Office of the

Provincial Audit WingConstitution Avenue

Islamabad

No.PA/FAP/PUNJAB/F-8/ VDated: 07.04.2015A

FM Team

J.auntry Director, 0 19 APR 2015World Bank, 20-A,Shahrah-e-Jamhuriat, T~h2

Sector G-5/1, Islamabad g

Subject: FOREIGN AIDED PROJECT (FAP) AUDIT REPORTS FOR FY 2013-14

Kindly refer to the subject noted above.

2. This office vide letter No. PA/External Review/F-74/1703 dated

23.1.2015 (copy enclosed) provided a copy of following World Bank funded project

Audit Reports to the EAD. However, a copy of the following FAP Audit Reports is

enclosed for further necessary action:

i. Punjab Land Record Management and information Systems

(LRMIS) for F-Y. 2013-14, World Bank funded

ii- Punjab Education Sector Reform Program (PESRP) for the F.Y_

2013-14. World Bank funded

Enclosure: (As Above) SA ULL KHAN(Assistant Director)

Provincial Audit Wing

Cc:i. Master File

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Provincial Audit WingConstitution Avenue

Islamabad

No.PA/External Review/F-74/1 Iq. Dated: 3 -01-2015

SecretaryEconomic Affairs DivisionPak Secretariat Block "C"Islamabad

Subject: Foreign Aided Promect (FAP) Audit Reports for the FY 2013-14

Kindly find enclosed a copy of following Seven FAP Audit reports for

further necessary action.

i. Land Record Management and Information Systems (LRMIS)

i1 Capacity Building of Elementary Teachers training Institute (PakCanada Debt Swap Agreement)

iii- National Maternal Newborn & Child Health Program (MNCH),Punjab

iv- Pak-Italian Modern Burn Center and Acid Burn Victims Treatmentand Rehabilitation Center, Nishtar Medical college and Hospital,Multan

v. Punjab Skills Development Fund, PEOP

vi Punjab Education Sector Reform Program (PESRP)

vii Southern Punjab Poverty Alleviation Project (SPPAP)

Enclosure (As above) SAMIULLAH KHAN(Assistant Director)

Provincial Audit Wing

Copy to-

i DG Audit Punjab, (Lahore)Ii. Master Fileiit FAP Punjab File F-8

FINANCIAL ATTEST AUDIT REPORT

ON THE ACCOUNTS OF

LAND RECORDS MANAGEMENT AND INFORMATIONSYSTEMS

WORLD BANK CREDIT NO. 4258-PAK & 5151-PAK

BOARD OF REVENUE, GOVERNMENT OF THEPUNJAB

FOR THE FINANCIAL YEAR 2013-14

FM Team

SAPR ISTo The Wc>rfCl:Ih.

AUDITOR GENERAL OF PAKISTAN ISLAMABAD

powVA

TABLE OF CONTENTS

Page No.

