Zahid Ali
Audit is one of the cornerstones of democratic governance. It ensures that public funds are spent efficiently, honestly, and in accordance with legal frameworks. In Pakistan, the mandate to audit government finances lies primarily with the Office of the Auditor General of Pakistan (AGP)—a constitutional institution tasked with safeguarding public interest through independent scrutiny. However, the current state of financial auditing, both at the federal and provincial levels, remains riddled with structural inefficiencies, lack of specialization, and a serious conflict of interest. If Pakistan is to enhance financial governance, a comprehensive reform of its audit system is not only essential—it is urgent.
At present, the Pakistan Audit and Accounts Service (PAAS) is responsible for both conducting audits and managing government accounts. This dual role presents a fundamental conflict of interest. How can an entity audit the very accounts it prepares or manages? It undermines both the integrity and the independence of the audit process. To address this, it is critical to separate the audit and accounts functions—creating a distinct Audit Service solely responsible for oversight, while another independent entity handles accounting. This separation will eliminate institutional bias, promote transparency, and enhance the reliability of audit outcomes.
The constitutional authority of audit lies with the federal government, and this must be exercised in full to ensure fiscal discipline across the federation. If the AGP’s office is allowed to function independently and on merit, without bureaucratic or political interference, it can play a transformative role. An empowered and merit-based audit system would deter misuse of funds and reveal systemic inefficiencies that drain the national exchequer. Moreover, the benefits would cascade down to the provinces, where much of the unchecked spending occurs without robust oversight.
Consider the current scenario: billions are allocated every year in provincial development budgets, yet public service delivery remains weak. Schools lack basic facilities, hospitals remain understaffed, and infrastructure projects are often marred by cost overruns and delays. Why? Because there is no effective post-expenditure accountability. A proactive and specialized audit service could identify leakages, prevent misappropriations, and recommend corrective actions before damage becomes irreparable.
One key reform should be the professional specialization of the audit cadre. Auditing is not a generalist function—it demands financial, legal, and operational expertise. At present, officers of PAAS often transition between audit and accounts roles, rarely developing deep specialization in either. A separate Specialized Audit Service, with mandatory qualifications in finance, accounting, or public administration, would be far more effective in detecting discrepancies, understanding fiscal trends, and guiding policy reform through evidence-based audit findings.
Furthermore, digitization and the use of advanced audit technologies must be prioritized. Manual audits are slow, error-prone, and susceptible to manipulation. Digital audit trails, real-time monitoring tools, and integrated financial management systems can revolutionize public auditing. However, for these tools to be effective, the human capital using them must be professionally trained, free from institutional bias, and equipped with the authority to take independent positions.
In addition to federal reforms, provinces must also be brought under a harmonized audit framework. While the AGP audits both federal and provincial expenditures, the provincial audit offices often lack capacity, independence, and enforcement mechanisms. A collaborative federal-provincial audit structure, under the leadership of an autonomous AGP, can ensure consistency, transparency, and standardization in financial oversight across Pakistan.
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It is also essential to institutionalize audit findings into the policy-making process. Too often, audit reports are submitted and shelved, with little follow-up or accountability. Public Accounts Committees (PACs) at both federal and provincial levels should be strengthened, made more independent, and given powers to enforce audit recommendations. Additionally, audit findings must be made public in a timely and accessible manner to allow civil society, media, and academia to play their role in promoting transparency.
Pakistan’s fiscal future depends on how well it manages its limited resources. With growing public debt, revenue shortfalls, and increasing expenditure demands, there is no room for waste or inefficiency. A reformed audit system—one that is independent, specialized, digitized, and merit-based—is the first and most necessary step toward good governance.
To move forward, the government must:
Separate audit from accounts functions to remove the conflict of interest.
Establish a dedicated Audit Service, recruiting professionals with expertise in auditing, accounting, and public finance.
Strengthen the constitutional and operational autonomy of the Auditor General’s office.
Modernize audit processes using technology and data analytics.
Enhance the role of PACs to ensure action on audit findings.
Promote public access to audit reports for greater civic participation in financial governance.
In conclusion, audit is not merely a bureaucratic function—it is a democratic necessity. A weak audit system perpetuates corruption, waste, and inefficiency. But a strong, professional, and independent audit regime can transform governance, restore public trust, and ensure that every rupee spent serves the people—not private interests. Pakistan must act now to put audit at the center of its governance reform agenda.
