THE continuous resistance put up by several public-sector organisations to submitting their accounts for audit by the auditor general of Pakistan is hard to comprehend. The AGP office has informed a Senate panel that more than two dozen public-sector entities, including federal, provincial, autonomous and semi-autonomous companies, are refusing audit, prompting the parliamentary committee to start a debate on the issue of the constitutionally mandated scrutiny of their accounts at length in its next meeting. These entities, which include a commercial bank, oil and gas firms, railway, investment companies etc, as well as certain ministries and entities under them, have so far not come up with any substantive reason for their refusal to submit to the inspection of their accounts by the AGP. This is in spite of the law ministry’s opinion that every rupee paid by or due to the state is subject to audit under the Constitution. The law ministry has also pointed out that the Public Finance Management Act, 2019, mandates that wherever exchequer money is involved it should be open to audit. The refusal of some of these entities like the National Bank to submit to AGP scrutiny is even more perplexing since their accounts are audited internally and externally every year to meet the regulatory requirements.

Scrutiny of accounts of any public-sector organisation is essential for ensuring that the taxpayers’ money is used in a transparent and efficient manner, as well as to protect them against fraud, corruption, extravagance and bad governance. Thus, the periodic assessments by the AGP to ensure that state resources are being deployed by a particular entity responsibly and effectively are necessary to hold them accountable to the public, improve their operations and governance, and bridge the trust gap between them and the taxpayers. In recent years, the world has moved beyond financial audits of the public-sector organisations to the scrutiny of their performance and efficiency. Pakistan also needs to move in this direction for effective use of the taxpayers’ money.

Published in Dawn, September 17th, 2021