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On

LISSAIL-E- WAL MAHROOM FOUNDATION

House No.48-B1-Chinar Road, University Town, Peshawar

For the Period ended May, 2022

ZAKAT, USHER, SOCIAL WELFARE, SPECIAL EDUCATION

AND WOMEN EMPOWERMENT DEPARTMENT
GOVERNMENT OF KHYBER PAKHTUNKHWA
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TABLE OF CONTENTS Page

I Abbreviations & Acronyms

1 Executive Summary 6

2. Key Audit Findings 7

3 Introduction to Lissail –Wal- Mahroom Foundation 9

Audit Methodology 11

4 Part I – Budget and Accounting Related Issues 13

4.1 Internal Control Weakness

4.1.1 The Bank Reconciliation Statement was not maintained as 14

per required procedures.

4.1.2 The Balance Sheet of the Organization was not prepared 15

as per Finance Department Instruction

4.1.3 The Financial Budget 2021-22 was not regularized from 16

Board Members /Search Committee.

4.1.4 During FY-2021-22. The T&G Center Machines 17

Procurement process delays without any logic reasons.

4.1.5 No Annual Report was published for Key Stakeholder 18

information

5 Part II – Human Resources 19

5.1. Internal Control Weaknesses

5.1.1 Service book of the Employees were not maintained nor 20

shown to Audit for verification.

5.1.2 Employee Seniority list was not shown to audit. 21

5.1.3 Vehicle logbooks was not maintained nor shown to audit. 22

5.1.4 Monthly POL Consumption detail was not shown to 23

audit.

5.1.5 Utility Register was not maintained 24

6 Part III- Education 25

6.1 Internal Control Weaknesses
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6.1.1 The Orphan Student Scholarship was not extended to 26

Merged District and New Created District of Chitral
,Kohistan

6.1.2 During last three year New Orphan scholarship Batch 27

were not selected.

6.1.3 The Student Enrollment Register was not maintained for 28

ready verification.

7 Part- IV - Tailoring & Garments Center 29

7.1 Internal Control Weaknesses

7.1.1 Center Rotation Policy was not adopted for T&G Center 30
from beginning till date

7.1.2 The Trainees enrollment Register was not maintained in 31

Head Office for ready verification

7.1.3 The T&G Center was not extended to Merged Districts 32

and New Established District of Chitral, Kohistan

8 Part VI– List of Assets of the Foundation 33

9 Part -VII Annexure 34

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I. Abbreviations & Acronyms

ADE Associate Degree in Education.

ADP Annual Development Programs.
BDU Bomb Disposal Unit.
BHU Basic Health Unit
CEDAW Convention on the Elimination of All Forms of Discrimination against Women.
CMWs Community Midwives.
CRC UN signatory
DHQ District Headquarter Hospital.
E&D Efficiency and Discipline.
ESRU Education Sector Reform Unit.
FATA Federally Administered Tribal Areas (Merged Districts)
FIA Federal Investigation Agency
GBV Gender Based Violence.
GHAG A custom in Khyber Pakhtunkhwa.
GRAP Gender Reform Action Plan.
HCP Health Care Providers.
IDS Integrated Development Strategy.
IAC Internal Audit Cell
IEC Information Education Communication
IHP Integrated Health Project.
ITC’s Industrial Training Centers.
KPCSW Khyber Pakhtunkhwa Commission on the Status of Women.
LFFS Livestock Former Field School
LHVs Lady Health Visitors.
MHSDP Minimum Health Services Deliver Package.
MNCH Maternal, Neonatal & Child Health.
NADRA National Database and Registration Authority (Pakistan).
NCSW National Commission on the Status of Women.
NGO Non-Governmental Organization.
NPOs Non-Profit Organizations
PHNP Provincial Health & Nutrition Program.
PTC Parents Teachers Council.
PSDP Public Sector Developmental Program
PWD Persons with Disabilities.
RH Rural Health.
RITEs Regional Institutes of Teacher Education.
SDPF Strategic Development Partnership Framework.
SMEDA Small and Medium Enterprises Development Authority.
SOP Skill Optimization Programme.
T&G Tailoring and Garments
TIP Trafficking In Persons.
ToT Trainings of Trainers.
UDHR Universal Declaration of Human Rights.
UNICEF United Nations International Children's Emergency Fund.
VSWA Voluntary Social Welfare Agencies.
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Executive Summary

The Lissan-Wal-Mehroom Foundation is working under an umbrella of the Secretary Social Welfare
while it has its own board & searching committee for regulating, authorizing its routine task or special
task within preview act and provincial Govt. Rules.

