The Auditor General of Pakistan (AGP), in its audit report for the Financial Year 2023–24, has highlighted severe financial mismanagement, irregularities, and violations of public finance rules across numerous federal ministries and divisions. The report details financial irregularities, losses, and other issues amounting to over Rs1,100 billion, painting a concerning picture of fiscal indiscipline, unauthorized payments, and weak internal controls within key government entities.
Key Findings and Impacts:
Among the most significant and damaging findings is the import of 3.59 million tonnes of wheat despite the availability of surplus domestic stocks. This decision resulted in an estimated loss exceeding Rs300 billion, leading to market oversupply and economic hardship for local farmers.
The report enumerates a range of critical observations, including:
- Expenditures Without Budget Approval: Several ministries incurred expenses in direct violation of fiscal regulations, lacking prior budget approval.
- Overpayments to Karachi Port Trust Employees: Employees of the Karachi Port Trust received excessive allowances, placing an unnecessary burden on the public exchequer.
- Unauthorized Payments and Procurement Irregularities in Civil Armed Forces: The audit revealed unauthorized payments and irregularities in procurement processes within the Civil Armed Forces, indicating serious lapses in financial compliance and oversight.
- Misuse of Public Funds in Regulatory Authorities: Overpayments of salaries and allowances were made to officials of the Private Educational Institutes Regulatory Authority, constituting unauthorized disbursements and misuse of public funds.
- Irregularities in Pakistan Cricket Board (PCB): The audit identified unauthorized payments, irregular contracts, and general financial mismanagement within the PCB, leading to calls for the recovery of misused funds.
- Encroachment on Public Land: Cases of illegal occupation of lands belonging to the Evacuee Trust Property Board, Jammu and Kashmir state properties, and the Karachi Port Trust were reported, signaling poor asset management and oversight.
- Tax Evasion and Non-compliance: Instances of non-deduction of taxes on various payments were flagged, resulting in revenue losses and clear violations of tax laws.
In addition to these operational irregularities, the AGP documented:
- Five cases of embezzlement and fictitious payments, totaling Rs1.69 billion.
- 107 recovery cases amounting to Rs689.48 billion, with recommendations for corrective action.
- 39 instances of weak internal controls, involving Rs160.39 billion.
Furthermore, dozens of other audit paragraphs highlighting internal control failures and procedural violations have been included in the Management of Financial Discipline and Accountability Compilation (MFDAC) but were not presented before the Public Accounts Committee (PAC) due to their lesser material significance.
AGP’s Recommendations and Government’s Stance:
To address the widespread financial mismanagement, the AGP has put forth several key recommendations:
- No government expenditure should be incurred without prior parliamentary approval.
- Supplementary grants must be issued only after a proper assessment and within the designated financial year.
- Serious embezzlement cases should be promptly forwarded to investigative agencies.
- All unspent balances and retained receipts must be deposited into the government treasury.
- Internal controls and internal audits must be significantly strengthened across all government entities.
- Government departments must provide all required records to auditors without delay.
- A proper fixed assets register should be maintained, along with annual physical verification.
The AGP’s audit for 2023–24 paints a concerning picture of public financial governance in Pakistan. With irregularities involving hundreds of billions of rupees, the report strongly emphasizes the urgent need for structural reform, more robust oversight, and stricter enforcement of accountability mechanisms to safeguard public funds and rebuild public trust in federal institutions.
When approached for comment, a government spokesman stated that these audit reports are subject to discussion in the Departmental Accounts Committee (DAC), which is chaired by the Principal Accounting Officer (PAO). He clarified that most audit observations are resolved at the DAC level and are then recommended to the PAC for settlement, with such recommendations typically accepted by the PAC.
The spokesman concluded, “So the so-called irregularities are not final by any means. The PAC has already directed all PAOs to hold DACs on a monthly basis so that maximum audit observations are settled at DAC level.”
