The Auditor General of Pakistan (AGP) has detected irregularities of around Rs25 billion in the financial affairs of armed forces.

According to the audit report on the account of defence services for the audit year 2021-22, Pakistan Army incurred Rs21 billion, Pakistan Air Force Rs1.6 billion, and Pakistan Navy incurred Rs1.6 billion in irregularities.

The audit report pointed out Rs66 million in irregularities in inter-services organizations and embezzlement of Rs203 million was incurred by Military Accountant General.

The report further maintained that Military Lands and Cantonments sustained irregularities of Rs2 billion.

The irregularities Pakistan Army sustained include around Rs18 billion due to the mis-procurement of a store. During the audit of Army formations, it was observed that procurement of different items was made without open competition and other irregularities in the tendering process.

The other major irregularity observed due to irregular conclusion of contracts without observing Procurement Rules which was around Rs2 billion. It was observed that the procurement of goods and services was made in violation of the Public Procurement Rule.

The report stated that the irregular award of a contract and mis-procurement of medicines in Combined Military Hospital (CMH) Peshawar caused Rs290 million of irregularities.

Similarly, the submission of tampered Public Procurement Regularity Authority (PPRA) website tender notices with contingent bills caused Rs132 million unauthorised payment.

Another mis-procurement was noted during the audit of PMA Kakul and the scrutiny of record revealed Rs10 million of irregularities.

According to the audit report, Pakistan Air Force violated PPRA Rules-2004 during irregular consumption of Sui gas for the generation of electricity to the tune of Rs610 million, Rs481 million of irregularity caused due to unauthorised payment of overtime and conveyance allowances, Rs181 million against unnecessary procurement of sports items, RS102 million for irregular expenditure on construction of sports complex, Rs83 million for unauthorised procurement of cruise boat beyond authorisation, Rs52 million for irregular supply of electricity to Air Force Officers Housing Scheme (AFOHS), Rs38 million for irregular receipt on account of hospital development fund, Rs15 million for doubtful expenditure on maintenance of grounds, Rs12 million for irregular benefit awarded to contract due to advance payment and four million for unauthorised expenditure on a fitness club.

The report maintained that Pakistan Navy incurred irregularities of Rs1.6 billion against non-imposition of liquidated damages reflecting the failure of the management to safeguard government interest.

Inter-services organisations, according to the audit report incurred around Rs40 million of irregularities due to unauthorised procurement of gifts/ souvenirs without observing public procurement rules and an amount of Rs26 million was spent on the purchase of stationery items from non-participant suppliers.

The report further stated the Military Lands and Cantonments incurred a total of Rs2 billion of irregularities, including Rs1.9 billion caused due to unauthorised construction of four floors by a builder in Hyderabad Cantonment. Rs88 million of irregularity was caused by unauthorised change of purpose and non-deposit of premium, composition fee and development charges in which residential property in Rawalpindi was used for commercial purpose. Another irregularity of Rs20 million was observed which was incurred due to unauthorised utilisation of residential leased property as commercial without renewal of the lease agreement.

The audit report further identified various sectors financed out of the Defence Services Grant and highlights significant issues within each sector.

The major issues identified in this report include non-production of record, violation of Public Procurement Rules, 2004, non-provision of public and municipal services, weak internal control within the armed forces, non-adherence to rules and regulations in the execution of public works, non-withholding of income and sales tax and its deposit into the public exchequer, lack of transparency in local procurement of stores and its management, health services, irregular conclusion of contracts for defence production of weapons and equipment and systematic issue of advance payment in defence procurement.


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