TDAP faces Rs3.656 billion audit objections over financial controls, recoveries

The Trade Development Authority of Pakistan (TDAP) faced audit objections of Rs3.656 billion during FY2024-25 over recovery issues, weak internal controls, bank account management, procurement and administrative lapses, according to the audit report for 2025-26.

The audit said TDAP, which is responsible for export promotion and replaced the former Export Promotion Bureau, failed to meet several statutory and financial management requirements.

A major portion of the objections related to recoveries of more than Rs 1.6 billion. The report also identified Rs1.36 billion in internal control weaknesses and over Rs513 million in mismanagement of commercial bank accounts.

One of the main observations was TDAP’s failure to prepare financial statements under the TDAP Act, 2013. The audit said the authority did not prepare balance sheets, income statements or cash flow statements within the required period.

TDAP management said external auditors had prepared statements for earlier years and that work for FY2024-25 was in progress. However, the audit termed the response inadequate and said the absence of audited financial statements affected transparency and accountability.

The report also flagged irregular retention of Rs513.615 million earned from Karachi Expo Centre operations. Under the TDAP Act, such income is required to be deposited into the official TDAP Fund, but the amount was kept in a commercial bank account with the National Bank of Pakistan.

Out of these receipts, Rs400.625 million was spent on operational expenses, including maintenance, utilities and security. Auditors said retaining and spending the funds outside the prescribed mechanism violated the law.

TDAP management argued that the authority was allowed to maintain bank accounts, but the audit said the income should still have been routed through the TDAP Fund.

The audit also pointed to a revenue loss of Rs29.546 million due to failure to charge for additional setup and dismantling days at the Karachi Expo Centre.

In one case, the Defence Export Promotion Organisation used the facility for more days than allowed under standard terms. The audit said additional days should have been billed at 50% of the standard rate, but TDAP did not recover the amount.

Another objection related to liabilities of Rs24.163 million created due to non-payment of water charges to the Karachi Water and Sewerage Board for Karachi Expo Centre connections.

TDAP management attributed the issue to billing errors and a non-functional connection, but auditors said the matter had not been reconciled or resolved.

Procurement-related irregularities of more than Rs144 million were also identified. The audit said such issues reflected weaknesses in procurement compliance, documentation and financial oversight.

The report also noted poor compliance with Public Accounts Committee directives. Out of 92 audit paras from previous years, only a small number had been fully addressed, while many remained unresolved.

The audit recommended immediate preparation of financial statements, deposit of all revenues into the TDAP Fund, stronger internal controls, timely reconciliation of accounts and liabilities, and compliance with PAC directives.

It also called for fixing responsibility on officials involved in irregularities.