OIL AND GAS DEVELOPMENT COMPANY LIMITED INTERNAL AUDIT DEPARTMENT F-8 MARKAS ISLAMAB

1- Lodging / Hotel stay charges Expatriate :- (402310) During audit of the Protocol Section it has been observed. An amount of Rs.1,625,544.38 paid against lodging / Hotel stay charges of Expatriate, Barrister, Member, Board of Director,Out side legal counsel, Media person. etc. Name Barrister. Shahid Hamid = M.O No Hotel Serena IBA = = = = Pre continental Karachi = = = = = Marriate IBA Serena IBA Serena Hotel IBA Pre continental IBA. Voucher No 4656271 4662366 4677318 4680350 4680421 4656277 4644237 4644289 4642943 4642949 4662378 4663377 4721185 4651813 4686929 Date 05-2011 06-2011 07-2011 27-07-11 02-09-11 05-2011 03-2011 03-2011 03-2011 03-2011 24-0411 06-2011 09-01-12 04-2011 Sep-2011 Amount Rs.15,500/= Rs.17,621/= Rs.14,501/= Rs.22,521/= Rs.15,521/= Rs.16,771/= Rs.12900/= Rs.16017/= Rs.12,900/= Rs.16,017/= Rs.15,570/= Rs.13,916/= Rs.34,518/= Rs.140501/= Rs.32,000/=

= = = = = = = = Mr.Kaiser Bangali Member of Board Mr.Abid Aziz Shaik

E/board /0101(134th) dt-1708-11 M9CSLD)08/2011

4642943

Mar-2-11

Rs.33,031/=

III-

Movement order & Approved amount (H.O) control register required. Agreement/ Policy letter against Expatriate Required.

2- Fare charges Expatriate :- (402304) During audit of the Protocol Section it has been observed. An amount of Rs.4,93,680/= paid against Fare charges of Expatriate during Jan-2011 to March 2012, some instances as under.

Name Mr.Mehmood AzamAwan. Mr.Shahid Hamid = Mr.Gohar Ali Mr.Zaka ullah Khan Omar Adam Khan Mr.Mehmood Azam Awan Mr.Raja Amir Abbas Mr.Mehmood Azam Awan Dr.Kaiser Bangali

M.O No KM-(LSD)1143/2011/ (CLSD)1187/2010 ED(F) 5509/10 PUC/Dy-Registrar NIRC PUC/DY-Registrar M(CLSD)1187/2010 M(CLSD)1219/2011 M(CLSD)190/2011 BOARD/01-01

Travel Agency. Travel Valley Quality Aviation = Air Pasban = Quality Aviation Travel valley Grays Travel Quality Aviation Gerrys Travel

Voucher No 4686773 4652840 4629580 4702854 = 4629495 4694793 4714345 4727058 4642916 4694793 4683096

Date 08-09-11 04-2011 01-2011 12-2011 = 01-2011 02-2011 02-2011 04-2011 03-211

Amount Rs.56,049/= Rs.42,185/= Rs.42183/= Rs.96,279/= Rs.96,279/= Rs.45,483/= Rs.41,192/=

Rs.26435/= Rs.45,483/= Rs.36,219/= Rs.41,192/= Sep-2011 Rs.32752/=

III-

Movement order & Approved amount (H.O) control register required. Agreement/ Policy letter against Expatriate Required.

Domestic Air Ticket Officer:- (402301) Rs.31,936,164.00

During audit of the Protocol Section it has been observed fare charges of Officers during Jan-2011 to March 2012, it was noted that fare charges has been charge maximum rate some example as under.

Name Mr.Mehmood AzamAwan. Mr.Shahid Hamid M.R

M.O No KM-(LSD)1143/2011/ (CLSD)1187/2010

Travel Agency. Travel Valley Quality Aviation

Voucher No 4686773 4652840

Date 08-09-11 04-2011

Amount Rs.56,049/= Rs.42,185/=

OIL & GAS DEVELOPMENT COMPANT LIMITED INTERNAL AUDIT DEPARTMENT F-8 MARKAZ ISLAMABAD

SCOP OF AUDIT:An internal audit of protocol Section was carried out for the 15 month from Jan-2011 to Mar2012. The scope of audit also entailed the review of the soundness and effectiveness of accounting and internal control as applied Further the audit also included the review and extent of compliance to the prescribe rules & regulations. The deficiencies observed have also being highlighted below for remedial measures and improvement in effective internal control system.

Function Of Protocol Section. Observation:Detail of Payments (Actual Versus Budget) During checking Variances were noted in between the budget allocated and expenditure incurred. In some Head of account the expenditure booked without budget allocation for the period from Jan-2011 to March-2012,detail as under Account Code 402101 Head of Account Office entertainment Budget Amount. Rs Actual Rs.10,822,702.99 Balance.

