Auditor General identifies violations of rules in granting of loans to Govt employees
Chitral Times Report
ISLAMABAD: In response to the concerns raised by President Dr Arif Alvi over the violations of merit and criteria for granting loans to government employees, the Auditor General of Pakistan (AGP) has identified weaknesses and violations of rules in the existing system of granting long term Advances (House Building and Conveyance advances) to Federal Government employees by conducting a special study that suggests recommendations for improving the system. President Dr Arif Alvi, in a letter to AGP, had urged the need to evaluate the current system of granting loans to government employees to ensure transparency, merit and fair play. He had raised concerns over the non-observance of criteria as two separate lists, called the “regular list” and the “out of turn list/priority”, were being maintained for granting loans. He observed that there seemed to be no criteria as to when, why and how an employee was to be moved from “regular list” to “out of turn” (priority) list.
This issue had come to light during hearing of representations, filed by different government officers/organizations, wherein incidents of preferential treatment and violations of merit were reported as loans were extended to some of the government employees in violation of General Financial Rules (GFR) and the approved criteria of 07-12-2015. In his letter to the AGP, the President had also observed that the Principal Accounting Officers (PAOs) of various ministries send lists of employees to AGPR based on their discretion. These out-of-turn loans to employees on the basis of priority were causing grievances and litigation. In response to President’s letter, AGP conducted a special study on the long-term advances to Federal Government employees that found violations and discrepancies due to non-observance of the existing rules and procedures.
The study suggests elimination of preferential treatment and areas for improvement in the prevalent system of granting loans. It is worth-stating that a mechanism had been devised by Finance Division in consultation with AGPR in 2015, which envisaged that a revolving fund would be established, and out of the total allocation, 10% would be earmarked for hardship cases, 25% for priority list, and 75% for the general waiting list. For hardship cases, a criteria would be prepared and cases would be decided by a two-member hardship committee. It further required that AGPR would ensure transparency and merit in the preparation of these lists that would be displayed on the webpages of AGPR and Finance Division. However, the special study by the Auditor General of Pakistan (AGP) pointed out that loans in hardship cases were being granted without approval of the Hardship Committee, and, in violation of the decisions made in 2015 as Finance Division and AGPR had failed to prepare and finalize any criteria for hardship cases. It even observed that in some cases, preferential treatment had been meted out to some employees as Fund Availability Certificates (FACs) had been issued to them on the same date of applications. It adds that mechanism made in 2015 was not being complied with as priority and general waiting lists were not being displayed on webpages of AGPR and Finance Division.
It also pointed out that 38% expenditure was made for hardship cases instead of 10% in both House Building Advance (HBA) and Motor Car Advance (MCA) cases. Further, 56% funds were released to priority list instead of 25% in MCA cases. Similarly, seniority lists were not being followed in HBA and MCA cases. The study further revealed that applications were being processed manually by sub-offices at Lahore, Gilgit and Peshawar instead through the SAP system of AGPR.
The Special study recommends that in the presence of hardship provision, there is no need for a separate priority list, and 10% quota for hardship cases should be strictly followed, and such cases should be processed on the recommendations of the hardship committee as per the mechanism already approved in 2015. The study states that proper rules and regulations should be framed for disbursement of advances. It further highlights the need to display lists on the website of AGPR for access to information, observance of a minimum waiting period of three months in the processing of loan cases, and processing of all cases through SAP instead of manual process
