Topic: Powers and Functions of the Auditor General of Pakistan

Introduction:
Since its inception, Pakistan has been facing significant economic challenges along with political
instability and a military regime. The progress remained slow throughout the time. Pakistan has
cultural heritage, natural resources, and human capital in its assets. A large agriculture sector has
been the backbone of its economy since 65 percent of its population is engaged in the agriculture
field. Despite getting large revenue from these resources the government has failed to make
payments and reduce poverty. It is one of the low-income countries in South Asia. The poverty
rate, as recorded by the World Bank, is 39.3 percent.
The constitution of Pakistan 1973 provides a framework for the regulation of its resources. It
includes a chapter specifically concerning the office of the Auditor General of Pakistan and its
powers, functions, duties, and role. This office has its standing committees to look after its
working. The auditor general is appointed by the president of Pakistan and also takes an oath in
front of Chief justice of Pakistan as provided in third schedule of the constitution. The maximum
office tenure as given in the constitution is 4 years. They submit their annual reports to the
president, who passes them to parliament, then to governor, and then to provincial assemblies.
The constitution also provides a framework for the allocation of resources, national budget, and
national government accounts.
The purpose of this office was to ensure good governance regarding fiscal matters. The other
functions of the office of Auditor General also include; ensuring transparency, accountability,
governmental accounts handling, and economic sustainability. The purpose of the office of
Auditor General Pakistan (AGP) is to ensure accountability and that the governmental spending
is for the welfare of the people. Every year the governments take trillions of taxes, and this
department looks after whether that money is being allocated efficiently or not. It keeps records
of all the spending and holds the government accountable. Their job is to track governmental
expenses.
Historical background
The history of the office of the Supreme Audit Institution in Pakistan began in British rule. This
institutional idea was borrowed from the British colonial structure. Most of the Islamic countries
haven’t done much research on the office of audit. These British practices were influenced
largely by those common in Europe and Britain. As a result of wars when the inflation increased,
the monarchs sought to increase taxes on people. In this period many writers criticized it hence
the power of levying and imposing taxes, was given to parliament. This shift of power was not
just limited to fiscal matters, but in its real essence, it was an end to absolutism. This period was
remarked by the separation of powers concept, as it emerged at that time. This power interplay,
consequently, passed to India. The demand for accountability and transparency increased.
English parliament played a significant role in bringing transparency and accountability in terms
of government fiscal matters.
For the first time in 1610, the parliament began to acclaim its right to regulate fiscal matters. In
an act of 1665, parliament required the king to maintain accounts in a prescribed manner. In
1667, the parliament established a commission to look after and investigate the king’s accounts.
The Bill of Rights in 1689, further took away the powers of the monarch to impose taxes.
English parliament set a precedent in this regard. In Pakistan, the implementation of this process
was the result of the judgments by the judiciary and its acts. They emphasize on the freedom of
the office of the Auditor General of Pakistan, the security of its office, and the powers to audit
the accounts of any provincial government. All these rules were upheld in different judgments by
the Supreme Court of Pakistan. For example: in case ‘Auditor General of Pakistan vs. The
Government of Punjab (PLD 1973 SC 207)’ it was held that the auditor general has the power to
audit and check the accounts of provincial governments. Secondly, in the case: ‘The Auditor
General of Pakistan vs. The Federation of Pakistan (PLD 1988 SC 637)’, the importance of the
independence of the office of the auditor general was emphasized. Thirdly, it was held in ‘the
Auditor General of Pakistan vs. the Pakistan International Airlines Corporation (PLD 1993 SC
473)’ it was held that the auditor general could conduct an audit on the accounts of corporations
and governmental entities. The constitutional powers conferred on this institute are upheld by
decisions of the judiciary.
Importance of the office of the auditor general office
The importance of this institution cannot be overlooked in a country like Pakistan where
corruption is already at its peak. According to a report published by ‘tribune,’ Pakistan ranked at
127 out of 180 in scores of corruption. In a country where the resources of people are not utilized
for spending on their welfare, and inflation is increasing every day and people are being prayed
of poverty, there, such an institution plays a pivotal role in ensuring its economic well-being
misuse of resources. They investigate about the complaints and provide recommendations. They
play a crucial role in the management of finances. They make audits and make the reports
accessible to the public. Furthermore, the auditor general office provides pieces of training to
public officials to effectively manage their finances. They provide a platform for the government
to share the best ideas, and challenges and bring solutions to the table. They build strategies to
allocate resources effectively to generate good revenue.
The office of the auditor general plays a vital role in promoting and stabilizing the economy in
Pakistan. They keep a check on the government's activities and the utility of public funds. If they
recognize anywhere that the finances are being mismanaged or being wasted, they build
strategies to avoid that. The audits of the Auditor General office provide the areas of inefficiency
and those in need of attention. They keep an eye on governmental spending, ensuring
transparency and accountability in the process. By doing so they ultimately contribute to a better
economy. The economy is indirectly related to poverty. The better the economy, the less the
poverty. In a country like Pakistan where poverty is so common and the funds of the public are
misused and mismanaged. In such circumstances an institution ensures clarity and that the best
way utilization is ensured. Such an institute significantly leads to fewer economic problems.
They even provide recommendations for all fiscal issues faced by the government. Prevalent
recommendations are strengthening control mechanisms over the management of funds. The
auditor general office recommends government to establish a detecting system to watchdog any
fraudulent activity, to regulate records, and ensure policies and rules. Another problem that
governments face is deficit funds, auditor general office provides mechanisms to enhance that
and implement strategies that result in cost-saving. Moreover, they devise long-term fiscal
strategies to cater the economic challenges. They conduct assessments, bring reforms, and
prepare beforehand in case of a sudden fiscal crisis.
Furthermore, they reform the tax collection system and make policies for their management. In
addition to that, they evaluate the impact of policies. Lastly, they assess the fiscal risks in
relation to public funds and encourage modern solutions.
Supreme Court’s role in reinforcing its powers

