IHC upholds Auditor General of Pakistan’s exclusive power to conduct audits

ISLAMABAD: The Islamabad High Court, in a significant ruling aimed at strengthening financial oversight and accountability in the public sector, has upheld the constitutional authority of the Auditor General of Pakistan, reaffirming AGP’s exclusive power to conduct audits of all entities utilising public funds under Article 170(2).

In its detailed judgement on a petition against an amendment in the statute that empowered the president to appoint an “independent officer” to conduct an audit of the AGP, the court clarified that no statutory law or government directive could restrict the AGP’s mandate.

According to the verdict, financial accountability and transparency are fundamental to good governance, and the AGP plays a crucial role in ensuring that state resources are utilised properly.

Earlier, during the course of hearing, an assistant attorney general representing the federation argued that the AGP office was subordinate to the federal government; AGP office employees were civil servants; the petitioners who were not personally aggrieved lacked the locus standi to question vires of the impugned legislation; the audit of the AGP office accounts had never been conducted since its establishment and that the audit matters fell within the purview of Article 73(2)(f).

No statutory law or government directive can restrict AGP’s mandate, court rules

The court held that the government, including ministries and other public sector organisations, could not limit or interfere with AGP’s constitutional functions. The judgement outlined that while government departments could establish their internal audit mechanisms, the same could not replace or override AGP’s independent authority.

It stressed that AGP’s role extended beyond routine financial checks, as it ensured adherence to international audit standards and constitutional provisions.

The judgement underscored the importance of aligning Pakistan’s audit practices with international standards. It stressed that AGP’s reports must adhere to globally recognised audit methodologies, ensuring credibility and transparency.

This alignment is expected to improve Pakistan’s standing in international financial assessments and aid organisations, the court noted, adding that the ruling would strengthen parliamentary oversight since AGP reports had a key role in guiding the Public Accounts Committee (PAC) in reviewing government expenditures.

The court was apprised that the AGP acts as the principal accounting officer of his department and the expenditures incurred by his office were charged to the federal consolidated fund.

The assistant attorney general said an “independent officer” appointed as per impugned legislation was empowered to conduct an audit and furnish his report to the President, while the petitioners failed to point out any constitutional provision that was violated through the impugned legislation.

It was contended that the petition was liable to be dismissed as there was no dispute regarding parliament’s power to legislate and ensure transparency and accountability through the audit of AGP office accounts.

Published in Dawn, February 23rd, 2025