CBR chalks out sketch of ''national audit plan''

The Central Board of Revenue (CBR) has chalked out an initial sketch of ''National Audit Plan'' in consultation with an ''international expert'', encompassing latest techniques to conduct productive audit.
Sources said on Sunday that a special Board-in-Council meeting appreciated the performance of the audit ''expert'', who gave detailed presentation on audit requirements, keeping in view the local business environment.
The Council was informed that the target date for re-establishment of audit program was January 2007. The new strategy would not only facilitate the registered persons in detecting discrepancies in their tax records, but would also rectify errors through proper guidelines. The element of harassment would be totally eliminated by applying new systems and help the taxpayers in proper maintenance of record.
The ''audit expert'' informed CBR Chairman M Abdullah Yusuf and Members that the preliminary work, including data analysis, had been completed. Her visit to the field formations has helped in identifying weaknesses in the existing audit system and suggested remedial measures based on the study of audit of Organisation for Economic Co-operation and Development (OECD) models. The study of audit techniques used in the OECD countries was compared with Pakistan''s strategy adopted for the last many years, sources said.
The audit expert also elaborated the IT-related system, which could be used for carrying out an effective audit under the Universal Self- Assessment Scheme (USAS).
Sources said that the process of development of the ''Audit Plan'' was also discussed threadbare during the Board-in-Council meeting. The expert went through the audit history, selection procedures, time utilised by the auditors and qualification of staff. Expert conducted detailed interviews of the auditors to know the techniques used by them in the field formations.
Sources said that the Board improved the level of co-ordination with regional commissioners of income tax (RCITs) and collectors of customs and sales tax for assisting in the development of the audit plan.
The field formations were requested to fully co-operate with the ''audit expert'' and convey the ground realities and problems faced during the audit proceedings. The clear picture of conducting audit would really help in devising the new strategy.
The new syllabus designed for auditors has been dispatched to CBR Directorate of Training, which includes courses for changing the mindset of the field officers. The audit would be conducted by professionally trained competent auditors, sources said.
The Secretary Revenue Division M. Abdullah Yusuf expressed satisfaction over the performance of the audit expert and directed all concerned to focus on key areas for development of ''national audit plan''.
During the Council meeting, CBR Member Audit Abdur Razaq highlighted the new role of the audit wing under the reformed units and self-assessment regime. The restructuring and revamping of the audit wing also came under discussion. In this regard, the limitations of the audit machinery were also conveyed to the Board. For example, Auditor General''s office has its own periodical plan to conduct audit and verifications of the organisations. Sub judice cases should be properly pursued at the level of collectors and commissioners.
To deal with the time bar cases, the tax officials would analyse the professional reasons of delay. In case of no solution found, they would fix the responsibility and initiate disciplinary proceedings against the official concerned.
UNRECOVERABLE AMOUNTS: If all means of recovering an amount are exhausted, tax officials would initiate ''write-off'' process, taking AGP into confidence.
Sub judice cases: Tax officials have prepared list of such cases and submitted the particulars and status to Member (Legal) and Audit Wing for prompt decision from the relevant court.
The Board-in-Council also directed the CBR Audit Wing to expedite the departmental working on the 11-year pending audit reports. The reports would be presented before the Public Accounts Committee (PAC) for early disposal.
The Council was informed that 10 old annual audit reports, including 11 special studies relating to direct and indirect taxes are under verification.
The CBR has established a special ''PAC Cell'' in each collectorate and commissionerate with a contact person to maintain record at one place for dealing with the old audit paras. Collectors/commissioners would pursue all pending audit reports simultaneously keeping close interaction with the Auditor General office.
The board has also directed the regional officials to focus on all the outstanding reports at the same time prioritising the cases according to PAC/DAC meetings'' recommendations and liquidations of proposed draft paras to avoid their printing in the final audit report.
Sources said that the Board has clearly conveyed to the regional officials that the CBR Chairman is very much determine and serious to dispose of the last ten years'' pending audit reports by the end of current fiscal year.
Under the action plan, the Board has categorised the cases on the year-wise basis. For example, time barred cases, sub judice and recovery cases have been bifurcated for easy identification and disposal. The collectors and commissioners would pursue all pending audit reports at the same time and they should keep close interaction with the Auditor General''s office. The staff of the Directorate General of Inspection and Internal Audit has been given assignment in each collectorate to assist to the CBR Audit Wing in disposal of pending paras.
Sources said that the basic change in studying the old audit cases was to devise a clear working paper for disposal of audit reports. Previously, the working paper does not give a clear picture about the categorisation of cases and other areas. The new compendium would give a clear picture about the proposed draft paras for the 2005-06, 2004-05 and 2003-04.
The Board has also informed the Collecorates/Commissionerates to jointly convene meetings with the AG office to evolve a strategy for completion of the outstanding work.
Sources said that where the department differs with AG, convincing documentary evidence, legal provisions and satisfactory explanations must be provided to PAC committee members. It should be simple and easy to understand without professional jargons.
The Audit Wing has also maintained the audit paras, collectorate/Commissionerate-wise, for each year separately. This will facilitate monitoring and updating the progress of each regional tax office. All Collectorates/ Commissionerates must pursue their filed staff to respond to the quires promptly with documentary evidence and satisfactory explanations. Slow/nil response must be discouraged through disciplinary proceedings, the directive said.
All audit paras should be classified according to CBR Audit Wing categorisation to facilitate its compliance and follow up, sources added.