IMF Flags Pakistan’s Financial Oversight Risks in New Warning
Pakistan is facing growing financial oversight risks, according to a new IMF review. The Fund warns that weak checks on public money threaten budget stability. In addition, it says poor coordination between institutions increases the chance of misuse.
The IMF examined how federal and provincial bodies manage nearly Rs40 trillion each year. As a result, it found serious gaps in internal control systems. These gaps affect daily decisions and long term planning.
Weak Internal Controls
The IMF highlights one major concern. Pakistan promised to appoint a Chief Internal Auditor in every federal division under the 2019 Public Finance Management Act. However, the government has not acted on this plan. Many ministries still operate without qualified financial managers. Therefore, important spending decisions often move forward without proper review.
Officials admit the lack of scrutiny allows mistakes and irregularities to go unnoticed. For example, several audit reports reveal repeated problems each year. The Fund believes stronger controls can reduce these issues and prevent corruption from taking root.
Strain on Audit Institutions
The Office of the Auditor General faces its own challenges. The Constitution gives this office independence. However, it still functions under the Federal Secretariat. This structure limits direct reporting to parliament, which weakens accountability.
The office also struggles with a shortage of almost 1,500 staff members. Tight budgets and slow hiring make the situation worse. Even though its budget is charged expenditure, it still depends on the Finance Division for releases. This slows down key tasks when faster oversight is needed.
Heavy Workload, Slow Follow Up
Pakistan produces more than 6,000 audit reports every year. However, the Public Accounts Committee follows up on only a small share. Three quarters of its recommendations remain pending. Many reports run into thousands of pages, partly because the same problems keep coming back.
The IMF now urges Pakistan to simplify the audit process and improve parliamentary scrutiny. It recommends clearer reports, stronger laws, and more accountability within ministries. These steps, it says, can reduce financial oversight risks and protect public money.
