Auditor General of Pakistan (AGP) has unearthed 282 cases of misappropriation, irregularities in contracts/ procurement, internal rules, violations of regulatory laws and financial mismanagement, etc., worth Rs 3.27 trillion in water and power sectors, during audit year 2021-22.
According to audit report on the accounts of Power Division and its attached entities, the AGP has detected 66 cases of procurement/ contractual irregularities involving Rs 131.803 billion, 43 cases of violation of internal rules and regulations of auditee entities involving Rs 740.397 billion, 33 cases of violations of regulatory law and regulations promulgated by constitutional authorities involving Rs 663.603 billion, 18 cases of recoveries of Rs 848.9 billion including accumulative power sector receivables, 13 cases were related to value for money and service delivery issues involving Rs 67.249 billion, 29 cases of other issues like non-utilization of loan and commitment charges, non-reconciliation of data, non-availing of rebate/ discount facility and shortage/ missing of material, etc., involving Rs 628.958 billion and one case of misappropriation of store material valued at Rs 66.44 million.
The key audit findings of Ministry of Water Resources and its attached entities are as follows: (i) eight cases of irregularities in procurement management amounting to Rs 6.862 billion;(ii) 29 cases of irregularities in contract management amounting to Rs 14.139 billion;(iii) 15 cases of financial management related issue amounting to Rs 159.577 billion;(iv) two cases of asset management issues amounting to Rs 754.767 million; (v) two cases of management of accounts with commercial banks related issues amounting to Rs 3.009 billion; (vi) one case of design-related issue amounting to Rs 700 million; (vii) three cases of HR and pension related issues amounting to Rs 39.731 million;( viii) three cases of issues relating to value of money and service delivery amounting to Rs 292.471 million; and (ix) 12 cases of miscellaneous issues amounting to Rs 2.360 billion. Revenue shortfall in FY 2020-21: 99,370 million units worth Rs 1.745 trillion were billed to consumers against which recovery of Rs 1.366 trillion was made (78.28 per cent). The shortfall indicated less receipts of revenue by the Discos.
The Auditor General maintained that revenue shortfall in Discos indicated managerial inefficiencies and policy bottlenecks constraining CPPA-G to pay-off its energy procurement liabilities. Although, the Power Division showed a comparative increase in shortfall by 5.84 per cent compared with FY 2022-21, it still remained 24 per cent less and constituted a significant operational issue for Discos. Recovery in QESCO and TESCO of 23.65 per cent and 28.52 per cent, respectively (in the financial year 2020-21) showed that major policy interventions were needed to save both Discos from practical insolvency.
AGP has recommended to Power Division and its attached departments that management may ensure strong supervision and improved internal controls in order to minimize theft cases and ensure that procurements are made in a transparent and efficient manner in line with PPRA provisions and procedures prescribed for the execution of works.
AGP has also recommended that management may ensure that targets/ limits set by National Electric Power Regulatory Authority (NEPRA) specifically on the issues of line losses and billed recovery are followed in letter and spirit. Efforts based on sound planning and a systematic problem-solving approach, having due involvement of all stakeholders, may be made to expedite recovery. This may include taking measures such as detailed feeder-wise analysis, taking action on extension of load cases from first instance of the event, large scale deployment of automated metering, maintenance of an integrated information system for the power sector and timely resolution of recovery related cases. According to audit report, AGP has recommended to Ministry of Water Resources and its attached departments to ensure that procurement of goods and services are made in a transparent and efficient manner in line with PPRA Rules and procurement guidelines.
Management has been advised to apply due care while framing contract documents in order to avoid violation of Pakistan Engineering Council (PEC) guidelines and instructions.