SUNDAY OCTOBER 16: FBR tax-related data: Pifra detects discrepancies during reconciliation

ISLAMABAD: Project to improve financial reporting and accounting (Pifra) has detected discrepancies in the tax-related data of the Federal Board of Revenue during reconciliation of information by applying its system. Sources told Business Recorder here on Saturday that the issue came to the light during the first quarterly meeting of Financial Accounting and Budgeting System (FABS) Technical Sub-Committee at Pifra Headquarters, Islamabad.
The meeting was chaired by Asif Usman Khan, Controller-General Accounts/Project Director PIFRA and was attended by members of the Committee or their representatives. The project is mainly related to establishment of the accounting, reporting and audit system, which covers core federal, provincial and district governments entities. It also covers online budget releases and re-appropriations of all provinces and development of functionality for reporting 'arrears' and spontaneous financing/liability of the finance managers.
During the meeting, the forum was informed that so far FBR had allowed access to direct taxes data only in which some discrepancies had been observed. For instance, dates were appearing in the amounts column, and so on. It was also pointed out that FBR had not yet provided data of indirect taxes despite repeated requests. FBR representative intimated that he is not in picture about the issue and that he will inform the relevant resource of FBR about Pifra's concern and requirements. During the system interface with the FBR, The Portal was provided by the FBR for direct taxes in June 2011 to the Pifra. However, there are quality problems in data. The indirect taxes data is still not available to the Pifra authorities.
According to sources, the forum was informed that interface with the State Bank of Pakistan (SBP) is required to ensure system based reconciliation and complete financial information. The SBP representative stated that they do not have any issue with providing transactional ID-based details as per agreed fields. However, the bank should not be made responsible to resolve accounting issues relating to transactions, which should be sorted out with the concerned Accounts Office. He assured that a meeting of the technical teams of SBP and Pifra will be called soon and portal may be ready in 4-6 weeks. It was agreed that only material issues, if any, will be taken up with the State Bank regarding the proposed interface/portal, while accounting issues will be referred to accounts office concerned. It was also decided that meeting of IT experts of SBP and FABS will be held during this month to finalise details.
About the interface with National Bank of Pakistan, the meeting was informed that as no significant progress in the matter could be made, the Chairman of the sub-committee requested the representative of the SBP to intervene. The SBP representative intimated that they do not have transaction level data of the NBP link branches and that Pifra will need to approach the banks directly. He also intimated that NBP automation is not state of the art and Pifra might need to invest in development of interface. It was decided that Pifra shall continue to pursue interface arrangements with NBP and in the subsequent meetings of the FABS Technical Sub Committee bank's representative shall also be invited.
Sources said that the economic affairs division (EAD) Interface is required for timely inclusion of debt data in the Accounts. The forum was informed that a Task Force had been constituted to resolve the issue of EAD interface and facilitate inclusion of foreign aided projects in the system. In this regard, Pifra has already presented draft terms of reference (TORs) of the Task Force to EAD. However, further progress by EAD is awaited. The EAD representative intimated that he will consult the relevant Debt Management Wing and also bring it to the notice of the Secretary EAD for early convening of task force meeting.
Sources further said that the Sub-Committee was informed that 5 foreign aided projects have been linked to the system and that linking of another two is in process. CGA/MoF is now required to issue necessary instructions for changes in the RFA (Revolving Fund Account) procedure so that real time accounting can be made.
About the implementation of commitment accounting module, sources said that it was intimated that the functionality was Live on all five servers (except Gilgit-Baltistan & AJK). The Executive & accounting offices are now required to complete the implementation (currently commitment is recorded when bill is submitted to office for payment). The Chairman of the sub-committee advised the Controller General Accounts (CGA) and AGPR office to take necessary measures for full implementation of the functionality. The committee was informed that a new facility for reporting Commitments and arrears (cash liability) has been provided on the request of Punjab FD.
It was proposed that FD may issue necessary instructions for endorsement of cheques by AGs/ DAOs on experimental basis. The CGA representative intimated that revised procedure containing proposed change has been forwarded to Finance Division (FD) after incorporating the "Mandatory Same Day endorsement" clause. It was therefore decided to wait for Finance Division's response in this regard.
Sources said that the forum was informed that two-model facilitation centers for pension and GPF payment accounting had been established at AGPR Islamabad and it was recommended that the model may be replicated in other payment sections and AG offices as. The Chairman of the sub-committee underscored the need for elimination of manual operations with a proper cut-off timeline, specifically in case of GPF and pension payments. It was decided that efforts should be made to increase confidence in the system. AG Punjab stated that changes in relevant rules was required to accept electronic data, to which it was pointed out that new accounting model (NAM) has such provision and overrides previous rules. However, the forum was informed that NAM contains a provision whereby payments can be made through the electronic system. AGPR stated that GP Fund and Pension facilitation centers are an effort by Pifra/AGPR to do away with the redundant processes.
Sources said that the forum was informed that CGA has sent a working paper to Finance Division (FD) regarding strengthening of CF&AOs with new role and responsibilities for effective internal controls. FD had indicated that the issue would be decided after the devolution process (post June-2011). FD is now required to decide the matter. The Chairman of the sub-committee emphasised the importance of FD's role to decide about replacement of FAs with CF&AOs with new role and responsibilities; now that the devolution process has been completed. Representative of FD was requested to inform relevant wing of FD to expedite the requisite decision.
The sub-committee was informed that system generated Federal GFS tables had been sent to FD by CGA, resource persons of both the organisations had been trained and initial version of the provincial GFS functionality was planned to be implemented by the end of October 2011. It was agreed that the actual issue is non-availability of timely data in the system which involves several stakeholders like State Bank, EAD, etc. Establishment of interfaces with these organisations will be a real step towards reflecting complete information in the System Generated GFS Tables.