Serious Financial Irregularities Found in Defence Services: AGP Report Highlights Key Concerns
Audit Report Exposes Non-Transparent Procurements and Unauthorized Expenditures
The Auditor General of Pakistan (AGP) has identified significant financial irregularities, non-transparent procurement practices, and unauthorized expenditures within various defence service formations. The AGP has called on relevant authorities to strengthen internal controls and initiate inquiries to establish accountability.
Key Findings from the 2023-24 Defence Services Audit
In the 2023-24 audit report covering Defence Services, the AGP published over 300 pages of audit objections. These included issues like non-recoveries, overpayments, procurement-related irregularities, losses to the state, and non-production of records. The audit examined expenditures amounting to Rs566.29 billion, with significant issues in both the 2022-23 and 2023-24 audit phases.
Non-Compliance and Financial Irregularities in Defence Services Regulations
The report highlights numerous instances of non-compliance with Defence Services Regulations. Specifically, key issues identified include advance payments before work completion, financial power splitting, non-recovery of rent and charges, tax violations, as well as unauthorized work. Furthermore, these findings point to systemic weaknesses in financial management within the Ministry of Defence.
Public Accounts Committee Directives Ignored Amid Financial Irregularities in Defence Services
The AGP’s report expressed concern over the slow compliance rate with directives from the Public Accounts Committee (PAC). Since 1985, the Ministry of Defence has complied with only 659 out of 1,974 PAC directives. In addition, the Ministry of Defence Production’s performance was similarly poor, as evidenced by compliance on only 109 out of 372 directives.s. The AGP emphasized the need for the principal accounting officer to expedite compliance, given the public money at stake.
Procurement Violations and Lack of Transparency
The audit found several violations of procurement rules within Army formations. In some cases, contracts were split and awarded to favoured contractors without transparent bidding. Other instances involved skipping mandatory newspaper advertisements for procurement, under the guise of secrecy. The AGP noted that officials did not properly authorize exemptions from procurement rules, raising concerns about accountability.
Failure to Implement Departmental Audit Committee Directives
The report criticized the failure to implement directives from the Departmental Audit Committee (DAC). Despite recommendations for inquiries and regularization of expenditures, these directives had not been carried out for months. The AGP stressed the importance of adhering to procurement regulations and ensuring transparent processes.
Conclusion: Need for Immediate Action
The AGP’s report calls for immediate action to address these financial irregularities within the Defence Services. Strengthening internal controls, enforcing compliance with regulations, and ensuring transparency in procurement are essential to safeguard public funds and maintain the integrity of defence expenditures.
