ISLAMABAD: The Auditor General of Pakistan (AGP) has pointed out irregularities of more than Rs15.67 trillion worth of public money by the federal ministries and divisions during the audit year 2018-19.
In its report laid before parliament as required under Article 171 of the Constitution, the AGP highlighted a series of violation of rules and regulations, weaknesses of internal control, misappropriation or overpayment of public funds and negligence. The funds audited were of the fiscal year 2017-18 which is described as audit year 2018-19.
The audit objections regarding the accounts of the federal government for the audit year 2018 are far greater (87 per cent) than the Rs5.8tr a year before, showing that financial control over public money has deteriorated instead of having been improved or the AGP office was too consumed in procedural niceties under the decade-old rules and regulations.
This is evident from the fact, for example, that the government raised $2 billion (Rs280bn) international bonds at 8.25pc and 7.25pc interest with the approval of the prime minister instead of the federal cabinet as required under the rules. While the audit objected to the higher interest rate, the entire amount of Rs280bn was described as irregular and unauthorised without raising questions if the funds were actually justified.
Highlights a series of violation of rules and regulations, weaknesses of internal control, misappropriation of public funds
As a consequence, majority of such big ticket items are ultimately regularised by the Public Accounts Committee because these seldom 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 a paltry amount of Rs862 million. But then there were also serious cases of bad fiscal management highlighted by the AGP.
The AGP in its report, also submitted to the president of Pakistan, put on record that its findings were based on scrutiny of public funds of 40 out of 50 federal entities and did not cover amounts below Rs1m spent or received by these entities. It said that an amount of Rs4.9bn was recovered during the year under review at the instance of the auditor and deposited in the federal consolidated fund.
The AGP highlighted a total of 39 cases of weak internal control amounting to Rs14.56tr involving several ministries and divisions and related entities abroad. Again, some of them were also included in 51 cases pertaining to weak financial management involving a total amount of Rs14.735tr. Also, 237 cases of Rs293bn were pointed out involving irregular expenditures or payments in violation of rules.
There were 56 cases of recovery amounting to Rs186bn, while in four cases record relating to Rs1.06bn was not produced on the auditor’s demand.
Interestingly, the AGP also questioned misrepresentation of more than Rs9.96tr worth of supplementary grants by the Ministry of Finance and the Accountant General of Pakistan Revenue (AGPR) which are required to ensure sound 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 finance ministry did not print these supplementary grants in budget accounts which accounted for 94.32pc of the total supplementary grants.
It said the total supplementary grants as per manuscript of appropriation accounts for the fiscal year 2017-18 stood at Rs10.561tr, but only Rs599bn of these grants had been printed in schedule of authorised expenditure, leaving an unauthorised expenditure of Rs9.962tr.
The AGP said the finance ministry was required to place all supplementary grants before the National Assembly for approval, but it was not done and such large amounts remained unreported. The finance ministry’s response that supplementary grants received from various ministries and divisions beyond a cut-off date could not be made part of the book presented to parliament was found untenable.
Moreover, the AGP noted that the ministries and divisions had incurred an expenditure of Rs3.643tr in excess of final grants available to them and in fact heads and principal accounting officers of the ministries were not authorised to incur excess expenditure without any supplementary grants or within original budget allocation. This also included about Rs3.48tr of excess payment of domestic debt.
The AGP also expressed concern over non-surrendering of savings worth Rs411bn by various ministries and divisions, resulting in lapse of funds. This was violation of financial rules that require that all anticipated savings should be surrendered to the kitty immediately they are foreseen but not later than May 15 each year. This could have pre-empted utilisation of funds by some other deserving areas.
The AGP also highlighted about Rs55bn less payment to the provinces under their National Finance Commission shares through over-deduction of collection charges and unauthorised overpayment of Rs35bn to Balochistan.