ISLAMABAD: The finance ministry on Wednesday informed the Public Accounts Committee (PAC) that Rs423 billion had lapsed during 2017-18 since the ministries concerned did not surrender the unspent amounts in a timely manner.

While briefing the PAC, Finance Secretary Naveed Kamran Baloch said that a huge chunk of the lapsed amount — Rs266.3bn — was of the development budget, Rs53bn of current and Rs92bn of charged budget.

The development budget relates to the federal Public Sector Development Programme, development loans and grants to the provinces and other development expenditure. The current budget is for interest payments, pension, defence services, grants and transfers, subsidies and running of civil government. The charged expenditure is not submitted before the parliament.

According to the briefing of the finance ministry, Rs12.5bn allocated for clean drinking water was also not utilised.

A large chunk of lapsed funds was allocated for development projects

Mr Baloch conceded that the revenue target for the current year would be missed by Rs700bn to Rs800bn but expressed the hope that in the last quarter of the year, the situation might slightly improve.

PAC members Sardar Ayaz Sadiq and Khawaja Asif rejected the finance secretary’s claim, saying that in the last quarter of a year, the Federal Board of Revenue (FBR) asked the businessmen to pay tax in advance to improve its revenue generation.

Mr Baloch suggested that the PAC should seek a briefing from the FBR chairman in this regard.

Likewise, when the committee inquired about the monitory policy and interest rate, Mr Baloch suggested that the governor or deputy governor of the State Bank of Pakistan should be asked to brief the committee on this issue.

Subsequently, the PAC decided to convene a meeting with FBR and SBP officials next month.

Mr Baloch said that Rs2.9 trillion had been allocated for debt service leaving little room for undertaking development projects.

AGP jurisdiction extended to PEC

PAC Chairman Rana Tanvir Hussain, after deliberations finally ruled that the auditor general of Pakistan (AGP) could scrutinise the accounts of the Pakistan Engineering Council (PEC).

The PEC challenged the AGP’s jurisdiction saying that under the council statute, it might get its accounts audited from a chartered accountant firm.

The PEC insisted that since it was a self-generating entity and never took any grant from the public exchequer, it did not come within the purview of the AGP.

Umer Gillani, the PEC’s legal adviser, told the committee that the AGP under Article 170 (2) of the Constitution was empowered to conduct audit of the ministries, divisions and autonomous bodies working under the federal and provincial governments. He further said that since the PEC had been established through an act of parliament and it was under the control of the parliament, the auditor general lacked power to audit its accounts.

Auditor General Javed Jahangir, on the other hand, said that the constitution mandated the AGP office to audit the accounts of the corporate entities and autonomous bodies as well.

He said that currently about 300 corporate and autonomous bodies -- including the Pakistan International Airlines, Oil and Gas Development Corporation, Securities and Exchange Commission of Pakistan and Oil and Gas Regulatory Authority -- had been established under an act of parliament.

In case the PAC exempted the PEC, the other entities might seek the same relief, he argued.

“The National Bank of Pakistan has already filed a petition before the Supreme Court and obtained a stay order. Therefore, we cannot audit its accounts for last four years,” Mr Jahangir said.

The PAC finally ruled that the PEC might get its accounts audited by a chartered accountant firm but the audit report must be shared with the AGP for compliance on the audit paras.

Published in Dawn, February 20th, 2020