AGP can audit NBP accounts, rules PAC
The Public Accounts Committee (PAC) has ruled that the Auditor General of Pakistan (AGP) can audit the National Bank of Pakistan (NBP) as the latter has not given the former access to its financial record since 2012.
The AGP had been conducting the bank's audit for decades, but the NBP management in 2012 went to the Sindh High Court and later barred the AGP from conducting audit of its accounts.
Altaf Ahmed Sheikh, director general (commercial audit), informed the PAC that the SHC had not issued any stay order as such. He read out the court order which stated: "No adverse action shall be taken against the bank."
The DG argued that audit was "not an adverse action" but a favourable step to point out weaknesses in the system that could lead to good governance.
For the past eight years, the NBP management had not allowed the auditors on pretext of the SHC order.
Mr Sheikh told the committee that the AGP office had sought opinion from the Ministry of Law and Justice, which was of the opinion that the AGP could audit any authority, established by the federal or provincial government, under Article 169 of the Constitution.
Action taken against incompetent, corrupt officers and those holding fake credentials, says ZTBL president PAC chairman Rana Tanveer Hussain then asked Finance Secretary Kamran Ali Afzal to explain whether the NBP status fell within the ambit of the AGP or not.
Mr Afzal said the court order was not a restraining order for the AGP and since the law ministry had also given an opinion in this matter, he had issued advice to the NBP to get its accounts audited by the AGP.
NBP president Arif Usmani informed the PAC that their accounts were being audited by six to seven audit organisations, including the regulator State Bank of Pakistan (SBP). He said the SBP conducted comprehensive audit of the NBP and they were ready to share the voluminous audit reports with the AGP as well.
"The AGP is the constitutional body and was established to conduct audit of the government entities and, therefore, you cannot stop them from performing their constitutional obligations," the PAC chairman said, adding that the NBP could hire as much audit firms as they needed to ensure transparency but stopping the constitutional body from undertaking their lawful duty was unacceptable.
Mr Hussain advised the NBP president to withdraw the petition from the SHC, as it was not wise to challenge the jurisdiction of the AGP. "You understand that the bank is not your personal property and the AGP is also a government body and, therefore, they should not have gone into litigation," he remarked.
The PAC also examined the audit reports of the Zarai Taraqiati Bank Limited (ZTBL).
The auditors informed the committee that the ZTBL had been functioning without a board of directors for the past three years.
As per the audit report, the bank management appointed 28 officers on 'bogus' educational credentials and 'irrelevant experience' to senior management positions.
ZTBL president Shahbaz Jameel informed the PAC that the board had been constituted and the summary in this regard submitted to the SBP. He said that action had also been taken against the incompetent and corrupt officers and those who had been appointed on fake credentials.