A recent audit of Khyber-Pakhtunkhwa’s (KP) government accounts has revealed extensive financial irregularities, resulting in an estimated loss of Rs152.1 billion to the public exchequer. The audit, conducted for the fiscal year 2022-23, identified numerous instances of fraud, mismanagement, and inefficiencies across various departments and projects. Key findings include:
Key Audit Observations:
- Mismanagement of Funds:
- Developmental expenditures misclassified and funds mismanaged amounting to Rs84.836 billion across 12 cases.
- Irregular payments and expenditures totaling Rs14.825 billion in 43 cases.
- Fraudulent Activities:
- Fraudulent payments and withdrawals of Rs132.95 million in 10 cases.
- Doubtful payments and withdrawals of Rs514.609 million in 16 cases.
- Cost Overruns and Project Delays:
- Cost overrun of Rs1.211 billion due to non-compliance with approved parameters and repeated revisions.
- Blockage of public funds totaling Rs139.156 million in three cases.
- Excess Payments and Supply:
- Overpayments and excessive expenditures of Rs281.324 million in seven cases.
- Public Money Misuse:
- Illegal retention and inadmissible payments of Rs3.525 billion in 14 cases.
- Misuse of vehicles leading to losses of Rs8.81 million in two cases.
- Pension Fund Misuse:
- Rs10 billion was improperly transferred from the pension fund investment account to the provincial consolidated fund, recorded as domestic debt.
Systemic Issues Highlighted:
- Governance Gaps: Ineffective project management, unjustified cost increases, and deviation from standard operating procedures.
- Accounting Flaws: Non-compliance with financial management laws, such as the Public Financial Management Act 2019 and cash management rules, leading to significant audit objections.
- Delayed Critical Work: Mismanagement caused delays in developmental projects crucial to the province’s progress.
Recoveries and Actions:
- Proposed Recovery: The report highlighted potential recoveries amounting to Rs42.967 billion, of which Rs747.389 million has already been recovered and verified.
- Future Steps: Officials responsible for the irregularities will need to defend themselves in the Public Accounts Committee or face recovery demands.
Implications:
This report underscores deep-rooted inefficiencies and irregularities in the KP government’s financial practices during the previous administration. The findings not only undermine public trust but also highlight the urgent need for improved governance, transparency, and accountability mechanisms to safeguard public resources.
