AGP detects non-recovery of Rs 3.384b by KP E&P department

The Auditor General of Pakistan (AGP) has detected non-recoveries of the outstanding dues of over Rs 3.384 billion of energy from Central Power Purchase Agreement (CPPA) and Peshawar Electric Supply Company (PESCO) and overpayment of Rs 3.08 million due to allowing higher dollar conversion rate in the accounts of the Khyber Pakhtunkhwa Energy and Power Department, said Audit Report on the accounts Year 2016-17.

The non-recovery was noticed during the financial year 2014-15, in the office of Pakhtunkhwa Energy Development Organization (PEDO) wherein the Director O&C has claimed energy tariff dues worth Rs 2,386,794,000 relating to Malakand-III Hydel Power Project (HPP) from National Transmission and Dispatch Company (NTDC) through CPPA on monthly basis.

In response, the CPPA did not pay the amount in accordance with the provisions of Article 9.6 of the CPPA. It was further found that the payment of dues cleared by CPPA did not match the claims of PEDO rather paid lesser amount in most of the period.

Furthermore, the CPPA did not pay energy charges according to claims of the PEDO rather than from the months of Feb to June, lesser amounts were paid as compared to actual claim of the PEDO while in the excessive.

Moreover, the payment from CPPA did not have any reference to the payment claimed by PEDO, therefore, it could not be ascertained as to which period the dues were cleared and how much is outstanding.

The local office did not carry any reconciliation of dues and also did not have any proof of receipt of payment because all the payments were directly made to the concerned bank account.

The audit pointed that all payments made by CPPA were required to have been properly reconciled on monthly basis and recorded in the ledgers separately with clearly shown amount of outstanding dues, if any, against the CPPA, but neither record was available nor any action take towards reconciliation and recovery of outstanding dues by the local administration.

Less realization occurred due to weak financial and internal controls and when pointed out in June 2016, the management stated that written reply would be furnished later on.

Audit requested the department repeatedly, through DO letters, for holding of the Departmental Accounts Committee (DAC) meeting, however, neither DAC meeting was convened nor any progress intimated till finalization of the audit report.

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