List of abbreviations 2

Preface 3

PART-I 4

Project Overview 5

Auditor's Report to the Management (Auditor's Opinion) 6

Financial Statements 7

PART-Il 8

COVERING LETTER TO THE MANAGEMENT LETTER 9

EXECUTIVE SUMMARY 10-11

MANAGEMENT LETTER 12-13

1. Introduction 13

2. Audit Objectives 13

3. Audit Scope and Methodology 13

4. AUDIT FINDINGS AND RECOMMENDATIONS 13-28

4.1 Organization and Management

4.2 Financial Management

4.3 Procurement and Contract Management

4.4 Overall Assessment 29

5. CONCLUSION 30

ACKNOWLEDGEMENT 31

Annexures 32

1

Abbreviations and Acronyms

AG Accountant General

DAC Departmental Accounts Committee

DDO Drawing and Disbursing Officer

DG Director General

EA Executing Agency

ECNEC Executive Committee of the National Economic Council

FC Foreign Currency

GAAS Generally Accepted Accounting Standards

GoPb Government of the Punjab

IDA International Development Agency

INTOSAI International Organization of Supreme Audit Institutions

IPSAS International Public sector Accounting Standards

LC Local Currency

LRMIS Land Records Management and Information Systems

ML Management Letter

OM Office Memorandum

PSDP Public Sector Development Program

SDR Special Drawing Rights

SOE Statement of Expenditure

TORs Terms of Reference

2

PREFACE

The Auditor General of Pakistan conducts audit, subject to articles 169 and 170 of theConstitution of the Islamic Republic of Pakistan, 1973, read with Sections 8 & 12 of the AuditorGeneral's (Functions, Powers and Terms & Conditions of Service) Ordinance, 2001. This auditof financial statements of the Land Records Management & Information Systems Project Phase-I, financed by Government of the Punjab and World Bank /IDA for the financial year 2013-14was carried out accordingly.

The Directorate General Audit, Punjab Lahore conducted audit of the LRMIS during July-August, 2014 for the financial year 2013-14 with a view to report significant findings tostakeholders. Audit examined the economy, efficiency and effectiveness aspects of the LRMIS.In addition, audit also assessed, on test check basis, whether the management complied withapplicable laws, rules and regulations in managing the project. The audit report indicatesspecific actions that, if taken, will help the management realize the intended objectives. Thereport has been discussed with the LRMIS Management in August, 2014

The report consists of two parts i.e. Part-I contains Auditor's Report (Audit Opinion) andfinancial statements and Part-Il consists of Executive Summary, Management letter and AuditFindings.

The report has been prepared for submission to World Bank/IDA in terms of loan agreement.

(Muhammad Nasir Ali)Director General

Audit, Punjab, LahoreDated:Place: Lahore.

3

PART-I

1- PROJECT OVERVIEW

2- AUDITOR'S REPORT TO THE MANAGEMENT

3- FINANCIAL STATEMENTS

4

PROJECT OVERVIEW

Name of the Project Land Records Management & Information Systems

Project

Sponsoring Authority World Bank / IDA

Executing Authority Project Management Unit, LRMIS

Credit No. Credit No. 4258-Pak & 5151-Pak

PC-I Cost Rs. 11,201.155 million

Principal loan Amount Total Rs.11,201.155 million (GoPb Rs.943.199million + IDA / World Bank Credit Rs. 10,257.956million)

Date of Commencement 28-02-2007

Actual Date of Commencement: 28-02-2007

Date of Completion (as per PC-I) 30-6-2014

Date of Approval by ECNEC 28-08-2013

Loan Closing Date 31-12-2015

Loan Utilization Status:(Amount in million)

Amount utilized up-to Amount utilized during30.06.2013 2013-14Rs. 2,637.499 Rs. 2,383.394US$ 28.336 US$ 23.162

Progressive Expenditure:

(Amount in million)Amount utilized up-to30.06.2014Rs. 5,020.893US$ 51.498

5

AUDITOR'S REPORT

Auditor's Report on LRMIS Financial Statements

We have audited the accompanying financial statements of Land Records Management and

Information Systems that comprises of Statement of Receipts and Payments, Statement of

Comparison of Budget and Actual together with the notes forming part thereof for the year

ended 3 0 'h June, 2014.

Management Responsibility

It is the responsibility of project management to establish and maintain a system of internal

control, and prepare and present the Statement of Receipts and Payments in conformity with the

requirements of Cash Basis IPSAS, Financial Reporting under the Cash Basis of Accounting

Standard.

Auditor' Responsibility

The responsibility of the auditor is to express an opinion on the financial statements based on

the audit conducted. We conducted our audit in accordance with International Standards of

Supreme Audit Institutions. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatements.

The audit process includes, examining on a test basis, evidence supporting the amounts and

disclosures in the financial statements. It also includes assessing the accounting principles used

and significant estimates made by management, as well as evaluating the overall statement

presentation. We believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion:

(a) The financial statements present fairly, in all material respects, the cash receipts and

payments by the project for the year ended 30 th June, 2014 in accordance with Cash

Basis IPSAS, Financial Reporting under the Cash Basis of Accounting Standards.

