ISLAMABAD: The Economic Coordinating Committee (ECC) of the Cabinet has authorized the release of Rs 37.33 billion for clearance of unpaid debts of utility companies/partner agencies by the Pakistan Post Department (PPOD).
According to well-placed sources, the PPOD is a department attached to the Ministry of Communications. Under the Rules of Conduct 1973, the PPOD, in addition to its basic functions, also performs agency functions on behalf of Federal/Provincial Governments and other corporate bodies.
Collection of utility bills is one of the agency functions performed by the PPOD and the amount so collected in this regard is deposited in Central Account No. 1 (Non Food) of the State Bank of Pakistan.
Pakistan Post had the option to clear debts of utility companies through Letter of Credit (LoC) issued by PPOD Accounts Manager, Lahore as per Sections No. 81 to 86 of the Original Account Code Vol-1 duly endorsed by the Auditor General of Pakistan.
After the enactment of the Public Finance Management Act 2019, the Finance Division ordered on 23-06-2021 the PPOD to open an account in the State Bank of Pakistan (SBP).
Meanwhile, the Finance Division continued to issue letters of credit until November 2021 for cash transactions, including agency functions.
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However, the Letter of Credit issued by the Finance Division in December 2021 did not include agency functions (Annex-D) resulting in liabilities accumulating to the tune of Rs 62.33 billion till March 31, 2022.
The issue of unpaid debts was brought to the attention of the Finance Division by the Ministry of Communications on 17-03-2022 (Annex-F).
In response, the Finance Division on April 15, 2022 approved Rs 25 billion for payment to utility companies.
The remaining liabilities of utility companies/partner agencies amount to Rs 37.33 billion.
Further, the PPOD with the approval of the Finance Division opened an account at the National Bank of Pakistan on 01-04-2022 and the amount collected under agency functions is now regularly transferred to the companies of partner utilities/agencies of said account. . Therefore, no further liabilities have been accrued.
However, the amount of Rs 37.33 billion previously deposited in Central Account No. 1 is still awaiting payment.
The Cabinet ECC is requested to direct the Finance Division to release funds amounting to Rs 37.33 billion for the clearance of unpaid debts of utility companies/partner agencies by the PPOD.
Copyright Business Recorder, 2022