gg
yy PROJEC
PAKISTAN LEGISLATIVE STRENGTHENING PROJECT
NEEDS ASSESSMENT OF THE
PUBLIC ACCOUNTS COMMITTEE,
NATIONAL ASSEMBLY OF PAKISTAN
DRAFT
13 August 2009
This document was produced for the United States Agency for International Development. It was
prepared by Gavin Woods and M. Mohsin Khan for Development Alternatives, Inc. under contract
(PAKISTAN LS) DFD-I-00-04-00129-00 Task Order 01
.
AN ASSESSMENT OF
PUBLIC ACCOUNTS COMMITTEE
Prepared by Consultants Gavin Woods, former Chair of Public Accounts
Committee of Parliament of South Africa, and M. Mohsin Khan, former
Controller General of Pakistan. Edited by PLSP Staff.
August 2009
The authors’ views expressed in this publication do not necessarily reflect the views of the
United States Agency for International Development or the United States Government or
DAI.
1
Contents
Acknowledgements
4
Acronyms
5
Executive Summary
6
PART 1.
1.1 Background Perspectives
1.1.1.
1.1.2.
The nature and extents of Legislative Oversight
The nature and extents of the PAC Oversight Role
9
9
9
PART 2.
2.1. The Assessment Approach
2.1.1.
2.1.2.
Approach and Methodology
The relevance of International Oversight Perspectives
2.2. An Assessment of the PPAC mandate
2.2.1.
2.2.2.
2.2.3.
The Current Mandate (Rule 203 of the NA rules)
Assessment of the PPAC’s Mandate
Recommendations
The Related Development of Financial Management Reforms
Recommendations
2.3. An Assessment of the General Functionality of the PPAC
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10
12
12
12
13
17
19
Recommendation
2.4. An Assessment of the AGP – in Relation to the PPAC
20
2.5. An Assessment of Specific Functional Concerns Regarding PPAC
20
2.5.1.
2.5.2.
2.5.3.
2.5.4.
2.5.5.
Backlogs of Audit paras
Recommendations
PPAC Performance and Accountability System
Recommendations
PPAC Independence
Recommendations
PPAC Members Training
Recommendations
22
PPAC Audit or FM Expert
26
Recommendations
2.5.6. Preparation for PPAC Hearings
24
24
25
27
2
2.5.7.
2.5.8.
2.5.9.
2.5.10.
2.5.11.
2.5.1.2
2.5.13.
Recommendations
The Hearings – Procedure
Recommendations
Follow up Routines/System
Recommendations
Other PPAC Engagements/Meetings
Recommendations
PPAC Method of Work
Recommendations
PPAC Branch
Recommendations
PPAC Module of NA MIS
Recommendations
PPAC Media Relations and Transparency
Recommendations
27
28
29
30
31
31
32
PART 3.
3.1. Short-Term Workplan for Assistance
3.1.1.
3.1.2.
3.1.3.
3.1.4.
3.1.5.
3.1.6.
3.1.7.
Dealing with the Backlog
Building the PPAC Team and its Sense of Mission
Raising the PPAC’s Work Processing Efficiencies
Add to the PPAC’s Effectiveness through Member Training and Education
Add to the PPAC’s Efficiency and Effectiveness through Improvements
to the PPAC Branch
Add to the PPAC’s Facilitation of Public Accountability through
Good Media Relations and Transparency
Improving the Accountability of the PPAC itself - through an Annual Report
33
34
35
36
38
39
41
42
PART 4.
4.1. Longer-term Interventions
42
Appendices
44
List of Interviewees
Document Sources -
45
International
Domestic
A Technical Needs Analysis on Design of Management Information System for PPAC Branch
46
47
48
3
Acknowledgements
Sincere thanks is given to the following individuals who provided their leadership, valuable
time, knowledge and wisdom
Honorable Chair
Mr. Tanvir Ali Agha - The Auditor General of Pakistan
Mr. Sardar Ayaz Sadiq -MNA and PPAC Member
Mr. Khwaja Asif in Lahore - MNA and PPAC Member
Ms. Yasmin Rahman - MNA and PPAC Member
Ms. Rubina Faisal – DG Audit PT&T in the AG’s office
Mr. Tahir Hanfi - DG Library and Research and Joint Secretary PPAC, National
Assembly
Mr. Khan Ahmed Goraya - Executive Director of PIPS
Mr. M.A. Soomro - DS PPAC Branch
Mr. Sharafat Ali – Section Officer, PPAC Branch
Mr. Khaleey Ahmed – Section Officer PPAC Branch
Mr. Fayyaz Hussain Shah – Section Officer PPAC Branch
Mr. H. U. Beg - Former Chairman of PAC
Mr. Ayub Tarin - Acting Secretary of Finance Ministry
And for their generous guidance, support and hospitality, gratitude is expressed to:
Mr. Christopher Shields – Director, USAID-PLSP
Ms. Carmen Lane – Deputy Director, USAID-PLSP
Mr. Aizaz Asif – Legislative Oversight Advisor, USAID-PLSP
4
Acronyms
AGP
Auditor General of Pakistan (used for both the Person and the Institution)
CFAO Chief Finance and Accounts Officer
CGA Controller General of Accounts
DAC Departmental Accounts Committee
DG
Director General
FM
Financial Management
FR
Fundamental Rules
FTR
Federal Treasury Rules
GFR
General Finance Rules (issued by the MoF)
MNA Member of the National assembly
MoF
Ministry of Finance
NA
National Assembly
PACs Public Account Committees (i.e. used in reference to Public Accounts Committees in
general)
PAD Pakistan Audit Department
PAO Principal Accounting Officer
Para’s Audit Report Paragraphs (which are put before the PPAC for its attention)
PLSP Pakistan Legislative Strengthening Project
PPAC Pakistan Public Accounts Committee (of the National Assembly)
PPAC Branch - Pakistan Public Accounts Committee staff unit
PPR
Public Procurement Rules (issued by MoF)
SAI
Supreme Audit Institution
SR
Supplementary Rules
5
1.1.
EXECUTIVE SUMMARY
The Public Accounts Committee of the National Assembly of Pakistan (hereafter referred to
as PPAC) is proving to be the most active committee in all of Pakistan’s Assemblies. The
Chair and its members are lauded for their continued seriousness and hard work to oversee
the government’s fiscal activities. However, the PPAC is operating under considerable
constraints, including years of backlog of audits and without the size or depth of staff
assistance that other comparable parliaments may have. Accordingly, the Chair and key
Members of this Committee welcomed assistance from the USAID-funded Pakistan
Legislative Strengthening Project (PLSP) to undertake a comprehensive needs assessment of
PPAC.
The goals of the assessment were to:
1) Report on existing PPAC capacity, outlining strengths and weaknesses in key areas
with the aim of improving the Committee’s oversight role and general effectiveness;
2) In cooperation with PLSP, develop a proposed “short-term” workplan for the
following eight months of activities (until May 2010 when the project ends) with
PPAC to address some of the issues raised in point 1; and
3) Provide Recommendations for longer-term assistance to PPAC, which could be taken
on by the PPAC directly and/or a subsequent USAID project or by other interested
donors.
The assessment took place in Islamabad from 1 July through 13 July 2009. Consultants Dr.
Gavin Woods and Mr. Mohsin Khan interviewed a number of interested individuals,
including Members and staff from PPAC; the Auditor General and select staff; Ministry of
Finance officials; PLSP project officers and other key stakeholders.1 (A full list of
interviewees is attached in Annex I.) The consultants and PLSP staff observed several PPAC
sub-committee hearings and reviewed a number of constitutional and legal resources..The
consultants also undertook an assessment of the new PAC module of the National Assembly
Secretariat’s Management Information System (a separate report is contained in Annex II).
Following is an amalgamation of key findings and recommendations:

