ISLAMABAD: The Auditor General of Pakistan (AGP) has not only pointed out financial irregularities in the procurement and storage by National Disaster Management Authority (NDMA) during the coronavirus pandemic mainly in 2020, but found the authority unprepared to timely devise a counter strategy.

The audit report on the expenditure incurred on Covid-19 by federal government has stated that the authority had failed to upgrade the national plan on annual basis, which is required under National Disaster Management Act 2010.

This led to a stalemate situation in the planning process of the authority in the wake of Covid-19.

The report also highlighted that the NDMA retained $4 million donated by China for the construction of 250 beds Isolation Hospital and Infections Treatment Centre (IHITC), Islamabad, but assigned the construction task to FWO by utilising the funds meant for fighting Covid-19.

The NDMA also failed to obtain the vouchers, etc., against the advances paid to FWO, and did not even make adjustments of Rs690 million paid in advance for construction of IHITC and renovation of Haj Complex, Rawalpindi, provision of quarantine facilities at Karachi and establishment of national control room.

Auditors point out irregularities in procurement during pandemic

The report added that after the outbreak of Covid-19 pandemic, the authority initiated procurement process and started emergency procurements directly from China mainly related to biomedical equipment, testing kits and personal protective equipment (PPEs).

The total procurements from China up to 30 June, 2020 amounted to $62.27 million in three phases, and the NDMA approached potential vendors in China but there was no documentary evidence available in this regard, nor were the minutes of video-conferences between the technical committee of NDMA, the committee constituted by Pakistani Embassy Beijing and the vendors recorded.

The NDMA also failed to recover liquidated damages (LD) charges from the suppliers upon late delivery of items related to Covid-19 procurements in 123 cases amounting to Rs2.64 billion and $8.33 million in 11 other cases.

The irregularities highlighted in the audit report included loss to public exchequer on account of purchase of ventilators at higher rates amounting to $1.96 million, procurement of ventilators at higher rates without justification and misprocurement amounted to Rs69.73 million.

The audit report recommended that NDMA needed to strengthen the contract management processes and internal controls.

Defence services

The audit report also pointed out deficiencies worth around Rs3.87 billion and $7.26 million in the records of defence services and highlighted weak internal controls that could have led to expenditure over and above the actual allocation.

During Covid-19 pandemic, the central procurement of Pakistan Army was carried out by the Director General Procurements, Army. For the Pakistan Air force and Pakistan Navy it was done by the Director Procurement (Air) and Director Procurement (Navy) respectively.

Besides, the procurements were made by the Central Ordnances Depots (COD), Medical Directorate GHQ and hospitals under its control carried out local purchase of medicines and electro-medical equipments.

The accounts are maintained by the Controller of Military Accounts (Defence Purchase), Controller of Military Accounts - Peshawar Command (CMA -PC), Controller of Military Accounts -Rawalpindi Command (CMA- RC).

The most serious audit objection relates to non-reconciliation of allocation and expenditure amounting to over Rs1.89 billion.

The auditors have stated that the budget directorate GHQ allocated Rs4.86 billion to Pakistan Army to fight Covid-19, on June 30 last year.

However, the record of CMA (RC) showed Rs3.48 billion was allocated to counter Covid-19 measures, which resulted into difference of Rs1.38 billion in overall Covid-19 allocation.

Whereas on its part the CMA (RC) Rawalpindi released payments of Rs1.42 billion relating to Covid-19, but its own record shows that the overall Covid-19 expenditure was Rs911.77 million, which resulted into a difference of Rs511.66 million.

The other audit objections included irregular expenditure by AFIC Rawalpindi amounting to Rs200 mn by procurement of normal cardiac medicines out of allocation for Covid-19.

Auditor General of Pakistan has recommended actions to improve the performance of the audited entities to realise the full benefit of the audit activity.

Published in Dawn, December 2nd, 2021