Report cites irregularities in defence spending

ISLAMABAD: A report formulated by the Auditor General has said that Rs2.5 billion was lost in 2009-10 due to “commonly occurring irregularities” in various departments of the armed forces and ministry of defence.
The Auditor General Report 2009-10, which was submitted to parliament on Friday, said Rs801.06 million was lost due to violation of rules, Rs809.54 million due to unauthorised expenditures and Rs379.84 million due to non-recovery of dues. The irregularities were persistent in nature as they occurred almost every year.

The other major causes for the wastage were blockage of funds, unjustified payments and weak management of contracts, the report said.

It said the procurement departments of the defence production units and various arms of the armed forces, cantonment boards, the Military Estate Offices and the Military Engineering Services were particularly susceptible to “costly errors”. That was why procurement and execution of works required special attention.

The audit report said that Rs308.91 billion was supposed to be spent in 2008-09 as per the defence budget. But the expenses went up to Rs332.52 billion, mainly owing to revision in pay-scales and revision in the cost of rations for the army.

The total expenditure of the army, including irregular spending, totaled Rs734.08 million, which included unauthorised purchase of milk worth Rs679.03 million.

According to the report, the auditors objected to unauthorised works by Military Engineering Services, non-recovery of rent, utility bills and non-deduction of sales tax, causing a loss of Rs71.96 million. Similarly, Rs135.68 million collected on behalf of the government was not deposited in the treasury.

The auditors objected to mismanagement in the affairs of the Heavy Industries Taxila, particularly about the $1.23 million in foreign exchange stuck up due to problems in installation of simulators of Al Zarrar and Al Khalid tanks, said the report.

The Auditor General also identified serious flaws in contracts and deals finalised with foreign suppliers leading to foreign exchange losses, apart from non-recovery of money from defaulting contractors.

Irregularities were also identified in divisions like the Directorate of Munitions Production and Pakistan Aeronautical Complex, Kamra.

The auditors objected to the loss of Rs594.21 million in the navy owing to violations of rules, including irregular purchases and improper contracts.

The report said objections worth Rs99.83 million were raised against air force departments. These mainly pertained to irregular purchases and flawed construction contracts.

Ineffectiveness of the Military Accountant General caused a loss of Rs59 million and irregularities worth Rs82 million were reported in the affairs of the Military Lands and Customs department, the report said.

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Defence budget hike

A report in this newspaper yesterday suggests the defence budget has been quietly hiked by an astonishing 25 per cent, from the budgeted figure of Rs442bn to over Rs550bn. As usual, neither the government nor the military has seen fit to divulge any details, making it difficult to comment on the need for such an extraordinary increase.

Surveying the landscape of Pakistan and assessing the security situation, however, provides some clues. For one, the army has been very active in the flood rescue and relief efforts, costly activities that could not have been budgeted for earlier this summer. For another, the military operations against militant groups in the tribal areas look set to continue. North Waziristan remains a hornet’s nest that has yet to be tackled and the other agencies of Fata continue to require the application of force as the security forces struggle to master the clear-and-hold phase of counter-insurgency. So a hike in the defence budget may well be justified.

What isn’t justified is the lack of transparency. At the best of times, there needs to be accountability of the public’s money that is spent by state institutions. In times of crisis, when funds are even scarcer than usual and the state has to make choices between equally pressing needs, accountability becomes an even more pressing factor. Do the armed forces absolutely need Rs110bn more or could they have done with less if belt-tightening had been attempted first? Where will the money go, only to fund essential, emergency needs or also to finance wants that could otherwise be postponed? The public will likely never know.

Even parliament, where in-camera meetings could provide some kind of limited oversight, is unlikely to be given any details. (Earlier this week, the Public Accounts Committee was stonewalled by Finance Secretary Salman Siddique when members demanded details of a one-time Rs5.5bn supplementary grant to the ISI in 2007-08.)

A few comparisons may put the figure of Rs110bn in the proper perspective. Rs110bn is close to half the amount public-sector enterprises rack up in losses each year — a key area of reform and restructuring that the international financial institutions have been emphasising. Rs110bn exceeds the entire gains that the reformed General Sales Tax is expected to make. The sum is also roughly equal to the amount which would be raised by the controversial ‘flood tax’ that has been mooted. One single head of expenditure, then, is already set to absorb all the revenue gains that are expected to be made this year — even before those gains are realised. Surely, the public is owed an explanation.

the report was published in dawn news on 24th september 2010

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hasham babar interview

please 1st save the photo and than maximize in photo editor or any software.thanks

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abaseen yousafzai

please 1st save the photo and than maximize in your photo editor software.thanks

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