The Auditor General of Pakistan (AGP) has raised objections over mismanagement, irregularities and weak financial control over Rs3.12 trillion of public money by 36 federal ministries during the audit year 2016-17.
Submitted to the president of Pakistan and laid before the parliament in accordance with the requirements of Article 171 of the Constitution, the AGP has put on record that its findings were based on the scrutiny of public funds released to 36 out of 60 federal ministries and divisions.
It added that amounts “not below Rs1m spent or received by these companies and entities” were audited on a ‘test-check basis’ and this was not “a 100pc audit”.
The AGP, who was appointed by the Pakistan Muslim League-Nawaz (PML-N) government and completed his tenure earlier this year, highlighted 123 cases of irregular expenditures or payments, in violation of rules, amounting to Rs876bn.
The report highlighted 33 cases of ‘weak financial management’ worth Rs1.9tr, and another 52 cases related to ‘unsound asset management’ to the tune of Rs9.5bn.
Another 78 cases worth Rs1.53tr were pointed out as having ‘weak internal financial controls’, while Rs730bn in ‘overpayments’ and ‘misappropriation of public funds’ were placed on the record.
The AGP also questioned the misrepresentation of more than Rs1tr in supplementary grants by the ministry of finance and the accountant general of Pakistan revenue (AGPR) who are required to ensure sound financial management by the federation.
If this was not enough, the finance ministry has been blamed for not reconciling expenditures worth Rs656bn in June, which were categorised by the AGP as being “high-risk”.
The audit said that the heads of government spending units and the AGPR were jointly responsible for reconciling actual expenditure, but this was not done and a large amount of actual expenditure remained un-reconciled.
Moreover, the AGP noted, ministries and divisions spent Rs352bn in excess of the final grants available to them. In fact, the heads and principal accounting officers of the ministries were not authorised to incur excess expenditure without any supplementary grants.
Auditors expressed the concern that the ministry of finance had allowed Rs1.1tr in supplementary grants to ministries and divisions in financial year 2015-16.
The rules require the finance ministry to accept supplementary grants only if they are related to matters of real importance, or to the earning or safeguarding of revenue. In such cases, the demand for a supplementary grant or a token grant in respect of a new service — if the expenditure can be met by re-appropriation — should be presented to parliament as soon as possible after the need arises.
The audit observed that of all supplementary grants, only Rs261bn were presented to parliament along with the federal budget for 2016-17.
Another damning indictment was the audit’s observation that supplementary grants worth Rs838bn, which comes to 76pc of all supplementary grants, were not laid before parliament for approval in 2015-16.
There was also no record to calculate the amount of technical supplementary grants.
Another example of the serious mismanagement of public money was the Rs217bn that ministries and divisions failed to spend during the year. Even more ironic was the fact that they did not surrender this money to the finance ministry in time, so that it could be utilised for some other productive exercise.
Rules require that all anticipated savings, which are defined as the inability to spend funds against allocations, should be surrendered to the government immediately when foreseen, but no later than mid-May of each year, unless they are required to meet excesses under some other unit under the same ministry.
However, savings accrued from funds provided after May 15 should be surrendered to the government immediately, and not later than June 30. But neither of these options was availed and the funds eventually lapsed.