IMF examines audit of $1.4bn Covid support fund

Published October 19, 2021
The International Monetary Fund logo is seen during the IMF/World Bank meetings in Washington, DC, in this file photo. — Reuters/File
The International Monetary Fund logo is seen during the IMF/World Bank meetings in Washington, DC, in this file photo. — Reuters/File

ISLAMABAD: The International Monetary Fund (IMF) on Monday sought input from the country’s constitutional auditors on use of $1.4 billion emergency financial support it provided for Covid-19 response as part of validation process of Pakistan’s economic and financial data amid discussions on revival of its $6bn programme.

The Auditor General of Pakistan (AGP) shared with an IMF team key findings and recommendations of its audit of the Covid-19 expenditures. This came the day the government notified re-designation of Shaukat Tarin as Adviser to the Prime Minister on Finance and Revenue since his six-month term as finance minister came to an end as the government failed to get him elected as a senator despite earlier announcements.

Tarin notified as aide to PM

IMF’s Resident Representative in Islamabad Teresa Daban Sanchez had a meeting with AGP Mohammad Ajmal Gondal and sought in-depth views on the credibility of use of $1.4bn Rapid Financing Instrument (RFI) as well as allocations and utilisations of over Rs1.24 trillion Covid-19 response of the government.

The IMF had provided $1.4bn RFI soon after the Covid-19 pandemic hit Pakistan in February-March 2020, enabling the authorities to introduce the Rs1.24tr support-cum-stimulus package, a part of which still remains unutilised.

The meeting was held at the request of the IMF resident representative, said a statement issued by the AGP office. While Ms Sanchez was accompanied by an economist, the AGP was assisted by Deputy Auditor General Maqbool Ahmed Gondal and Director General Policy Tafakhar Ali Asadi.

The meeting followed last week’s policy-level meetings between the IMF and a Pakistani economic team led by then finance minister Shaukat Tarin.

Mr Tarin had said on Friday that Pakistan had shared some statistics with the IMF which they wanted to validate and get back to the government team staying put until October 19. “They said they are validating the numbers we shared with them and will get back to us,” Mr Tarin had said, adding: “We told them that we welcome the review.”

Ms Sanchez discussed the RFI and also extended offer for training of the personnel of AGP department by the IMF in the fields of budgeting, financing, execution and reporting. The AGP appreciated the proposal and briefed the IMF team on the mandate of the constitutional body, the process of accountability and the timelines of audit reports. The IMF delegation was also explained the parliamentary oversight and role of the Public Accounts Committee and procedure of the public hearing on audit reports, “especially the audit of Covid-19 expenditures”.

The AGP’s director general policy apprised the IMF team of the coverage of Covid-related expenditure in report and the audit of expenditure of Utility Stores Corporation’s (USC) subsidies on food items during the pandemic. “The IMF representatives appreciated the recommendations part of the report,” the statement said.

Informed sources said the IMF team was shown the audit report on entire spectrum of Covid-related expenditures, including those relating to the National Disaster Management Authority (NDMA), the federal government, the Ministry of Finance, Benazir Income Support Programme, USC and all other departments and organisations involved in the spending process.

The IMF team was told that the report contained serious shortcomings pertaining to preparedness, systematic issues, warehousing of various goods and supplies and their proper accounting procedures and had suggested recommendations for improvement and addressing those shortcomings.

The IMF delegation appreciated the recommendations part of the report, asked questions on the way forward and how these would be settled. The team was told that the auditors had raised various audit objections which were discussed with the relevant departments through departmental audit committees and outstanding audit paras were made part of the final report and sent to the president who signed and referred the final report to the Public Accounts Committee.

The IMF delegation was also explained that the PAC of parliament would now hold follow-up public hearings on the audit paras, listen to the views of the stakeholders and take decisions as it may feel appropriate.

Published in Dawn, October 19th, 2021

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