(b) The expenditure has been incurred in accordance with the requirements of legalagreement.

(Muhammad Nasif'ii)Director General Audit Punjab

Place: LahoreDate:

6

FINANCIAL STATEMENTS

FOR THE YEAR ENDED ON 30thJUNE, 2014

7

FINANCIAL REPORTING UNDER CASH BASIS OF ACCOUNTNGGOVERNMENT ENTITY

Statement of Receipto and PaymentmLand Records Mamagement and Inforation System Project

For the year ended June 30, 2014

2013-14 2012-13

ANN~n *~jp~ by byeØa~al T~ta Ft~ TOWatmird PsRi~r m third par~iesby-mi nl

lacSIa/Appcpdamions 4.2 90,000 90,000 19,810 19.310

Or../Au/ (IDA - 4,5. - 2,737,527 2.737.327 229156 2,291,656

Dhtelbh 4.3 101.338 101.336

PAVMNEIyS g 2,M321 - 2,453,211 09 -,TIO95

- n= B.3 Auds 2 69.817 69,817 8,823 ,823

Frm IDA Cr~dt A~coun t.i 2.212056 2,282056 1.697.172 1*97,172

D~SPuynmn 5.1 101.338 - 101,338

ense e 20235 j_23us w3 13ß"9

~t 3t tØ22 574.422 36830T734I307-

1.WCemBm(DWeMe) inc.ia due Sadhams 9,59 9.439 33,63 33As3rafe

casabatnefymr.àr < 1,an,s0ie . 1,339.541 V74422 874,422

* Amount Basd on Exchang Rae of US S 1 - Rs 104.93 a on 31-03-2014 for IDA-423-PAK on USS 1,528.04" AmountBased on Exhange Rate of US $51 -Rs. 99.0021 m on 30-06-2014 for IDA-5151-PAK on USS 11,909.59

CH F ACCOUN A P R ECT DIRECTOR A R

e is n ag e e n a n d In form a tio n Sy stem s P rojeet

isagSourme (World dank & GoFb)- Stbtn of Cash Flow'Fr te-ycarem c o nic M,2914

(A ountin'000')

Own Sourcl= oa-Wrld Bank (IDA) T

Note (leb)

3 8,830 874,363 60 974,422

4 27,710 2,838,865 9l,00 2,928,865

-.. 90.000 90,00

S 6, 2,737,527 - 2,737,527

~101 38

4.3 1,030 101,338 .01,338

2I 3,162 2,8339 9,17 5

-AYMENTS-_-...--.- --- -

F (T otb allocation 5.2 --81

i5.1 1,30 10 1 3 101,338

r r - -

ndæto - 9,659- -- 9,n59_

- F C T T

pø m z. E &rL-

Land Records Management and Information Systems ProjeetStatement of Comparison of Allocated and Actual Amounts

For the year ended June 30, 2014

Rs In 000s Rs i 000s

ACTV= 2,014 2,013Allocated Actual Allocated Actual

__ Amomunts Amomnta Amounts Amounts1. Business Procesa Improvemsnt and Institutional Capacity EnhancementBune Prom Im vnnt 19,388 1,217 49,490 1,020

-Ospef~ ty Enhanemment 20,294 1,245 44,898 1,297

f-43881 - 2,317

Zr - 8 LRM~ø Sp T«n,epop Wn andrPwr Enhancem~n 93,102 17,880 152,338 10,663

- aaEniy & Valkd~o 703,952 1,176,462 3,963,138 609,490

218,087 74,154 2,482,190 928,524

t f sp 8,163 - 12,730-

3. Service Detvery and Infonnation Campaigns

1,083,165 353,799 674,062 72,460GA end A»aren«»& Disumination for 20,408 72,789 133,147 32,378etmlstakedn j.

