ISLAMABAD. The Auditor General of Pakistan (AGP) has declared payments amounting to Rs329.92 billion, made to Independent Power Producers (IPPs) by the Federal Consolidated Fund on the advice of the finance division, as 'unconstitutional' and against treasury rules.

The present regime paid the amount to IPPs, to overcome the energy crisis prevailing in the country, without consulting the Auditor General and without pre-audit checks, according to a report compiled by the AGP for the fiscal year 2014-15.

The report says that irregular direct payments were made from the Federal Consolidated Fund on the advice of the finance division.

The audit has observed that article 170 (1) of the constitution states that the account of Federation and Provinces shall be kept in such form and in accordance with such principles and methods as the Auditor General may, with the approval of the president, prescribe.

Section 5(b) of Controller General of Accounts (Appointment, Functions and Powers) Ordinance, 2001 states that it is the function of the Controller General of Accounts to authorise payments and withdrawals from the Consolidated Fund and public accounts of the federal and provincial accounts against approved budgetary provisions.

Other relevant rules also emphasise that unless the government ─ after consultation with the Auditor General ─ directs, money may not be withdrawn from the Federal Consolidated Fund or the public account of the federation without written permission of the Treasury Officer or of an officer of the Pakistan Audit Department authorised in this behalf by an Accountant General.

The Manuscript of Appropriation Accounts of Federal Government for 2013-14 revealed that payments amounting to Rs329.92 billion were directly made from the Federal Consolidated Fund on the advice of the finance division.

According to the report, the auditor observed that the payments were made without consultation with the Auditor General and without pre-audit checks as required under Section 5(b) of Controller General of Accounts (Appointment, Functions and Powers) Ordinance, 2001 which was a violation of Article 170(1) of the Constitution and resulted in financial indiscipline.

Finance division management has not made any reply on the matter, the report says.

Read: Audit gives clean chit to Rs342bn payment to IPPs

The Auditor General of Pakistan has recommended that payments should not be made without pre-audit checks which are a violation of constitutional provisions and the Federal Treasury rules.