These committees comprised of representatives of civil society and were required to clear the back-log of audit reports prepared by the Auditor General of Pakistan (AGP), over the last decade, before a representative government was in place. The Constitution provides that the AGP shall prepare a report on the accounts of the federation, the provinces and their autonomous bodies and submit it to the president and the governor of the province for laying it before the Assembly. According to the standing procedure, the assemblies were to form standing committees on public accounts to examine these reports. In the absence of legislative assemblies, it was decided that pending reports will be referred to the ad hoc committees for examination.
Unfortunately, none of the constituents of the financial accountability cycle envisaged by the Constitution, worked effectively in the past, except for very short periods. Resultantly, the office of the Auditor General became redundant and the audit reports meaningless, and the financial indiscipline and waste of resources continued to increase unabated. In October 99, there was a heavy backlog of audit reports awaiting examination at both federal and provincial levels. The elected governments in Sindh and Balochistan had not constituted the PACs, in the last ten years. The committees, at the federal level as well as in the provinces of Punjab and NWFP had finalized examination of only about one tenth of the reports submitted to them in the last decade.
The decision of the present government to form the ad hoc committees was thus a step in the right direction. It was heartening to note that these committees have taken up their assignments in the right earnest.
A glimpse of the work done by these committees is reflected in a press report released by the Balochistan PAC. The province had no history of financial management accountability in the public sector. The committee, in last one year, has completed examination of two years accounts and has so far sent 15 cases to the national/regional accountability bureau and the governors inspection team for the recovery of Rs146.545 million, apart from communicating various proposals for improved financial management to the provincial government.
There is thus no doubt that these committees were doing an extremely important work with a view to providing less corrupt governance. We should, therefore, briefly review the impediments involved in their work to find out how could it be made more productive.
To begin with our analysis, there are five players involved in the exercise. Two that are accountable, one who reviews and report on their performance and the two finally sit on judgment. These players are:
(a) administrative departments, who implement government policies and use tax payers’ money for specific purposes; (b) finance department which allocates these resources and keeps an account of the receipt, expenditure, assets and liabilities of the government; (c) auditor-general who audits the accounts; (d) public accounts committee which examines, and advises corrective measures on, these reports and finally (e) the civil society, who is the ultimate owner of the resources and beneficiary of the accountability process.
We would briefly review the role of all the five players to have a comprehensive analysis.
The financial framework evolved by the government provides that the secretary of an administrative department is the principal accounting officer, or the person responsible for administering the resources placed at his disposal. The framework, however, does not specify as to how he is expected to exercise this function and what would be the consequences if he fails to perform this function in a satisfactory manner. The absence of such a mechanism is therefore the biggest drawback in evolving an efficient public sector management.
The finance department, which is responsible for allocating the resources amongst the executive agencies, has no criteria to do so. It has been managed on ad hoc basis for decades without any guiding principles, parameters or rules of the game. The Constitution of the country clearly provided two basic laws to regulate the financial management of the country; one, to regulate the overall financial management of the country and the other to regulate the borrowings of the government. Unfortunately, none of the two legislations have been framed so far.
Finance Minister Shaukat Aziz had made a public commitment in his last budget speech to legislate a law governing the borrowings of the federal government but it seems that he found it convenient to forget his public commitment to enable him to borrow left and right without any long term considerations.
The latest addition to the existing financial mess of the public sector is the promulgation of the Controller General of Accounts Ordinance. It is a unique piece of literature based on the premise that accounting is not a managerial function. It has thus created a monster that is expected to maintain the accounting record of not only the federal government but also the provincial and district governments. It thus provides a centralized base to a devolved administration, a contradiction in terms.
The overbearing finance department tried to regulate every thing and thus failed to regulate anything. The most evident and basic indicator of its performance over the years was the perpetual budgetary deficit, which it has miserably failed to control..
The auditor general is an interesting institution that has been auditing the public sector without auditing the efficiency and effectiveness of it’s own organization. He had been producing thousands of pages every year for keeping them in archives and without making a dent to the quality of governance. He has never been bothered with the productivity of his own pursuits. Even to this day, he has not been able to decide if he was an internal auditor or an external auditor to the government and whether he was reporting to the finance department or to the civil society, and whether he was to review trees or the forest. The result is the redundancy of the institution. The absence of public accounts committees over prolonged periods has made the accountability non-existent. The committees were not given due importance because it was not in the vested interest of the ruling elite to do so. The reports prepared by the Auditor General and the debate by the PAC on these reports, both were kept secret from the civil society, so that there is no information available to it to react. This is still being the case with the only exception that has been made by the federal ad hoc PAC.
The civil society, being the ultimate owner of the resources placed at the disposal of the government, has been the victim of poor governance, has thus continued to suffer, without knowing that the Constitution provided an adequate mechanism to fight against the bad governance.
It is therefore in larger national interest to ensure that the work being done by the ad hoc PACs is sustained after October 2002. The only way to do so is to remove the impediments in the process of financial management accountability by (a) fixing responsibility/ rights of the each player through a law; (b) making public all information as soon as it is generated and (c) ensuring that accountability process is not impaired by lateral changes in the governance mechanism in future.