TOt- .1,083,573 426,589 807,209 104,8384. fhohtoring & EvaluationProjectManag~m UnIt (PMU) 104,932 75,462 110,001 49,943

Divismonal CoodiationC 10,347- 8,182 10,347 219ProtEaluaon dkima ct ACo ssen 15,308__ -__ _____ -____

Gra d Total 2,277,124 2,453211 132,339 1706,99

CHIEF ACCO NTANT PROJECT DIRECTOR AU

Ast

LanO Records Management and Information Systems ProjectBank Redonciliation of Special Account/Imprest Account No. 221059-3 O

NBP Main Branch, Lahore for the. financial year 2013-14Out of IDA, World Bank Loan Account

Description Pak Rs. US $

Opening Bamnce on 01.07.2013 842,668,996.36 9,441,835.02

Add: 890,656,212.62 8,483,813.69

Bank Riplenlshmnt 890,656,212.62 8,483,813.69

1ssue41 Cheques Cancelled --

Total 1,733,325,208.98 17,925,648.71

Deduct: 1,669,594,672 16,397,605.56

Payments during the year 2013-14 1,669,594,672 16,397,605.56

Closing Balance as per bank statement 63,730,536.98 1,528,043.15as on31.03.2014

Less: Un-presented cheques

Closing Balance as per cash book on31.03.2014 63,730,536.98 1,528,043.15

Account Number 221059-3,IDA Credit 4258-PAK has been closed and excess balance will be refundedduring the Financial Year 2014-15.

CHIEF ACCOUNTANT PROJECT DIRECTOR ITOR

Land Records Management and Information Systems ProjectfBank Reconciliation of Special Account/Imprest Account No. 221081-5

NBP Main Branch, Lahore for the financial year 2013-14? .Out of IDA, World. Bank Loan Account

Descdpdon Pak Rs. US S

/ Opening Balance on 01.12.2013

Add: 1,846,871,021.19 18,215,653.84

Bank Replenishment 1,846,871,021.19 18,255,653.84

Issued Cheques Cancelled

Total 1,846,871,021.19 18,255,653.84

Deduct: 638,972,761 6,001,973.94

Payments during the year 2013-14 . 638,972,761 6,001.973.94

Closing Balance as per bank statement 1,207,898,260.19 12,253,679.9as on 30.06.2014

Less: Un-presented cheques 34,115,130 344,589.97

Closing Balance as per cas book on 1,173,783,130.19 11,909,089.9330.06.2014

CH FACCOUN ANT PROJECT DIRECTOR DI OR

4W*_

Project Management Unit

Land Records Manageenlt & Information Systems ProjecBoard of RevenUe

Governmlent of the PinIab

Nota to the Ipaelal Statmmenut for the year ended June 30, 2014

t - introductlon

het of the Punjab alms at improving access to land for the POPulatIOn

a .. of thosa land records mor .Van.sarent. i1s will be

*-thr0* a of business procns accompanled by an automation of

tan how theyre mknaged. Land uights holdnr o b ebl. to access and

verify Ohwir pw~rshlp ?nd uge rights; and allenate and acCIuilh rlht in astrnspret.

sr ff tf d be Ma tos* land a sPmal thereby

faciitatli access to crecdtt from financdal Institutions, and the iater-Wotilbe-In a etter

postiob to access mortgge and r&gstration services on-line.

13 Ulpct Ohtves

The h" r level objactlve of the Projeet Is to Improve the land records services deliveryin

the Pr ca of Punjph, gntrkbting to ionlastin g tenure security. The outcomes,

expetuå to mesult fröft fto~e ame:

cesed access to Ia i-cordi at lowe transaction tost for the bneficlary through

- - i efedlWe4#4s~eauc i and ight holders.

-ncreased transparency in transaction of land.

-V 4EX;

91the origna project was 18 distrkts of the Province of the Punjab in Phas.L 5

t the revised scop, of the projet

the 6il~strcts of the Puhjab province In 7 years, Timellne of 7 years has been

-gflg- dor a further period of 1 year and 6 months.

