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ISLAMABAD: The federal government has sent “observations” of Regulatory Authorities (RAs) on audit powers to a high-level committee for final decision, well informed sources told Business Recorder.

There had been a dispute between the Regulatory Authorities, functioning under the Cabinet Division, and the office of the Auditor General of Pakistan (AGP) regarding the extent and nature of the annual audit to be conducted by AGP office.

The Authorities, in view of the constitutional stipulations and their particular enactments, believed that the AGP could conduct audit of their accounts only and not of their regulatory functions or their performance. However, the AGP insisted on its broader role in the scheme of audit.

On the request of the OGRA, the Cabinet Division requested the Ministry of Law and Justice to tender its opinion regarding scope of the audit by the AGP, with regards to the RAs. The Ministry of Law and Justice concluded that “the AGP could only conduct audit of accounts and also determine the nature of extent of such audit of accounts.”

Thereafter, the Public Accounts Committee (PAC), in its meeting held on August 10, 2020, decided that the jurisdiction of the AGP and consequential oversight jurisdiction of the Parliament could not be restricted to accounts only, by excluding the performance of the authorities or bodies established by or under the control of the Federal Government, particularly, when they impact public interest and involve public finances.

In view of the direction of the PAC, Nepra requested the Cabinet Division to seek advice from the Ministry of Law & Justice regarding special audit of the IPP agreement/ tariff determinations by the Nepra/ NTDC and payments made to the IPPs under the Power Policy 2002 & 2015, on the following two questions: (i) what was the scope of powers of the AGP with respect to conduct of audit under the Constitution, the applicable laws and the rules? More specifically, did the powers include audit of regulatory functions performed by regulatory Authorities such as, Nepra, and (ii) can the Public Accounts Committee (PAC) confer powers upon the AGP to conduct audit of regulatory functions of the regulatory authorities?

When the issue was verbally discussed with the Ministry of Law and Justice, the Cabinet Division was advised to seek the opinion of the Attorney General for Pakistan on the issue.

The Attorney General opined that “the audit of (i) economy of administrative activities; (ii) efficiency of utilization of human, financial and other resources; and (iii) effectiveness of performance was beyond the scope of the Auditor General of Pakistan”. The AGP, while disagreeing with the advice, approached the Cabinet Division to take up the matter with the Auditor General for reconsideration. The Cabinet Division suggested the AGP to take up the matter directly with the Auditor General. The AGP, instead of approaching the Auditor General directly, had again referred the matter to the Cabinet Division with the following observations:

“It was pertinent to mention that Attorney General’s said opinion was not an advice made on reference from the Federal Government under Article 100 and hence should not get a treatment more than that, especially after receipt of clarification from this office, as it would constitute denial of audit in violation of Articles 169-170 of the Constitution, AGP’s Ordinance, PAC directives and Supreme Court’s unequivocal judgments on the matter of audit by the Auditor-General for the purpose of accountability, transparency and parliamentary oversight. Article 100(3) of ‘the Constitution of the Islamic Republic of Pakistan, 1973, stated as under: “It should be the duty of the Attorney-General to give advice to the Federal Government upon such legal matters, and to perform such other duties of a legal character, as may be referred or assigned to him the Federal Government, and in the performance of his duties he should had the right of audience in all courts and tribunals in Pakistan”.

Cabinet Division proposed that the issue of NEPRA may be referred to the Attorney General for Pakistan, under Article 100(3) of the Constitution of the Islamic Republic of Pakistan, 1973, for advice.

During discussion, the Minister for Law & Justice Division advised that the Attorney General for Pakistan had already tendered his opinion and there was no need to refer the matter to him again. Secretary Cabinet reminded that the Cabinet, in its meeting held on December 07, 2021, had already constituted a Committee to review and recommend the parameters of Financial Audit by the AGP, the issue may also be referred to that Committee.

After detailed discussion the Cabinet Division decided to refer the matter to the Committee constituted by the Cabinet on December 7, 2021. The Committee shall finalize its recommendations within two weeks.

Copyright Business Recorder, 2022

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