AUDIT REPORT ON

REVENUE RECEIPT ACCOUNTS OF GOVERNMENT

OF

THE GILGIT-BALTISTAN

2022-23

Draft Prepared by:

(MUHAMMAD ALI)
FINANCE & ACCOUNTS OFFICER
R&E SECTION

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 PREFACE

As per Rules of Business, 2009 schedule-II (DISTRIBUTION OF BUSINESS AMONG

DEPARTMENTS) Rule 9(4) and Section 27 of Finance Act-2023, the Finance Department
Gilgit-Baltistan has been given the mandate to have supervision and control of financial
business and to perform internal Audit. Under the said mandate, Finance Department
Gilgit-Baltistan carried out Internal Audit (revenue) of the five departments (Skardu
Region) for the financial year 2022-23. In pursuance of Office Order, No.F. R&E-2/2019-
20 dated 5th October 2023, a team of this department have been nominated to carry out
the subject audit. The audit team comprising of following members:

1. Mr.Ahamd Shah Masood Deputy Secretary (A&A,R&E) (Team Leader)

2. Mr. Muhammad Ali Finance & Accounts Officer (R&E). (Team Member)
3. Mr. Hasrat Hussain, DEO (R&E). (Team Member)
4. Mr. Khalid Mehmood DEO (R&E) (Team Member)
5. Mr. Naveed Abbas LDC (R&E) (Team Member)

1. HOME AND PRISON DEPARTMENT

Core Operational Activities:

1. Issuance of driving license 2.Renewal of driving licenses
3. Domicile Fee 4.Renewal of Firm Fee
6. Stamp duty on gift 5.Arms license fee
7. Arms license renewal 8.Expolisive permits
8. Firm registration fee 10.Registration of NGO
B) Comments on Budgeted Receipts (Variance Analysis)
The Home and Prison department has failed to achieve its revenue targets during the
financial year 2022-23. The comparison of budgeted revenue estimates, and actual
collection of the department for the financial year 2022-23 are given in the table:
Target Actual Percentage
200,000,000 142,462,799 71.231%

The management needs to analyze the causes of the shortfalls depicted in the above table
and take appropriate steps to improve the revenue collection.
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Audit profile of Department:
Revenue/Receipts
S# Description Total Nos. Audited
FY 2022-23
01 Formations 15 05 71.231

Classified Summary of Audit Observations:

During audit of the Home and Prison department it was observed, that the books of
account are not prepared and didn’t follow accounting mechanism by the concerned
formation. It was further observed that the department did not recover renewal fee, not
applied rates as per Finance Act 2023, 5% deduction on initial basic instead of deduction
on running basic, issued tender forms without receiving tender documents fee and not
following the rules and procedure defined for land registry.

THE KEY AUDIT FINDING

1.1 Non Maintenance of Receipt record: (AC, DC, SP & TEHSIL Office)
According to para 77 (I & ii) of central treasury rules (CTR); all transactions of
receipt/expenditure should be recorded in Cash Book in Form T-R 4 as soon as they
occur and are attested by the head of the office.
During audit of the accounts record of the Traffic Police for the Financial Year 2022-23,
following shortcomings were noticed:
1. Receipt Cash Book, Fine Challans Books record and stock register was not properly
maintained. Furthermore, Challan Books consists of 100 Challan pages but the
missing Challans from books were not known.
1.2 Missing of 19 (19*100=1900 pages) Traffic Challan Books: (SP Traffic)
According to para-23 of GFR volume-I, every Government officer should realize
fully and clearly that he will be held personally responsible for any loss sustained by
Government through fraud or negligence on his part or on the part of his subordinate.
During our audit, audit team noted that the traffic police department has lost (19 books
containing 100 pages per book) the fine book, which contains records of fines imposed on
offenders for traffic rule violations. The loss of this book presents a significant risk to the
Government as it can lead to the loss of revenue and fraudulent activities.
1.3 Traffic Challan Books were printed by the Department itself: (SP Traffic)
Para-11 of GFR provides that each head of the department is responsible for
enforcing financial orders, strict economy at every step and observing all relevant
financial rules and regulations both by his own office and by subordinate disbursing
officers.
During the audit of police fine books, it was found that the books were printed by the
police department without proper authorization from the finance department. The lack
of authorization raises concerns about the transparency of financial transactions. Failure
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to comply with established procedures can result in financial irregularities, which may
lead to legal and financial implications for the department and heavy loss to Government.
1.4 Non-Application of New rates as per Finance Act 2023: (AC, DC, SP &TEHSIL
Office)
Para-11 of GFR provides that each head of the department is responsible for
enforcing financial orders, strict economy at every step and observing all relevant
financial rules and regulations both by his own office and by subordinate disbursing
officers.
The non-application of new rates of fines and fees as per the Finance Act 2023 is a
significant concern, which exposes the government to the risk of losing potential revenue.
According to Sr. No. 5 of the First Schedule to the Gilgit –Baltistan Finance Act- 2022 rate
of Domcile fee was Rs.100. During audit of the assistant commissioner Rondu and skardu
for the financial year 2022-23, it was observed during scrutiny of Domcile Fee,
departments has charged at the rate of 10 instead of 100 which resulted in loss to
Government.
Recommendations:
i. Treasury officers at respective district shall be made part of surprise visit
and snap checking so that the fines shall be submitted initially through TR-
6 form dully signed by concerned Treasury Officer.
ii. Fine books shall be issued through Treasury Office dully printed by Finance
Department to avoid duplication and misuse.
iii. Department shall submit proposal for digitalized fine mechanism as per
prevailing practice in other provinces of Pakistan.
iv. Circulate Finance Act, 2023 to all DDOs across the province for strict
compliance.
1.5 Loss to Government due to misuse of Government land: (SP Office)
According to Rule 1 of Annexure A to Para 38 of GFR Vol.-I states that the
departmental authorities are primarily responsible to see that all revenues are correctly
and promptly assessed, realized and credited to government treasury.
The use of government land for the construction of buildings for departmental use is a
practice that must be subjected to adequate scrutiny, transparency, and accountability.
Audit team revealed that senior superintend of police department (SSP) have been using
government land for the construction of buildings for departmental use, without
following the necessary legal processes and procedures. This practice creates an
opportunity for misuse of public resources, corruption, and abuse of power. During audit
of the accounts of senior superintendent of police department for the financial year 2022-
23, it was noticed that an area of 2 kanal (approximate) was occupied by department and
build 06 shops size 18*12 (approximate) and 01 marriage hall. Police department set
shops (5*6000=30,000 per month) and marriage hall(475000 per year) on monthly rent,
and receives a handsome amount (835000) per year regularly, and transfer the amount
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to POLICE WELAFARE FUND Account, resulting the Government sustained a loss of
Rs.835000 /- per year, rent assessment done by audit team of Finance team.
Recommendations:
Audit Team recommends that the department concerned may take up case with
concerned authorities to ascertain actual position to recover amount identified by Audit
Team.
1.6 Deducted 5% HRA on initial basic instead of running basic from the
resident in Government accommodation. (AC, DC, SP &TEHSIL Office)
During audit of accounting record of the Home and Prison department for the financial
year 2022-23, it was noticed that 5% of initial basic was deducted instead of deduction on
running basic (as per Finance Act-2023, schedule-1 section 12(11) from the resident in
government accommodation (HRA). The same was required to be recovered from the
employee.
Recommendations:
Audit recommends recovery @ 5% on running basic and the difference amount since July
2023 should be deposited into Government treasury under intimation to finance
department.
1.7 Issued tender forms without receiving tender documents fee: (AC, DC, SP
&TEHSIL Office)
According to Para 8 of GFR, subject to such general or specific instruction as may be
issued by Government in this behalf it is the duty of the Revenue or Administrative
Department concerned to see that the dues of Government are correctly and promptly
assessed collected and paid into the treasury.
During the audit of Excise and Taxation department it was observed that the accountant
issued the tender forms to the contractors without receiving the tender documents fee as
per the Finance Act-2023, which is high negligence on the part of department.
Recommendations:
Audit recommended that the tender forms should be issued after checking the bank
deposit slip (TR-6) duly verified by the concerned treasury office and should recover the
amount lost due to negligence of the department.
1.8 Accounting mechanism were not followed:
During the audit of accounting record, it was observed that the excise and taxation
department did not follow the accounting mechanism to prepare financial statements e.g
 TR-6 are not filed in chronological order
 Documentary proof/evidence were not attached/annexed the with the books of
record

