An audit report has uncovered financial irregularities amounting to Rs4 billion in Khyber Pakhtunkhwa Oil and Gas Company Limited (KPOGCL) for the fiscal year 2021-22, raising concerns over weak financial controls and administrative mismanagement within the state-owned entity.
According to the report prepared by the Auditor General of Pakistan, a significant portion of the financial loss to the public treasury stemmed from the payment of salaries to employees hired on a daily wage basis without proper authorization or necessity. The audit findings revealed that between the fiscal years 2014-15 and 2020-21, KPOGCL recruited daily wage employees arbitrarily, without official directives, leading to irregular expenditures.
The management allegedly made these recruitments based on personal preferences rather than organisational needs, causing a financial loss of Rs1.57 billion to the exchequer. The report attributed this loss to weak administrative oversight and mismanagement.
Authorities first identified these irregularities in April 2022. However, it was only in June 2022 that the company responded by forming a high-level committee to investigate the matter. Following the inquiry, the committee imposed a hefty fine on the former chief executive officer and subsequently removed him from his position.
Despite this action, the Auditor General deemed the company’s response inadequate and insisted that the losses be fully recovered from the former CEO.
The audit report also highlighted additional financial mismanagement within the company. Unnecessary recruitments in various cadres resulted in an estimated loss of Rs400 million, while illegal payments of Rs130 million were made to provincial directors. Furthermore, KPOGCL incurred losses of Rs230 million due to unjustified payments for security equipment and special allowances.
In addition, irregularities amounting to Rs388 million were discovered in the appointments of the chief internal auditor and the corporate finance manager, further underscoring the company’s weak internal controls.
The revelations have raised concerns over governance and accountability within KPOGCL, with calls for stronger oversight to prevent further financial mismanagement in the future.
