KARACHI, Nov 17: In an effort to tame local bodies mainly headed by nazims from opposition parties, the Sindh government has ordered a special audit of their funds for the period from 2002 and 2008, it has been learnt.

According to sources, while Chief Minister Syed Qaim Ali Shah’s order calls for the special audit of the local bodies of the whole province, it exempts the City District Government of Karachi and the District Government of Hyderabad – which individually are not only the biggest single district establishments in the province but their budget might also be more than the combined budget of the rest of the local governments of the province.

The order by Mr Shah says that teams are being constituted for the special audit of all district governments/ town/ taluka municipal administrations in Sindh (excluding the city district government of Karachi and the district government of Hyderabad) with the following composition in accordance with Section 115(8) and Section 132 (C) of the Sindh Local Government Ordinance 2001. The team includes: deputy director (director-general of audit/ district audit, government of Sindh), deputy secretary of the finance department, deputy director of the local government commission (technical), and the deputy director / assistant director, local fund audit.

The order says that the special audit shall be undertaken in phases, starting with the current financial year and going back to financial years up to audit year 2002–2003. In the first phase, special audit of accounts pertaining to financial years 2006–2007 and 2007-2008 (up to June 30, 2008) shall be taken up immediately.

The audit conducted during the aforementioned periods shall not form the basis of any immunity from the special audit and they shall not be exempted from the purview of the said special audit.

The special audit exercise would compass all payments from Account No IV and from the accounts of all banks of TMAs (town municipal administrations) both officially allowed and those created unlawfully by the sub-national governments. The audit teams shall take special note of this anomaly and recommend actions for the malpractices in the contravention of Section 108 of SLGO 2001.

The finance department shall provide a complete list of the annual development programme (ADP), Tameer-i-Karachi Programme, details of PFC awards, releases pertaining to special programmes during the period under audit and other releases to the teams for conducting the audit.

The special audit teams shall take into account the financial management system of sub-national governments and ensure that the provision of Section 109 SLGA 2001 is duly followed.

The special audit shall essentially cover the following areas: a) scrutiny of annual budget estimates; b) audit of the own resource revenue (OSR); c) a random checking of the receipt side of the OSR to ascertain the internal working of the revenue collection department of the local government concerned; d) random checking of expenditure on goods and services exceeding Rs200,000 and recurrent purchases of the same or similar articles exceeding Rs200,000 or any threshold amount determined by the director-general of Sindh.

The audit teams will also do the 100 per cent physical verification of non-perishable items of stores/ stocks, goods, T&P, equipment, machinery, vehicles, etc, examining critically that the SLGO 2001 and its allied rules and the PPRA rules have been followed in letter and spirit. The audit will also identify the payments made on works/ functions outside the assigned statutory functions of district governments. It will also examine the schedule of establishment and to ensure that the schedule of establishment is in accordance with the instructions of the government.

During the audit, special emphasis shall be put on the accounting standards of the local governments concerned and it will be ensured that they are adopting the “best value practices”, says Mr Shah in his special audit order.

The sources said the Sindh government had probably taken the step following such a step taken by the Punjab government, where also the local bodies headed by the opposition parties were making hue and cry about the Shahbaz Sharif government, but after the announcement of the audit there the overwhelming majority of the nazims changed their political strategy and shifted their loyalties and found shelter in the chief minister’s camp or the governor’s house. And now one rarely hears about the audit, otherwise a good built-in accountability tool to keep the system free from misappropriation of funds by the people running the system.

The sources said that in Sindh also the district and town nazims, overwhelming majority of whom belonged to the opposition parties (thanks to the elections held under the stewardship of former chief minister Dr Arbab Ghulam Rahim), were raising hue and cry against the provincial government, which now expects to get results in the interior of the province similar to those achieved by Punjab Chief Minister Shahbaz Sharif.

However, Mr Shah has probably not mustered enough courage to carry out an audit of the city district governments of Karachi and Hyderabad despite the fact that their budgets are the largest, running into tens of billions of rupees, the sources concluded.