TDAP comes under serious scrutiny

ISLAMABAD: The Trade Development Authority of Pakistan (TDAP), the country’s premier export promotion body, has come under serious scrutiny following audit findings that reveal widespread financial irregularities, governance failures, and systemic weaknesses in internal controls.

The audit report of audit year 2025-26 for the financial year 2024-25 highlights violations of statutory provisions, poor financial management, and lapses in accountability involving billions of rupees, raising concerns about the effectiveness of the organization tasked with boosting Pakistan’s exports.

TDAP, a successor to the erstwhile Export Promotion Bureau, is mandated to promote exports through strategic planning, coordination with stakeholders, and development of a supportive export ecosystem. However, the audit findings suggest that the organization is struggling to meet its responsibilities due to deep-rooted administrative and financial issues.

According to the audit, irregularities amounting to Rs 3.656 billion were identified during the review period. These observations span multiple categories, including recoveries, internal control weaknesses, mismanagement of bank accounts, procurement issues, and other administrative lapses.

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A major portion of these irregularities relates to recovery issues amounting to over Rs. 1.6 billion, followed by internal control deficiencies of Rs. 1.36 billion and mismanagement of commercial bank accounts involving more than Rs. 513 million.

The scale and diversity of these irregularities indicate systemic problems within TDAP’s financial and administrative framework.

One of the most serious lapses highlighted in the audit is the failure to prepare financial statements in accordance with the TDAP Act, 2013.

Despite clear legal requirements, the management did not prepare balance sheets, income statements, or cash flow statements even years after the close of the financial period. This omission constitutes a direct violation of statutory obligations and undermines transparency.

Although management claimed that external auditors had prepared statements for previous years and that work for 2024-25 was underway, auditors rejected this explanation, terming it inadequate and indicative of weak financial discipline.

The absence of audited financial statements not only hampers accountability but also makes it difficult to assess the true financial position of the organization.

The audit also uncovered irregular retention of Rs. 513.615 million generated from Karachi Expo Centre operations.

Under the TDAP Act, all such income is required to be deposited into the official TDAP Fund. However, the management retained the entire amount in a commercial bank account maintained with the National Bank of Pakistan.

Out of the total receipts, Rs. 400.625 million was spent on operational expenses, including maintenance, utilities, and security. However, auditors noted that retaining and utilizing funds outside the prescribed mechanism was a violation of the law.

Management defended the practice by citing provisions allowing the authority to maintain bank accounts. However, auditors dismissed this argument, emphasizing that the funds must be routed through the designated TDAP Fund to ensure transparency and oversight.

The report also points to a revenue loss of Rs. 29.546 million due to failure to charge for additional setup and dismantling days at Karachi Expo Centre.

In one case, the Defence Export Promotion Organization (DEPO) utilized the facility for significantly more days than allowed under standard terms. While only a limited number of setup and dismantling days are provided free of charge, additional days are required to be billed at 50 percent of the standard rate. However, TDAP management failed to levy these charges, resulting in substantial financial loss. The audit termed this lapse as negligence and recommended recovery of the amount along with fixing responsibility on officials involved.

Another issue highlighted in the audit is the irregular creation of liabilities amounting to Rs. 24.163 million due to non-payment of water charges to the Karachi Water and Sewerage Board (KWSB).

TDAP had obtained water connections for the Karachi Expo Centre but failed to make timely payments, leading to accumulation of arrears and potential surcharges.

While management attributed the issue to billing errors and a non-functional connection, auditors found the explanation unsatisfactory, noting that the matter had not been properly reconciled or resolved. This reflects poor financial management and lack of proactive engagement with service providers. Internal control weaknesses emerged as a recurring theme throughout the audit.

The report highlights deficiencies in financial oversight, documentation, and compliance mechanisms. In many cases, transactions were not properly recorded or reconciled, increasing the risk of errors and misuse of funds.

The lack of robust internal controls not only affects financial integrity but also undermines the organization’s ability to detect and prevent irregularities.

The audit has also revealed poor compliance with directives issued by the Public Accounts Committee (PAC). Out of 92 audit paras from previous years, only a small fraction has been fully addressed. Many issues remain unresolved, reflecting a lack of seriousness in implementing corrective measures. In several years, compliance levels were either negligible or non-existent, indicating systemic resistance to accountability processes.

Procurement-related irregularities amounting to over Rs. 144 million were also identified. Although details vary, such irregularities typically involve violations of procurement rules, lack of competitive bidding, and inadequate documentation. These practices not only compromise transparency but also raise concerns about value for money in public spending.

The audit has suggested that internal inefficiencies and governance gaps are hindering its ability to perform effectively, adding that failure to manage resources properly can limit the organization’s capacity to implement export promotion initiatives, support businesses, and attract foreign investment.

The audit report has outlined several recommendations aimed at addressing the identified issues and strengthening TDAP’s institutional framework.

Key recommendations include: (i) immediate preparation of financial statements in accordance with legal requirements (ii) deposit of all revenues into the designated TDAP Fund ;(iii) strengthening internal controls and financial oversight mechanisms ; (iv) ensuring timely reconciliation of accounts and liabilities ; and (iii) strict compliance with PAC directives and audit recommendations.

The auditors have also called for fixing responsibility on officials involved in irregularities to ensure accountability.

Beyond immediate corrective actions, the findings highlight the need for broader structural reforms within TDAP. This includes improving governance practices, enhancing transparency, and building a culture of accountability.

Copyright Business Recorder, 2026