Govt amends financial regulations, shifts key oversight role to Finance Division

The federal government has amended the Financial Management and Powers of Principal Accounting Officers Regulations, 2021, transferring a key oversight responsibility from the Auditor General of Pakistan (AGP) to the Finance Division. 

This move is seen as a step towards enhancing the Finance Division's authority over financial management procedures across various ministries and divisions.

As per reports, the amendment, announced through a notification by the Finance Division (S.R.O. (1)/2025) under section 27 of the Public Finance Management Act, 2019, replaces the phrase “in consultation with the Auditor General of Pakistan” with “as recommended by the Finance Division” in Regulation 31(c).

This change grants the Finance Division the exclusive authority to recommend actions under this regulation, thereby consolidating fiscal decision-making within the ministry responsible for budgetary control and policy.

The amendment is part of the government's ongoing efforts to streamline financial powers under the Public Finance Management Reform (PFMR) framework. These reforms aim to create a more unified structure for fiscal accountability. 

However, some sources have expressed concerns that the change could reduce the AGP’s role in the consultative process for administrative financial decisions.