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Subservient watchdog

November 11, 2012

WHILE the constitution requires an independent watchdog on the use of public resources by the federal, provincial and public sector entities as a key instrument of public accountability, the Auditor General of Pakistan continues to function as an attached department of the ministry of finance.

This is a clear conflict of interest. Given the fact that ministry of finance has fiscal responsibilities, its subordinate office cannot be expected to operate with complete independence and question irregularities that financial authorities may commit.

Articles 168-171of the constitution provide for a constitutional forum to perform its duties with complete independence and autonomy without external influence on the pattern of Election Commission of Pakistan, State Bank of Pakistan or the Supreme Court of Pakistan.

A draft law seeking separation of AGP office from the ministry of finance has been pending consideration of the government for over two years now. The proposed modification in the rules of business will allow the top audit body to function independently.

Article 168 of the constitution provides for the appointment of an AGP who is required to take oath of office from the Chief Justice of Pakistan in the form set out in the Third Schedule of the constitution.

Like the Supreme Court judges, the constitution also requires that AGP cannot be removed unless found guilty of moral turpitude or physical or mental incapacitation and that too through a supreme judicial process.

The constitution provides AGP a legal and parliamentary role of a watchdog on accounts of the federation and the provinces and those of the any authority or body established by the federal or provincial government.

The wisdom behind such an arrangement is to ensure AGP’s constitutional mandate to support parliamentary oversight over the management and prudent use of public resources and to promote transparency, accountability and good governance through the findings of the professional and independent audit reports.

It has international legal ramifications. Unless certified and regularised through an audit and parliamentary process, the accounts of the State become technically unacceptable to international lending agencies. At home, certification of accounts require compliance of rules, regulations and law in utilisation of public resources to bring efficiency and effectiveness of government policies, projects and programmes.

Notwithstanding general complaints about corruption and audit clearance, the parliamentary supervision of public funds has been facing a lot of challenges. On top of such challenges has been an inordinate delay of audit reports and a large backlog in consideration of these reports by the Public Accounts Committees.

Most of the time, the PACs take up outdated audit reports of the AGP leading in majority of the cases to ineffective accountability action, minimal recoveries and compelling regularisation of misused funds — a fait accompli. By the time, the audit report of the AGP are taken up by the national assembly’s PAC with a time lag of 10-15 years, those committing fraud / embezzlement, etc., are seldom available to be taken to task.

While the PACs have been able to recover a fraction of the lost public funds because of delayed action, a recent attempt by opposition leader in the national assembly Chaudhry Nisar Ali Khan to take up audit reports of the last four years as PAC chairman was effectively thwarted by the government in a fashion that Mr Khan had to resign in protest.

That was the only attempt by any PAC to take up fresh audit reports in the presence of a sitting government.

No wonder that people keep on complaining so much about ‘commissions’ and ‘service charges’ by the audit and accounts officials for clearance of bills related to public funds, schemes and their regularisation.

But more serious is the fact that application of public procurement rules for transparent use of public funds remains a pipedream even though the Public Procurement Rules were adopted and Public Procurement Regulatory Authority was established almost a decade ago.

Apart from a softer application of PPRA rules at the federal level, none of the provincial governments have so far adopted the rules of the Public Procurement Regulatory Authority (PPRA), as reported to the parliamentary panel by Controller General of Accounts (CGA).

Farhad Khan, additional CGA, told a senate standing committee that one of the tools to end corruption was to improve systems but complained that parliamentarians had approved such an exhaustive and cumbersome PPRA rules that if applied in true letter and spirit, not a single bill could be cleared.

As a consequence, huge sums of public money estimated to the extent of 25 per cent usually go down the drain every year. In the latest example, the Auditor General of Pakistan has reported an irregular, illegal and objectionable expenditure of Rs1.858 trillion by federal and provincial governments in last financial year.

According to additional AGP Tanveer Ahmad, about 16 government entities utilising public funds had refused to present their accounts for AGP audit. Some such entities were as important as Securities and Exchange Commission of Pakistan that in itself is a corporate watchdog and required to ensure transparency in the corporate sector.

Also included in the audit-defiant list were the National Bank of Pakistan, PTCL, Pakistan Poverty Alleviation Fund, National Database and Registration Authority (Nadra) and Pakistan Medical and Dental Council — another medical sector watchdog.

More astonishingly, the Balochistan province did not even set up a public accounts committee (PAC) since the current government was elected to power in 2008 despite a constitutional requirement.

On top of that, none of the federal and provincial ministries had their own internal system of checks and balances that could instantly point out irregularities for recovery or improvement.

In the absence of effective and independent audit bodies, the objective of parliamentary oversight of public resources would remain a distant dream.