THE Auditor General of Pakistan`s latest audit report is, in effect, a charge-sheet against the state`s weak economic and fiscal governance. The sheer scale of mismanagement and staggering expenditure lapses of Rs375tr flagged in the report are mind-boggling. Procurement-related irregularities alone account for around Rs284tr, topped by huge losses to the exchequer because of delayed civil works, defective contracts and non-recovery of dues at the expense of the public good.

The audit shows that the irregularities detected represent a recurring pattern and reflect the systemic rot in governance caused by weak oversight, poor controls and a tendency to bypass parliamentary approval of expenditures through large supplementary grants. Public funds are sought without actually determining actual needs, and allocations are blocked, leaving billions in unspent money a practice that underscores the bureaucracy`s penchant for ticking boxes rather than enforcing financial discipline or delivering the planned outcome. This largely explains our perpetual fiscal and development crisis.

The report draws attention not only to the mismanagement of public expenditure but also to the regulatory lapses and financial misconduct in the affairs of market regulators. For example, it has painted a troubling picture of weak regulatory governance in the telecom industry. This is reflected in the partially privatised PTCL`s refusal to permit an audit of its accounts, the detection of financial discrepancies of Rs3.54bn in the purchase of equipment at inflated prices, excessive operational expenditure in the accounts of the state-owned SCO and Jazz`s Rs6.58bn consumer overcharging in FY24. Besides, it emphasises the failure of the telecom regulator to resolve the Rs53.54bn Zong spectrum case.

While the financial discrepancies found in the SCO accounts are the result of weak corporate governance that has already pushed most SOEs to the brink, the overcharging of consumers by the largest mobile operator reflects poor regulatory oversight and the tendency of regulatory bodies to serve corporate interests instead of consumers. The audit report serves to remind both citizens and rulers of the need to enforce strict financial discipline for better fiscal management to divert scarce funds towards public welfare and improve regulatory governance to protect consumers from the unfair practices of corporations. These objectives can be achieved only if parliament and the judiciary decide to enforce accountability. In the absence of accountability, the AGP`s audit reports are little more than an annual ritual.