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The management entirely relied on figures reported by the treasury office/AGPR they
didn’t bother to maintain a file or register regarding revenue collections.
Recommendations:
Audit is of the view that under existing arrangement audit could not ascertain the
authenticity of the collections of revenue. Recommended to follow the proper accounting
mechanism in preparation of financial statements and submit reconciliation statements,
on monthly basis. training sessions shall be arranged to equip staff with accounting
mechanism.
1.9 Issuance of arms licenses without receiving requisite fee: (AC Office)
During audit, audit team found that Deputy Commissioner (DC) sakrdu had issued arms
licenses without receiving the requisite fee. This action of the DC is a clear violation of the
rules and regulations outlined for the issuance of such licenses. The non-receipt of fees
has led to financial irregularities and loss to the government. It is necessary to ensure
that proper procedures are followed for the issuance of arms licenses and that fees are
collected as per the rate mentioned in Finance Act 2023. Failure to do so can lead revenue
loss to Government.
Recommendations:
Audit team strongly recommend that the concerned authorities take necessary action to
rectify this issue and ensure compliance with the rules and regulations for such
transactions.
1.10 Cash collection and Delayed in depositing into bank: (AC, DC, SP &TEHSIL
Office)
According to Finance Act 2023, Section 19, all the collection shall be deposited into
Gilgit-Baltistan consolidated Fund Account through treasury challan instead of cash
collection, Even if collected in, the same shall be deposited in the treasury with in twenty
four hour.
During the course of audit, audit team noted that the Home and prison department
received tender document fees and domicile fee in cash (kept in pocket for couple of days)
instead of receiving it in the form of treasury receipts.
Recommendations:
Audit recommend that the department should adopt a strict policy as defined in Section-
19 of Gilgit- Baltistan Finance Act, 2023 for submission of fee collection against various
heads within 24 hours in GB Consolidated Fund Account.
1.11 Non-production of auditable records/books (AC Office)
According to para 17 of GFR Vol-I read with Section 14 of the Auditor General’s
Ordinance 2001, no information nor any book or other documents, to which the Auditor
has a statutory right of access, may be withheld from the Audit.
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During Audit of accounting record of Excise and Taxation department following record
was requisitioned.
 Revenue register (Fines)
Despite several verbal requests, the record was not produced to audit for verification. The
lapse occurred due to non-observance of rules.
Recommendations:
Audit recommends production of auditable record and strict disciplinary action against
the persons at fault.
1.12 Loss due to non-renewal of stamp vendor: (AC Office)
During the audit it was observed that stamp venders operate their services without
renewal of license, Assistant commissioner skardu neither recovered license renewal Fee
& penalty from the defaulters nor suspended/canceled registration of the defaulting
stamp venders. This resulted in non-realization of Government revenue. The loss
occurred due to non-enforcement of rules.
Recommendations:
Audit recommends recovery of Government dues from the defaulters under intimation to
Finance Department. Instructions to follow procedures prescribed as per Finance Act,
2023.

