ISLAMABAD: A staggering Rs 824 million in financial irregularities, mismanagement, and suspected losses have been flagged in the Defence Division by the Auditor-General of Pakistan, according to the Audit Report for 2024-25.
These included unaccounted fuel worth over Rs 638 million, procurement violations amounting to Rs 148.85 million, unauthorised advances of Rs 28.05 million, and irregular insurance payments of Rs 9.12 million. The audit, which covers the financial year 2023-24, exposes serious weaknesses in internal financial controls and persistent non-compliance with public finance rules within the Pakistan Maritime Security Agency (PMSA), operating under the Defence Division.
One of the most significant findings concerns the disappearance of 2.553 million litres of high-speed diesel (HSD), issued by the Pakistan Navy depot to the PMSA for operational and training purposes. Out of the 4.369 million liters received, only 1.816 million liters were accounted for through available documentation, leaving the remaining fuel, valued at Rs 638.29 million, unreconciled and unsupported by consumption logs or vessel movement records. The auditors classified this as a doubtful expenditure due to the absence of fuel registers, operational deployment records, and proper usage tracking mechanisms.
In addition to fuel discrepancies, the PMSA was found to have violated Public Procurement Regulatory Authority (PPRA) rules by conducting non-transparent purchases worth Rs 148.85 million without open competitive bidding.
The procurements, which included operational items and services for PMSA’s Karachi and Gwadar units, lacked comparative evaluation reports and were executed in disregard of mandatory financial procedures. The auditors highlighted these purchases as clear examples of non-compliance and financial mismanagement.
The report further uncovered Rs 28.05 million in unauthorised advance payments made to contractors and suppliers without securing the required bank guarantees. These payments remained unrecovered at the time of audit, despite previous objections, and were made without adherence to prescribed government procedures. The report also pointed to irregular spending of Rs9.12 million in insurance premiums for PMSA marine craft, with no evidence of policy details, coverage periods, or approval records, making the expenditure unjustified and unauthorised.
Beyond these specific financial lapses, the audit criticised PMSA’s broader financial governance practices. The agency failed to maintain critical registers for fuel and inventory, did not present original invoices or contract agreements during audit scrutiny, and exhibited a general lack of transparency in managing public funds. Moreover, the Defence Division showed non-compliance with Public Accounts Committee (PAC) directives, particularly regarding recurring issues previously raised in audit reports, indicating a lack of accountability and follow-through.
The auditor-general has recommended immediate reconciliation of the missing fuel stock, recovery of all unauthorised payments and advances, and full compliance with procurement rules. The report also stresses the urgent need for establishing an effective internal audit mechanism, as mandated by Section 29 of the Public Finance Management Act, 2019. All relevant audit observations have been forwarded to the PAC for further review, with a strong recommendation that the Principal Accounting Officer of the Defence Division be held accountable for rectifying the identified irregularities and enforcing compliance moving forward.
Copyright Business Recorder, 2025
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