The First ASOSAI_EUROSAI Joint Seminar on“Challenges for ensuring transparency and

accountability in public financial management”

Country Paper by the SAI Pakistan on“ The importance of enhancing the quality of SAI Reports, and 

their impact on Parliament with reference to ensuring accountability and transparency”

 

Asia Sherazi,Director Audit,SAI Pakistan

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Sequence

• Introduction• Accountability paradigm in Pakistan• Initiatives taken by the SAI Pakistan for enhancing the quality of Audit Reports

• Impact of the SAI Reports• Way forward

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Parliamentary financial control

Make recommendatio

ns

Examine budget estimate

s, accounts & audit reports

Approve taxation & expenditu

re

(Select committees)

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Importance of SAI reports

• A tool for the Parliamentary financial control and oversight

• Comprehensive and competent external audits required for effective scrutiny by the legislature

• Quality audit reports vis-à-vis enhanced accountability and transparency in governmental operations

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Accountability paradigm in Pakistan

Accountability cycle

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SAI Pakistan

• Known as Auditor General of Pakistan• Appointed by the President under Article 168

of the Constitution• Conducts audit of all (Federal, Provincial ,

District) government entities• Submits audit reports to the President and

Governors to be laid before the National/Provincial Assemblies and discussed in Public Accounts Committees

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Initiatives taken by the SAI Pakistan for enhancing the quality of Audit Reports

• Project to improve financial reporting and auditing

(PIFRA)

• Financial Audit Manual (FAM) and guidelines

• Quality Management Framework(QMF)

• Code of ethics

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PIFRA

• Launched in 1994• Audit Component facilitated Department of Auditor-

General of Pakistan to modernize its auditing processes:– Financial Audit Manual was prepared and implemented– Risk based audit methodology was introduced at all the

three tiers of government– Certification audit cycle was reduced from 22 to 8 months– Audit Command Language (ACL) was introduced in field

audit offices, and– AGP staff had been equipped with modern working

accessories

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FAM & Sectoral Guidelines

• Launched in 2006

• Introduced methods and approaches based on

INTOSAI Auditing Standards & international best

practices

• Provides guidance throughout the Audit Cycle

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QMF

• Launched in 2010

• Draws on ISSAI 40, which is an adaptation of the

International Standard on Quality Control

• Provides for quality assurance procedures at all

stages through quality assurance, control &

improvement mechanisms

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Code of Ethics

• Adoption of COE was formalized in 2002• COE Plan being made to ensure adherence to

Integrity, Independence, Objectivity and Impartiality, Professional Secrecy & Non disclosure , Competence

• Its impact would be widespread awareness of COE among the staff of DAGP and its strict implementation

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Impact of SAI reports(Audit activity 2010-2011)

348,192.09

16,043.41

5,840.05

181,875.23

127,678.70

24,733.64

164,577.11 violation of Rules and Regulations

fraud,embezzlement etc.

accounting errors

internal controls weaknesses

recoveries and overpayments

non production of record

others

Rs. In million

Impact of SAI reports(Recovery made at the instance of audit)

Wing Total amountAudited

Amountplaced under 

audit observations

Recovery made at the instance of 

audit

Federal Audit 534,700.47 27,064.45 1,195.69

Corporate Audit 4,087,080.34 220,798.43 9,193.96

Provincial Audit 828,497.15 18,3602.26 2,527.66

District Audit 186,107.57 103,830.33 870.87

Defense Services Audit 126,648.19 56,452.28 397.85

Revenue Receipts Audit 9,515,157.61 277,192.50 55,434.14

Total 15,278,191.33 868,940.25 69,620.71

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Impact of SAI reports(Systemic improvements)

Sr. No.

Audit sectors

Systemic improvements

1 Foreign Affairs

Rules revised regarding utilization of Pakistan Community Welfare & Education Fund (PCW&EF) and Fund for improvement of Government Owned Buildings (FIGOB)

2 Federal Government

Legal Practitioners and Bar Councils Act being amended,Provincial Governments Rules being framed to regulate regimental funds of the Civil Armed Forces

3 Works Public Procurement Regulatory Authority (PPRA) Rules been adopted by Provincial Engineering Departments,Civil Aviation Authority (CAA) and Pakistan Rangers, CAA formulating Standard Operating Procedures to streamline its posting/transfer procedures

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Way forward

For SAI Reports to create rightful impact, continuous efforts are required:

• The code of ethics should be made a part of staff contracts

• Accountability in the Supreme Audit Institution be ensured

• Internal audit function be strengthened

• Necessary dissemination arrangements for the audit reports should be clearly laid down in the legislation

• Public Accounts Committee processes be improved

• An effective channel of communication between the civil society and the accountability institutions should be maintained

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Thank You