1.13 Failure to attach the Stamp Paper at the prescribed rate of 1.5% of the
total value of Land Registry: (Tehsil Office)
During the audit of Land Registry records, Audit team observed that in some instances,
the Stamp Paper was not affixed to the documents at the prescribed rate of 1.5% of the
total value of the property (Land Registry). The Stamp Paper is a legal instrument that
serves as proof of payment of the applicable stamp duty on the document being registered.
In some instances, the Stamp Paper without verified valid stamp of stamp vendor was
affixed.
Recommendations:
It is imperative that management ensures compliance with regulatory requirements by
implementing robust controls and reviewing procedures for the payment/affixing of
stamp duty. Audit recommends that matter be pursued and recovery shall be made as per
law/ rules.

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1.14 All judicial fines (fine on flour mills, fines on petrol pumps etc.) collected
were deposited in the municipal community account rather than the Gilgit-
Baltistan consolidated fund account: (AC Office)
During our audit of deputy commissioner office, audit team observed that all judicial fines
(fine on flour mills, fines on petrol pumps etc.) collected were deposited in the municipal
community account rather than the Gilgit-Baltistan consolidated fund account. As per
regulatory requirements, judicial fines must be deposited in the Gilgit-Baltistan
consolidated fund account after collection. Failure to comply with this regulation may loss
to Government revenue.
Recommendations:
Audit recommend that immediate action should be taken by management to rectify the
non-compliance and ensure the timely deposit of all judicial fines collected into the Gilgit-
Baltistan consolidated fund account.
1.15 Issuance of NGO Register licenses without receiving requisite fee:(AC
Office)
During audit, audit team found that Deputy Commissioner (DC) sakrdu had issued NGO
licenses without receiving the requisite fee. This is clear violation of rules and regulations
outlined for the issuance of such licenses. The non-receipt of fees has led to financial
irregularities and loss to the government.
Recommendations:
Audit team strongly recommend that the concerned authorities take necessary action to
rectify this issue and ensure compliance with the rules and regulations for such
transactions and fees shall be collected as per Finance Act, 2023.

2. Water and power Department

2.1 Inaccurate meter reading:
During the audit, it was noticed that inaccurate meter reading is causing immense
financial loss to the government. This is mainly due to the traditional meter reading
methods and outdated meters, which result in inaccurate readings, leading to abandoned
revenue loss to the government.
Recommendations:
i. The audit team strongly recommends the installation of smart meters in
major urban areas, training of billing staff and shuffling of staff working for
more than three years.
ii. Prompt decision is required for installation of smart meters/ digital meters
at commercial areas i.e. Banks, high rated hotels, telecommunication
towers, filling stations and mini industries operating in the province.
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2.2 Short-realization of electricity charges:
According to paras 26 & 28 of GFR volume-I, it is the duty of the departmental
controlling officer to see that all sums due to government are regularly and promptly
assessed, realized and duly credited in the public account, no amount due to government
should be left outstanding without sufficient reason.
During the audit of water and power department for the financial year 2022-23 it was
observed that a huge amount Rs.118,526,397/- of government revenue was outstanding
against the consumers on account of electricity bill charges but the department did not
take concrete steps to realize the charges. However, no legal action was taken by the
management for recovery of long outstanding electricity charges from the users, this
caused short-realization of government revenue of Rs.118,526,397 /- as summarized
below:
Govt. Army UNO Offices public Total
21,130,000 27,270,728 4,325,669 65,800,000 118,526,397

Further bifurcation of Army’s outstanding amount till August 2023.

Outstanding
S.No Consumer # Name/Location of Office
(Rs.)

1 733 62 Bde office Tak HQ Kusho Bagh 2410533

2 739 FIU Office Skardu 66305
3 730 Army Signal center Office Meter No I 281570
4 1366 Army Signal center Office Meter No II 543945
6 3054 Control Room Gamba Offices 259772
7 1380 66 AIP C/O FPU-8 1608222
5 1868 5 Aviation Offices Gamba 183508
9 7240 CMH Gamba 847900
10 7237 Officer Mess Kusho Bagh 2074759
11 8058 Cantt- Three Phase 2589702
12 20544 62 Brigade Take HQ Khoshubagh 801527
13 15107 5 Aviation office Mess M No 02 Gamba 3786641
16 20572 CMH 200 KVA TR M/No 02 789113
20 25339 CT Scan CMH Gamba Skardu 2368387
18 25353 Nustat Shaheed Camp 7410907
8 3017 Guard Room STA House 33524

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 14 20554 Newly install 200 KVA Transformer near 147437
578 Btry army aviation
19 1861 BOQS Hamid Guard Skardu 652821
17 11058 Sanullah S/O Abdul Rahim House C/O 232063
209 Svy Sec
15 20555 Officer Mess 5 aviation airport 182092
Total 27,270,728

List of electricity defaulters of government employees living in government

accommodations:

C/No Amount
S.No Name of employee Department Designation due
1 8 Mejor Tanveer CMH Doctor 5040
2 15 W. Younus Ali W&P LDC 15361
3 16 Zubair Ahmed Khan GBDMA AD 3794
4 17 M. Hussain DC Office LDC 3016
5 23 Syed Khurshid Alam GBPED Work Munshi 19246
6 25 Khadim Hussain GBPHE Helper 11890
7 28 Kashif Hussain Civil Court reader 1721
8 28 Ali Raza GBPWD Quli 230
9 708 Nelofer Khan Education Principal 7288
10 743 Mirza Hassan Police SSP 8702
11 789 Atif Mir Police SDPO 77010
12 787 Fayaz Alam GBPWD Accountant 3784
13 787 SaeedulAmeen GBPWD Accountant 5407
14 1308 Doc Ghulam Abbas Agriculture SSO 4401
15 1319 Mayam Police Lady Police 220517
16 1322 M. Qasim Power LDC 42130
17 1325 M. Javaid Police SIP 32673
18 1325 Muneer Ahmed Power Helper 4588
19 132 Saif House ISI Saif House 28177
20 1333 ADC House ADC ADC 106625
21 1336 Sharafat Hussain GBPWD Clerk 43201
22 1350 M. Ashraf Education HM 889
23 1393 M. Ashraf GBPWD H/E 51719
24 3030 Taj Muhammad GBPWD SE 22442
25 3095 Mehrin imtiaz Education Principal 35777
26 3096 M. Ilyas Civil Court Driver 41339
27 3927 Gulshan Nisa Police Inspector 40100

