The financial irregularities of the government have gone from bad to worse, with arrears at Rs 733.19 billion in the 2023/24 fiscal year which is an additional increase of Rs 91.59 billion in the previous year’s totals. The 62nd annual report of the Office of the Auditor General (OAG), which audited transactions worth Rs 9.462 trillion in 5,769 institutions, highlights the annual growth in arrears. The regular pattern of incurring arrears every financial year implies that audit reports have been reduced to an annual formality without any practical follow-up. The successive governments have treated such audits as formalities, and the suggestions are frequently shelved for good. The parliamentary committees do discuss the reports, but fall short of adopting them for enforcing remedies. Institutional failures, bureaucratic, and political shielding have weakened the powers of the OAG. Thus, year after year, arrears reappear in new forms, but the actors are the same. The latest report observes a 1.54 percent rise in arrears over last year's Rs 641.60 billion, reflecting heightened administrative failures at the federal, provincial, and local levels. Most glaringly, the Ministry of Finance contributed Rs 33.71 billion in arrears alone, accounting for more than 70 percent of the total irregularities made by the ministries. Local governments and committees, traditionally responsible for the delivery of public services, also made a large contribution to the fiscal mess.
Apart from local mismanagement, unreimbursed donor grants of Rs 6.25 billion and pending foreign loans of well over Rs 63.70 billion present an international side to the issue. The numbers point to deeply rooted problems: evasion of financial controls, undermined supervision, and frustrating failure to act on suggestions of previous OAG reports. And, resolving this long-standing issue requires more than preparing OAG reports. Parliament has to become more active. Each OAG report should be accompanied by compulsory parliamentary panel hearings and adjustment timelines. Ministries have to be legally bound to eliminate anomalies or be made liable to budgetary penalties. To address the issues of repeated offenders, a full-time audit supervising committee in parliament could monitor them throughout the year. Local governments that often ignore record keeping must be trained in financial management and penalized for any failure to keep their finances in order.
Govt’s arrears climb to Rs 669 billion, with an addition of Rs...
The Auditor General's Office itself must have effective tools, and it must carry out real-time verification during budget implementation instead of auditing finances after financial offenses are committed. A mechanism for detecting risk spending can spot irregularities early. The inclusion of OAG findings in procurement, budgeting, and fund release mechanisms can help close gaps and loopholes. Authorities must utilize digitization, as it helps monitor financial activities and can cross-check expenditures against approvals and audit them in real time. No audit report, no matter how strict, will be the sole solution to the current gaping problem. Political leadership, parties, and civil society must show a willingness to tackle this issue. Public finance reforms begin with commitment at the top and parliament, civil society, and media have to come together to egg on government and leadership in implementing audit reports effectively, instead of allowing them to be merely a ‘report of yearly warnings.” Audit failures are reflective of the state’s reluctance to act. If such a reluctance persists, then the next year's report will be no different as it is likely to come out with the mentioning of heavier irregularities and arrears. The government must hold related departments, the bureaucracy and other regulatory bodies to account for not playing an effective role as regulators.
