Plunder of public money necessitates audit reforms

Smart audit of certain departments should be the prime focus to avoid being declared a ‘failed’ state.

ISLAMABAD: The modern state has to be smarter in dealing with economic issues in an environment of cut-throat competition.

Gone are the days when ruling forces could compromise financial and economic status of the state for vested interests. Now, market forces decide limits of modern day ruling forces within the state and in their respective regions.

This authority depends on how the ruling forces treat the resources and the scope of political activity. These two spheres are now constantly determined by the balance between resource management and state spending.

States that ignore this mechanism are either categorised as primitive or failed. These states cannot become market competitor and are discarded. Pakistan appears to have passed seven decades since independence in complete disregard to the danger of such categorisation.



That is why all the performance data in the economic and financial spheres speaks of decadent trends in the country. Social and physical infrastructure, taxation, fund allocation, market development policy and regional as well as global relations are awkwardly managed.

Lately, sociopolitical tensions have intensified and the feeling of primitive statehood deepens after watching the Public Accounts Committee (PAC) that regularly seeks explanations from the Auditor General and government departments for turning a blind eye to the plunder of public money.

Last week, PAC members lost their temper over the explanation given by the federal petroleum authorities. MNA Mian Abdul Manan asked a federal secretary to explain the outsourcing of government tasks and how funds at his disposal were dealt with. Manan pinpointed to the corrupt methods that caused losses of billions to the public exchequer.

The statements of federal secretaries given in response to the Auditor General’s objection to unauthorised spending were unacceptable. Such spending by the federal and provincial organs is so huge and the channels of spending are so diverse that identifying them will be a hugely tough task for an ordinary journalist.

While listening to the barrage of questions and the dodgy answers at the PAC meeting, I thought that I should list areas where smart audit should be the prime focus to avoid being categorised as a ‘failed’ state.

These areas include the Ministry of Finance, revenue and taxation departments, public procurement, budget of state-owned organisations and the Auditor General of Pakistan.

Once the government decides about conducting this audit in an honest manner, the state apparatus may find a way out.

At present, as officials of the Auditor General explained in the PAC meeting, the department conducts a random audit of 25% of the inflows and outflows without particularly targeting major spending. Its staff selects only the spending which is agreed between audit officials and the targeted organisation.

It is incomprehensible in a country where leakages in the inflow and outflow of funds have gone on without any significant check. Recent remarks on certain cases of pilferage and money-laundering by Supreme Court judges have indicated that they might propose restructuring of the audit system in the country.



I asked a NAB official, who attended a PAC meeting, a relevant question about unauthorised spending. He came up with an interesting answer. He told me to keep writing on the subject, which might bring about a change at the highest level of the state apparatus.

Is that a plausible way of accomplishing such a dream? Would consistency in pushing the issue via print and electronic media be of any help in achieving some success? I have my doubts.

I looked for stories of reporters and views of commentators over the internet on restructuring Pakistan’s audit system over the past decade and found that only the government departments had been targeted by the Auditor General, but not the audit department itself.

None of the political stalwarts have ever considered audit reform as the most effective tool of preventing the state apparatus from going entirely corrupt.

Many of them cried over the mafias emerged with the plunder of public funds, but how such mafias could manipulate audit functions did not attract their attention.

Should Pakistanis lose hope or they should raise their voice for an effective audit system? The choice is clear.

The writer has worked with major newspapers and specialises in the analysis of public finance and geo-economics of terrorism

 

Published in The Express Tribune, December 4^th, 2017.

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