ISLAMABAD: Pakistan Audit Department (PAD) is planning to sign a memorandum of understanding (MoU) with investigating agencies like National Accountability Bureau (NAB) to promote transparency and accountability in the country.
This was stated in the first meeting of newly constituted Audit Policy Board.
“The style of engagement with other accountability agencies will not only create a deterrent effect on financial irregularities but will also facilitate practicality of the accountability process,” the Audit Policy Board was informed.
Auditor General of Pakistan, Rana Asad Amin, chaired the meeting of newly constituted Audit Policy Board which endorsed the major recommendations to promote sustained transparency and accountability in the country.
According to a statement of AGP issued, the foundation of audit initiatives and reforms were based on implementation of the department’s strategic plan of 2015-19, which would turn the department as a model supreme audit institution in the world.
The board included representatives of all stakeholders concerned including professional accounting bodies and civil society organisations.
The members of the board also include heads of federal government departments like finance division, controller general accounts, Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), planning commission and additional secretary of Public Accounts Committee (PAC).
The two additional auditor general and deputy auditors general who are ex-officio members also participated in the meeting. The board has the mandate to make recommendations about the policy and strategic issues of government auditing and accounting in public financial management.
The key features of the agenda included endorsement of initiatives and reforms of the Auditor General of Pakistan, collaboration with professional bodies, involvement of civil society and NGOs in audit operations and international activities and specific recommendations for sustaining audit reforms.
The board appreciated and endorsed initiatives and reforms of the department, which include remarkable achievement of a record benefit-cost ratio of Rs 28 for each.
During first seven months of current fiscal year, Rs 56 billion was recovered on account of financial deviations by government departments against an expenditure of Rs 2 billion only.
The auditor general of Pakistan in his capacity of chairman of the Audit Policy Board, briefed the forum about special initiatives and achievements of the current management to improve the quality and accountability of audit. He assured the board that officers with integrity, competence and experience are being placed on top and middle management positions. The lower positions are also being taken care of through planning and implementation of field audit activities.
The chair also highlighted some major challenges for the Supreme Audit Institution (SAI), Pakistan for the promotion of accountability.
Externally, the independence of SAI Pakistan is compromised as it is subordinate to finance division and is treated as an ordinary service delivery department instead of a supreme accountability agency. The argument was that SAI Pakistan is an auditing organisation which identifies financial deviations in all government bodies including finance division.
The board observed that SECP had delivered significantly by virtue of its independence.
Therefore, it was recommended that to ensure the SAI Pakistan’s sanctity, it should be treated as an independent watchdog and be allowed to report directly to the finance minister on the pattern of independent agencies like FBR and statistic Division.
The board also recommended that Pakistan Audit Department should be given a one-line budget to be managed by a board for regulating financial affairs of the department.
The policy board was informed that there has been a remarkable improvement on the quality of audit.
Previously, massive resources were spent on compliance audit. This includes procedural variations of financial transactions from financial regulations.
The problem with this approach is that it focuses on symptoms instead of facilitating system reforms.
However, the current management has implemented a shift in audit policy by allocating at least 40 percent of financial and human resources to special operations including environment, forensic, and information technology audit. The chair said special attention is being given to implementation of international auditing and accounting standards and guidelines for conducting professional audit for capacity building of the department adding that human resource development has also been regarded a high priority area.
Similarly, Pakistan Audit and Accounts Academy is conducting professional training programmes for the employees besides continuous improvement of curriculum, he said. The employees are being given the opportunity to seek professional degrees in the world’s best universities. The auditor general assured the board that more interaction will be made with ICAP, ICMAP and PIPFA, he said. It was emphasised that the entire output of the audit department is based on the Public Accounts Committee (PAC). However, impact of the audit reports largely depend on frequency and directives of the PAC.
It was unanimously observed by the board that no government agency can escape from auditing process, in view of a Supreme Court’s ruling with reference to Article 17(2) of the Constitution that the auditor general of Pakistan enjoyed a strong constitutional mandate to audit all public spending without exception.