REFERENCE / COMPLAINT NO. XX

Reference dated 22-5-2004 – Billion Rs Irregularities in Defence Budget

To:
The Chairman
National Accountability Bureau
President’s Secretariat
Islamabad.

Pakistan Peoples Party ...... COMPLAINANT

V/s

1. Controller Military Accounts

2. Garrison Engineer (Army Services)

3. DW&CE (Air and DW&CE) (Army)

4. Minster of Defence ......... RESPONDENTS

Subject : Complaint In terms of Section 5 and 18 (b) (ii) 0F THE NATIONAL ACCOUNTABILITY BUREAU (NAB) ORDINANCE 1999 against the Public Office Holder for punishment under Section 10 of NAB Ordinance REGARDING financial and administrative irregularities in defence budget 2001 to 2002

1. The respondents in this complaint do fall within the ambit of NAB Ordinance 1999 for the purposes of investigation trial and punishment.

2. The respondents are reportedly guilty of corruption and corrupt practices as defined in Section 9 of the Ordinance and as such are subject to punishment under Section 10 of the Ordinance based upon the following facts and grounds:

Facts and Grounds:
According to a news item published in THE NEWS dated March 23, 2004 (copy enclosed), a serious case of abuse of power resulting into massive loss to the government exchequer as pointed out by the Auditor General of Pakistan.

In the said news item, the irregularities committed by the respondents have been pointed out which are being incorporated as under:

According to the AGP, these irregularities cover only the accounts of defence services, controllers military accounts, special audit report of GE (Army services), special audit of DW&CE (Air and DW&CE(Army) and cantonment boards.

Many other audit reports of the federal ministries were also tabled in the House but their financial impact is less than that of the audit containing the details of irregularities in the military.

Over three dozen government owned public enterprises were found involved in irregular spending of Rs 17 billion during the year 2001-2002. According to the AGP, the audit report on the accounts of defence services has topped the list of irregularities as over Rs 29 billion were found misused, Rs 27 billion, recoverable, violation of rules, Rs 761 million, mismanagement, Rs 165 million, violation of propriety Rs 8.5 million, recoverable Rs 213 million, overpayments Rs 5.9 million, irregular expenditures Rs 43 million, unauthorized expenditure Rs 10.2 million, extra and avoidable expenditure Rs 2.6milloiin and others Rs 1.2million.

The special audit report on GE army services Rawalpindi covers irregularities. Mismanagement Rs 790 million, misuse Rs 2.9milion, recoverable Rs 109million, violation of rules Rs 32million and others Rs 40milloin. The audit report on the accounts of controller of military accounts covers the irregularities of Rs 6 billion on account of irregular expenditure, mismanagement Rs 56 million and unauthorised payments Rs 228 million.

The audit report on accounts of defence services (DP division) covers the irregularities of Rs 858 million, recoverable Rs 18million, negligence Rs 2.3 million, unauthorised/irregular expenditure Rs 1.4 million, violation of rules, Rs 217million and others Rs 72million.

Special audit report on the projects of DW&CE (air) DW and CE (Army) covers irregularities of Rs 132 million, violation of rules Rs 16.358 million, overpayments Rs1.4 million, recoverable Rs 4.8 million, others Rs 4.4 million. Special audit report on the accounts of cantonment board covers the irregularities of Rs1.9 billion on account of mismanagement, recoverable Rs1.6 billion, violation of rules Rs34milloin and others Rs 7.7 million.

Conclusion:
Based on the above facts and grounds respondents have shown willful indulgence in corrupt practices under Section 9 of the Ordinance. Such persons are subject to punishment under Section 10 of the Ordinance.

As such the Chairman of the NAB is called upon to initiate investigation in connection with the matters set out herein above and further proceed to file a reference against respondents for violating the provisions of Section 9 of the Ordinance punishable under Section 10 of the Ordinance in competent court of law and proceed against those concerned for violating Section 9 of the Ordinance.

Complainant
Pakistan Peoples Party

Through:
Amir Fida Paracha Advocate
Islamabad Dated : 22 May 2004

The Reference / Complaint is based on the source incorporated as under :

Army audit reports tabled in NA
By our correspondent
The News, March 23, 2004

ISLAMABAD: Five audit reports of Pakistan Army containing details of "financial and administrative irregularities to tune of Rs 40 billion" in defence budget in 2001-2002, were tabled in National Assembly here Monday.

The Auditor General of Pakistan in his five reports has identified many "common lapses and negligence" on the part of Army, such as "prevalent practice of violation of rules, procedures, regulations, weak internal financial control over spending."

According to the AGP, these irregularities cover only the accounts of defence services, controllers military accounts, special audit report of GE (Army services), special audit of DW&CE (Air and DW&CE(Army) and cantonment boards.

Many other audit reports of the federal ministries were also tabled in the House but their financial impact is less than that of the audit containing the details of irregularities in the military.

Over three dozen government owned public enterprises were found involved in irregular spending of Rs 17 billion during the year 2001-2002. According to the AGP, the audit report on the accounts of defence services has topped the list of irregularities as over Rs 29 billion were found misused, Rs 27 billion, recoverable, violation of rules, Rs 761 million, mismanagement, Rs 165 million, violation of propriety Rs 8.5 million, recoverable Rs 213 million, overpayments Rs 5.9 million, irregular expenditures Rs 43 million, unauthorized expenditure Rs 10.2 million, extra and avoidable expenditure Rs 2.6milloiin and others Rs 1.2million.

The special audit report on GE army services Rawalpindi covers irregularities. Mismanagement Rs 790 million, misuse Rs 2.9milion, recoverable Rs 109million, violation of rules Rs 32million and others Rs 40milloin. The audit report on the accounts of controller of military accounts covers the irregularities of Rs 6 billion on account of irregular expenditure, mismanagement Rs 56 million and unauthorised payments Rs 228 million.

The audit report on accounts of defence services (DP division) covers the irregularities of Rs 858 million, recoverable Rs 18million, negligence Rs 2.3 million, unauthorised/irregular expenditure Rs 1.4 million, violation of rules, Rs 217million and others Rs 72million.

Special audit report on the projects of DW&CE (air) DW and CE (Army) covers irregularities of Rs 132 million, violation of rules Rs 16.358 million, overpayments Rs1.4 million, recoverable Rs 4.8 million, others Rs 4.4 million. Special audit report on the accounts of cantonment board covers the irregularities of Rs1.9 billion on account of mismanagement, recoverable Rs1.6 billion, violation of rules Rs34milloin and others Rs 7.7 million.