An audit report spanning from 2002 to 2024 has revealed that Khyber Pakhtunkhwa (KP) local governments are facing unresolved financial irregularities totaling Rs354.126 billion, The News reported. Despite numerous findings over the past two decades, only Rs3.232 billion has been recovered due to the lack of an effective system to address these audit objections.
The audit, which reviewed 765 reports issued over the period, uncovered 18,090 audit paras detailing massive misuse or mismanagement of public funds. The report also indicated that much of the irregularity stemmed from insufficient oversight and the failure to implement key regulatory reforms, particularly those related to the formation of Tehsil Accounts Committees as mandated in the 2019 Amendment Act.
The 2019 amendment, which called for the establishment of Tehsil Accounts Committees to evaluate audit reports and ensure transparency, remains unfulfilled. These committees were designed to offer greater oversight of local government finances.
However, the KP government has failed to operationalise them, leaving a gaping hole in financial accountability. In contrast, provinces like Punjab, Sindh, and Balochistan have Public Accounts Committees that regularly review the financial affairs of local governments.
The audit highlights the scale of unresolved issues with audit objections escalating year after year. For example, in 2023-24, audit paras amounted to Rs40.76 billion, with only Rs1.25 billion recovered. Similarly, in previous years, such as 2022-23 and 2021-22, audit findings revealed Rs52.66 billion and Rs52.44 billion in irregularities, respectively, with minimal recoveries.
Experts suggest that the lack of a functional accountability framework has allowed these issues to persist, with the audit process proving ineffective. Local governance remains riddled with inefficiencies and systemic failures, and the pattern of high-value audit objections with minimal recoveries suggests deep-rooted issues in financial oversight.
The failure to implement reforms and empower relevant bodies, such as the Public Accounts Committee, has left local governments vulnerable to continued mismanagement.
The audit also called attention to how several financial irregularities from previous years, particularly in 2013-2014, have not been adequately addressed. During that period, Rs7.5 billion in audit paras were flagged, but only Rs121 million was recovered. In 2014-15, a similar pattern emerged, with Rs3.29 billion flagged and just Rs106 million recovered.
