The first ever study of the Federal Board of Revenue (FBR) on Accountability in Public Sector of Pakistan suggested merger of Federal Investigation Agency's (FIA) anti-corruption and economic crimes functions with National Accountability Bureau (NAB) for setting up a specialised autonomous Anti-Corruption Agency (ACA).
It further suggested elimination of political interference in transfers/postings of the tax officials for smooth functioning of taxation machinery. The multiplicity of investigating agencies creates problems for investigators to carry out case-specific investigations in most of the corruption cases and financial crimes, it added.
The study has been conducted by the Directorate General of Training and Research (Inland Revenue) which is a bold analysis of the accountability in Public Sector of Pakistan. The study is a part of the overall research being conducted by DOT headed Abdul Wadood Khan.
This unique kind of study has been conducted by a group of officials of Inland Revenue DOT FBR, supervised by Ambreen Iftikhar, Additional Director, DOT. The research paper has been prepared by Saba Ijaz and other officials who assisted the analysis and data collection process.
According to the syndicate report, at the federal level, FIA's functions of anti-corruption and economic crimes should be merged with NAB to create a single, specialised and autonomous ACA; a recommendation based on international best practice and domestic experience.
The study said the prevention of corruption has so far been missing from the anti-corruption apparatus in this country. So-called mega corruption, for example, is usually seen in major contracts and public procurement. In both these areas, the procedures are tedious and lack transparency. Advocacy against corruption in society creates the necessary public opinion, which reinforces and supports law enforcement. In addition, it leads to moral rejuvenation and improvement of ethical standards. To ensure effectiveness of the ACAs they must be given administrative, operational and financial autonomy.
Institutional strengthening is required for the ACAs, particularly the ACEs. Human resource capacity needs to be urgently upgraded, by improving training provision via a centralised training regime, particularly in areas such as money laundering, forensic auditing, computers and collection of evidence. Ensuring the integrity of agency officials will be paramount. Increased pay, integrity testing and robust assets declaration and monitoring systems will be critical.
The DOT report recommended a three-pronged strategy to deal with the corruption related issues. Firstly, prevention: Systemic, institutional, legislative, administrative reforms and public education and awareness raising, aimed at building democracy and a strong civil society, and an early and effective removal of incentives/compelling factors and opportunities for corrupt practices, also increasing the risk/deterrent effect. Secondly monitoring: The regular and systematic measuring of the nature, causes and extent of corruption and ill-decision making through reliable and verifiable data collection, analysis and co-ordination. Thirdly combating: The improvement in the legal and institutional arrangements for the detection, investigation and prosecution of corruption.
The report further suggested that the political interference and other forms of nepotism, in the tenure of officials, transfers and postings, and promotion must be eliminated. Fixed tenures, decision making by participative committees, performance evaluation systems and examinations determining promotion decisions are useful tools. Increasing civil service remuneration and meritocracy will promote the value of being competent. We must enable this by providing opportunities for functional specialisation and appropriate training, particularly in IT and management skills.
The study stressed the need for strong institutional leadership with integrity. Appointing high calibre officers on merit is the first step then giving them autonomy, authority, resources, skills and security against political interference. They need to be able to rid their institutions of corruption by ensuring sound internal controls.
The civil service needs to attract and retain individuals with skills and integrity. This requires meritocracy in the recruitment process and adequate remuneration. Monetization, an option which has been considered in the past, needs to be re-examined, this time with a specific view to its role in minimising incentives and opportunities for corruption. Clearly, recommending this is easier than doing it in practice. However, it must be cognisant that without improvements in pay, any anti-corruption initiatives may only have a limited impact. Reducing corruption, for example in revenue collection, can help finance improved remuneration.
Other key tools to reform ethics will be clear codes of conduct, developed in a participative manner by each institution, within an overall framework, which includes a law banning conflict of interest. The organisational culture which sustains corruption can be transformed by another set of measures: streamlined and transparent organisational structures, with delegation of responsibility; strong accountability mechanisms including output oriented job descriptions and a transparent, objective performance evaluation system.
The study suggests to increase risk of detection and punishment. Vigilance units should prove an essential weapon, if implemented, in a non-intrusive way, in institutions suffering high levels of entrenched corruption. Integrity testing of officials in vulnerable positions will be met with resistance but provides an extremely effective deterrent, but only if officials are fearful of the threat of being caught. Measures include strengthening assets disclosure and monitoring mechanisms and strictly implementing disciplinary procedures.
The report said that there is an urgent need to simplify and codify key rules and procedures. Discretionary powers must be curtailed where possible, including by standardisation of processes and fees/charges, using automation where possible. One-window operations, e-government and other initiatives can reduce face-to-face official/customer contact. Where face-to-face contact cannot be reduced, systems are required to ensure that officials and customers cannot build collusive relationships, randomise official/customer contacts.
The Access to Information Law and revising the Rules of Business to promote transparency will be necessary, but not sufficient. Empowerment and public participation must follow. A cultural shift is required which will require change management strategies within each institution, including training in areas such as customer service. Enquiries and transactions must be conducted in full public view, with formal mechanisms for dealing with customers. The DOT report said that the Auditor General's Department must increase its relevance and effectiveness. It should transform its role from one of undertaking retrospective transaction/compliance audit to validating management assertions about internal controls and the financial governance environment, (by undertaking system audits), and about the efficiency and effectiveness of resource utilisation (by undertaking performance audits). It is already preparing for this role by its design of Corruption Rating Index (CRI), Financial Governance Rating (FGR), Accountability Index and Internal Quality Rating for departments. The Department must continue to take measures to ensure that its work has the widest possible audience.
PIFRA plans for widespread upgrading of proficiencies and professionalism, which is most welcome. This emphasis must be matched by significantly improved pay for auditors. This can only be achieved by de-linking the Auditor General's Department from the civil service pay structure on the basis that it is a constitutional body, allowing it to set terms and conditions for staff. The Department must then use its new corporate planning tools to determine efficient resource allocation to enable the increased pay.
The third major strategic area for the Auditor General's Department is independence. The Department must cease to be an attached department of the Ministry of Finance and have administrative and financial autonomy.
The study said that the Federal and provincial PACs must be strengthened to mirror the improvements in the audit function, bringing issues before it. The PACs' impartiality and effectiveness should be enhanced through appointment of its chairman from the opposition and specifying a time frame for the appointment after a new government takes over. Mechanisms to ensure speedy disposal of audit paras include sub-committees, an advance annual timetable and a prioritisation mechanism.
Another public accountability body is the Ombudsman, for whom the strategy is straightforward: institutional strengthening, with the focus on a centralised database or networking between ombudsman's offices, continuous training for its officers and staff, and a defined time frame for disposal of representations against ombudsman's findings.
Actions in this area are, largely, either underway with adequate funding, or have minimal cost implications. The study pointed out that the design of the disciplinary process is reasonably sound, but the application of this is weak. The process is governed by the Efficiency and Disciplinary Rules 1973. Proceedings often extend over many months or even years, despite the 30-day limit set down by the E&D Rules, by which time, the institution may have lost interest or the initiator might have been transferred. Delaying tactics are thus the key means by which corrupt officials avoid punishment, the report added.
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