Audit uncovers Rs152bn losses, irregularities in KP govt projects

An audit report by the Khyber-Pakhtunkhwa Directorate General Audit has revealed fraud, mismanagement, and irregularities across multiple projects and departments of the provincial government, resulting in losses of Rs152.1 billion to the public exchequer.

According to a news report, the audit examined accounts from the financial year 2022-23 and previous years. It identified systemic issues such as cost overruns, ineffective governance, and questionable financial practices, which have hindered the province’s development efforts and eroded public trust. 

The report uncovered Rs84.836 billion in misappropriation and mismanagement of developmental funds in 12 cases, along with fraudulent payments and withdrawals totaling Rs132.95 million in 10 cases. 

Losses related to missing or misused vehicles were estimated at Rs8.81 million, while doubtful payments, expenditures, and withdrawals amounted to Rs514.609 million across 16 cases.

Among the significant findings, Rs42.97 billion was marked for recovery, though only Rs747.39 million was recovered and verified between January and December 2023.

It noted unjustified cost increases, such as an Rs200.54 million rise in a single project despite substantial rebates. The report also highlighted Rs139.16 million in blocked public funds across three cases, delaying crucial developmental projects.

The transfer of Rs10 billion from the pension fund investment account to the provincial consolidated fund, treated as a “dividend,” was flagged as problematic. 

The Environment, Forestry, and Wildlife Department faced scrutiny for using outdated accounting systems that violated financial management laws, leading to cash disbursements worth billions of rupees and serious audit objections.

The Works Department was also criticized for executing projects without proper estimates, technical sanctions, or adherence to standard operating procedures. Cases of cost overruns due to deviation from project parameters totaled Rs1.21 billion, while excess payments and supply expenditures amounted to Rs281.32 million across seven cases.

Other findings included Rs3.52 billion in illegal retention of public funds, Rs25.98 million in ineffective implementation of an early-age programming project, and Rs35.45 billion in losses from 181 cases. 

The report also flagged Rs14.82 billion in irregular payments and expenditures and Rs11.06 billion in less deduction, deposit, and realization of funds across 45 cases.

A KP government official said the audit objections primarily pertain to the previous administration, and those involved would be required to defend themselves before the Public Accounts Committee. 

The official added that a mechanism has been proposed to address these objections; otherwise, the responsible parties would need to refund the disputed amounts.