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 28 3994 Narjis Khatoon Education Teacher 36386
29 15196 Kifayat Hussain Torizm AD 69696
30 165197 Zarina Batool Police SP 29282
Total: 972431

Government Departments’s outstanding balances:

S.No C/No Department Outstanding

1 5 District Police Rest house 183881
2 34 PTDC Rest house 13738
3 35 VIP Rest House 125878
4 36 Special Branch Office 4623
5 58 DIG House 100858
6 704 District Head Quarter Hospital 4275073
7 716 Women Thana Skardu 11310
8 722 City Thana Skardu 21025
9 737 VIP Rest House 11531
10 747 SSP Office 9360
11 748 VIP Rest House 71855
12 750 Commissioner House Boiler 118050
13 753 SSP Office 9675
14 770 Veternary hospital 8518
15 1828 DDMA Office 105238
16 1832 PCR Office 133427
17 1871 PTDC Rest house 255175
18 1872 PTDC Rest house 18043
19 3051 Agriculture 6901
20 3992 DSP Office 8171
21 7242 VIP rest house B&R 30650
22 7249 GPO Skardu 7200
23 7252 Girls College Hostel 8540
24 7296 DIG Guard room 33480
25 8059 IT Gorls College 107559
26 8089 GPO Skardu 6000
27 8091 Girls /college III Phase Meter 108904
28 8095 Girls College Hostel 17601
29 15102 PCR Lab 52880
30 15141 Tissue culture lab Agriculture 58025

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 31 15142 Tissue culture lab Agriculture 72114
32 20508 GPDMA Qtr 51342
33 20543 Police Markaz 44239
34 20576 Passport Office III Phase 89036
35 206586 Water filter plant PHE 67970
36 20580 Water filter plant PHE 75834
37 20583 Water filter plant PHE 44979
38 20586 Water filter plant PHE 39774
39 20589 Water filter plant PHE 49269
40 25326 Hospital Bakeri 59414
41 25325 Drug Bank Hospital 86526
42 32134 Veternary hospital 3840
43 32154 Complain Office PHE 35128
Total: 6642634

Recommendations:
Short realization of electricity Charges resulted in loss to the government, Audit
recommends that the department needs to take effective steps for timely recovery of
outstanding amount under intimation to Finance Department and fixing of responsibility
on the person(s) at fault.
2.3 Non-production of auditable records/books:
According to para 17 of GFR Vol-I read with Section 14 of the Auditor General’s
Ordinance 2001, no information nor any book or other documents, to which the Auditor
has a statutory right of access, may be withheld from the Audit.
During Audit of accounts record of water and power department for the financial year
2022-23, the following record was requisitioned.
 Detail of officers/officials who are residing in Government Accommodation
Despite several verbal requests, the record was not produced to audit for verification. The
lapse occurred due to non-observance of rules.
2.4 Non deduction of 5% HRA from the resident in Government
accommodation:
During audit of accounting record of the water and power department for the financial
year 2022-23, it was noticed that 5% of initial basic was not deducted from the resident
in government accommodation. The same was required to be recovered from the
employee and deposited into Government treasury under intimation to finance
department.
Recommendations:

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Audit recommends recovery as well as fixing of responsibility on the person(s) at fault.

2.5 Difference in the revenue figure of Reconcile statements and Revenue

Register Rs. 1000,000:
During scrutiny of the record and Reconcile statement, it was observed that the actual
figures of receipts mentioned in the Revenue Register of water and power department
were not matching with the Reconciliation figures showed and a difference of
Rs.1000,000 for in the month of July 2023. (Detail given in annexure- C)
The incorrect figures were supplied for preparation of budget estimates due to lack of
administrative and internal control and resultantly true and correct figures were not
represented in budget book and other accounting documents.
Recommendations:
Audit recommends that the differences may be sorted out and corrected accordingly in
books and other accounting documents.
2.6 No accurate preparation of Revenue Ledger & Non Maintenance of
summarized Receipt record:
Para-23 of GFR provides that every Government officer should realize fully and
clearly that he would be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will also be held
personally responsible for any loss arising from fraud or negligence on the part of any
other Government officer to the extent to which it may be shown that he contributed to
the loss by his own action or negligence.
During audit of the accounts record of the water and power for the Financial Year 2022-
23, it was noticed that the water and power department did not prepare Revenue Ledger
which were required to be presented for internal audit as required under the rules.
However, the following shortcomings were noticed:
1. Revenue Ledger was not properly maintained to know the actual receipt.
2. Fine Book record was not maintained.
Recommendations:
The lapse occurred due to weak internal control. Audit recommends investigating the
matter and fixing responsibility.
2.7 Dues of Government collected and not paid into the treasury promptly:
According to Para 8 of GFR, subject to such general or specific instruction as may be
issued by Government in this behalf it is the duty of the Revenue or Administrative

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Department concerned to see that the dues of Government are correctly and promptly
assessed collected and paid into the treasury.
During the audit of water and power department it was observed that cashier received
cash from contractors against the issuance of tender form and deposit the same amount
in bank after couple of days instead of issue the tender form after checking the TR-6 duly
verified by concerned treasury office.
Recommendation:
Audit recommended that the form should be issued after checking the bank deposit slip
duly verified by the concerned treasury office.

