ISLAMABAD: Cabinet Committee on State-Owned Enterprises(CCoSOEs) has directed the finance division to consult the relevant ministries/division to select major loss-making SOEs under their control for a forensic audit of the last ten years and the federal cabinet has ratified this decision.
According to sources, previous federal cabinet meeting had ratified the directions of CCoSOEs to finance division including obtaining information from auditor general of Pakistan (AGP) about the availability of expert auditors to carry out a forensic audit of major loss-making SOEs in pursuance of PM’s directives, obtaining information from audit firms regarding the estimated cost of the forensic audit and estimated time during which the forensic audit would be completed and to consult relevant ministries/divisions to select major loss-making SOEs under their control for the forensic audit which should not be confined to a particular sector.
“Finance Division will submit its compliance report on the above decisions to the CCoSOEs in its next meeting for consideration,” said sources.
The sources said that the finance division through a summary dated August 31, 2020 had proposed the CCoSOEs to approve selection of major loss-making entities for a forensic audit on the basis of either the total loss accrued during fiscal year (FY) ending June 2014 to FY2018 or may be based on the accumulated losses as of FY2018.
The forensic audit may be undertaken by the AGP to ensure consistency and availability of the results. The draft scope of forensic audit is that it may be undertaken initially for a period of last five years (FY2016 to FY2020) and be extended to cover the last ten years for selected SOEs on case to case basis by CCoSOEs once the initial report is received. Henceforth, the AGP may be advised to complete the forensic audit of selected SOEs within a time of 90-120 days and submit its report to the CCoSOEs for further directions.
Finance Division further informed CCoSOEs that in order to obtain the forensic audit report it needs to identify the SOEs to be audited, decide if forensic audit be undertaken by AGP or by reputed firms of chartered accountants, and decide the timeline of the forensic audit.
The top 15 loss-making entities had consistently contributed to more than 90 per cent of the overall losses of SOEs for FY2014 to FY2018. Prime Minister Imran Khan had earlier directed Advisor to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh to get forensic audit of the major loss-making SOEs conducted for the last ten years.
It is pertinent to mention that ratification of the federal cabinet on the decision taken by the CCoSOEs was sought in pursuance of rule 17 (1) (C) of the Rules of Business, 1973.