AGP’s audit process under scrutiny

EDITORIAL: The controversy surrounding the latest Auditor General of Pakistan (AGP) report has cast a troubling shadow over the country’s system of financial oversight. According to recent media reports, the National Assembly Speaker has taken the highly unusual step of returning the audit documents for FY2023-24 to the AGP without presenting them before parliament.

By law, AGP reports must be laid before the National Assembly, but two contentious aspects have sparked the present uproar and forced the Speaker’s hand.

First, the procedure followed by the AGP in releasing the report appears inconsistent with constitutional requirements. Instead of routing the documents through the Ministry of Parliamentary Affairs — a long-standing practice — the AGP apparently sent the reports directly to the National Assembly Secretariat for placement before the House. To make matters worse, the report was also released on the AGP’s website before it was tabled in parliament, a highly irregular step that undermines parliamentary authority and casts doubts over the AGP’s judgement.

Second, and equally troubling, the content of the report itself has stunned observers. It cites a jaw-dropping Rs375 trillion in financial irregularities across government departments. To put that in perspective, this is 27 times the entire federal budget for 2023-24, i.e., Rs 14.5 trillion, and more than 3.5 times Pakistan’s GDP of roughly Rs 110 trillion. That the numbers are grossly implausible is a fact, bringing the report’s accuracy and credibility into question.

The breakdown of the figure cited reveals irregularities worth Rs 284.17 trillion in procurement, Rs 85.6 trillion in delayed or defective civil works, Rs 2.5 trillion in unsettled receivables and Rs 1.2 trillion in circular debt. That these areas may be plagued by financial lapses surprises no one.

What defies belief is the astronomical scale of the numbers cited. This has sparked scepticism, with observers now pointing to either colossal errors in tabulation or to a potential breakdown in the integrity of the national audit machinery. It is clear that when an audit figure dwarfs the entire national economy, it shifts the debate from accountability to incredulity, defeating the purpose of an audit.

For sake of fairness it needs to be stated that the accounts are prepared by the office of the Accountants General Pakistan Revenue (AGPR) in all the four provinces and the federal government under the office of Controller General Pakistan Revenue but are certified by the Auditor General. Both these branches are staffed by officers of the Pakistan Audit and Accounts Service Cadre.

However, it needs to be determined whether these numbers of incredible magnitude originated from the AGPRs and carried forward by the Auditor General, or otherwise. Whatever the case, a clarification from the concerned offices is warranted and must be demanded.

AGP audit reports are meant to uphold transparency and accountability by scrutinising public spending, flagging irregularities, ensuring compliance with rules and offering recommendations to strengthen financial management across government departments. They form a vital part of official data, informing governing authorities in setting the course of national policymaking, which makes safeguarding their credibility essential.

But with even former AGP Javed Jahangir now describing the latest report’s figures as “abnormal” and calling for their re-examination, that credibility is now in doubt. He also criticised the report’s premature release in the public domain.

The AGP spokesperson’s justification that making the report public was meant to improve accessibility for those unfamiliar with audit functions is a weak one, as this reasoning cannot justify sidestepping constitutional norms of first laying it before parliament, while the defence that this was done last year as well is equally weak, since repeating an irregularity does not make it acceptable.

Another point worth noting here is the silence of the country’s premier accounting bodies — the Institute of Chartered Accountants of Pakistan and the Institute of Cost and Management Accountants of Pakistan — on the extraordinary scale of the irregularities cited in the AGP report.

Though not mandated to validate audit reports, their complete absence from the debate over figures of such magnitude is conspicuous. They would be well advised to provide some commentary on methodology or adherence to accounting standards by the AGP as that could help anchor the discussion on the integrity of financial reporting in the country.

It is now incumbent upon the AGP office to address these concerns more comprehensively than it has so far. Restoring confidence in its reporting is essential to ensuring that audits remain a cornerstone of accountability and sound economic management.

Copyright Business Recorder, 2025