Auditor General of Pakistan (AGP) has unearthed financial and procedural irregularities, irregular expenditure/payments and violation of rules, amounting to over Rs 15.7 trillion in different government departments/organisations including the Ministry of Finance, Commerce Ministry, Aviation Division, the Cabinet Division and Establishment Division during the year 2018-19.
The audit was primarily conducted for the financial year 2017-18, but in the case of entities not audited during the preceding years, the audit was also extended to the previous financial years.
According to the AGP report for 2018-19, the key audit findings of the report include 11 cases of fraud, embezzlement, theft and misuse of public resources amounting to Rs 862.400 million, 237 cases of irregular expenditure/payments and violation of rules amounting to Rs 292,974.916 million, 56 cases of recovery amounting to Rs 185,885.759 million, 4 instances of irregularity pertaining to non-production of record amounting to Rs 1,054.459 million, 39 cases of weak internal controls amounting to Rs 14,562,562.898 million, 51 cases pertaining to weak financial management amounting to Rs 14,735,367.133 million and 03 cases related to unsound asset management amounting to Rs 811.257 million.
The audit report 2018-19 recommended sending all cases of embezzlement of public money and fictitious payments to the investigation agencies. All payments may be made in accordance with the applicable rules and regulations. It also recommended depositing all the government receipts and unspent balances immediately into the government treasury. All auditable record may be produced when demanded and internal control system may be strengthened to mitigate the risk. It further recommended physical verification of all assets recorded in the stock register annually.
An amount of Rs 4,882.893 million was recovered at the instance of audit and deposited into the Federal Consolidated Fund. The report said that the Directorate General Audit, the Federal Government [DGA (FG)] is a strategic audit unit of Department of the Auditor General of Pakistan (DAGP). This office facilitates the Auditor General of Pakistan to fulfil its constitutional responsibility of conducting the audit of the federal government. The main products of this office are the Certification Audit Reports of the federal government, Foreign Aided Projects Reports, Performance Audit Reports, Special Audit Reports and Compliance with Authority Audit Report. The office is located in Islamabad with four sub-offices, one each at Lahore, Karachi, Peshawar and Quetta. The office is headed by a director general (BS-20).
The federal government conducts its operations under the Rules of Business, 1973 and comprises 50 principal accounting officers (PAOs) for different ministries, divisions and entities. The DGA (FG) conducts audit of transactions relating to the Federal Consolidated Fund and public account of the federal government. The annual budget allocated to directorate general for the year 2018-19 amounted to Rs 214 million.
The audit was conducted to review the financial systems and transactions, including an evaluation of compliance with applicable statutes and regulations. The scope of audit was to cover all federal government entities where operations are material in the context of the financial statements of the federation.
The total expenditure of the federal government for the financial year 2017-18 was Rs 31,882,565.890 million. The auditable expenditure under the jurisdiction of Directorate General Audit (Federal Government) was Rs 2,138,814 million covering 50 PAOs and 2,700 formations. The DGA (FG) audited an expenditure of Rs 416,277 million, which in terms of percentage was 19 percent of the auditable expenditure. The DGA (FG) also certified accounts of 26 Foreign Aided Projects (FAP), 4 accounts of the federal government and 4 special audits.
Audit was conducted in accordance with INTOSAI Auditing Standards as incorporated in Financial Audit Manual (FAM), guidelines for the Audit of Federal Government Operations and the International Standards on Auditing. The evidence was primarily gathered by applying procedures, like inquiries from the management, review of monitoring and progress reports and examination of payment vouchers. Audit evidence was also collected through access to SAP/R3 data of the Accountant General Pakistan Revenues (AGPR).
The AGP said that the audit tests and analytical procedures were performed to evaluate that the expenditure was completely recorded and receipts were timely deposited into government treasury. Payments were validated by proper supporting documents and approval of competent authority. Expenditure was incurred in accordance with the approved budget.
The report highlighted that the internal controls are a specific set of policies, procedures and activities designed to meet particular objectives in an organisation. Internal controls and internal audit units are the critical risk mitigating factors in any organisation. One of the objectives of the audit was to assess whether the controls are properly designed, implemented and working effectively. For most of the entities audited during 2017-18, it was noticed that the internal audit units were non-existent. Considerable instances of internal control failures were also noted which resulted in waste or theft of the government money. Audit has identified certain issues where the government suffered loss due to weak internal controls and non-functioning of internal audit units.
An official of AGP while talking to Business Recorder said that the irregularities include number of unforeseen expenditures like increase in exchange rate and increase on interest repayment on loans. He said the irregularities are higher than the budget for the fiscal year 2017-18 because the budget does not include charged expenditure as only voted expenditure is presented in the budget.
A source within AGP while talking to Business Recorder said that the expenditure is higher than the budget for the fiscal year 2017-18 because the budget does not include charged expenditure as only voted expenditure is presented in the budget.