402301 402304 402309 402310 402301 402304 402103

Domestic air ticket Domestic air ticket Expatriate Lodging/Hotel stay charges Lodging/Hotel stay charges Expatriate Domestic air ticketing Officer Domestic air ticketing Officer Ex Meeting/Seminar

Rs.31,31,936,164

Rs.16,413,821.00 Rs.1,625,544.00 Rs.31,936,164.00 Rs.493,608.00 Rs.5,266,547.00

Wrong Control of Account Head

Entertainment Charges;During checking on random check basis it is observed that payments to various venders against refreshments, launches and office entertainment charges made by protocol section it has been observed that may sources of payments has been adopted for these payments and different payments are involved in this one account head. Expenditure Approval of Meettings An amount of Rs.37435.00 approved for 123rd meeting of the OGDCL Board of Directors is schedule to be held on 30-12-2010, Balance amount Rs.10462.00 paid against reimbursement charges to sr, protocol officer, an other amount Rs.18852.00 approved by GM(Comm) for meeting draft Sinjhoro GAS with Joint venture partners as request as on 10-01-2011Balance amount Rs.3352.00 paid to sr, Admin assistant against reimbursement charges An amount of Rs.13615.00 approved by A.M (admin) for 56th meeting of Human Resources Committee as on 04-Jan,2011balance amount Rs. 3205.00 paid to admin assistant protocol section against reimbursement of entertainment charges further, An amount of Rs.Rs.13,615.00 voucher No 4631217 invoice No.374 dated-04-01-2011Balance amount approved for 56th Meeting of Human resources committee of the OGDCL Board of Directors as on 30-12-2010 Balance amount Rs.3205.00 paid to control register of head office head approval and reimbursement charges control register required. Lodging / hotel Stay Charges Officer & Expatriates:Account code (402309) Total Expenditure Rs.16,413,821.00 Account code (402310) Total Expenditure Rs.1,625,544.00

There is practice by protocol Section that Lodging / Hotel Stay Charges is provided in private hotels in the private hotels in the cities areas where hired rest houses are already available along with sufficient accommodation for stay of company employees. As frequent Lodging/ Hotel Stay in private hotels is being provided in Islamabad /Rawal Pindi ,Karachi,Multan, ect.it has been observed that huge amount of Rs.16,413,821.00 and expatriates Rs.1,625,544 was paid in this regard for the period from Jan-2011 to Mar-2012while rest house facility is already available in these cities at company level. As per company policy vide Circular No-AAO-108-10 dated-06-07-2005 Hotel will be provided in condition of not availability of OGDCL Rest House, and PPRTI policy also pertains to allow such stay vide letter No-AAO102-06 dated-22-03-2000 that It has been decided to earmark 06 rooms for officer at OGTI hostel for stay on transfer, tour, and transit issued with the approval of E.D (Admin). The detail of hired Rest Houses & Regional Offices, Monthly Expanses where comfortable accommodation is available as under. Sr.No 01 02 03 04 05 06 07 08 09 Name Officer Transit Camp Karachi Transit Camp Uch gas Field Jacobabad Regional Office/ Officer Transit Camp Sukkur Regional Office/Officers Transit Camp Hyderabad Officer transit Camp Sadiqabad Officers Transit Camp Kohat Regional office Kohat Regional Office/Transit Camp Queta OGTI Hostel Islamabad Monthly Rent(RS.) 43,686.00 1,20,000.00 37,000.00 51,000.00 50,000.00 35,000.00 25,000.00 55,000.00 OGDCL Other Expenses

Stay in Hotels beyond the entitelment:Hotels charges facility is provided by protocol Section without considering the entitlement of Officers which is against the Company rules instances noted on random check basis that the following officer were provided hotel stay beyond the entitlement in four star hotel (M/S. Islamabad Hotel while these Officer have entitlement for four Star hotel. Reference BPV No4663751 Invoice No-70360,70361,70362-dated-22-05-2011 in respect of M/S. Islamabad Hotel (IBA ) are as under. r.No Name of Officer

Mr.Anwer Shah DCE(Mech)OG-101445-G 0 02 03 04 05 06 Mr.Nasir Mehmood DCE(Mech) OGMr.Saleem Nasir DCE (Civil) OGMr.Mir Ahmad Khan DCE (Civil)OGMr.Riazat Hussain CE (Civil) OGMr.M.Muaz DEC (Mech) OGAs per travel and expenses reimbursement policy of the company vide No. Board 01-06(01) dated-October 30,2007 following categories have been defined entitlement in company designation hotel. It is noted that Protocol Section is not following the policy in its true sprit.

Recommendation:-

As per travel and expenses reimbursement Policy of the company vide No-Board 01-06 (1) dated-October 30-,2007 following categories have been defined for entitlement in Company designated hotels. EG- 1 to EG-III- Star EG-4 & 5 Four Star and EG-VII to EG-VIII & CEO Five Star hotel