Scandal-hit companies avoiding audit

LAHORE – Public sector companies facing probes on their financial irregularities have come up with lame excuses to avoid the audit of their accounts, reveal the official documents.

The committee constituted by the Punjab Chief Minister to look into the companies’ affairs met last week but only to find that companies were reluctant to undergo the statutory auditory process on one pretext or the other.

Minutes of the meeting (copy of which is available with The Nation) have revealed that most of the companies even failed to submit their complete record before the committee.  Earlier,  the companies were directed to furnish detailed reports indicating the funds received from government, year wise and sequential events that led to delay in the audit duly supported by the documentary evidence to the I&C wing of the S&GAD.

As per details, Lahore Waste Management Company took the stance that since it was a subsidiary of the MCL, its accounts were not auditable by the Auditor General, Punjab. Its representatives, however, informed the meeting that external audit was conducted up to the June 30 2016. After advice from the Law Department, the committee decided that the company will have to get its accounts audited from the AG Office. 

Representatives of other companies, including Lahore Parking Company, Punjab Agriculture and Meet Company and Engineering consultancy Services told the meeting that they would start the audit process very soon. One company, Punjab Rural Support Program (PRSP) came with the claim that it was not a company at all under the law and for this reason its accounts were not auditable. 

The committee, however, empowered the administrative departments to blacklist the external auditors who failed to follow the given path. It also directed Energy department to take up the case with the Prosecution Department and the Anti Corruption Establishment to expedite the investigation into the matter.  In the second and third meeting of the committee chaired by the Additional Chief Secretary (ACS) Punjab last week, it was also decided that the concerned department may take up the matter for blacklisting of the external auditors.

The CFO of the Punjab Power Development Company informed that committee that consequent to the identification of the financial irregularities, the financial statement prior to the year ended 20015 became questionable. Hence, special audit was got conducted for the period ranging from 2013-16.

The committee observed that the external auditor M/S Deloitte could not detect the fraud during external audit, raised many questions on the credentials of the external auditors. It also directed that the board should take up the matter with the competent authority for proper action against the external auditor on the account of such inefficiencies. It was also decided that the matter should be taken up as a special agenda item in the company’s next board meeting.

The Energy Department was asked to take up the matter with the M/S Deloitte International for failure for the M/S Deloitte Pakistan in detecting the fraud during audit. The BWMC rep told that the company BOD was dissolved in February 2017 and the new board was notified on 17th April. He also gave the commitment about the appointment of the external auditor for the year 2015-17 in the near future while informing that audit by the AGP has been commenced from November 11.

The Punjab Agriculture and Meat Company official while defending the company informed that the delay in getting timely audit for years 2015-17 was due to engagement of the management for getting its financial audit and accounts for past five years from 2011-15. He said that the AGP was requested to audit the company.

The ECSPL gave the excuse that the company had appointed external auditor M/s Ford for the financial year 2014-15. The company became partner of the firm in another project which created conflict of interest due to which firm declined to finalize audit. Hiring of the new auditor was underway, he added. The chair questioned as to why the company made the external auditor as its partner.

The PRSP representative claimed that it does not fall within the meaning of Public Sector Companies as defined in the Public Sector Companies Rules 2013. The committee said that the case will be taken separately.

The Lahore Parking Company explained that the BOD was dissolved on December 30 2015 which led to delay in hiring of the external auditor. He said the company had reservations on the legal provision referred by the AGP for conducting of audit. However, the committee observed that the company didn’t make any request to the LG&CD department for reconstitution of the board after it was dissolved by the CM.

Punjab Industrial Estates Development and Management Company stated it could not hire external auditor as it was engaged in post-disaster management in Sunder Industrial Estate and also due to litigation in the Supreme Court.



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