ISLAMABAD: Auditors have found gross mismanagement and financial errors worth billions of rupees in the 2016 Haj operation, and uncovered a move by the Ministry of Religious Affairs to grant illegal favours to banks that collected Haj fees from applicants.

“Audit is of the view that non-adjustment of advances was [a] violation of rules and may lead to misappropriation,” said the auditor general of Pakistan’s (AGP) report on the ministry’s finances.

The most serious audit objection relates to the ministry’s failure to provide documentary proof of expenditures made in regard to a Rs4.94 billion advance, paid to the Director General Haj, Jeddah from the Haj account and the Pilgrim Welfare Fund for the 2015 Haj operation.

Through an unauthorised change in MoUs, Ministry of Religious Affairs allowed banks to pocket interest on Haj fees

Most damning, however, is the revelation that while the Ministry of Religious Affairs and Interfaith Harmony was informed about the audit requirements August 18, 2016, it submitted no reply to the AGP office.

Apart from not producing vouchers and other documentary evidence related to Haj expenditure, there are 10 other serious allegations of mismanagement against the ministry, most of which are related to the Haj operation.

One audit objection related to the ‘illegal change in the MoUs to favour banks’, which allowed banks to keep the profits on the amounts submitted by unsuccessful applicants.

The audit report pointed out that before Haj 2015, the profit made by banks on Haj fees submitted by applicants was forwarded to the ministry.

However, an amendment was made by the ministry in its contract with the banks, without the approval of the Ministry of Law and Justice, stipulating that banks would pay the profits on fee amounts paid by successful applicants.

Due to this amendment, banks did not pay interest to the ministry on the amounts submitted by unsuccessful applicants, which were retained for 60 days or more.

The ministry also did not extend any support to the auditors in determining the financial implication of this change, the report stated.

Besides, the ministry did not provide a record of bank accounts where Haj fees were deposited by applicants – both successful and unsuccessful ones. In one case, ministry officials even retracted a statement regarding the details of one bank, which was earlier submitted to the audit team.

The ministry has also not recovered around Rs89.16 million in interest from the banks, in connection with late payment of Haj dues pertaining to previous years.

In another objection, auditors pointed out that the ministry had failed to recover Rs83.49 million from the banks in terms of interest from fee deposits made by successful applicants.

Ministry officials allegedly also gave another benefit to the banks by not making a term deposit of 12.50 million Saudi Riyals – the balance amount – after closing the 2014 Haj operation. This, it was estimated, caused a loss of around Rs34.02 million. Auditors have suggested strict action against the relevant officers in this regard.

Referring to changes in the MoU with banks, the audit report states: “Every government officer should realise fully and clearly that he/she will be held personally responsible for any loss sustained by [the] government through fraud or negligence on his part and that he/she 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/she contributed to the loss by his own action or negligence”.

The ministry also seemed to have favoured the airlines taking pilgrims to Saudi Arabia by not recovering 50,875 Saudi riyals that was not utilised, against the total expenditure of 60.11 million riyals made by airlines.

The audit report also highlighted unnecessary expenditure of Rs38.91 million for rent of an office building, which could have been avoided by shifting to E- Block of the Pakistan Secretariat, where office space has been reserved for the Ministry of Religious Affairs.

Auditors maintained that the ministry also caused financial losses to other government departments by charging them around Rs27.72 million for seasonal Haj duties, to serve pilgrims in Saudi Arabia and in Pakistan.

It revealed how the ministry deputed 192 of its own employees for seasonal duties, as well as 99 employees of other ministries.

However, these ministries were charged for the services of the seasonal staff, instead of being paid from the Pilgrim Welfare Fund, as stated in the 2014 Haj Policy.

Published in Dawn, August 27th, 2017