Financial deviations: Auditor General recovers Rs56b from govt departments

Challenges to the Supreme Audit Institution highlighted. PHOTO: STOCK IMAGE

Challenges to the Supreme Audit Institution highlighted. PHOTO: STOCK IMAGE

ISLAMABAD: The office of the Auditor General of Pakistan (AGP) has said that it recovered Rs56 billion from various government departments in the last seven months as a result of audit initiatives, highlighting flaws in government rules that allow these departments to cause the loss.

The AGP office shared its progress in the first meeting of the newly constituted Audit Policy Board. The board appreciated and endorsed the initiatives and reforms introduced in the AGP department, according to an official statement.

It said due to the high rate of recovery the cost-benefit ratio was Rs28 against every Rs1 spent on the department.

“During the first seven months, Rs56 billion was recovered on account of financial deviations by government departments against an expenditure of Rs2 billion only,” it added.

AGP Rana Assad Amin chaired the meeting of the Audit Policy Board. The board includes representatives of all the relevant stakeholders including professional accounting bodies and civil society organisations.

The AGP briefed the board about the special initiatives and achievements of the current management to improve the quality of audit. He assured the board that officers with integrity, competence and experience were being placed on top and middle management positions.

Lower positions were also being taken care of through planning and field audit activities.

Supreme Audit Institution

The chairman also highlighted some major challenges for the Supreme Audit Institution (SAI) Pakistan for the promotion of accountability.

He said the independence of SAI Pakistan was compromised as it was subordinate to the Finance Division and was treated as an ordinary service delivery department instead of a supreme accountability agency.

The argument was that SAI Pakistan was an audit organisation which identified the financial deviation in all government bodies including the Finance Division.

The board observed that the Securities and Exchange Commission of Pakistan (SECP) had delivered significantly by virtue of its independence.

It was, therefore, recommended that to ensure SAI Pakistan’s sanctity, it should be treated as an independent watchdog and be allowed to report directly to the finance minister on the pattern of independent agencies like the FBR and Statistics Division.

The board also recommended that the Pakistan Audit Department should be given a one-line budget to be managed by a board for regulating financial affairs of the department.

Audit quality

The policy board was informed that there had been a remarkable improvement in the quality of audit. Previously, massive resources were spent on compliance audit including procedural variations of financial transactions from the financial regulations.

The problem with this approach is that it focuses on symptoms instead of facilitating system reforms. However, the current management has implemented a shift in the audit policy by allocating at least 40% of financial and human resources to special operations including environment, forensic and information technology audit.

To promote transparency and accountability, the Pakistan Audit Department plans to sign a memorandum of understanding with the investigating agencies like NAB.

This style of engagement with other accountability agencies will not only create a deterrent to financial irregularities but will also facilitate practicality of the accountability process.

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