Due to change in scope and design of the project the cost estimates had been revlsed and

the estimated cost had been increased to Rs. 11,201.155 millions. Further increase in the

number of land owners, cost of data entry, Increase in timelines and cost of inputs to the

project have necessitated another revision of PC-i which is in process for approval from

PDWP. The details of foreign exchange and local component are given below;

.......... n

Original Cost

(Rupees In '000)

b "P Local Component Foreign Exchange Total

2,777,980 337,048 3,115,028

/ Revised C(Rupees In '000)

Local Component Foreign Exchange Total5,667,632 662,086 1,329,718

Second Revised Cost

(Rupees In '000)

Loval Component Foreign Exchange Total9,851,586 1,349,569 11,201,155

13 Uftet of FnanceThe Government of Pakistan has entered Into agreement with the World Bank (through IDACredit No.4258-Pak) for an amount of Special Drawing Rights (SDR) 30350 millionequivalents to US $ 45.650 million. The agreement was signed on 28* February, 2007. Thesecond revised PC-I has been approved by ECN EC on 28 August,] 2013. The breakup ofsources of financing In the second revised project plan In Pak rupees are as ut)der:

(Rupees In '000)

Govt. of the Punjab IDA Credit Total943,199 10,257,956 11,201,155

Agreement for Additional financing for an amount of Special Drawing Rights (SDR) 46.200million equivalents to US $ 70.000 million has been signed with World Bank on 20December, 2012 through IDA Credit No. 5151-Pak.

1.6 Components of LRMIS

There are four components of LRMIS Project:

I. Business Process Improvement anI Institutional Capacity Enhpncement.II. Development, Enhancement and Deployment of the LRM IS.

111. Service delivery and information campaigns.IV. Project Management Monitoring and evaluation.

s qf presentatIon

x110 ~ 1 u staternents have been prepared in accordance with Cash Basis under 1les have been applied consistently throughout the period.

Convntion

statements have been prepared under the historical cost convention with

occout. Accordingly, expenses are recognized when pald rather incurred.

Foreig currwncyTranscton s

adL. CaLcurrencls are accounted for in compliance with the

Dusmn O.M. No.F241)- BR-I/2007-1618 dated 27 July 2011. These are

tugthe pot-exchag rate on the date of tranactlon. Closing balances areusing the 'echange rate as on 3V March 2014 CPKR 104.9830 per US $ for IDA

Credit o. 4258-Pmk and on 30MJune 2014 @PKR 99.0021 per US $ for IDA Credit No. 5151-Pak.

2.4 Fixed Assts

FLxed Asets are disclosed on Historical Cost Basis. Schedule of Fixed Assets has been givenat Anexure - A.

Ma*- 2.5 Provsons

Du to ca batis of accounting no provislor is racognlued in-finencial statements.-fte,I aye hc a nysisia Jeg;al or Other obilgafion with cåntn~ent

e - a Listauk bNdetIfid d by sepnra9d,1osure in the ntas to the-,,flnancl d•at-ant- - - -

2.6 Offsetting

sairw 'thn~zrtJE,wimtd ea -~d tidWur have en set off An the finanial- state nts

ä~~uuatc cotuprise:iUj-

Description Us$ Rs.

shTh and ' DA 502.83OS-- -- ,49;f1.56Cash at Bank -DA 8,829,562.69 874,313,010.08Cash at Distric5s - GoPb 59,730.00

Tota 8,830,064.72 874,422,451.64

.7L

. 3 Servin eIIvery ond informatton Compolgns (Rues ln '000) ~

-- Su.omponnt - Payments Total

Operation and Maintenance of Service

Tobl 356.77 Ef- -..CTotal

5.1.4 Pr$lct Muf Mon~rng 8 Evoluation

Pyents Total

28,691 28,691Salar of Staff

53,668 53,568anertmaxP.of PMU

Hard ra, sofItware, Furniture & 1,305

Equip t -Total

Total of 5.1 23.9I.9

sj Puyments from GoPb Funds

(Rupees n 000)

