AGP audit report reveals Rs4,800 billion irregularities in power sector

The Auditor General of Pakistan (AGP) has uncovered significant financial and operational irregularities in the power sector, with a total of Rs4,800 billion in mismanagement for the fiscal year 2023-24, The News reported, citing a latest audit report. 

The findings will be presented to the Public Accounts Committee (PAC) and illustrate serious governance failures across the sector. The audit report highlights a range of issues, pointing to a systemic breakdown rather than individual scandals. 

It reveals widespread violations, including the theft, embezzlement, and misappropriation of Rs2,212.95 million across six cases. Procurement and contractual irregularities have been identified in 86 cases, amounting to Rs156,141.88 million, while violations of internal regulations and SOPs total Rs507,242.82 million in 77 cases.

The report also highlights Rs957,751.65 million in breaches of laws and regulations issued by constitutional authorities such as the Ministry of Energy, Finance Division, and Nepra, across 90 cases. In addition, irregularities related to asset tagging and revaluation in Discos and Genco-I have been reported, with an estimated value of Rs624,470.85 million.

Furthermore, the audit points to Rs1,369,053.65 million in outstanding power sector receivables, primarily from consumers and CPPA-G towards Discos and K-Electric. Irregularities related to human resource management and employee benefits were found in 32 cases, amounting to Rs4,470.34 million, while Rs21,634.08 million in recoveries were identified in seven cases. The audit also reported Rs22,249.60 million in value-for-money and service delivery issues across ten cases.

The report notes Rs1,056,808.80 million in various other issues, including the reconciliation of receivables, blocked investments, capacity payment claims, and late payment surcharges in 58 cases.

The Ministry of Energy (Power Division) on the same day clarified that the audit report was based on preliminary observations and not final findings, potentially creating a misleading impression.

The spokesperson explained that audit observations are part of an initial process that involves discussions and the presentation of records at various forums, including the Departmental Accounts Committees (DACs) and Public Accounts Committee (PAC). These preliminary observations are often based on factors like non-provision of proof, disagreement over rules, and compliance issues, but they do not reflect final conclusions.

Furthermore, the spokesperson clarified that these observations were not related to the current government tenure. They will be discussed at multiple forums where records will be presented, and the majority of the issues are expected to be resolved. The spokesperson stressed that the term “irregularities” used in the report should not be mistaken for final findings.