observation, Rs511.67 million was paid to contractors due to faulty measurements and misapplication of rates in the same package. The auditors noted that quantities claimed and paid were not properly validated by field staff or supported with engineering estimates. The report also highlights that the NHA suffered a loss of Rs360.91 million due to irregular bidding practices and flawed escalation calculations during another section of the Hakla–DI Khan Motorway project. The tendering process failed to ensure a level playing field and did not reflect prevailing market conditions. An unjustified price adjustment of Rs300.8 million was also recorded, where contractors were awarded price escalations even beyond the allowed notification period. This adjustment was granted without verifying if actual cost changes warranted such increases. Separately, auditors flagged Rs272.17 million in non-adjustment of recoverable advances, where contractors had been paid mobilisation funds that were never deducted from final bills. This reflects serious lapses in internal controls and contract enforcement. An additional Rs224.55 million was lost due to delay-based price adjustments that were granted to defaulting contractors. Despite poor progress, the NHA allowed escalations instead of enforcing penalties under contract clauses. Another audit para noted Rs217.2 million paid for non-scheduled items, which were outside the scope of the original PC-I and were never approved by the competent authority. This was done without competitive bidding and against standard procurement practices. Finally, the auditors revealed Rs344.5 million in undue benefit given to a contractor by ignoring contract clauses related to progress and milestone penalties. The NHA failed to enforce provisions that could have prevented overpayments and encouraged timely completion. Copyright Business Recorder, 2025
Business Recorder
02-08-2025
- Politics
- Business Recorder
FY25 audit report: Concerns voiced over non-independence of AGP Office
ISLAMABAD: The Audit Report for 2024–25 has raised serious concerns over the continued non-independence of the Office of the Attorney-General for Pakistan (AGP), despite explicit directives issued by the prime minister nearly seven years ago. The report highlights that the AGP, a constitutional office under Article 100 of the Constitution, continues to operate as an attached department of the Ministry of Law and Justice rather than as a separate division, as mandated. According to the report, the Prime Minister's Office, via Letter No 658/SAPM/2018 dated May 30, 2018, approved in principle the reorganisation of the AGP's office as an independent division. The directive also sought to provide legal cover to the AGP's role in the appointment of law officers. However, auditors found that these orders have yet to be implemented, which, they noted, undermines the constitutional status of the Attorney-General's office. The audit report termed this continued subordination of the AGP to the Law Division a violation of the prime minister's order and recommended immediate corrective measures to ensure compliance with both the Constitution and the PM's directive. In its response to the audit, the AGP Office acknowledged that a similar observation was made in the 2018–19 and 2019–20 audit cycles. It stated that the matter was taken up with the Law and Justice Division and subsequently, referred to the Cabinet Division for a final decision. The case remains pending. A Departmental Accounts Committee (DAC) meeting held on February 6, 2025, directed that the issue be referred to the Public Accounts Committee (PAC) for further deliberation. The auditors have recommended that immediate steps be taken to formalise the AGP's independent status in line with constitutional provisions and the prime minister's instructions. Copyright Business Recorder, 2025
