Performance Audit: A Tool for Improvement

Performance Audit Applications in Public Sector

At the very outset of this section, it may be mentioned that there is not much data available on the subject in our country’s context. The reason for this is that the concept of accountability has so far not found deep acceptance and roots in our public and private sector organizations. Auditors are not welcome in any organization and they are rather dreaded and feared by the management of the organizations. They are considered as an outside influence rather than assistance to managements of different auditee organizations. But the blame cannot be placed at the door of any single organization and in this regard auditors have to share the blame equally because they have also the old mindset to point out the weaknesses of the auditee organizations and not to appreciate their good work and do not provide the guidance to administrations of the concerned organizations. In the following sub-sections are given the details of some performance audit reports.

Sukkar Bypass Project

A performance audit was conducted on the construction of the Sukkar Bypass Project in June 2002. The project was financed by the Asian Development Bank to the tune of US$45 million (PKR 1924.219 million). The cost was shared by ADB by 57% and by the Government of Pakistan (GoP) by 43%. The loan by ADB was provided at the rate of 6.53%. (Hussain June 2002) The primary objectives of the project were to reduce congestion, delays, and accidents on N-65 and also facilitate traffic flow on Lloyd Barrage. The main objections raised on the project were that it has both cost and time run. It was to be completed in 3 years but actually, it has a delay of one and a half years. The project was awarded to the second-lowest bidder at a higher cost than the first bidder by Rs.366.747 million. Although the delay in completion was due to some procedural reasons this is a comment on the inability of National Highway to plan for seen and unforeseen contingencies. Other lapses like escalation formula, deduction of total income from a local portion of funds, fixed exchange rates added to the loss of PKR 482.5 million. Time overrun of one and half years also increased the cost by PKR 399.5 million. A foreign consultant was hired at an exorbitant rate of PKR 50.815 million. Despite these higher costs on the financial side that have compromised efficiency and economy, the third benchmark of effectiveness was also not realized because both objectives of neither the congestion were reduced because it passes through close vicinity of Sukkar city and Buchal Shah Miani which is a very congested area nor traffic flow was streamlined. In addition, there were some serious structural drawbacks pointed out by the experts and auditors like the project was completed without weighbridges and toll plaza. “Operation of a bypass without installation of the weighbridges and its construction in a congested area is clear and flagrant violations of the bypass project”. (Hussain June 2002)

Performance Audit Report of Benazir Income Support Program (BISP), 2010

The Performance Audit of Benazir Income Support Programme (BISP) was conducted in 2010 only two years after its inception. The report at that time has pointed out many valid observations at its efficiency in the terms of poverty alleviation and effectiveness of the program to outreach to the poor sections and bring them out of the poverty trap through a gradual exit strategy. Other objections raised by the audit to BISP include the program is being run in an ad-hoc manner without any planning. (Ahmad, Durrani and Rajoka 2010) BISP has not constituted its BISP Council and “structure of Board does not adhere to applicable law.” (Ahmad, Durrani and Rajoka 2010) It has further raised questions over the sustainability and effectiveness of Waseela-e-Haq, one of the projects of the BISP. Some faults were indicated in the Poverty Scorecard Survey because the survey was not conducted as it was designed by going door to door and secondly it was awarded to the firms without any competition and without checking their previous experience and profile. This was the reason that survey did not depict the poverty level indicators of the district of Multan. The performance audit has pointed out problems with the involvement of the postman in the distribution of payments and illegal gratification taken by him and a very tedious and slack system of grievance redressal.

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