Due to budget constraints the L.W.M foundation is working on limited welfare activities like Tailing
and Garments Centers, Orphan Scholarships, and limited contribution into Eye surgery Hospital
Foundation.

During the course of the Internal Audit, some weak areas were also identified which need to be
addressed on priority basis by MD to avoid future complications.

Recommendation:

 Staff is not taking interest in their duty on regular bases because almost targeted activities are behind
the schedule, like during FY-2021-22, Machine Procurement delays, last three year New Scholar Batch
selection delays, surrender of Rs.1 Million Disability fund during FY-2020-21, ignoring 10th BOD
decision.

 Annual Report and News Letter were not published to take confidence of the Donor and
Stakeholder in the Foundation through their service delivery.

 Budget Austerity measures were not properly followed to minimize Operation Expenditure.

 Joint Cooperation with New Charitable Organizations was not extended as per BOD Decision.

 Donor was not contacted for contribution in budget and expanding the activities to new charitable
organizations like Doost Foundation, etc.

 The Foundation Could not extend their service to the Merged District and New Established District
of the Khyber Pakhtunkhwa Province.
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2. KEY AUDIT FINDINGS OF THE L.W.M FOUNDATION

During the Course of the Internal Audit the following Key Audit findings were identified:

 The Bank Reconciliation Statement was not maintained as per required procedures.

 The Balance Sheet of the Organization was not prepared as per Finance Department
Instruction
 The Financial Budget 2021-22 was not regularized from Board Members /Search Committee.
 During FY-2021-22, the T&G Center Machines Procurement process delays without any logical
reasons.
 No Annual Report was published for Key Stakeholder information
 Service books of the Employees were not maintained nor shown to Audit for verification.
 Employee Seniority list was not shown to audit.
 Vehicle log books was not maintained nor shown to audit.
 Monthly POL Consumption detail was not shown to audit.
 Utility Register was not maintained
 The Orphan Student Scholarship was not extended to Merged District and New Created
District of Chitral ,Kohistan
 During the last three year New Orphan scholarship Batch were not selected.
 The Student Enrollment Register was not maintained for ready verification.
 Center Rotation Policy was not adopted for T&G Center from beginning till date
 The Trainees enrollment Register was not maintained in Head Office for ready verification

 The T&G Center was not extended to Merged Districts and New Established District of
Chitral, Kohistan
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3. Introduction to L.W.M Foundation

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2.1 INTRODUCTION TO DIRECTOR LISSAIL-E- WAL MAHROOM FOUNDATION

Government of Khyber Pakhtunkhwa Province

The Government of Khyber Pakhtunkhwa is following the agenda of change and has taken various
policy initiatives along with legislative measures for the betterment of the vulnerable population of the
community within Provincial Jurisdiction thereby enabling them to realize their full potential as equal
citizens of the country.

Secretary of the Department

The (P.A.O) Secretary of the Zakat and Social Welfare Department has deployed their existing
resources in order to fill the gap between vulnerable sectors of the population and prosperous citizens.

The Objective of Lissail-E- Wal Mahroom Foundation

a) To enhance the availability of specified facilities to the indigent and dispossessed persons in
health, education and social welfare sectors.
b) Further synergized the welfare activities of the charity organizations and evolve a partnership
with more private charities.