3. EXCISE & TAXATION Z&U and COOPERATIVES DEPARTMENT

Introduction:
The Excise, Taxation Z&U and Cooperatives Department was established as an
independent entity in 2009. This Department provides services for collection of various
fee, duties and suggests ways and means for additional resource mobilization in the
Province, Excise & Taxation Z&U and cooperatives Department consists of 13 auditable
locations/formations.
Core Operational Activities:
1. Indexing of NCP Vehicles
2. Annual road tax for vehicles
3. Route permit fee
4. License fee for bus/wagon stands,
5. Fitness fee
6. Registration of new cooperative societies and
7. Annual renewal of cooperative societies.
B) Comments on Budgeted Receipts (Variance Analysis)
The Excise and Taxation department has failed to achieve its revenue targets during the
financial year 2022-23. The comparison of budgeted revenue estimates, and actual
collection of department for the financial year 2022-23 are given in the table:
Target Actual Percentage
4.50 million 215.005 million 47.779%

The management needs to analyze the causes of the shortfalls depicted in the above table
and take appropriate steps to improve the revenue collection.
Audit profile of Department:

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 Revenue/Receipts
S# Description Total Nos. Audited FY 2022-23
(Rs. in Millions)
01 Formations 13 01 17.732

Classified Summary of Audit Observations:

During audit of the Excise and Taxation department it was observed, that the books of
account are not prepared and didn’t follow accounting mechanism by the concerned
ETOs. It was further observed that the department did not recover renewal fee/token,
motor vehicles driven without Registration, Issued tender forms without receiving tender
documents fee and penalty on late depositors has also been not charged by the
department.

THE KEY AUDIT FINDINGS

3.1 Defaulting Government Departments, semi government departments and
private rent a car companies:
Under Section 34 and 35 of the Motor Vehicle Ordinance, 1965, a registering
authority can also suspend/cancel the registration of a defaulting motor vehicle.
According to Para 8 of GFR, “it is the duty of the Revenue or Administrative
Department concerned to see that the dues of Government are correctly and promptly
assessed collected and paid into the treasury”.
During the audit, it was noticed that Excise and Taxation department did not recover
renewal fee/token in on yearly basis, and no mechanism to collect the fine for non-
payment of renewal fee token. Details of defaulted government and semi government
departments are as under:
OUTSTANDING
S# DEPARTMENT AMOUNT
1. WATER AND POWER DEPARTENT GB 12000
2. POLICE DEPARTMENT GB 4000
3. TOURISM DEPARMENT GB 5500
4. LG & RD DEPARTEMENT 13500
5. ADMINISTRATION DEPARMENT 68000
6. EMERGENCY SERVICES (RESCUE 1122) 7700
7. FISHERIES DEPARTMENT GB 5500
8. FOREST DEPARTMENT GB 201500
9. AGRICULTURE DEPARTMENT 58000
10. ANIMAL HUSBANDRY DEPARTMENT 60500
11. LG & RD DEPARTMENT 147500
12. EXCISE TAXATION AND COOPORATIVE DEPARTMENT 13500
13. EDUCATION DEPARTMENT GB 91500

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 14. HEALTH DEPARTMENT GB 82500
15. NAPWD 325000
16. POLICE DEPARTMENT GB 118500
17. PRISON DEPARMENT GB 10000
18. TOURISM DEPARTMENT GB 13500
19. P&D GB 5000
20. POPULATION WEALFARE DEPARTMENT GB 37000
21. NATCO 16500
22. PUBLIC SCHOOL & COLLEGE SKARDU 11000
23. CADET COLLEGE SKARDU 9000
24. KCBL 12000
25. UNIVERSITY OF BALTISTAN 56500
26. BISP SKARDU 43000
27. SCO GB 39000
28. OTHER FEDERAL ORGANISATIONS 242000
Total Outstanding Amount 1,709,200

Recommendation:
Audit is of the view that this negligence on the part of the management resulted in non-
realization of potential revenue. Unpaid amount along with penalty (under Section 9) is
recoverable as arrears so the authority should make mechanism to collect the arrears and
penalties.
3.2 Motor Vehicles Driven Without Registration:
Under section 23 of Motor Vehicles ordinance, 1965, motor vehicles not to be
driven without registration. It’s mainly observed that the most of the vehicles are
running without number plates (unregistered), which cause loss to government.
Recommendations:
i. Audit recommends that effective steps are required to be taken to ensure
registration.
ii. Department shall share the number of vehicles registered in each district of
GB.
3.3 Non-production of auditable records/books:
According to para 17 of GFR Vol-I read with Section 14 of the Auditor General’s
Ordinance 2001, no information nor any book or other documents, to which the Auditor
has a statutory right of access, may be withheld from the Audit.
During Audit of accounting record of Excise and Taxation department following record
was requisitioned.
 Revenue register (Fines)
 Route permit register

