PCB audit reveals massive financial mismanagement

A comprehensive audit of the PCB covering a period of five financial years up to June 2008 has unveiled a spectacular depth of financial ineptitude

Osman Samiuddin
Osman Samiuddin
Nasim Ashraf addresses the media in Lahore, July 24, 2008

Nasim Ashraf's tenure as PCB chairman came under the audit period  •  AFP

A comprehensive government-organised audit of the PCB covering a period of five financial years up to June 2008 has unveiled the spectacular depth of financial ineptitude, mismanagement and wastefulness of the administration of three chairmen this decade: Tauqir Zia, Shaharyar Khan and Nasim Ashraf.
Criticism over the way the board has been run has never been mild, but the audit report, conducted on the request of Pakistan's sports ministry, will provide further fuel to the ire of those who say that the board has never been as poorly managed, as it has been this decade. Though not a public document, the report has found its way to several media outlets.
According to the report, the PCB's annual expenditures have nearly doubled from Rs 571 million in 2004 to Rs 1.8 billion in 2008. The board recorded a surplus budget of just over Rs1 billion in 2004, but by 2008 that had been whittled down, staggeringly, to a deficit of Rs 130 million. How that has happened is clear from the report.
Money has been lost from non-recovery of rent (nearly Rs 25 million), it has been squandered and not recovered on legal bills of players such as Mohammad Yousuf and Mohammad Asif (over Rs 20 million); Rs 65 million, says the report, has been wasted on development projects with no results; Rs 44 million was spent on procuring equipment for a biomechanical analysis lab for the national cricket academy, which has since been lying unused; Rs 67 million is estimated to have been lost because the board didn't implement the recommendation of its own finance committee in 2005 to re-invest its foreign currency earnings in local currency accounts. The audit also estimated a loss of nearly Rs 6 billion due to the failure of successive administrations to get nearly 60 acres of land it owns around the National Stadium in Karachi vacated from illegal occupation. The list goes on.
As disconcerting as the waste has been the lack of procedure and the ad-hoc way in which the board has run its financial dealings. The report criticizes the board for not clearly defining the role and limits of the chairman's powers, especially when it comes to financial control. The ambiguity allowed Nasim Ashraf, for example, to announce a bonus of Rs 19.50 million for players without mandatory approval from the governing board. In much the same, arbitrary way, cars and unsecured advances to staff - totally nearly Rs 20 million - have been handed out without approval.
The report also calculated expenditure of nearly Rs 150 million carried out without the support of proper documentation, as well as chiding the board for not providing, for the audit, over a 100 documents. Additionally, the board, it says, has consistently hired employees and awarded contracts without following the proper procedure. One example was the five-year TV rights deal the board signed with Ten Sports in 2003 - worth US$ 42.6 million - for which no bidding documents were provided. The most evident message from the audit seems to be that not only have boards knowingly wasted money, they have had little clear idea of how an organisation is run and organised.
The current administration of Ijaz Butt - which began in October 2008 - does not come under the period audited and so is not implicated in any way. On taking over Butt openly talked of the financial mismanagement of preceding administrations and launched an austerity drive to cut down on expenses. Efforts were made to cut down on staff numbers - allegedly over 800 during Ashraf's time - and on related perks, but the effects of that will only be known when details of the next audit emerge.
"Expenditure on the 2008-2009 budgets, which was approved under former administration, was cut to half of the approved amount, saving over a billion rupees," Butt said. "The budget on 2009-2010 also stands on less than half of the amount of approved budget of the last year. It was done by carrying out a comprehensive cost cutting in all financial matters by cutting expenditures, streamlining staffing, and adopting a policy of austerity in all matters of the Board during his term."

Osman Samiuddin is Pakistan editor of Cricinfo