L.W.M Foundation Office location

The House No.48-B1-Chinar Road, University Town, Peshawar
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The organizational setup of District Lissan-Wal-Mehroom Foundation is as follows:

Managing
Director

Buget & Accounts Administration

Welfare Manager
Officer Officer

Orphan
T&G Centers Scholarship

Contribution to
Eye trust
Hospitals
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INTRODUCTION TO AUDIT METHODOLOGY

Internal Audit Cell conducts Audit under the authoritative jurisdiction Internal Audit Policy -2018
Section 8.1 provided under Internal Audit Charter which authorizes Internal Audit Cell to:
i. Have unrestricted access to the Department’s books, and records (including confidential and
information) , functions, property and facilities and Personnel;
ii. Consult with and seek any information it requires from any employee and all employees shall be
required to cooperate with any request made by the internal audit cell in the course of its duties.
iii. Conduct any examination within the scope of its chartered responsibilities or as assigned by the
Principal Accounting Officer;
iv. Examine and audit any activity of the Department within all the controlling offices; and
v. Monitoring, taking follow-up action and evaluating the corrective actions taken by auditee.
SCOPE
Internal audit of the Lissail-e-Wal Mehroom Foundation was carried out in compliance of audit
program duly approved by Secretary Social Welfare vide this office NO.AO/IAC/A.P.I/2022/0010
dated 24.01.2022.
The scope of Audit was manly restricted to the significant portion to examine the functionality of
Lissail-e-Wal Mehroom Foundation and existing on-going activity on ground.
To undertake the foundation’s welfare activities, audit all those processes which are recorded in
Internal Audit Toolkit were examined. The overall functionality of Internal Audit Toolkit was tested.
The audit adopted a multi-facet approach and was focused on different aspects such as financial,
operational, compliance and performance.

METHODOLOGY
The audit was carried out using system-based approach; the approach entails an across-the-board
examination of the system in question to identify the causes of problems and to come up with a
fundamental remedy. Following was the detailed approach adopted;
 Understanding the entity and its operations
 Assessment of overall control environment and related risks (inherent, control and detection
risks)
 Review of operational processes and controls
 Test of controls
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 Detailed testing of significant expenditure

 Analytical operational procedures
 Checked compliance with laws and regulations.
 Physical Verification of site and Assets.
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Part I – Budget and Accounting Related Issues

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The Bank Reconciliation Statement was not maintained as per

Observation 4.1.1
required procedures.

Risk Ranking Medium

Criteria/Importance
Under GFR-Vole-I , Chapter : VI.—CONTROL OF EXPENDITURE
Sub-Clause (viii) “The head of the department and the Accountant General will be jointly
responsible for the reconciliation of the figures given in the accounts maintained by the head of the
department with those that appear in the Accountant General’s books. Unless in any case there are
special rules or orders to the contrary such as those contained in paragraph 90, the reconciliations
should be made monthly the initial responsibility resting with the Accountant General”.
Condition
During course of the Internal Audit, it has been observed that No Bank reconciliation Statement
was maintained in the office. As per Accounting Principle at end of each month Bank
Reconciliation Statement shall be prepared which is show the reason of discrepancy among bank
balance and cash book balance.
Any balance either Cash Book Or Bank Account Balance can be justified from BRS Statement.
Implication
Causes and reason of difference among cash book and Bank cannot be verified.

Recommendation
Proper Bank Reconciliation Statement shall be maintained for verification and Bank account
justification.
Role Responsible

Account Section

Management Response

Further Audit Comments

Decision of the Competent Authority

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4.1.2
The Balance Sheet of the Organization was not prepared as per
Observation
Finance Department Instruction.

Risk Ranking Medium

Criteria/Importance
As per notification NO.SO(A)/FD/1-20/2022 dated 21/02/2022 of the Finance Department
Khyber Pakhtunkhwa regarding policy framework to be followed by public autonomous bodies for
matters relevant to finance and accounting.
 Prepare financial statements in accordance with accrual basis of accounting.
 PSC to prepare them according to requirements of third schedule of Companies Act.
 The autonomous bodies shall prepare its financial statements in accordance with
International Financial and Accounting Standards (IFRS), Any deviation from the IFRS
shall be explained in notes to the financial statements.
Condition
During course of the Internal Audit, it has been observed that No Balance Sheet (Financial
Statement) Was prepared by the Account section in compliance of Finance Department
notification.
Implication
It leads towards the Violation of Finance Department Instruction.

