Govt proposes to expand scope of audit

Published: April 14, 2017

ISLAMABAD: The government has proposed amendments to the Auditor General’s Functions and Powers Act to clamp down on departments – both military and civilians – that have been resisting parliament’s oversight of their budgets.

The amendments, if approved by parliament, would also give access to the Auditor General of Pakistan to the electronic database of the government-owned departments.

The National Assembly Standing Committee on Finance and Revenue on Thursday discussed the proposed amendments to the Auditor General’s (Functions, Powers and terms and Condition of Service) Ordinance 2001.

It has also proposed to expand the scope of audit by including regulatory, information technology, environment, forensic, performance and management audit in the ambit of the Auditor General of Pakistan.

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Importantly, the definition of public sector enterprises has been proposed to insert in the law. The AGP can audit any corporation or company established under any act of parliament or a provincial assembly or local government or by any resolution or order or a company established under the Companies Ordinance 1984 or previous companies legislation.

The proposed amendments would enable the department of the Auditor General of Pakistan to fulfil its constitutional responsibilities in an efficient and effective manner, according to the finance minister’s statement of objects and reasons.

After the 18th Amendment, it is the responsibility of the Auditor General of Pakistan to audit accounts of all institutions. This principle has been enshrined in Article 170(2) of the Constitution that all such bodies that were established by the federal government shall be subject to audit.

However, despite that the government bodies, particularly companies registered under the Companies Ordinance-1984, were not giving access to federal auditors to their accounts.

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Till January this year, companies that were resisting federal auditors are: Pakistan Telecommunication Limited, Pak-China Investment Company Limited, Defence Housing Authority, National Bank of Pakistan, Agri Business Support Fund, Punjab Industrial Estate Development and Management Company, Punjab Rural Support Programme, Pakistan Ordnance Factories Welfare Trust Fund, Wah Noble Private Limited, Trust for Voluntary Organisation and People’s Primary Health Initiatives Khyber-Pakhtunkhwa.

Other such companies are: Frontier Works Organisation (FWO), KP-Employees Social Securities Institution, Lahore Parking Company Limited, Saudi Pak Industrial and Agricultural Investment Company Limited, Pak Oman Investment Company Limited, Pak Kuwait Investment Company Limited, Pak Iran Investment Company Limited, Pak Libya Holding Company Limited, Pak Brunei Investment Company Limited, Mari Petroleum Company Limited and Gun & Country Club Islamabad were not allowing the federal auditors to access their accounts.

Parliament exercises its control on the government’s fiscal matters through the department of the AGP.

However, some members of the standing committee were not happy with the proposed changes, as they also wanted more powers for the AGP to enforce decisions of the Public Accounts Committee.

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“The existing AGP and Controller General of Accounts laws are watered down to provide an escape to those who commit irregularities,” said Daniyal Aziz of the PML-N.

He said the AGP should be given powers to enforce decisions of the PAC. “In the absence of such powers, the AGP and the PAC are toothless.”

In the next meeting, the department of the AGP would share the date of last ten years on the implementation of PAC decisions in order to have an idea whether there is a need to give more powers to the AGP.

The government has also proposed to amend the discretionary powers of the president of Pakistan and provincial governors from exempting any department from mandatory statutory audit.

There is a new clause that, if approved, will allow the department of the AGP to access any record – whether manual or electronic – and to information technology systems of these state-owned departments and companies.

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