The International Monetary Fund (IMF) has expressed serious concerns about the lack of internal audit mechanisms and weak constitutional and parliamentary oversight in Pakistan, according to its “Governance and Corruption Assessment Report” (GCDA). The fund warned that these weaknesses put an estimated 4 trillion rupees at the federal level—and even more at the provincial level—at serious financial risk.

The IMF questioned why, despite constitutional autonomy, the Auditor General’s Office still functions as part of the federal secretariat. This indirect reporting structure—through the federal secretariat to the Prime Minister and then the President—could undermine the independence of audits.

The fund noted that even after the Public Finance Management (PFM) Act 2019, Chief Internal Auditors (CIAs) had not been appointed in all divisions by 2020.

The Auditor General’s Office produces over 6,000 reports each year, but the Public Accounts Committee (PAC) rarely follows up on them. As a result, 75% of the 34,000 recommendations remain pending with the PAC. The IMF pointed out that audit reports are often too long and contain repetitive recommendations, reducing their effectiveness.

Despite being responsible for budgeted expenditures, the Auditor General’s Office still has to seek budget approval from the Finance Division, which limits its operational independence. The office also faces a shortage of 1,500 staff members due to delays in government approvals.

The IMF has called for amendments to PAC regulations and the AGP Act to ensure that recommendations are implemented. The fund also recommended shortening audit reports and making it mandatory for the PAC to review them promptly to improve public accountability.