Recommendation
Balance Sheet (Financial Statement) of the Organization shall be prepared and shown for
verification ..
Role Responsible

DDO/ Account Section

Management Response

Further Audit Comments

Decision of the Competent Authority

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The Financial Budget 2021-22 was not regularized from Board

Observation 4.1.3
Members /Search Committee.

Risk Ranking Medium

Criteria/Importance
Under the Section 17 of the L.W.M Foundation Act-2015 , Budget of the Foundation :-
“ The Managing Director shall in respect of each financial year , Prepare and place before the Board
for approval , the budget of the Foundation”.

Condition
During course of the Internal Audit, it has been observed that Financial Budget 2021-22 was not
approved from Board.

Implication
Irregular Budget cannot be ignored.

Recommendation
The Budget shall be regularized from Board and approved budget shall be provided to audit for
justification.
Role Responsible

Accountant ,MD

Management Response

Further Audit Comments

Decision of the Competent Authority

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During FY-2021-22 the T&G Center Machines Procurement

Observation 4.1.4
process delays without any logic reasons.

Risk Ranking Medium

Criteria/Importance
As per Chapter V of KPPRA rules section 30. Procurement planning.
“Each procuring entity shall plan its procurements with due consideration to transparency,
economy, efficiency and timeliness, and shall ensure equal opportunities to all prospective bidders
in accordance with section 22 of the Act

Condition
During course of the Internal Audit, it has been observed that Machines and other Material
Purchasing was not complete till date of audit, which reflects internal control weakness and
Management slickness.
Implication
Public deprived from targeted Benefit and budget mismanagement cannot be ignored.

Recommendation
Proper justification shall be furnished in light of relevant rule and documentary evidence.

Role Responsible

Welfare Manager

Management Response

Further Audit Comments

Decision of the Competent Authority

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4.1.5 No Annual Report was published for Key Stakeholder

Observation information

Risk Ranking Medium

Criteria/Importance
As per notification NO.SO(A)/FD/1-20/2022 dated 21/02/2022 of the Finance Department
Khyber Pakhtunkhwa regarding policy framework to be followed by public autonomous bodies for
matters relevant to Annual Report.
“The board of directors shall submit an annual report to the Administrative Department and
Finance Department as per prescribed requirements”

Condition
During course of the Internal Audit, it has been observed that there is no Authorized published
Annual Report in respect of Organization found in the office which shown weak Management
control.
Implication
Key Stakeholder cannot take on board for donation regarding the organization welfare activities.

Recommendation
Annual Report in light of Finance Department notification shall be prepared and share with Audit
for compliance .
Role Responsible

DO/Warden/Manager /Principal

Management Response

Further Audit Comments

Decision of the Competent Authority

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Part II – Human Resources

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5.1.1 Service book of the Employees were not maintained nor shown
Observation to Audit for verification.

Risk Ranking Medium

Criteria/Importance
As per Chapter -VI GFR-Vol-I Para-121(1) At a fixed Time early in the year the service books
should be taken up for verification by the head of the officer who after satisfying himself that the
services of Government Servant concerned are correctly recorded in each Service book”.

Under section 13 of the Foundation Act-2015, Public Servants “ All Employees of the
Foundation shall be deemed to be public servants”
Condition
All benefit of Public Servants and Rules shall be apply on the Foundation Employees and Service
book Shall be Prepared and shown to audit for variation.

Implication
GFR Rule Violation cannot be ignored.

Recommendation
Service Book shall be prepared duly signed from relevant office and shown to audit for verification.

Role Responsible

Admin Section

Management Response

Further Audit Comments

Decision of the Competent Authority

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5.1.2 Employee Seniority list was not shown to audit.

Observation

Risk Ranking Medium

Criteria/Importance
As per KP Esta Code, Chapter II Para 8. Seniority: - (1) For proper administration of a service,
cadre or 3 [post], the appointing authority shall cause a seniority list of the members for the time
being of such service, cadre or 4 [post] to be prepared, but nothing herein contained shall be
construed to confer any vested right to a particular seniority in such service, cadre or 5 [post] as the
case may be.

