Objections to audit

By Syed Saadat | From the Newspaper Dawn

 

VISIT a post office to buy life insurance and the man sitting across the counter would suggest you cross the road and have yourself insured with a private organisation. Seeing his unwelcoming attitude, shabby uniform and humid working environment, you are very likely to be the private firm’s new client unless you are hit by a speeding bus while crossing the road.

I am pretty sure that many readers don’t even know that Pakistan Post is in the insurance business and I would be very surprised if any know that Pakistan Railways runs a tourist safari train to Changa-Manga in winters and has been contemplating one for Khewra and another for Kalabagh. An Internet service provider, an ice-cream company or omnipresent cellphone operators inundate the media with their advertisements long before the actual launch of the product in order to get the desired response. No doubt they make huge profits, sometimes even from mediocre products .On the contrary, good products launched by government organisations not only go unnoticed but also cause huge losses to the government kitty, which, thanks to the media, does not go unnoticed.

An argument that comes to mind is that the poor government organisations don’t have money. As a matter of fact it is not always about money but the way it is spent. Being a government officer one often finds oneself in the midst of the bizarre world of audit objections and audit paras which results in innovation being buried so deep that it drowns in groundwater.

I am not trying to imply that there should not be a watchdog to oversee the spending of public money but the watchdog should know who, what and when to watch. A few years ago, a few officers of Pakistan Post decided to share with the employees a very small percentage of the service charges that Pakistan Post gets from each utility bill collected or mail delivered. This small incentive gave the poorly paid lower staff enough motivation to visit private enterprises to convince them to do business with Pakistan Post; the result was a remarkable increase in revenue.

Everybody was happy and the government was actually reaping benefits of this little change but then the inevitable happened.

The arrangement came under the notice of audit teams and was termed illegal and I have been reliably informed that it took quite an effort on the part of the officers who came up with the idea to clarify the audit objections thus raised.

It explains why government servants don’t try to get even remotely creative. It should also be enough to explain the reasons behind the difference in ambience when you compare a government office with a private office providing the same service.

Audit objections are sometimes laughable and legislation can make a mockery of the concept of spending money in a thrifty manner. Certain departments might need good vehicles due to the nature of their work but austerity-specific regulations prohibit the purchase of new vehicles.

However, a budget is allocated for the repair of vehicles, that could exceed even the cost of a new vehicle. Unfortunately, if one thinks a little out of the box and sells the old vehicle and contributes the money earned towards buying a new one then one can expect some gruelling years of correspondence with the auditor general. I must add that the ban on vehicles is only generally followed where they are most needed in true public interest and no objections are raised to the snow-white BMWs and Mercedes of the VVIPs. As the fairytale goes, Snow White was surrounded by dwarfs and it seems to be the case in the land of the pure too.

Some might argue that had there been no system of audit, officials would have had a licence to be ruthlessly corrupt. This seems true on paper but in reality the system of audit in its current form is hardly a check on corruption. After all, the audit teams do not come from another planet — one can always buy a clean chit. Also the way audit objections are pursued leaves a lot to be desired.

An official report released in the first half of this year points out that around 1,000 important audit objections in only six government departments have yet to be discussed, while in some cases compliance in over 1,500 paras even after the Public Accounts Committee’s directives is still awaited since 1985. How tough is it to make it mandatory for both the auditor and auditee to settle objections within 180 days?

On top of that, general lethargy in making the system more IT-savvy despite funding by the World Bank for the Project to Improve Financial Reporting and Auditing (Pifra — the project started in 1997) raises serious objections over the ability of financial reporting and the audit mechanisms of our country.

Lastly, one can’t help wondering why successive governments have been so indifferent to the all-important institution of audit. Maybe, the fact that our governments are generally too busy swearing in new ministers is one reason. I won’t be surprised if we soon have a senior minister of tailoring as well, especially if there is a need for another coalition. Generally, everything we have a minister for tends to be in short supply, examples being petrol, electricity and even security. Now I understand why they emphasise planting more trees.

The writer is a civil servant.