Auditor's office must not go outside its purview

Auditor General of Pakistan's (AGP's) report tabled in the National Assembly has highlighted irregularities, losses, malfeasance, etc., of 390 billion rupees during four years (2011-12 to 2015-16) in achievements of Nepra targets by six power distribution companies due to poor recovery of bills, lower revenue recovery, unjustified distribution margin and missing capital investment targets. The audit was a special study report on targets fixed by Nepra and performance of six distribution companies. In this context, two observations are in order. First, the years of the audit are long past, three years ago, and the relevance of some of the AGP's concerns/observations are perhaps no longer valid. And second, some of the recommendations of the AGP require technical expertise in the field on the part of the AGP. In this regard, it may be mentioned here that it is always safe to assume an auditor does not possess for example stipulating what is a justified distribution margin or whether the transmission and distribution losses set by Nepra are realistic in the context of the obtaining environment. Thus, it would be desirable that the AGP limits itself to audit of the accounts and in its recommendations focus on the way forward in this respect.

The AGP recommended to the Federal Board of Revenue (FBR) on a subject study report 2018-19 to upgrade software and hardware customs imports clearance system on an emergency basis to avert any glitches due to system failure of Web Based One Customs Clearance (WeBOC); and regretted the lack of will of the Customs Department to strengthen this system through the use of expired software and hardware. On 14 May 2019, Customs launched the Web Based One Customs Global (WeBOCGlo) system, an upgraded version of the WeBOC, with Member Customs clarifying that the new system contained 37 modules to be rolled out in three phases of which 13 modules were launched in phase-I enabling the system to exchange electronic data with terminal operators, while the rest of the modules would be introduced in two phases (June and September, 2019), respectively. He further claimed that the new upgraded version would reduce clearance time of export LCL cargo to five to six hours from five to six days and a valuation gateway system had also been implemented from March 2019 as well as an Artificial Intelligence-based predictive analytical system in January 2019.

The AGP strongly recommended rationalisation of exemptions to charitable organisations and those granted to independent power producers (IPPs) in yet another special audit report. On 23 April 2019, the Khan administration began to renegotiate the deal with IPPs with the objective of easing the circular debt and this newspaper published a report of the agreement dated 4 December 2019 wherein the two sides agreed to an amicable resolution of all outstanding issues, including capacity payment charges and interest chargeable on delayed payment at different domestic and international fora culminating in a commercial understanding document. This agreement rendered the AGP report on the subject irrelevant.

To conclude, while there has been general acceptance of the AGP report from the treasury as well as the opposition benches especially as the year of the audit approximates to the current year yet one would urge the office of the AGP to desist from making recommendations that are beyond its purview, based on its available expertise and to undertake special reports on sectors that are not being reviewed by the government.