Not just the constitution but the superior judiciary in Pakistan has also reinforced the duties of
the office of auditor general. The Supreme Court of Pakistan has consistently stressed the vital
role of the Auditor General of Pakistan (AGP) as a constitutionally authorized institution, being
responsible for promoting transparency, accountability, and good governance in the management
of public funds. Under Article 170(2) of the Constitution, the law empowers the office to audit
all public expenditures comprehensively, without any exceptions, including secret funds. The
Supreme Court also passed a landmark judgment regarding that. These rulings have reinforced
the AGP's authority to ensure strict compliance with financial regulations, and policies,
adherence to procedural requirements, and oversight of public accounts. Cases such as those
addressing the scope of the AGP's auditing powers, procedural changes in departmental
examinations, and the AGP’s role in evaluating governmental accounting practices illustrate the
judiciary's unwavering support for financial discipline and accountability. Some notable
examples are below:

 Petition # 102 of 2012

This petition was brought in 2012. Supreme Court in its judgment emphasized the role of auditor
general in ensuring transparency and accountability by stressing their role to audit all accounts of
institutions and government without any distinction. The court decided that no funds could be
kept secret from the audits by AGP. This judgment upheld the constitutional principles and those
powers and functions related to the office of auditor general in Pakistan.

 Mustafa Impex v. Government of Pakistan (2016 PTD 2269)

In this case, the Sindh High Court affirmed the Auditor General of Pakistan’s authority to audit
the accounts of the Karachi Metropolitan Corporation (KMC). The Court upheld the Auditor
General of Pakistan’s authority to audit all public accounts, including those of local
governments, or any other institutions reinforcing the AGP's role in ensuring financial
transparency and scrutiny in all governmental institutions. .

 Constitutional Petition No. 105 of 2012

In this judgment, the Supreme Court clarified that the AGP is not only permitted but also
obligated to exercise oversight over accounting procedures adopted by the government. The
Court stated that the AGP's role includes ensuring transparency and accountability in
government financial matters, thereby reinforcing the AGP's mandate to audit all public
expenditures comprehensively.

Consequently, it can be affirmed from above judgments that judiciary considers it the backbone
of the accountability system for the good governance.
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