The government has decided to send a constitutional reference to the Attorney General of Pakistan for seeking his formal advice on stopping federal auditors from conducting a special audit of agreements of independent power producers (IPPs) by limiting the scope of the audit.
Prime Minister Imran Khan has allowed the presentation of a summary before the federal cabinet for determining the scope of audit to be conducted by the office of the Auditor General of Pakistan (AGP), sources told The Express Tribune.
This move may trigger a legal dispute between the federal government and the auditor general’s office, which has already described any such attempt to limit the scope of audit as “violation of the constitution”, according to official documents.
The federal cabinet is expected to take up the summary for sending a reference under Article 100 of the Constitution to the Attorney General’s Office to review the scope of work of the federal auditors.
However, the Attorney General has already given an opinion that the AGP office work should only be limited to the audit of accounts and it should not venture into the performance audit of government enterprises.
On the other hand, the AGP has refused to accept this advice, said the sources.
At the root of the dispute is the AGP’s decision to conduct the special audit of the IPP agreements, tariff determinations by the National Electric Power Regulatory Authority and payments being made to the IPPs, under the Power Policy of 2002 and 2015, according to the documents.
In mid of 2020, the government and 47 IPPs signed memorandums of understandings and then in 2021, formal agreements were inked, which the government had said would result into Rs836 billion savings over a period of 10-12 years.
In return, the government had agreed to make Rs450 billion payments to the IPPs out of which Rs224 billion have already been approved by the federal cabinet. The government had also condoned the irregularities committed by the IPPs in the past.
The Public Accounts Committee (PAC) had directed the AGP to conduct the audit of the IPPs. The PAC had also decided that the jurisdiction of the AGP and consequential oversight jurisdiction of the Parliament cannot be restricted to accounts only, by excluding the performance of the authorities or bodies established by or under the control of the federal government, particularly, when the impact public interest and involve public finances.
However, the Nepra approached the Cabinet Division to seek advice from the Ministry of Law and Justice regarding the special audit of the IPP agreements and payments made to these companies. The Nepra had also raised the questions about the scope of the AGP with respect to conducting the audit under the constitution, the applicable laws and the rules.
It had objected to the conducting of audit of the regulator, functions performed by regulatory authorities and the authority of the PAC to ask the AGP to conduct audit of regulatory functions of the regulatory authorities.
The sources said that the Attorney General had opined that the audit of the administrative activities, efficiency of utilisation of human, financial and other resources, and effectiveness of performance “is beyond the scope of the Auditor General of Pakistan”.
But the office of the Auditor General has disputed the attorney’s advice, raising constitutional questions about the manner the Cabinet Division sought the advice.
The AGP has termed the attempts to limit the scope of the audit “violation of Articles 169-170 of the Constitution, AGP’s Ordinance, PAC directives and Supreme Court’s unequivocal judgments on the matter of audit by the Auditor General for the purpose of accountability, transparency and parliamentary oversight”, showed the documents.
Under the Article 100 of the Constitution, the federal government can seek an advice from the office of the Attorney General -a route that the government did not follow earlier. In order to address this lacuna, the cabinet may today (on Tuesday) direct the Attorney General to give advice on the Nepra’s questions about the scope of the audit by the federal auditors under Article 100 of the constitution.
The federal cabinet has already set up a committee to recommend how to bring ‘improvements’ in the functions of the AGP. The committee has not yet finalised its report and Finance Minister Shaukat Tarin has decided to engage a private firm to prepare the report, said the sources.
The AGP had also come under the microscope after it pointed out over Rs40 billion irregularities in the Prime Minister’s Covid-19 relief package. The government was forced by the International Monetary Fund (IMF) to release the report, which it had earlier withheld due to serious irregularities pointed out by the federal auditors.
Published in The Express Tribune, January 18th, 2022.
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