ISLAMABAD: The International Monetary Fund (IMF) has raised alarm over Pakistan’s weak internal audit controls and inadequate parliamentary oversight, warning that these shortcomings pose significant fiduciary risks to roughly Rs40 trillion in federal public funds, with even larger risks at the provincial level. In its Governance & Corruption Diagnosis Assessment (GCDA), the IMF called for establishing a fully independent Office of the Auditor General of Pakistan (AGP) to ensure stronger accountability and safeguarding of taxpayers’ money.
The Fund highlighted chronic weaknesses across Pakistan’s internal financial systems, pointing to the non-implementation of the Public Finance Management (PFM) Act 2019, which mandated the appointment of Chief Internal Auditors (CIAs) in every division by 2020. Despite the legal requirement, no such appointments have been made. While 25 chief finance and accounts officers (CFAOs) are posted in ministries, several ministries still lack both CFAOs and CIAs, severely undermining internal checks.
The IMF also questioned why the AGP remains an attached department of the Federal Secretariat despite constitutional provisions ensuring its autonomy. This structure, it warned, compromises the AGP’s independence, as it reports indirectly through the prime minister and president rather than directly to parliament. The AGP has additionally cited a severe staffing deficit of 1,500 personnel due to hiring constraints requiring Public Service Commission approval and budget releases tied to Finance Division cash availability.
The Fund expressed concern about the effectiveness of Pakistan’s external audit process, noting that the AGP produces more than 6,000 reports annually, many stretching thousands of pages. Yet, 75 per cent of the 34,000 audit recommendations remain pending before the Public Accounts Committee (PAC) due to delayed reviews and a lack of follow-up mechanisms.
To strengthen audit integrity, the IMF recommended streamlining audit reports, developing systems to enforce compliance with audit findings, amending PAC and AGP laws to enhance accountability, and mandating timely PAC review through a centralised monitoring secretariat.
