AGP un­earths Rs270 bil­lion ir­reg­u­lar­i­ties in min­istries

The Pak Banker - - FRONT PAGE - ISLAMABAD -APP

The Au­di­tor Gen­eral of Pak­istan (AGP) has un­earthed mis­ap­pro­pri­a­tion and em­bez­zle­ment of pub­lic funds in var­i­ous min­istries to the tune of over Rs12 bil­lion, with ir­reg­u­lar­i­ties of gov­ern­ment funds amount­ing to Rs258bn. The AGP's re­port cov­ers the fis­cal year 201819 - the first year of the Pak­istan Tehreek-i-In­saf gov­ern­ment - and rec­om­mends strict ac­tion, in­clud­ing ref­er­ences, to in­ves­ti­ga­tion agen­cies against those re­spon­si­ble.

The AGP has fi­nalised its re­port on Au­dit Year 2019-20 and it would be sub­mit­ted to par­lia­ment and the pres­i­dent in a cou­ple of days. The re­port also dis­closed that record for a num­ber of en­ti­ties and ac­counts was not given to au­dit teams in vi­o­la­tion of rules. A gov­ern­ment min­is­ter while com­ment­ing on the au­dit re­port said that such ir­reg­u­lar­i­ties dur­ing the pe­riod of past gov­ern­ments used to in­volve up to Rs1,000bn. Geo TV quoted Min­is­ter for In­dus­tries Ham­mad Azhar as say­ing the graph had come down by 80 per cent but added that the PTI gov­ern­ment needed to im­prove it fur­ther.

Rec­om­mends strict ac­tion against those in­volved; min­is­ter says graph of ir­reg­u­lar­i­ties has dropped The au­dit re­port iden­ti­fied 56 cases of mis­ap­pro­pri­a­tion and em­bez­zle­ment of pub­lic funds and fic­ti­tious pay­ments amount­ing to Rs12.561bn. In ad­di­tion, there were 98 cases in­volv­ing re­cov­ery of Rs79.59bn and 37 in­stances of non­pro­duc­tion of record of Rs17.97bn.

Like­wise, the au­dit un­earthed 35 cases per­tain­ing to weak fi­nan­cial man­age­ment amount­ing to Rs152.21bn. The AGP put on record that au­dit paras for the Au­dit Year 2019-20 in­volv­ing pro­ce­dural vi­o­la­tions, in­ter­nal con­trol weak­nesses and ir­reg­u­lar­i­ties which were not con­sid­ered sig­nif­i­cant for re­port­ing were not be­ing re­ported to Pub­lic Ac­counts Com­mit­tee of the Na­tional Assem­bly.

Based on these find­ings, the au­dit has pro­posed to the gov­ern­ment to en­sure that no ex­pen­di­ture be in­curred with­out bud­getary cover and au­tho­ri­sa­tion by the par­lia­ment and sup­ple­men­tary grants should not be is­sued with­out need as­sess­ment and ap­proval from par­lia­ment be­fore close of fi­nan­cial year. The AGP also rec­om­mended to the par­lia­ment that cases of se­ri­ous em­bez­zle­ment of pub­lic money be sent to in­ves­ti­ga­tion agen­cies and the gov­ern­ment should be di­rected that re­tained gov­ern­ment re­ceipts and un­spent bal­ances be de­posited into the gov­ern­ment trea­sury wher­ever ap­pli­ca­ble.

The Au­dit has also sought strength­en­ing of in­ter­nal con­trol sys­tem to re­duce risks and in­ter­nal au­dit and print­ing of its re­port should be en­sured along with the shar­ing of Fi­nan­cial At­test Au­dit Re­ports with AGP's au­dit teams where re­quired.

More­over, all as­sets should be recorded in the stock reg­is­ter and phys­i­cal ver­i­fi­ca­tion be car­ried out an­nu­ally and all au­ditable record be pro­duced to au­dit when de­manded. The au­dit re­port also sug­gested that prin­ci­pal ac­count­ing of­fi­cers (fed­eral sec­re­taries head­ing the min­istries) should be di­rected to take se­ri­ously is­sues of non-pro­duc­tion of record as it ham­pered au­dit func­tions of the AGP.

The Fed­eral Gov­ern­ment con­ducts its oper­a­tions un­der the Rules of Busi­ness, 1973, and com­prises 60 Prin­ci­pal Ac­count­ing Of­fi­cers (PAOs) for dif­fer­ent min­istries, di­vi­sions and en­ti­ties. The au­dit re­port was fi­nalised after re­views of In­ter­nal and Ex­ter­nal Qual­ity Con­trol Com­mit­tee meet­ings with the ob­jec­tive of en­sur­ing par­lia­men­tary over­sight over the ex­pen­di­ture in­curred by fed­eral min­istries and di­vi­sions. It re­viewed fi­nan­cial sys­tems, trans­ac­tions and eval­u­a­tion of com­pli­ance with ap­pli­ca­ble statutes and reg­u­la­tions, the pro­bity and pro­pri­ety of ad­min­is­tra­tive de­ci­sions taken and to high­light cases of ir­reg­u­lar ex­pen­di­ture or waste of pub­lic money.

The ev­i­dence was pri­mar­ily gath­ered by ap­ply­ing pro­ce­dures like in­quiries from the man­age­ment, re­view of mon­i­tor­ing and progress re­ports and ex­am­i­na­tion of pay­ment vouch­ers. Desk au­dit was car­ried out be­fore ini­ti­at­ing field ac­tiv­i­ties which in­cluded per­form­ing of au­dit tests and an­a­lyt­i­cal pro­ce­dures to eval­u­ate in­ter­nal con­trols and to as­sure that pay­ments were val­i­dated by proper sup­port­ing doc­u­ments, ap­proval of com­pe­tent author­ity and ex­pen­di­ture was in­curred in ac­cor­dance with the ap­proved bud­get.

It was noted with con­cern that for most of the en­ti­ties au­dited dur­ing 2019-20 it was no­ticed that the in­ter­nal au­dit units were non-ex­is­tent. In­stances of in­ter­nal con­trol fail­ures were also noted which re­sulted in ir­reg­u­lar­i­ties and loss of pub­lic money.

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