Articles 169 and 170 of the Constitution of the Islamic Republic of Pakistan, 1973 read with Sections 8 and 12 of the Auditor-General‘s (Functions, Powers and Terms and Conditions of Service) Ordinance, 2001 require the Auditor-General of Pakistan to conduct audit of the accounts of Federal Government, Provincial Governments and the accounts of any authority or body, established by these Governments.
Auditor-General of Pakistan, being Auditor-General of Azad Jammu & Kashmir (AJ&K) and Gilgit-Baltistan (GB) also conducts audits in both these Regions under their respective legal provisions. The audit report recently made public is the consolidated Audit Report (Federal) based on audits of the accounts of 7,879 formations working under entities of the Federal Government for the financial year 2023-24, conducted by 16 Field Audit Offices, and also contains some audit observations for the previous years. The audit was conducted during 2024-25 on a test-check basis to report significant audit findings to the stakeholders.
As per the preface to the report, it includes only the systemic issues and audit findings carrying high monetary value. Relatively less significant issues are to be pursued with the respective Principal Accounting Officers (PAOs) in meetings of Departmental Accounts Committee (DAC) and in cases where the PAOs do not initiate appropriate action, the audit observations will be brought to the notice of the Public Accounts Committee in the next year‘s Audit Report.
As per the Executive Summary of the Report the scope was as under:
a. Scope of Audit Department of Audit-General of Pakistan (DAGP) is mandated to conduct audits of 7,879 formations working under different PAOs/Ministries at Federal level. Audit coverage relating to expenditure for the current audit year, under compliance audit category, comprises 1,362 formations having a total expenditure of Rs 24,257.531 billion and receipts of Rs 20,693.582 billion for the financial year 2023-24
(Emphasis is ours)
As per the Budget for the year 2023-2024 the total budget outlay (expenditure) was Rs 14.46 trillion. Federal revenue for the budget was budgeted as Rs 12.163 trillion. When this amount is compared with what has been shown in the audit report then it means that expenditure and revenue include more than one financial year. This matter has not been indicated in the audit report.
Nevertheless, in paragraph (f) of the report that relates to key audit findings it has been reported:
f. Key Audit Findings of the Report Major audit findings included in this Audit Report are:
i. Procurement and PPRA Regulations related issues – Rs 284.166 Trillion
ii. Defective, unexecuted and delay in civil work – Rs 85.614 Trillion
iii. Receivables and Recovery related issues – Rs 2.519 Trillion
iv. Non-settlement of circular debt – Rs 1.228 Trillion…….
In case if the aforesaid figures are considered to be correctly reported then it means that there were PPRA Regulation issues for cases involving USD1.13 trillion. The author has no right to challenge the accuracy of the amounts reported however this amount does not seem reasonable in relation to the total budget of the country.
The author has spent forty years in the accounting profession and is fully aware that such errors may arise for various reasons, including typographical and editing mistakes; however, the following two matters are of concern for all persons knowledgeable about financial matters of Pakistan:
a. First, even after the lapse of around seven to eight days no clarification or correction has been issued by the concerned department which is a constitutional body; and
b. Secondly, there is a need to look back into the process through which the financial impact of various objection paragraphs is determined and quantified especially in the cases where audit is conducted on test basis as clearly stated in the report.
One of the national weekly raised the issue of quantification in their article published on September 1, 2025 and the relevant extract is as under:
The AGP spokesman, when asked about the return of reports, said that the AGP followed the laid down process — it wrote a letter to the M/o Parliamentary Affairs along with its endorsements to the NA and Senate Secretariats. As per procedure, the spokesman added, the requisite number of copies of the audit reports were forwarded to the relevant authorities and properly received over there.
Asked why for first time the latest report includes in its executive summary the un-believable figures, he explained, “As far as the issue of amount of irregularities contained in the combined audit report is concerned, it is highlighted that a combined report containing findings of all audit reports of the federal government and its organisations was prepared last year as well and placed on the website of AGP. The basic purpose of doing so was to make it easier for search purposes to all who may not be as acquainted with the working of auditing function and its distribution among different Field Audit Offices (FAOs) spread across Pakistan. The only difference this year is the inclusion of the amount of irregularities along with the title of different nature of audit findings.”
It appears that the amount of irregularities is not limited to any one year. It may include the amount identified in earlier years also. Unless the time period is identified this presumption cannot be adopted. It is the author’s view that a satisfactory answer to identify the basis of the amount reported is yet to be given. Whatever may be the situation, the status at this stage is fluid which leads to erosion of general public’s trust on the amounts reported in various reports issued by the institutions.
Pakistani people at large and the media in particular are tuned to listen to sensational news on financial matters. In this country in all the cases the repealed provision of dissolving the assemblies under Article 58(2)(b) was invoked by citing the financial irregularities; however, the people whose parties were considered as being involved in financial misappropriation are the rulers at present. For example, Sardar Farooq Ahmad Khan Laghari dissolved the government of Benazir Bhutto inter alia on the grounds that:
“And whereas in the matter of the sale of Burmah Castrol Shares in PPL and BONE/PPL shares in Qadirpur Gas Field involving national assets valued in several billions of rupees, the President required the Prime Minister to place the matter before the Cabinet for consideration/reconsideration of the decisions taken in this matter by the ECC. This has still not been done, despite lapse of over four months, in violation of the provisions of Articles 46 and 48 of the Constitution.
And whereas for the foregoing reasons, taken individually and collectively, I am satisfied that a situation has arisen in which the Government of the Federation cannot be carried on in accordance with the provisions of the Constitution and an appeal to the electorate is necessary”
Similarly the dissolution of government of Nawaz Sharif by President Ghulam Ishaq Khan included the following matters:
“Decisions of the Cabinet meeting held on 6th of April, 1991 in the Prime Minister’s
Secretariat;
(7) A working paper on Pak istan Telecommunication Corporation,
(8) Privatisation of Muslim Commercial Bank;
(9) Development in and around Raiwind;
(10) Permission to new Commercial Banks;
(11) Levy of customs duty on shredded and bundled waste and scrap.”
This shows the whole democratic process was derailed, raising sensational financial issues for the vested interest. There were no ultimate actions against those Prime Ministers who were allegedly involved in such financial corruption. As a result of the continuity of this manner, people in the country have lost trust in the reported financial irregularities.
The amount of audit finding in relation to the procurement process, which appears to be an inadvertent error, has shaken the whole accounting fraternity. Even if it is taken that the actual amount is substantially less than that reported the primary question is whether or not there is any recourse against the ‘person’ or ‘persons’ who were responsible for non-compliance of PPRA Regulations. Knowing the nature of the transaction, the author is clear that there cannot be any recovery from the person approving the payment without complying with the PPRA Regulation. If it is so, then the author has the right to question the objective of raising that issue. The possible answer may be administrative remand and negative comments in the annual confidential report. It is also possible that the case may be referred to the National Accounting Bureau (NAB) for collusion with the contractor or the supplier. Whatever may be the case, the public at large is totally unaware of the process involved once it is established that a particular purchase was made without complying with PPRA Regulations. Even if it is accepted that the amount is limited to Rs 28 trillion there is a need to provide to the public the names of the department where it has been established that there is established non-compliance of the PPRA Regulations.
In these circumstances it is suggested that reporting about financial irregularities be made with caution and once something is reported for public consumption then its ultimate fate is also required to be known to the public. If this is not done our younger generation will continue losing hope in the economic future of the country.
Copyright Business Recorder, 2025
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