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PAC had taken a serious notice of audit reports of OGDCL pointing out financial irregularities to the tune of million of rupees

Feb-11 - 17, 2002

One of the many good decisions of the present government to ensure transparency and good governance is to provide complete autonomy and freedom of action to the ad-hoc Public Accounts Committee to probe into the financial affairs of the government and semi-government departments and organisations, detect unauthorised use of public money, misuse of official position, pin point the culprits and recommend penal action against them. To have a Public Accounts Committee (PAC) is a constitutional requirement and it has been always in existence but never before it had been allowed to act so independently.

During its many sittings in the last year, the PAC has minutely scrutinised the reports of the Auditor General of Pakistan and probed itself into the accounts of various "powerful ministries", detected frauds and many cases of unauthorised use of public funds holding senior officers responsible for it. During the last month alone the PAC unearthed many such cases in several organisations including Oil and Gas Development Company (OGDCL), Pakistan Oil Fields Limited and Employees Old Age Benefit Institution (EOBI).

PAC had taken a serious notice of audit reports of OGDCL pointing out financial irregularities to the tune of million of rupees and after detailed investigations directed the company to refer the cases of the officer held responsible to the National Accountability Bureau (NAB). During its meeting in Islamabad on January 27 PAC was informed by the management of OGDCL that 22 cases of misappropriation, financial irregularities and mismanagement have been referred to NAB.

Chairman Ad-hoc Public Accounts Committee, H.U. Beg presided over the meeting attended by members including Lt. Gen.Talat Masood, M.S. Zafarullah, Syed Shaukat Hussain, Muzzafar Ahmad, Dr. Waseem Azhar, Hussan Bhutto and Ahadullah Akmal. Auditor General of Pakistan Manzur Hussain, Deputy Auditor General (Senior), Chaudhry Muhammad Ilyas, senior officials of Audit Department, Finance Ministry and Ministry of Petroleum and Natural Resources and attached departments were present in the meeting. Secretary Petroleum and Natural Resources, Abdullah Yousaf who is also Principal Accounting Officer of the Ministry (PAO) and other senior officials of the Ministry and LGDCL were also present on the occasion.

The Committee also took serious notice of Rs,25.021 million donation given by OGDCL to various institutions and individuals and directed PAO to investigate the issue. The Committee directed the Finance Ministry to introduce a monitoring system for checking mismanagement in ministries and departments and ensure that responsible officials are punished.

The Committee expressed displeasure over the mismanagement and gross violation of financial matters in OGDCL where even rules and regulations were not followed at some level. The audit brief had indicated that stores and spares amounting to Rs.824.197 million were not even mentioned in the inventory reflecting lack of control over inventory store.

The Committee directed Principal Accounting Officer to investigate the matter of Rs.653.446 million kept in current account of United Bank Limited at low interest rates which caused millions of rupees loss to the company. The committee asked authorities to submit a report in this regard within 30 days.

The PAC described as dubious the accounts of Pakistan Oil Fields Ltd. While hearing the audit objections to the accounts of 99-2000 pertaining the Ministry of Petroleum and Natural Resources it observed "as a result of wrong entries, the accounts of Pakistan Oil Fields Limited for the last five years have become dubious, and require physical verification to avert a chaos-like situation in the company. Talat Massod, a member of the committee," remarked "he was ted up with poor performance of the company. I feel it is corruption everywhere in the Pakistan Oil Fields Limited and its officials are helpless".

Chairman H.U. Beg, who presided over the meeting, expressed "utter dissatisfaction" over the poor financial system of the company and directed its officials to evolve a prudential system to check discrepancies in its inventory system within three months. The committee also expressed displeasure over unjustified expenditure of Rs.8.068 million spent on unnecessary advertisements. The Chairman desired from the officials that unlawful orders of the executives be resisted. The committee was unanimous that corruption and plundering was a common feature of the company, which was being protected by making dubious accounts entries.

Federal Ad hoc Public Accounts Committee took serious notice of an apparent fraud worth Rs.1.04 billion committed in Employees Old Age Benefit Institution (EOBI) during the financial year 2000. This astonishing fraud was pointed out by Audit Department in its report for financial year 1999-2000 committed by senior officials with the connivance of others. The committee was astonished as to why the credentials of pay order amounting to Rs.1.04 billion issued by Bank of Ceylon were not verified and deliberately kept in lock and key.

Secretary of the Ministry Farhat Hussain who is also Principle Accounting Officer (PAO) informed the Committee that upon investigation, Bank of Ceylon refused to own the said pay order. The Former Chairman of EOBI, Barkatullah approved the transaction on last working day before his retirement and later on fled the country. However, the National Accountability Bureau (NAB) is now dealing the case. The Chairman of the committee asked PAO to improve the system so that such occurrences are avoided in future and ensure efforts for recovery of the loss.

Auditor General of Pakistan appraised the committee that accounts for the year 1999-2000 pertaining to Kagan Bricks Works Limited have not been provided by Overseas Pakistani Foundation (OPF). Though, Kagan Bricks is a non-functional entity and under process of liquidation, its financial health was deplorable. "The company has to pay back loan to POF amounting to Rs. 59.435 million, besides the investment of Rs. 60 million and accumulated losses are Rs. 86 million."

The Auditor General said that it was a misconceived project and also mismanaged therefore, requires investigation. H.U. Beg ordered inquiry through a committee comprising representatives of Finance Department, Audit and OPF and to furnish report to PAC within 30 days. He further said that in future, non-production of record would not be tolerated and disciplinary action would be taken against those who violate this legal requirement.

The committee also ordered recovery of Rs. 1.6 million from four former federal ministers and six federal secretaries for using telephones and staff cars beyond the ceiling.

The former federal ministers from whom recovery has been ordered include Ghulam Akbar Khan Lasi (Rs 0.616 million), Ch. Shujaat Hussain (Rs. 70,461) and Sheikh Rashid Ahmad (Rs 0.215 million).

The Federal Secretaries are Sultan Hameed (Rs. 52,370), A.Z.K. Sherdel (Rs. 5567), Arshad Farooq (Rs. 958), M. Zafarullah Khan (Rs. 9025), Yousaf Kamal (Rs. 2913) and M. Hasan (Rs. 7320).

The audit had pointed out the misuse of telephone and staff cars by the political elite and senior bureaucrats and suggested recovery from them.


"Pakistan & Gulf Economist in its issue of February 11 - 17 - 2002 carried an article captioned "Public Accounts Committee in Action". It has now come to our light that the contents of the article inadvertently carried the name of Pakistan Oilfields Limited instead of Oil and Gas Development Corporation Limited (OGDCL) whose accounts were under scrutiny by the Public Accounts Committee (PAC). Adverse remarks of PAC specially mentioned in para 8 of the article were meant for OGDCL instead of POL as reported. Pakistan & Gulf Economist regret this incorrect report which was incidental and as a result of mis-understanding. The inconvenience caused to the management of Pakistan Oilfields Limited is highly regretted".