Condition
During scrutiny of record, it has pointed out that serenity list of employee could not prepared
which can creates future complication to the management.

Implication
Violation of KP Esta Code Rules cannot be ignored.

Recommendation
Employees Seniority list shall be prepared and shown to audit committee for justification.

Role Responsible

admin

Management Response

Further Audit Comments

Decision of the Competent Authority

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5.1.3 Vehicle logbooks was not maintained nor shown to audit.

Observation

Risk Ranking Medium

Criteria/Importance
As per Government staff Vehicle Rule 1997 under the Clause -22, “The following books shall be
maintained for each motor vehicle.
(i) Log Book-I shall be maintained in Form “A” and shall remain in the custody of the
driver of the vehicle.
(ii) The name of the Deptt, the designation of the officer In-charge, his telephone
number and the registration number of the Motor vehicle shall be indicated on the
title cover of the Log Book.
(iii) Petrol Account Register shall be maintained separately in Form “C” Copy at Annex: “C”.
Condition
During the course of the internal audit, it has been notice that the admin section could not
maintained logbook of vehicle. No.A-2716,A-9062,A-9063,A-9064,A-9065,A-6440 and A-6441.

Implication
Misuse of Vehicle cannot be ignored.

Recommendation
Vehicle Logbooks shall be prepared and shown to audit for verification.

Role Responsible

Admin Section

Management Response

Further Audit Comments

Decision of the Competent Authority

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5.1.4 Monthly POL Consumption detail was not shown to audit.

Observation

Risk Ranking Medium

Criteria/Importance
As per Government staff Vehicle Rule 1997 under the Clause -22, “The following books shall be
maintained for each motor vehicle.
(i) Log Book-I shall be maintained in Form “A” and shall remain in the custody of the
driver of the vehicle.
(ii) The name of the Deptt, the designation of the officer In-charge, his telephone
number and the registration number of the Motor vehicle shall be indicated on the
title cover of the Log Book.
(iii) Petrol Account Register shall be maintained separately in Form “C” Copy at Annex:
“C”.
Condition
During course of the Internal Audit, It has been observed that Monthly POL Consumption Report
of Vehicle could not furnish to audit for verification.

Implication
Misuse of POL Cannot be ignored.

Recommendation
Monthly POL Consumption Report of all vehicles shall be prepared and shown to audit for
justification.
Role Responsible

Admin Section

Management Response

Further Audit Comments

Decision of the Competent Authority

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5.1.5 Utility Register was not maintained

Observation

Risk Ranking Medium

Criteria/Importance
As per GFR rule 13; “…each Head of the Department will get the account of his office and those
of the subordinate disbursing officers if any inspected at least once in every financial year by a
Senior Officer not connected with the account matters to see whether; iii) Satisfactory arrangement
exists for systematic and proper maintenance of Account Books and other ancillary records
concerned with the Initial Accounts.

Condition
During scrutiny of record, it has been pointed out that the admin section could not maintain the
Utility Register for ready verification.

Implication
Weak Internal Control cannot be ignored.

Recommendation
Proper Utility Register shall be maintained which shows monthly consumption and payment details.

Role Responsible

Admin

Management Response

Further Audit Comments

Decision of the Competent Authority

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Part III- Education

Orphans Scholarship Program

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6.1.1 The Orphan Student Scholarship was not extended to Merged

Observation District and New Created District of Chitral, Kohistan

Risk Ranking Medium

Criteria/Importance
As per the vision of Social Welfare, “An empowered inclusive society based on equitable social
welfare system in Khyber Pakhtunkhwa”.
As per Constitutional Right of the Merged Areas to be considerate as part of Khyber Pakhtunkhwa
Province and eligible for the same benefit like other district of the province.
Condition
Due to war against terrorism in the newly merged districts of Khyber Pakhtunkhwa, every second
home is victim of terrorism and there are large number of orphans students in the merged district
as compared to the rest of the districts. They are eligible for the said education facility, without any
negligence.
Implication
The public deprived from the targeted benefits.

