The Auditor General of Pakistan (AGP) has uncovered significant financial irregularities, non-transparent procurement practices, and unauthorized expenditures within various formations of the defence services.
Dawn reported that the findings were published in the AGP’s audit report on the accounts of Defence Services for the year 2023-24.
Key concerns raised in the report include non-recoveries, overpayments, procurement-related irregularities, losses to the state, non-production of records, advance payments made before the completion of work, the splitting of financial powers, non-recovery of rent and taxes, violations of public procurement rules, and unauthorized construction activities.
The Ministry of Defence, which receives a single-line budgetary grant distributed among various divisions, including the Army, Navy, and Air Force, was the primary focus of the audit. The report covered expenditures totalling Rs566.29 billion including Rs335.63 billion during the second phase of the 2022-23 audit and Rs230.66 billion in the first phase of the 2023-24 audit.
The AGP highlighted that the Defence Services were allocated an original budget of Rs1.563 trillion for the fiscal year 2022-23, later increased to Rs1.592 trillion through supplementary grants. Despite these allocations, the audit report expressed concern over the persistent poor compliance rate with audit objections within defence formations.
The report noted that the Ministry of Defence complied with only 659 out of 1,974 directives issued by the Public Accounts Committee (PAC) of the parliament since 1985, indicating slow progress in addressing these issues.
The AGP also found that procurement processes within certain Army formations were conducted in violation of relevant rules, with contracts often split and awarded to preferred contractors without transparent bidding. In some instances, procurement was carried out without the required advertisements, citing the secret or urgent nature of the work, yet without obtaining the necessary exemptions from the defence secretary as the principal accounting officer.
The audit report recommended that the Departmental Audit Committee (DAC) conduct inquiries to fix responsibility and regularise irregular expenditures. However, the report noted that these directives had not been implemented by the time the audit report was published.
The AGP’s findings underscore the need for stricter adherence to procurement regulations, particularly those requiring advertisements for procurements exceeding Rs500,000. The report also revealed instances where purchase orders were issued at inflated rates, bypassing the competitive bidding process, and highlighted irregular expenditures on renovations and procurement activities without proper contracts or approvals.
The AGP has called for urgent corrective action to address these irregularities and improve the financial management practices within the Defence Services. It has also urged relevant authorities to strengthen internal controls and initiate inquiries to hold those responsible accountable.