De sptio n Pym u T

55151* 1,459 --

11,049 11049

1,458 1,458_Eleet nic Commrunicatio>n-

Grand Tol

6, Closing BklanceCsigbalanCe COmrPl$S

Descriptio ____0124$613

Cash in Iiand - IDA ___ .7 __,6_1---____-_ _. - --- - 3 43 13 .09 1,339,443,467.2

Cash at Bank - IDA 8,140.00Cash at Districs - GoPb

- - - - - - -1 3 ,4 3 7 .6 3 4 .8 1 ¯ 1 ,3 3 9 ,5 0 1 ,2 7 8 .6 0

Tota _-

3t..

k75~I

Receipts4.1 IDA Receipts

An amount of Rs. 2,737,527,233.81 (890,656,212.62+1,846,871,021.19) equivalent US$26,739,467.53 (8,483,813.69+ 18,255,653.84) (IDA 4258-Pak + IDA 5151-Pak respectively)

*% was received from IDA, World Bank during Financial Year 2013-14. Status of IDA receiptsWithdrawal Application wise for the Financial Year 2013-14 Is enclosed at Annexure-B.

42 Gb Receipt

An amount of Rs. 90.000 million received by Government of the Punjab for the FY2013-14.

4.3 DiKt Payment by the World Sank

Direct Pay ent has been made of amounting US$ 1,030,434 equivalent PKR 101,337,983through ICA Credit No. 51S1-Pak on dated 13-06-2014 and Dollar Rae was 98.34495279.

S. Payments

5.1 Payment from IDA, World Bank Financing

11 BM & Insttautnet Capecity Enhancement

(Rupees in '000)Sub-Component Payments Total

Legal/Business Process Consultancies 1,217 1,217

Institutional and Capacity Enhancement 1,245 1,245

Total

5.21.2 Oewlopment and Deployment of LRMIS

(Rupees in '000)Sub-Component Payments Total

Data Entry and Validation 1,176,462 1,176,462

Ovil Works 242;757 242,757

LRMIS Software 17,880 17,880

Connectivity 24,267 24,267

Provincial Data Center 23,830 23,830

Goods and equipment for Service Centers 455,300 455,300

Total 9 940J46 1,940,496

Recondliation of Accounts

7.1. GoPb Account:

Out of allocation of Rs. 90.000 million by Government of the Punjab, unspent balance ofRs.20,234,931 surrendered/lapsed on June 30, 2014.

Snad w....1M 4a2ss&Pak)

Description Pak HA. US$

BalSaN as per Bank Statement on 01.07.2013 842,668,996.36 9,441,835.02

-Received against W/A No. 26 890,656,212.62 8,483,81369

Cheques Issued and Cleared during the year (1,669,594,672.00) (16,397,605.56)

Balance as per Bank Statement on 31,03.2014 63,730,536.98 1,528,043.15

Less: Cheques Issued but not presented till 31.03.2014 --

Balance as p Cash Book on 31.03.2014 . 65,73053638 1,528,043.15

7.3. Special Account (IDA 5151-Pftk)

Description Pak Rs. US S

Balance as per Bank Statement on 01.12.2013

Received against W/A No. 01, 02, 03 1,846,871,021.19 18,255,653.84

Cheques Issued and Cleared during the year (638,972,761.00) (6,001,973.94)

Balance as per Hank Statement on 30.06.2014 1,207,898,260.19 12,253,679.9

Less: Cheques issued but not presented till 30.06.2014(34,115.90.00) (344,589.97)__

Balance as per Cash Book on 30.06.2014 1,173,783,130.19 11,909,08933

8. Authorla4tion

These fiHancial statements were authorized for issuance by mana ement of the LandRecords jianagement and Information Systems Project Punjab on 5 4a14.L.of

I A

PART-IT

COVERING LETTER TO THE MANAGEMENT LETTER 9

EXECUTIVE SUMMARY 10-11

MANAGEMENT LETTER 1-132

1. Introduction 13

2. Audit Objectives 13

3. Audit Scope and Methodology 13

4. AUDIT FINDINGS AND RECOMMENDATIONS 13-28

4.1 Organization and Management

4.2 Financial Management

4.3 Procurement and Contract Management

4.4 Overall Assessment 29

5. CONCLUSION 30

ACKNOWLEDGEMENT 31

Annexure 32

8

Office of the

DIRECTOR GENERAL AUDIT, PUNJAB61h Floor A.G Office Building, 1 Turner Road, Lahore.