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Despite several verbal requests, the record was not produced to audit for verification. The
lapse occurred due to non-observance of rules.
Recommendations:
Audit recommends production of auditable record and strict disciplinary action against
the persons at fault.
3.4 Deducted 5% HRA on initial basic instead of on running basic from the
resident in Government accommodation (HRA):
During audit of accounting record of the Excise and Taxation department for the financial
year 2022-23, it was noticed that 5% of initial basic was deducted instead of deduction on
running basic (as per Finance Act-2023, schedule-1 section 12(11) from the resident in
government accommodation (HRA).The same was required to be recovered from the
employee.
Recommendations:
Audit recommends recovery @ 5% on running basic and the difference amount since July
2023 should be deposited into Government treasury under intimation to finance
department.
3.5 Difference in the revenue figure of Reconcile statements and Revenue
Register:
During scrutiny of the record and Reconcile statement, it was observed that the actual
figures of receipts through TR-6(Treasury Challan) were not matching with the
Reconciliation figures showed and. (Detail given in annexure- C)
The incorrect figures were supplied for preparation of budget estimates due to lack of
administrative and internal control and resultantly true and correct figures were not
represented in budget book and other accounting documents.
Recommendations:
Audit recommends that the differences may be sorted out and corrected accordingly in
books and other accounting documents.
3.6 No accurate preparation of Revenue Ledger:
Para-23 of GFR provides that every Government officer should realize fully and
clearly that he would be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will also be held
personally responsible for any loss arising from fraud or negligence on the part of any
other Government officer to the extent to which it may be shown that he contributed to
the loss by his own action or negligence.
According to para 77 (I & ii) of central treasury rules (CTR); all transactions of

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Receipt/expenditure should be recorded in Cash Book in Form T-R 4 as soon as they
occur and are attested by the head of the office.
During audit of the accounts record, it was noticed that the Excise and Taxation
department did not prepare Revenue Ledger which were required to be presented for
internal audit as required under the rules. However, the following shortcomings were
noticed:
1. Cash book
2. Revenue Ledger was not properly maintained to know the actual receipt.
3. Fine Book record was not maintained.
4. Route permit book
5. NCP vehicle register book to know the actual registration of NCP vehicle during FY
and so for.
Recommendations:
The management entirely relied on figures reported by the treasury office/AGPR they
didn’t bother to maintain a file or register regarding revenue collections.
3.7 Issued tender forms without receiving tender documents fee:
According to Para 8 of GFR, subject to such general or specific instruction as may be
issued by Government in this behalf it is the duty of the Revenue or Administrative
Department concerned to see that the dues of Government are correctly and promptly
assessed collected and paid into the treasury.
During the audit of Excise and Taxation department it was observed that the accountant
issued the tender forms to the contractors without receiving the tender documents fee as
per the Finance Act-2023, which is high negligence on the part of department.
Recommendation:
Audit recommended that the tender forms should be issued after checking the bank
deposit slip (TR-6) duly verified by the concerned treasury office and should recover the
amount lost due to negligence of the department.
3.8 Accounting mechanism were not followed:
During the audit of accounting record it was observed that the excise and taxation
department did not follow the accounting mechanism to prepare financial statements e.g
 TR-6 are not filed in chronological order
 Documentary proof/evidence were not attached/annexed the with the books of
record
Audit is of the view that under existing arrangement audit could not ascertain the
authenticity of the collections of revenue. Recommended to follow the proper accounting
mechanism in preparation of financial statements and submit reconciliation statements,
on monthly basis.
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 4. FORESTRY, WILDLIFE &ENIROMENT DEPARTMENT
Core Operational Activities:
Forests: Wildlife:
 Registration of saw mills Small shooting licenses
 Renewal of Saw mills Big shooting licenses
 Issuance of dead firewood NOC for Documentaries
 Auction of timber Fines
 Auction of grasses Auction of medicinal items
 Room rent forest guest house `
B) Comments on Budgeted Receipts (Variance Analysis)
The Forestry &Wildlife and Environment Department has failed to achieve its revenue
targets during the financial year 2022-23. The comparison of budgeted revenue
estimates, and actual collection of department for the financial year 2022-23 are
given in the table:
Target Actual Percentage
100 million 24.405 Million 24.406%

The management needs to analyze the causes of the shortfalls depicted in the above
table and take appropriate steps to improve the revenue collection.
Audit profile of Forestry &Wildlife and Environment Department:
Revenue/Receipts
S# Description Total Nos. Audited FY 2022-23
(Rs. in Millions)
01 Formations 13 03 24.405 million

Classified summary of Audit Observations:

During audit of Forest & wildlife and Environment Department, it was noticed that in
the revenue realized from the imposition of penalty, tender documents fee has not been
deposited in the Government treasury on time and deducted 5% HRA as renovation cost
of Government accommodation on initial basic instead of deduct 5% deduct on running
basic. In addition, the precious timber confiscated from the offenders is going to waste
due to imposition of Section C6 (forest Act).

KEY AUDIT FINDINGS:

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4.1 Deducted 5% HRA on initial basic instead of on running basic from the
resident in Government accommodation:
During audit of accounting record of the Excise, Taxation and environment department
for the financial year 2022-23, it was noticed that 5% of initial basic was deducted instead
of deduction on running basic (as per Finance Act-2023, schedule-1 section 12(11) from
the resident in government accommodation,
Recommendations:
Audit recommends recovery @ 5% on running basic, since July 2023, less/fewer
deducted amount should be deposit through Form II into Government treasury under
intimation to finance department as arrear since July 2023, and deduct/withheld 5% on
running basic forthwith.
4.2 Loss to government due to non-auctioning of Rest House on rental
basis:
“All Government Rest Houses/Guest Houses etc shall be managed on commercial basis
through appropriate institutional arrangements”.
During audit of the record of forest and wild life department for the year 2022-23, it was
observed that the department constructed three guest Houses (chilim,basho)
Recommendations:
Audit recommends for immediate initiation of proceedings of rest house on rental basis
or through public auction.
4.3 No preparation of Revenue and Fine Ledger (wildlife):
Para-23 of GFR provides that every Government officer should realize fully and
clearly that he would be held personally responsible for any loss sustained by
Government through fraud or negligence on his part and that he will also be held
personally responsible for any loss arising from fraud or negligence on the part of any
other Government officer to the extent to which it may be shown that he contributed to
the loss by his own action or negligence.
According to para 77 (I & ii) of central treasury rules (CTR); all transactions of
Receipt/expenditure should be recorded in Cash Book in Form T-R 4 as soon as they
occur and are attested by the head of the office.
During audit of the accounts record, it was noticed that the Forest & wildlife and
environment department did not prepare Revenue Ledger which were required to be
presented for internal audit as required under the rules. However, the following
shortcomings were noticed:
6. Cash book
7. Revenue Ledger was not maintained to know the actual receipt.
8. Fine Book was not maintained.
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Recommendations:
The management entirely relied on figures reported by the treasury office/AGPR they
didn’t bother to maintain a file or register regarding revenue collections. Audit is of the
view that under existing arrangement audit could not ascertain the authenticity of the
collections of revenue.
4.5 Issued auction tender forms without receiving tender documents fee:
(wildlife):
According to Para 8 of GFR, subject to such general or specific instruction as may be
issued by Government in this behalf it is the duty of the Revenue or Administrative
Department concerned to see that the dues of Government are correctly and promptly
assessed collected and paid into the treasury.
During the audit of Excise and Taxation department it was observed that the accountant
issued the tender forms to the contractors without receiving the tender documents fee as
per the Finance Act-2023, which is high negligence on the part of department.
Recommendation:
Audit recommended that the tender forms should be issued after checking the bank
deposit slip (TR-6) duly verified by the concerned treasury office and should recover the
amount lost due to negligence of the department.

