Embezzlement of Rs.11 million was found by the Audit department in the procurement activities of PIA’s Food Service department for VIP and VVIP flights it was revealed on Monday.
According to the sources, the auditors have detected discrepancies claiming that the procurement process was not documented properly, and the annual contracts and quotations were missing, nor there approved vendors on the accounts.
According to the sources, the flight Kitchen Islamabad with prior approval of Food Services Division Manager made direct procurement and raised 148 internal Requisitions (IR) costing Rs.11 million from January to August—The Nation reported.
The Kitchen which provides special catering services and meal arrangements for VIP (PAF flights) and VVIP (Chartered flights) in PIA has raised many questions. The kitchen also provides services to local and international airlines such as Air China in case of an emergency, landing or grounding of aircraft.
According to the details provided by auditors, the procurement division had an agreement with Air China which confirms the rates per recipe and the meal requirements were specific with specific ingredients. Those specific ingredients were not in use by the Kitchen itself hence, they arranged procurement of specific items out of the required procedure. The procurement department used four pre-qualified vendors and procured required items at various rates.
The Flight Kitchen generated Rs.95 million and Rs.76 million in 2016 and 2017 respectively through catering services to other flight carriers during the period under discussion from January to August 2017.
The department was ordering such items through IR and ad-hoc basis at higher rates as compared to the quoted prices by M/S and MM Traders which puts a significant dent in the overall management cost.
The auditors said, a formal annual contract should be followed for all procurement activities, or a fresh tender should be released for specific items if not supplied by the approved vendors at competitive rates. The PIA spokesperson said we have addresses the audit concerns and if it was not settled the case would have been forwarded to Public Accounts Committee for further action.