Audit report finds over 'Rs1 trillion irregularities' in Punjab

• Audit report identifies internal control lapses.
• It recommends investigation into misappropriation.
• Audit report 2024-25 covers financial year 2023-2024.

ISLAMABAD: The Auditor General of Pakistan, in its report for the audit year 2024-25, has uncovered massive irregularities — including fraud, misappropriation, overpayments, financial mismanagement, mis-procurement and unauthorised retention of consolidated fund receipts — amounting to over Rs1 trillion in the expenditure accounts of the Punjab government, The News reported on Sunday.

According to the report, published recently, the key audit findings of the report include 14 cases of fraud and misappropriation amounting to Rs3.1 billion, 50 cases of recoveries/overpayments and unauthorised payments amounting to Rs25.4 billion, 21 cases of financial mismanagement amounting to Rs10.6 billion, 45 cases of mis-procurement amounting to Rs43 billion, 12 cases of unauthorised retention of consolidated fund receipts in commercial banks besides imprudent decisions to retain public funds in non-interest bearing accounts by respective autonomous bodies amounting to Rs988 billion, 24 cases of HR-related irregularities amounting to Rs8.2 billion and seven cases of performance-related deficiencies amounting to Rs3.6 billion.

“As a result of the audit, a recovery of Rs25,462.55 million (Rs25.4 billion) was pointed out. Recovery affected from February 2024 to January 2025 was Rs2,239.66 million (Rs2.2 billion) which was verified by audit,” disclosed the report.

The report identifies internal control lapses pertaining to areas such as financial management, procurement and contract management, hiring of human resources, payroll procedures, handling of assets, as well as overall budgetary planning and execution.

It recommended that the management is required to investigate the matters of misappropriation and fraud for taking action under the law against those held responsible, affect recoveries of overpayments and unauthorised payments and strengthen its recovery mechanism, develop and upgrade internal control checks, reinforced by disciplinary action against government officials involved in malpractices, adhere to the provisions and restrictions as provided and set forth in the Punjab Procurement Rules 2014, curb diversion of provincial consolidated fund receipts outside treasury for retention in commercial banks, follow advertisement-based recruitment through merit-based selections against all posts with a view to strengthen internal controls on HR, ensure stringent monitoring and evaluation on key performance indicators, key result areas for achievement of deliverables for improving project outcomes and improved service delivery targets.

The audit report 2024-25 covers the financial year 2023-2024.

The cases highlighted in the report include non-reconciliation of e-pay online receipts worth Rs282 billion, non-recovery of loan and advances from companies/ development authorities — Rs352 billion, Long outstanding dues not reported as receivables — Rs282 billion, unreported amount of Punjab Consolidated Funds held in commercial bank accounts Rs44 billion and non-deposit of interest — Rs2 billion, non-retrieval of illegal encroachment of state land consisting of 541.563 acres, grant of subsidies to ineligible farmers Rs480 million.

Out of Punjab government’s total expenditure, four sectors covered almost 73% of the spending which are: Communication and works 41%, health 15%, education 6% and housing urban development and public health 11%. “It was notable that although agriculture is considered as an economic driver in Punjab, the spending share of the Irrigation Department and Agriculture Department is 4% and 5%, respectively. On the other hand, the remaining (others) 18% of spending was divided into departments such as Environmental Protection, Excise & Taxation, Mines & Minerals, Women Development, Forestry and Wildlife & Fisheries Department etc.

Salaries and other employee benefits constituted 25%, repayment of debts 20% and servicing of debts 5% of the total expenditure. Repair and maintenance was only 2% of the total expenditure, said the report.

The Punjab government is advised to work on improving revenue collection, bring reforms in its budgetary and expenditure management systems to get better value for money. A set of measures aimed at business process re-engineering, enhancing of e-services, raising agricultural productivity, increasing industrial production, receipt of pending claims/ dues, change of rules and regulation, and utilisation of modern research and development tools for resource planning, distribution and monitoring will be fruitful.

In response to the AGP report, Punjab Minister for Information Azma Bokhari said that due process would be followed and the paras would be placed before Special Departmental Accounts Committees (SDACs), and those paras that remain unsettled in the SDACs would be placed before the PAC for consideration. “Decisions of the PAC will be complied with. Until unsettled paras are considered by the PAC, any action would be against the law and procedure and premature,” she concluded.

Originally published in The News