AGP Raises Objections on Huge Irregularities, Illegal Expenditures, Anti-Competitive Practices in Defence Sector

The Auditor General of Pakistan (AGP) has exposed serious financial irregularities, unlawful spending, and opaque procurement procedures in the defense industry.

The results are outlined in the AGP’s audit report on Defence Services finances for fiscal year 2023-24. The report contains various audit objections, including non-recoveries, overpayments, procurement irregularities, state losses, and failure to produce data.

The audit investigated expenditures of Rs. 566.29 billion, including both the latter part of the

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The AGP’s main worry is the Defence Services’ continued noncompliance with regulations, notably around advance payments, inappropriate separation of financial authorities, and infractions of public procurement rules. The audit also faulted the Defence Ministry’s management of a Rs. 1.563 trillion budget for fiscal year 2022-23, which was later boosted to Rs. 1.592 trillion via additional funds.

The report also highlighted the PAC’s delayed reaction to audit objections and directions. Since 1985, the Ministry of Defence has only followed 659 out of 1,974 PAC instructions.

According to the research, contracts have been inappropriately divided and allocated to preferred contractors, frequently without the use of transparent bidding processes. Some procurements were made without formal ads, claiming that the job was of a “secret nature.” The audit discovered that exemptions from public procurement laws, which only the Defence Secretary can give, were not secured correctly in such circumstances.

Furthermore, the investigation stated that in one Army unit, purchase orders were issued for roughly three times the lowest bid. The audit also revealed questionable spending at an Army school, where remodeling and purchase were carried out unlawfully.

The Departmental Audit Committee (DAC) suggested that investigations be launched to hold those responsible for these anomalies accountable, as well as that the relevant authorities regulate improper spending. However, these orders had not been executed by the time the AGP report was published.