Special audit of Toshakhana opens a can of worms

ISLAMABAD: Auditor General of Pakistan’s special audit of Toshakhana opened a can of worms as nothing concerning the Toshakhana affairs of the government is found working properly.

The audit found everything wrong from irregular and unauthorised modification of Toshakhana Rules 1973 to non-reconciliation of receipt collected through challans against gifts, non-production of record relating to Toshakhana, non-conducting of physical verification of Toshakhana gifts displayed in prominent places, non-provision of certificate regarding physical verifications in original form and actual quantity, irregular conducting of auction of Toshakhana articles as per given time line, irregular enlistment of private appraiser for evaluation of gifts, and irregular and unauthorised approval for disposal of gifts without delegation of powers.

During the special audit of Toshakhana, audit observed that amendments to Toshakhana Rules framed in 1973 were made from time to time without approval from the federal cabinet as was done in 1973; relaxation of rules was obtained for prime minister against the rules; rules were superseded ab initio through framing of procedures in 2001, 2004, 2006, 2007, 2011, 2017 and 2018.

“Audit is of the view that amendments and replacing of Toshakhana Rules with policies, procedures and relaxation of Rules were irregular and unauthorised,” the report said, recommending that matter may be inquired and responsibility be fixed.

The report revealed that the management of Cabinet Division (Toshakhana) has collected an amount of Rs226.987 million as percentage of assessment value of gifts from recipients and through auction from 2002 to February 28, 2023 through bank chalans. During Special Audit of Toshakhana, it was observed that the Cabinet Division has not reconciled the bank challans figure with the Federal Treasury Office.

Audit recommended that matter may be inquired, verification of each challan be carried out and responsibility be fixed for non-reconciliation of receipts. According to the report, during Special Audit of Toshakhana, the Cabinet Division was requested to provide, i). List of complete gifts received in Toshakhana from 1990 to 2002. ii). All gifts’ files (in original) along with files index register from 1990 to 2002. Iii). Copies of approved Rules/Regulations/SoPs of Toshakhana and subsequent amendments made from 1990 to 2002. iv). First Entry Registers (FER), Toshakhana Stock Registers and Bank Challan Register from 1990 to 2002. v). Physical verification report of gifts displayed in various government buildings’ as well as in Toshakhana from 1990 to 2002. vi). List of items auctioned along with bank challans from 1990 to 2002. But the management replied that as per the recommendation of Inter-Ministerial Committee on Toshakhana, the federal cabinet on 22.02.2023 approved the declassification of Toshakhana record from 2002 onwards. The record prior to 2002 is classified and hence cannot be provided. Audit recommended inquiry to fix responsibility besides production of record.

According to the report, the management of Cabinet Division was required to carry out physical verification of first quarter of each calendar year of those gifts which were displayed by the Toshakhana in the prominent buildings/institutions owned by the government or in the official residences of the Head of the State or the Head of the Government but it was not done. “Audit recommends that matter may be inquired and necessary verification as required under procedures be carried out without further delay,” said the report.

During Special Audit of Toshakhana, the Cabinet Division was requested to provide i). Physical verification certificate for existence of articles in original form and quantity as received in Toshakhana from competent authority. But the management replied that physical verification of articles in original form and quantity is time taking activity that requires services of an official and private expert to assess and evaluate the value and quality of each item.

“At present, there is no private appraiser engaged with the Cabinet Division. As and when the hiring process is completed, the required physical verification will be carried out and the report will be submitted to the Audit,” said the report while referring to letter dated 09.05.2023. In this case too, the Audit recommends inquiry to fix responsibility besides production of record.

The report also said that as per Toshakhana procedures, the management was required to dispose of gifts through auctions at least once or twice in a year but the management failed to carry out the auctions in time.

The special audit report also pointed out irregular enlistment of private appraiser for evaluation of gifts. It was observed that the two firms engaged in 2016 were registered as importer/exporter and other personal services and have no experience of evaluation of articles. “Audit is of the view that the firm was selected without having any experience of assessment of diamonds, gold, watches, jewelries, handicrafts etc., and undue favour was extended to the firm,” the report said and recommended, “The fact finding inquiry be made and responsibility be fixed for irregular enlistment of private evaluator.

The management of Cabinet Division was also requested by the audit team to provide copies of delegation of powers with regard to disposal of gifts in Toshakhana. The management of Toshakhana stated that there was no delegation for disposal of gifts in Cabinet Division before 18.12.2018. The first delegation letter was issued on 18.12.2018 and second was on 18.06.2021. Prior to 18.12.2018 approval were given by the officers without delegation of powers.

During Special Audit of Toshakhana, Audit observed that the disposal of cases other than Secretary Cabinet Division without any delegation was irregular and unauthorised. On sample test basis it was found that cases amounting to Rs13.985 million were disposed of by the Deputy Secretary Administration and Rs28.520 million by Joint Secretary Administration.

Irregularities in assessment of gifts and disposal of gifts were also observed. Audit recommends the fact-finding inquiry be made and responsibility be fixed for irregular and unauthorised use of powers, said the report.