According to the FBR's instructions to the field formations, audit observation, bearing No 12 has been raised by the office of the Director General Audit, Inland Revenue (North), Lahore with the FBR during the Financial Attest of the Financial Statements of Federal Government (Revenue Components) for the FY 2013-14 at "National Level." As agreed with the audit, field formations of the FBR are requested to direct the quarters concerned to carry out the bank reconciliation and reconciliation with AGPR or its respective sub-office well in time.
Moreover, to avoid audit observations the treasuries may strictly be directed to ensure that there is no difference between departmental, AGPR and bank's figures and matter being urgent nature "Top Priority", FBR's instructions added. As per audit observations of the Director General Audit, Inland Revenue (North), Lahore, according to 3.4.2.12 of Manual of Accounting Principles, at the close of each month the entity will reconcile its books of accounts with the bank records. This reconciliation is to be performed in accordance with the policies and procedures set out in the Accounting Policies Procedure Manual, GFR and Federal/Provincial Treasury Rules. FBR being an entity is not conducting the requisite bank reconciliation at macro level and in micro level some treasuries are reconciling the figures from respective regional offices of SBP to the extent of collection of NBP 'A' category branches only.
During scrutiny of auditable record relating to reconciliation of tax receipts figures by the FBR treasuries with sub-offices of AGPR during 2013-2014, it has been noticed that the FBR treasuries are finalising the reconciliation of revenue figures with sub-offices of AGPR without prior reconciliation with respective link/ main branches in case of 'A' category of bank's branches and with respective regional office of SBP. Similarly in case of revenue receipts collected by B & C branches of NBP, no such bank reconciliation with the chest branches of NBP and Head Office, Karachi and accordingly with SBP Main Office Karachi is being conducted by the respective FBR treasuries, audit observation said.
Moreover, the FBR treasuries are not carrying out the requisite reconciliation with accounting office at remote areas, ie, DAOs for collection of B & C branches falling under their respective jurisdiction.
It is, therefore, requested that proper arrangements may be made by FBR for carrying out the requisite bank reconciliation both at micro level by nominating the co-ordinator treasury for the purpose of reconciliation with respective bank's regional office. Similarly, at macro level, such reconciliation with bank's head offices may be carried out by consolidating the bank reconciliation statements of field offices on the prescribed format of reconciliation with AGPR.
Due to dearth of FI data relating to revenue receipts in SAP, it is quite necessary for AGPR to confirm the cash from NBP/SBP before reconciling the reporting of FBR. Hence, the reconciliation of revenue receipts figures should not be finalised without prior bank reconciliation with NBP/SBP as discussed above. Therefore, AGPR authorities are requested that before finalising the reconciliation with any FBR treasuries, prior bank reconciliation with respective bank's branches or regional offices be ensured, audit added.
When contacted, a tax expert said that 'A' category of bank branches coves those bank branches having online facility; 'B' category covers those banks which are located in urban areas but not online. The 'C' category branches are those which are operating in remote areas like Turbat, etc.