The Auditor General of Pakistan (AGP) has detected two cases of the non-recovery of a huge amount of Rs.3384.794 million in the accounts of the Energy and Power Department of Khyber Pakhtunkhwa, says AGP Audit Year 2016-17.
The audit report has already been tabled in the provincial assembly that has referred it to the Public Accounts Committee (PAC) of the house. The KP Assembly comprising of the representatives of all parliamentary parties is headed by the Speaker of the house.
The report said that during the financial year 2014-15, it was noticed in the office of the Pakhtunkhwa Energy Development Organization (PEDO) that Director O&C PEDO has claimed energy tariff dues worth Rs.2,386,794,000 relating to Malakand-III Hydel Power Project from National Transmission and Distribution Company (NTDC) through Central Power Purchase Agency (CPPA) on monthly basis.
In response, the CPPA did not pay the amount in accordance with the provision of article 9.6 of the CPPA. It was further found that the payment of dues cleared by CPPA did not match the claims of PEDO rather paid lesser amount in most of the period.
Furthermore, the CPPA did not pay energy charges according to claim of the PEDO rather from the months of February to June, lesser amounts were paid as compared to actual claim of the PEDO while in the earlier excessive. Moreover, the payment from CPPA did not have any reference to the payment claimed by the PEDO, therefore, it could not be ascertained as to which period the dues were cleared and how much is outstanding.
The local office did not carry any reconciliation of dues and also did not have any proof of receipt of payment because all the payments were directly made to the bank account. Audit was of the view that all payments made by the CPPA were required to have been properly reconciled on monthly basis and recorded in the lodgers separately with clearly shown amount of outstanding dues, if any, against the CPPA, but neither record was available nor any action taken towards reconciliation and recovery of outstanding dues by the local administration. So the audit attributed the less realization due to weak financial and internal controls and when pointed out, the management stated that written reply would be furnished later on.
The Audit requested the department repeatedly, through DO letters, for holding the Departmental Accounts Committee (DAC) meeting. However, neither DAC meeting was convened nor any progress intimated to it. Therefore, the audit recommended investigation into the matter and reconcilement of the all claims with CPPA and recovery of the outstanding amount.
The second case of the non-recovery to the tone of Rs.998.00 million was noticed during review of joint verification report of the monthly generation and export of energy to PESCO from the Pehur Power Complex and payment of outstanding dues made by the quarter concerned, than an amount of Rs. 2,313,000 was less paid as compared to the claims made during the year.
However, the payment so made did not have any reference to which period the payment relates. The details showed that an amount of Rs. 46,037,000 was paid by PESCO against the demand for payment of Rs. 48,351,000 sent to them during the period under audit while the difference remained unpaid. Furthermore, payment was made directly to bank on on-line basis therefore the local office has no documentary evidence in support of payment.
When pointed out, the management replied that it was decided with PEDO that the energy generated would be sold to WAPDA@Re1/KWh has an interim arrangement and once the tariff is determined by NEPRA and power purchase agreement (PPA) signed with PESCO, the arrears would be claimed.
Since PPA has not been signed with PESCO/NTDC they are receiving payment of energy sold @ Re.1/KWh. As such, Rs. 998,000,000 have been accumulated against PESCO and the amount is not loss, rather outstanding payment. This reply of the department was declared not tenable.
Despite the repeated requests of the audit through DO letters, for holding of the DAC meeting, neither the DAC meeting was convened nor was any progress intimated till finalization of the audit report. The audit has recommended the recovery of the outstanding amount.