Top auditor finds over Rs15tr irregularities by ministries – Pakistan

ISLAMABAD: The Auditor General of Pakistan (AGP) has indicated irregularities of more than Rs15.67 billion of public money by federal ministries and divisions during fiscal year 2018-19.

In its report submitted to Parliament as required by article 171 of the Constitution, the AGP highlighted a series of violations of the rules and regulations, weaknesses of internal control, misappropriation or excessive payment of public funds and negligence. The audited funds were from the 2017-18 fiscal year, which is described as the 2018-19 audit year.

Audit objections regarding federal government accounts for the 2018 audit year are much greater (87 percent) than Rs5.8tr from the previous year, which shows that financial control over public money has deteriorated in instead of improving or the AGP office was too consumed in procedural subtleties under the rules and regulations of a decade ago.

This is evident from the fact, for example, that the government raised $ 2 billion (Rs280bn) of international bonds at 8.25pc and 7.25pc of interest with the approval of the prime minister instead of the federal cabinet as required by the rules. While the audit opposed the higher interest rate, the total amount of Rs280bn was described as irregular and unauthorized without asking questions if the funds were really justified.

It highlights a series of violations of rules and regulations, weaknesses of internal control, misappropriation of public funds

As a consequence, the Public Accounts Committee ultimately regularizes most of these important items because they rarely involve corruption or embezzlement. This is also evident from the fact that in the huge sum of Rs15.67tr that attracted audit objections, the actual reported cases of fraud, embezzlement, theft and misuse of public resources involved an insignificant amount of Rs862 million. But there were also serious cases of fiscal mismanagement highlighted by the AGP.

The AGP in its report, also presented to the President of Pakistan, noted that his findings were based on the scrutiny of public funds from 40 of 50 federal entities and did not cover amounts less than Rs1m spent or received by these entities. He said that an amount of Rs4.9bn was recovered during the year under review at the auditor's instance and deposited in the federal consolidated fund.

The AGP highlighted a total of 39 cases of weak internal control in the amount of Rs14.56tr involving several ministries and divisions and related entities abroad. Once again, some of them were also included in 51 cases related to weak financial management involving a total amount of Rs14,735tr. In addition, 237 cases of Rs 293,000 million involving irregular expenses or payments in violation of the rules were noted.

There were 56 cases of recovery worth Rs186bn, while in four cases the record related to Rs1.06bn did not occur at the request of the auditor.

Interestingly, the AGP also questioned the misrepresentation of more than Rs9.96tr in supplementary subsidies by the Ministry of Finance and the General Accountant of Revenue of Pakistan (AGPR) that are required to ensure good financial management of the federal government. The audit described it as a "high risk" area because it violated articles 80-84 of the constitution because the Ministry of Finance did not print these supplementary subsidies in budget accounts that represented 94.32{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} of the total of the complementary subsidies.

He said that the total of additional grants according to the manuscript of the appropriation accounts for the 2017-18 fiscal year was Rs10,561tr, but only Rs599bn of these grants were printed on the calendar of authorized expenses, leaving an unauthorized expense of Rs9 .962tr.

The AGP said that the Ministry of Finance should place all supplementary subsidies before the National Assembly for approval, but it was not made and no such large amounts were reported. The Ministry of Finance's response that supplementary grants received from various ministries and divisions beyond a deadline could not be part of the book submitted to parliament was deemed unsustainable.

In addition, the AGP noted that the ministries and divisions had incurred an expense of Rs3,643tr in excess of the final subsidies available to them and, in fact, the chiefs and chief accountants of the ministries were not authorized to incur excessive expenses without any complementary subsidy or within the original budget allocation. This also included around Rs3.48tr of overpayment of the internal debt.

The AGP also expressed concern about the non-delivery of savings worth Rs411bn by various ministries and divisions, resulting in the expiration of the funds. This was a violation of the financial rules that require all anticipated savings to be delivered to the kitten immediately, but no later than May 15 of each year. This could have prevented the use of funds by other deserving areas.

The AGP also highlighted the payment of Rs55bn less to the provinces under its actions of the National Finance Commission through the excessive deduction of collection charges and the unauthorized overpayment of Rs35bn to Balochistan.

Posted on Dawn, September 20, 2019



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