LAHORE, April 27: The Auditor-General of Pakistan, in its report to President Pervez Musharraf, has pointed out Rs4.660 billion irregularities in Wapda during 2000- 01.

In its report, the auditor-general printed 118 paras (audit objections) amounting to Rs531.061 million misappropriation. Another 393 paras containing misappropriation of Rs4129.438 million have been referred to the Departmental Accounts Committee. This is in addition to Rs45.019 million that was recovered at the instance of the audit.

The audit report includes all 12 companies of Wapda —- eight distribution and three generation companies and the National Transmission and Distribution Company — and has divided the misappropriation under eight different heads — overpayment, recoverable, negligence, misappropriation, violation of rules, violation of propriety, non-production of record and theft.

The report said that various issues mentioned in the report as audit findings were illustrative and not exhaustive and, therefore, served as pointer for Wapda to further explore the real effect on its working.

The report lamented the fact that Wapda spent Rs171.548 million on the set-up of its Internal Audit which consists of a Chief Auditor assisted by five Deputy Chief Auditors at Headquarters, eight Regional Deputy Chief Auditors and 176 audit parties.

In spite of having such an elaborate paraphernalia, not a single audit report was generated which could have highlighted various financial irregularities to be considered at the Authority’s level. However, various local audit inspection reports were prepared which were discussed at the level of chief executive of the companies only. This speaks for non- implementation of proper internal controls resulting in re- occurrence and repetition of irregularities. Such repetition could only be stopped if Internal Control mechanism, already existing in Wapda, was further strengthened and made more effective, the report said.

The report also included a table of all heads of irregularities and the amount misappropriated under them during the last four years to show the repetitive pattern of bungling every year on the same lines.

The report also lamented that lines’ losses were still fluctuating above 25 per cent, which means that one-fourth revenue was being lost. It is also worth mentioning, the report said, that in Profit and Loss Accounts of the companies or residual Wapda, the line losses were not being accounted for. Wapda should take effective steps to improve its operating efficiency to minimise the line losses. Line Losses around 25 per cent were not acceptable by any standard, it said.

The report also pointed out that cost per unit was increasing every year. The basic reason for this increase is due to increase in operating cost. Moreover, Wapda is relying mainly on the electricity produced by the independent power producers (IPPs). Therefore, it is exploiting the internal sources of Wapda on the one hand and adversely affecting its overall cost structure on the other. Due to this fact, cost per unit of thermal and hydel generation is continuously increasing, as source are not being used optimally.

Heavy purchases from the IPPs were also affecting the profitability of Wapda by increasing per unit cost. A thoughtful review of this was needed to reduce the share of this resource in total cost, the report added.

The report recommended the need to investigate each case and fix the responsibility for various irregularities and losses to the public exchequer. Officials dealing with financial and accounting matters be adequately trained to manage the matters efficiently, it advised.