Local governments: Governor ‘directs’ CM to place audits before PAC

Fears ‘massive financial irregularities’ in unchecked accounts.

LAHORE:

Governor Sardar Latif Khosa has “directed” Chief Minister Shahbaz Sharif to send all annual audit reports (AARs) of local governments to a Public Accounts Committee of the Punjab Assembly “without any further dereliction or delay”.

In a strongly-worded 10-page letter to the chief minister dated May 22, 2012, the governor wrote that the auditor general of Pakistan had pointed out that spending of Rs160.086 billion by various district governments, dating back as far as 2002, had not been reconciled. He said that spending of Rs40.241 billion by the provincial government in the last year had also not been reconciled.

Khosa wrote that the governor’s secretariat had forwarded the AARs of the district governments in question to the chief minister’s secretariat on five occasions – on December 12, 2008, on June 4, 2009, on August 27, 2009, on March 5, 2012, and on March 26, 2012 – for placement before either of the two PACs of the Punjab Assembly. However, this had still not been done.

He also presented a lengthy legal argument as to why he believed that the Punjab government’s plan to place the local government audit reports before ad-hoc district committees that included district coordination officers (DCOs) was wrong. “… it would be idiotic to have the audit reports placed before the administrator (the DCO) who in his ex-officio capacity also exercises the power of principal accounting officer against whom” the question of irregularities had been raised, he said. Further, Section 28 of the Punjab Local Government Ordinance stated that DCOs or principal accounting officers were only answerable to the PAC of the Punjab Assembly.

The governor said that under Article 170(2) of the Constitution, the auditor general of Pakistan was supposed to audit the accounts of the federal and provincial governments and any body they established. Under Article 171, the governor was to place the auditor general’s reports before the PAC.

He also expressed concern that the Punjab government was not following procedure when opening of special drawing accounts (SDAs) and personal ledger accounts (PLAs), leading to the possibility of “huge financial irregularities”. He “directed” the chief minister to send him the record of SDAs “for my perusal, information and orders, it being the constitutional duty of the chief minister to keep the governor informed on matters relating to provincial administration”.

A Finance Department official said that it in his experience of over 10 years, he had never heard of the governor of a province writing such a long letter to the chief minister.

A Finance Department spokesman said that the provincial annual audit report for 2009-10 had been placed before the PAC, and the one for 2001-11 would be placed soon. He said the unreconciled funds did not represent fraud, merely that the process of accounting was not yet complete. He said that the Punjab government was co-operating with the Punjab accountant general for reconciliation of accounts.

He said that the government had set up ad-hoc accounts committees at the district level as there were no elected local governments in the province.

Published in The Express Tribune, June 4^th, 2012.