4.6 Cash collection and Delayed in depositing into bank: (Forest and
wildlife)
According to Finance Act 2023, Section 19, all the collection shall be deposited into
Gilgit-Baltistan consolidated Fund Account through treasury challan instead of cash
collection, even if collected in, the same shall be deposited in the treasury with in twenty-
four hours.
During the course of audit, audit team noted that the Forest and wildlife department
received tender document fees in cash instead of receiving it in the form of treasury
receipts. Cash transactions can pose a risk to the organization as they may not be well-
documented and there is a possibility of mishandling or misappropriation of funds.
Recommendations:
Audit recommend that the department should adopt a strict policy as defined in Section-
19 of Gilgit- Baltistan Finance Act 2023.
4.7 Forest Produces:

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The audit found that there was no proper system in place to track the sale of forest
produce, such as mushrooms and medicinal produce, leaves. This made it difficult to
verify the actual revenue generated from the sale of forest produce.
Recommendations:
Policy shall formulate to regulate transportation of medicinal and herbal plants to stop
illegal transportation and to generate revenue.
4.8 Ecotourism:
The audit found that there was potential for revenue leakage and fraudulent revenue
generation in ecotourism. The department did not have a proper system in place to track
the number of visitors, and there were instances of underreporting of revenue generated
from ecotourism. There were also instances of unauthorized collection of entry fees by
unauthorized personnel.
Recommendations:
It is recommended that the department should strengthen its monitoring of ecotourism
sites to ensure that all revenue is being accurately recorded. This department shall
initiate case for enhancement of fees for entrance into ecotourism spots in GB.

5. Agriculture, Livestock & Fisheries Department.

5.1 Mismanagement and irregularities in auction process: (Agriculture)
During audit of the Agriculture Department, audit team examined the auction process of
fruits, vegetables, and grass and observed several irregularities committed in auction
processes which result in significant revenue loss to the government. For instance, instead
of conducting a competitive bidding for auction to award the bid to the highest bidder.
The department's management auctioned the fruits, vegetables, and grass on a base rate
which significantly reduced the amount of revenue that the government could have
received.
Moreover, there were no market surveys or price comparisons conducted before deciding
on the base rate, which may have resulted in a lower than market value rate in sale of
agriculture produces.
Recommendations:
Audit recommends that the department establish proper and transparent auction
procedures based on market rates and monitor the process closely to ensure minimal risk
of revenue loss.
The department shall make Treasury Officer mandatory member of Auction Committee
to promote transparency and accountability, eliminate potential malpractices, and
minimize the risk of revenue loss to the government.

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 5.2 Issued tender forms without receiving tender documents fee:
(Agriculture/livestock)
According to Para 8 of GFR, subject to such general or specific instruction as may be
issued by Government in this behalf it is the duty of the Revenue or Administrative
Department concerned to see that the dues of Government are correctly and promptly
assessed collected and paid into the treasury.
During the audit of Agriculture, livestock & Fisheries department it was observed that the
accountant issued the tender forms to the contractors without receiving the tender
documents fee as per the Finance Act-2023, which is high negligence on the part of
department.
Recommendations:
Audit recommended that the tender forms should be issued after checking the bank
deposit slip (TR-6) duly verified by the concerned treasury office and should recover the
amount lost due to negligence of the department.
Treasury Officer of Concerned district shall be made member of all tenders to check TR-
6 forms before proceedings and to ensure transparency.
5.3 Accounting mechanism were not followed: (Agriculture/Livestock/fishers)
During the audit of accounting record it was observed that the Agriculture, livestock &
Fisheries department did not follow the accounting mechanism to prepare financial
statements e.g
i. TR-6 are not filed in chronological order
ii. Documentary proof/evidence were not attached/annexed with the books of
record
The management entirely relied on figures reported by the treasury office/AGPR. They
didn’t bother to maintain a file or register regarding revenue collections. Incorrect and
assumed figure are supplied to the finance department due to which problems are being
faced to set the next year targets, preparation of budget.
Recommendations:
Audit is of the view that under existing arrangement audit could not ascertain the
authenticity of the collections of revenue and recommended to follow the proper
accounting mechanism in preparation of financial statements ensuring submitting
reconciliation statements, on monthly basis.
5.4 Cash collection and Delayed in depositing into bank: (Agriculture)
According to Finance Act 2023, Section 19, all the collection shall be deposited into
Gilgit-Baltistan consolidated Fund Account through treasury challan instead of cash
collection, Even if collected in, the same shall be deposited in the treasury with in twenty
four hour.
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During the course of audit, audit team noted that the Agriculture, livestock & Fisheries
department received tender document fees and other revenues in cash (kept in pocket for
couple of days) instead of receiving it in the form of treasury receipts. Cash transactions
can pose a risk to the Department as they may not be well-documented and there is a
possibility of mishandling or misappropriation of funds.
Recommendations:
Audit recommends that the department should adopt a strict policy as defined in Gilgit-
Baltistan Finance Act, 2023 section-19 to ensure proper accountability, transparency,
and traceability of funds.
Additionally, the Department should establish adequate controls to ensure that all tender
document fees collected are appropriately recorded in the department's revenue book.
5.5 Irregularities in inventory/ feed register: (Livestock)
During the course of our audit of Dairy Farm Skardu, audit team noted several
irregularities in the feed register maintained by the farm management. Our examination
revealed that the feed register did not contain accurate and complete information about
the type and quantity of feed received and distributed to the animals.
22 cattle 17 cattle
40 kg Venda 80 kg Venda
80 kg Wheat 120 kg Wheat
48 kg Bran 45 Kg Bran

