The subcommittee of the Senate Standing Committee on Finance here on Wednesday recommended strict rules for all regulatory bodies and financially independent institutions working under the administrative control of the Ministry of Finance to uphold highest integrity and moral standard whenever conflict of interests arises during decision making by the heads and key members of the institutions.
This was stated by Senator Ishaq Dar, who headed the subcommittee, while discussing the alleged mismanagement in the Competition Commission of Pakistan, which took place prior to the appointment of Rahat Kaunain Hassan as Chairperson of the CCP. The meeting was attended by officials of Ministry of Finance and Senators including Haroon Akhtar, Safdar Abbasi and Professor Khurshid. However, officials of the CCP were not invited to the meeting.
The subcommittee came up with recommendations for the Senate Standing Committee on Finance including proper internal control and audit system in the financially autonomous organisations and regulatory bodies. The rules and regulations on conflict of interests to be followed by all finally independent organisations and autonomous bodies would create a healthy work environment for heads of the organisations.
During the meeting, Ishaq pointed out that strict financial internal control should also be ensured by the Ministry of Finance in the regulatory bodies to ensure proper spending of public money in these financially independent institutions. The Finance Ministry can frame rules to ensure that the conflict of interests should not take place while sitting on the positions as heads of the regulatory bodies and financially independent institutions.
The representatives of the Ministry of Finance explained to the committee that anonymous e-mail had been investigated and probed by the Ministry. A proper inquiry had been conducted by the Finance Ministry on the basis of documents provided by the CCP. Finance Ministry endorsed the viewpoint of the CCP that the competent authority has dully recovered the whole amount from the concerned persons. Due to financial constraints, the recovery of the amount in millions has been acknowledged by the Finance Ministry.
Referring to the competition law, officials of the Ministry of Finance informed the committee that the CCP is an autonomous body, having financial and administrative autonomy. As far as the role of the CCP is concerned during this investigation, the Commission had made proper disclosures, without hiding anything. All facts were shared by the CCP with the Ministry of Finance. The CCP had not made any attempt to hide any kind of information reflecting full co-operation of the Commission. In case of CCP, there was no mala fide as nothing had been hidden and all amount was recovered by the current CCP management. The CCP is facing financial issues as the regulatory bodies are not paying three percent annual fee/charges as required under the law. In these circumstances, the Commission had preferred to go for recovery of the whole amount instead of criminal prosecution.
Later, Finance Ministry officials agreed with the committee to frame rules to widen scope of definition of the conflict of interest so that the heads and key members should separate themselves from decisions where there is a possibility of conflict of interest. The committee recommended that merely recovery from the concerned persons is not enough and penal/criminal proceedings should be initiated against such persons who caused loss to the national exchequer.
Ishaq further recommended that the Auditor General Office should review the existing internal controls and audit systems of the CCP. The department should also conduct special audit of the tenure during the period of previous management of the CCP when financial irregularities were committed by two officers. The special audit should be conducted for 2008-2009 and 2009-2010 periods.
Referring to the statement of the CCP Chairperson, Dar said that the Chairperson had admitted that no internal audit system existed during the tenure of the previous management of the CCP and new internal control and audit systems were introduced since inception of Rahat as new Chairperson of the CCP. However, the credibility of the new system needs to be checked to ensure a foolproof system in future.
The subcommittee further recommended that the anonymous e-mail, having substantive material, must be entertained for investigation. It is important to mention here that during the last meeting of the Senate Committee, Chairman of Senate Standing Committee on Finance, Ahmed Ali, and Secretary Finance stated that anonymous e-mail with allegations of corruption to defame the CCP was nothing but junk, and should be thrown in the dustbin.