Phone No.0429210147,Excange Nos.0429210823&0429212459 Fax No.0429210166

No. DGA/FAP/CDI Date:

To

The Senior Member,Board of RevenueGovernment of the Punjab,Lahore.

SUBJECT: Audit In Respect Of The Land Records Management & Information SystemsProjecL Financed By Government Of The Puniab And World Bank / IDA For TheFinancial Year 2013-14

We have audited the financial statements of LRMIS for the financial year 2013-14. While executing the audit, INTOSAI Auditing Standards as adopted by the Auditor Generalof Pakistan were applied to express audit opinion on the financial statements of the LRMIS.During audit activity, focal areas of internal controls and other operational spheres wereexamined and the results are given in the management letter for your consideration.

Audit findings and recommendations have been discussed with the LRMIS.Mangement in the meeting during August, 2014. The issues have been highlighted to facilitatethe management in improving internal controls and policies of operating procedures.

If you have any questions, please feel free to contact this office.

(MUHAMMAD NASIR ALI)DIRECTOR GENERAL AUDIT

9

EXECUTIVE SUMMARY

Director General of Audit Punjab conducted an audit of LRMIS in July and August, 2014. Themain objectives of audit were to express an opinion on financial statements of the project, toassess whether project was managed with due regard to economy, effeciency, and effectiveness,to review performance of LRMIS against the intended objectives, to review compliance withapplicable rules, regulations and procedures. The audit was conducted in accordance with theInternational Standards of Supreme Audit Institutions (ISSAI).

Main Findings:

1. Unauthorized expenditure out of previous year's balance of Assignment Accountwithout re-allocation by the Finance Department for Rs.874.363 million.

2. Non-deduction of Provincial Sales Tax from Consulting Firms for Rs. 86.268 million

3. No evidence for deposit of Punjab Sales Tax into the government treasury by the ServiceProviders for Rs. 79.138 million

4. Unjustified Payments to Patwaris by the Project Management and not by AppointingAuthority without any policy for assessing their efficiency for Rs.19.818 million

5. Payment of 20% advance on the basis of expired Bank Guarantee for Rs. 10.107 million

* 6. Non-deduction of LD charges from suppliers due to delay in delivery for Rs.8.937million

' 7. Irregular enhancement of salary of contract staff without approval of the competentauthority for Rs. 2.865 million

8. Irregular payment of Special Incentive on monthly bases to the Project Managementwithout approval of the competent authority during the year 2013-14 for Rs.2.730million

9. Less deduction of Income Tax from Consultants for Rs. 1.933 million

10. Non-realization of Provincial Sales Tax on acquiring services of individual consultantsfor Rs.1.678 million

11. Non-deduction of Income Tax at source from payment of Special Incentive toofficers/officials of Revenue Department for Rs.1.387 million

12. Irregular expenditure incurred on Entertainment without availability of Meeting Notices,Lists of Participants, attendance sheets and minutes of meetings etc. for Rs.1.024 million

13. Undue utilization of Project funds by purchasing vehicles not being utilized till the dateof Audit for Rs.25.054 million

10

14. Irregular/uneconomical expenditure on purchase of furniture & fixture for Rs.4.999million

15. Irregular Procurement without inviting tenders for Rs. 751,232

16. Irregular Purchases/ Repair work/Printing work without quotations and comparativestatements for Rs. 545,502

17. Incomplete acknowledgement of receipt of Hardware, IT Equipment, Plant/Machineryand Furniture / Fixture for Rs. 69.371 million

RECOMMENDATIONS:

i. The mechanism of procurement needs to be strengthened.ii. The government taxes need to be deducted and deposited into treasury at the earliest.iii. The financial management needs to be improved.

11