A recent audit of Khyber Pakhtunkhwa’s (KP) local governments, covering the period from 2002 to 2024, has revealed serious financial irregularities amounting to Rs354.126 billion, as reported by The News on Tuesday. These irregularities, however, largely remain unresolved due to the absence of an effective system or mechanism to address such audit objections.
To date, the Auditor General’s office has only managed to recover Rs3.232 billion, which is a mere fraction of the total irregularities identified over two decades. Experts suggest that the Pakistan Tehreek-e-Insaf (PTI) government failed to operationalize the Tehsil Accounts Committees and did not undertake any substantial legislative reforms to empower the Public Accounts Committee to exercise proper oversight over the financial affairs of local governments.
The 2019 Amendment Act mandated the establishment of Tehsil Accounts Committees, granting them the authority to scrutinize audit reports, budgets, and financial statements. Despite this, these committees have yet to be formed. In stark contrast, provinces like Punjab, Sindh, and Balochistan have active Public Accounts Committees that regularly examine audit observations related to their local governments.
A senior government official has warned that without urgent reforms to the accountability system, the volume of audit objections will continue to escalate, leading to ineffective oversight of public funds. He further noted that the existing law provides no mechanism to settle audit observations from before 2019, highlighting not only prolonged financial mismanagement but also a complete lack of a functional system for audit resolution.
A spokesperson for the Local Government Department stated that the provincial government has not received any audit reports of local governments from the Auditor General’s office. They added that should any audit report be received, it would be forwarded to the relevant Tehsil Councils. The spokesperson also clarified that, by law, the responsibility for reviewing audit reports rests with the Tehsil Accounts Committees.
Detailed Breakdown of Financial Irregularities
Over the 22-year period, a total of 765 audit reports were issued, highlighting 18,090 audit paras involving massive misuse or mismanagement of public funds. According to the data, the total disputed amount pointed out in these audit reports stands at Rs354.126 billion. However, the amount recovered is only Rs3.232 billion, meaning a staggering Rs350.893 billion is still pending recovery.
- Financial Year 2013-14: Audit paras highlighted objections worth Rs7,502.791 million. Recovery stood at Rs121.567 million, with Rs7,381.224 million remaining pending.
- 2014-15: Audit paras amounted to Rs3,290.469 million. Recovery was Rs105.965 million, and Rs3,184.504 million remained unaddressed.
- 2015-16: Saw audit observations worth Rs7,052.033 million. Recoveries were Rs62.374 million, with Rs6,989.659 million still outstanding.
- 2016-17: Audit paras reached Rs32,423.149 million. Only Rs280.691 million was recovered, leaving Rs32,142.458 million pending.
- 2017-18: Auditors flagged Rs31,147.537 million in objections. Recovery stood at Rs128.939 million, while Rs31,018.598 million remained unrecovered.
- The following year, 2018-19: Audit objections totaled Rs26,035.223 million. Recoveries were Rs100.491 million, with Rs25,934.732 million pending.
- During 2019-20: Audit paras amounted to Rs34,320.556 million. Only Rs221.295 million was recovered, and Rs34,099.261 million remained unsettled.
- In 2020-21: Audit authorities pointed out Rs37,199.340 million in irregularities. Recovery stood at Rs134.208 million, with Rs37,065.132 million still pending.
- A sharp spike was seen in 2021-22: With audit paras totaling Rs52,438.652 million. Recovery was only Rs0.573 million, leaving Rs52,438.079 million unaddressed.
- In 2022-23: Audit objections reached Rs52,658.098 million. Recoveries stood at Rs62.196 million, and Rs52,595.902 million was still pending.
- In the most recent financial year, 2023-24: Auditors flagged Rs40,756.117 million in irregularities. Recovery was recorded at Rs1,251.555 million, while Rs39,504.562 million remains unresolved.
An official from the Auditor General’s office informed this correspondent that the consistent pattern of high-value audit objections and minimal recoveries year after year reflects deeply ingrained inefficiencies in local governance and financial oversight. He warned that unless the government reforms the accountability framework, these audit paras will continue to accumulate, and public money will remain unaccounted for.
The KP government’s perceived silence, coupled with its failure to operationalize the Tehsil Accounts Committees or the Public Accounts Committee, has effectively rendered the audit system toothless concerning local government finances. The Public Accounts Committee currently lacks the mandate to address this matter under the 2019 Act, which limits its jurisdiction over local government financial issues.
