The Auditor General of Pakistan (AGP) has released a damning audit report detailing severe financial irregularities, opaque procurement processes, and unauthorized expenditures within various branches of the country’s defence services. The report, spanning over 300 pages, reveals widespread issues and calls for immediate reforms and accountability. The audit, covering the fiscal year 2023-24, scrutinized expenditures totaling Rs 566.29 billion. This includes Rs 335.63 billion from the latter part of the 2022-23 audit and Rs 230.66 billion from the initial phase of the 2023-24 audit.
The report exposes numerous instances of financial mismanagement, including:
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Advance payments made before the completion of work:
This practice undermines transparency and accountability, potentially leading to misuse of funds.*
Failures to recover rents and allied charges:
This indicates a lack of proper financial management and oversight.*
Violations of public procurement rules:
The report highlights instances where procurements were conducted without adhering to established rules, potentially favoring certain contractors and undermining fair competition.*
Irregularities in the execution of unauthorized work:
This suggests a disregard for proper authorization processes, potentially leading to wasteful expenditure.*
Non-compliance with Defence Services Regulations and A-1 land policy:
These violations indicate a lack of adherence to established guidelines and procedures.The report also raises concerns about the Ministry of Defence’s persistent non-compliance with audit objections. Despite a significant budget allocation, the AGP notes that the Ministry only complied with 659 out of 1974 directives from the Public Accounts Committee (PAC) of the parliament. This highlights a lack of urgency in addressing the audit findings. The Ministry of Defence Production fared even worse, complying with only 109 out of 372 PAC directives.
The audit uncovered significant procurement irregularities. Many procurements exceeding Rs 500,000 were not advertised as required by the Public Procurement Regulatory Authority (PPRA). This lack of transparency potentially favors certain contractors and undermines the integrity of the procurement process. In several instances, contracts were divided and awarded to preferred contractors to bypass transparent bidding processes. The audit also found cases where procurement was conducted without formal contract agreements or proper estimates, such as the renovation of a Foreign Trainees Mess Shed at an Army School. The report criticizes management for inadequate responses to audit objections, citing missing or incomplete documentation.
The Departmental Audit Committee (DAC) had recommended holding inquiries and regularizing expenditures to address these issues. However, by the time the audit report was published, these recommendations had not been acted upon. The report also highlighted discrepancies such as cash receipt vouchers (CRVs) issued without receiving items and the issuance of 5 per cent super check certificates without proper verification. The AGP’s findings underscore an urgent need for reform within the Defence Services to address financial mismanagement and improve procurement transparency.