These irregularities in maintaining various stock register are of serious concern. They
could lead to a mismanagement of the farm's resources, resulting in higher costs and
decreased profitability.
Recommendations:
Audit recommend that the concerned department shall instruct management of Dairy
Farms to take immediate corrective measures to address these irregularities and establish
a robust system to maintain accurate and complete records of feed distribution to the
animals.

5.6 Irregularities in Stock Register of cattle/Dairy forms: (Livestock)

During the course of audit of Dairy Farm at Skardu, Audit team identified significant
negligence and irregularities in the animal quantity register maintained by the farm. Our
examination found that there were discrepancies in the total number of cattle recorded in
the register on June 30th and July 1st. According to the register, there were 18 cattle on
June 30th, but on July 1st, the number rose to 22.
Recommendations:

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Audit recommend that the management of Dairy Farm take immediate corrective action
to address the issues identified and establish a system to maintain accurate and up-to-
date records of animal numbers, movements, and death. Additionally, the farm should
implement proper controls and processes to ensure the accuracy and consistency of the
animal quantity register.

General suggestions
1. Should Instruct the AGPR to deduct 5% on the running basic pay of employees who
are residing in government accommodations, with due intimation to the finance
department. This will ensure that the deduction is based on the current salary of the
employee and this instruction should be implemented as soon as possible to avoid any
further delays.
2. Regular internal audits (annually) are essential in the government sector to avoid
errors, omissions, fraud and to sensitize the departments regarding their financial
responsibilities.
3. The findings of audit reports should be shared with the department management
(PAO) and used to develop and implement corrective measures.
3. At present, the 470-Kanal land belonging to the agriculture department is not being
used for any purpose, which is a waste of resources. Therefore, it is suggested that the
agriculture department should take immediate action to utilized the said land and realize
full potential.
4. Agriculture livestock and fisheries department shall formulate a committee by
including Treasury Officer of district concerned before auction of Agriculture products
of District Concerned for transparency.
5. It is suggested to conduct a two-day training on accounting mechanisms in three
Divisions (Gilgit, Skardu and Diamer). This initiative ensures that staff members
understand the recent changes to finance regulations and how to comply with them.
6. All departments shall deposit working balance and surplus funds into daily profit
account and profit earned shall submit to GB consolidated funds
7. Implementation of Section 23, of finance act 2023-23 shall generate more than one
billion revenue per year.
8. Ensure implementation of mechanism prescribed vide Section 19, of Finance Act for
revenue receipts and implementation of Finance act 2023-24
9. Treasury officers at respective districts shall be made part of all tenders and check TR-
6 forms before proceeding to ensure transparency and add up revenues.

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10. Home and prison department shall make treasury officer member of surprise visits
and snap checking so that the instant fines shall be submitted through TR-6 forms dully
singed by TO,s to avoid pilferages .
11. Introduction of automation and digitalization mechanism in home and prison
department/ excise and taxation for real time reporting.
12. Finance Act 2023-24 shall be circulated to DDO,s at respective districts for
compliance .
13. Prompt decisions for installation of smart meter/ digital meters at commercial areas
i.e. banks, high rated hotels, telecommunication towers, filling stations, mini industries
at initial stage is highly required.

14. Installation of smart meters in all the major urban areas of GB to ensure transparency
in the billing system.
15. Excise and Taxation Department shall carryout annual renewal of cooperative
society/banks (For each branch, head office, sub office) as mentioned in schedule I of
Finance Act 2023.
16. Initiate proposal for Toll fee collection of each vehicle entering into GB for tourism
purpose as per prevailing precedent in other provinces of Pakistan.
17. Implementation of levy act on hotels. Guesthouses & Camp.
18. The department may initiate a summary for enhancement of fee for entrance of
National Parks.
19. Policy shall formulate to regulate medicinal and herbal plants to stop illegal
transportation and to generate revenues.
20. Existing policy for disposal of confiscated timber shall be revised and confiscated
timber shall be auctioned instead of disposal.
21. The fisheries department shall submit revised rates proposal as mentioned in
Schedule I of Finance Act 2023 in comparison with existing market rates.
22. Fishing License Vouchers mechanism shall be made centralized.
23. Digitalization of fine collection mechanism as per practice in other provinces of
Pakistan
24. Issuance of fine books duly printed by Finance Departments to ensure transparency
and avoid duplication.
25. Instructions shall be issued to all department, not to utilize amount received against
various revenue head in recurring expenditures and submit the same to GB Consolidated
funds within 24 hours.

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