Recommendation
A letter shall be circulated to Merged District Elementary & Secondary Education Directorate ,
GT Road Peshawar for providing the list of Orphan student .
Role Responsible

Admin/ W.Manger / AD-Education

Management Response

Further Audit Comments

Decision of the Competent Authority

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6.1.2 During last three-year New Orphan scholarship Batch were not
Observation selected.

Risk Ranking Medium

Criteria/Importance
As per planned financial policy, targets shall be achieved during specified financial period.

Condition
During Scrutiny of Record, it has been pointed out that during last three year new batch of scholar
were not selected without any logical reason. Although the Finance Department has granted fund.

Implication
Mismanagement of Budget cannot be ignored.

Recommendation
Proper Justification shall be furnished to audit committee.

Role Responsible

Budget/Account Section

Management Response

Further Audit Comments

Decision of the Competent Authority

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6.1.3 The Student Enrollment Register was not maintained for ready
Observation verification.

Risk Ranking Medium

Criteria/Importance
For the Academic Record Purpose, the Head Office shall be maintained the student enrollment
record in proper sequences and in Chronological order for ready reference.

Condition
During course of the Internal Audit, it has been observed that L.W. Foundation admin office does
not maintain Enrollment Record Register of the Student who are studding in various Institute &
District for the ready information and verification.
Implication
Accurate data cannot not verify at the time of verification.

Recommendation
All student and trainee record shall be entered into Enrollment Register for ready verification.

Role Responsible

AD- T&G and Education

Management Response

Further Audit Comments

Decision of the Competent Authority

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Part-IV Tailoring and Garments Centers

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7.1.1 Center Rotation Policy was not adopted for T&G Center from
Observation beginning till date

Risk Ranking Medium

Criteria/Importance
Due to saturation in one place new enrollment becomes lesser and benefits of the center is
declining with the passage of time. There should be a rotation policy for T&G centers.

Condition
During the course of the Internal Audit, it has been pointed out that there is no Center Rotation
Policy for T&G Centers , in order to maximized the benefit and trained the large community in
multiple places in one District.
Implication
Old student again and again get training in one place due to saturation in one area.

Recommendation
Center Rotation shall be introduce, in order to get maximum training, skill in one district instead of
one place.
Role Responsible

Welfare Manager and MD

Management Response

Further Audit Comments

Decision of the Competent Authority

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7.1.2 The trainee’s enrollment Register was not maintained in Head

Observation Office for ready verification

Risk Ranking Medium

Criteria/Importance
For the Academic Record Purpose, the Head Office shall maintain the student enrollment record in
proper sequences and in Chronological order for ready reference.

Condition
During scrutiny of record, it has pointed out that there is no trainee enrollment Register for ready
verification and to avoid duplication.

Implication
Duplication cannot be ignored.

Recommendation
Proper Trainee Enrollment Register shall be maintained for ready verification.

Role Responsible

Management Response

Further Audit Comments

Decision of the Competent Authority

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7.1.3 The T&G Center was not extended to Merged Districts and
Observation New Established District of Chitral, Kohistan

Risk Ranking Medium

Criteria/Importance
As per Constitution Right, all citizens equal and it is state responsibility to provide opportunity to
their community for wellbeing and welfare. The 25th Amendment of constitution extends the
Khyber Pakhtunkhwa jurisdiction to Merged Districts. The social, Economics, administration and
development activity is the responsibility of Provincial Government.

Condition
During scrutiny of record, it has been pointed out that the foundation does not extend their service
towards merged districts and new established districts of the Province.
The Foundation could not contact the Additional Secretary merged Areas Finance Department for
additional grant.
Implication
At the last time sudden burden will disturbed the management.

Recommendation
The case shall be taken up with Finance Department for additional grant from Merged Area Fund
and the fund shall be utilized for the welfare activity in merged Districts.
Role Responsible

MD and Manager

Management Response

Further Audit Comments

Decision of the Competent Authority