The PPAC Mandate. A review of the National Assembly Rules of Procedure
regarding the Committee shows that these rules empower the PPAC to perform as an
efficient and effective Public Accounts Committee. However, the consultants
recommend a number of important changes in the Rules to further strengthen the role
of the PPAC, especially with regard to its relationship with the Auditor General’s
Office and its ability to fully evaluate the outcomes of government spending.
 Financial Reform Environment. PPAC Members and staff should be fully informed
about the financial management reform programs being undertaken by the
1
Due to unforeseen travel schedules, the assessment team was unable to meet with the PPAC Chairman, who
was out of the country. The authors and PLSP look forward to receiving his feedback which will be
incorporated into the final report.
6
government of Pakistan, led by the Ministry of Finance. These reforms, which include
such initiatives as supply chain procurement practices, departmental strategic
planning exercises, Medium-term Budgetary Frameworks (MTBF) and conversion to
performance-based budgeting, offer the PPAC an increasing responsibility and
opportunity to measure the outcomes of government spending. The PPAC should
regularly engage the Ministry, the Auditor General, and outside financial experts on
the process and progress of reform.

Legal Environment. The Financial Management systems and other related reforms
currently being developed should be codified into law (as per international practice).
While this is not the direct responsibility of the PPAC, the report recommends the
Committee hold discussions on the issue with the Ministry of Finance and the Auditor
General, in light of a proposed Financial Management Law’s relevance to
accountability and oversight arrangements and obligations.

Transparency. The PPAC is praised for regularly opening its deliberations/hearings
to the media, and media coverage over the last months shows the PPAC as a tough,
rigorous and effective PAC in the making. For this media interest to be sustained and
heightened, the PPAC will increasingly need to add substance to its sharp public
utterances and activities by demonstrating a deeper understanding of the issues and its
ability to probe and dig out factual evidence to reveal specific shortcomings in
government.
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PPAC Independence. The assessment exercise clearly indicates that the PPAC
maintains an appropriate distance between itself and the Executive and senior
government officials. However, the consultants recommend that the PPAC, once
some of its immediate capacity issues are addressed, reduce its reliance on the Auditor
General for guidance and staff assistance, especially after the annual audit report is
submitted. Through informational and training sessions, which the assessment lays
out, PPAC Members should increase their own expertise over time. The PPAC
Branch also should employ some of their own financial management experts.

Workload and the backlog. Examining years of backlog of audit paras causes an
overall workload which far exceeds the PPAC’s current work capacity. There are
currently more than 20,000 outstanding audit observations dating back to 1994, all of
which the PPAC’s sub-committees are trying to review. The report recommends that
PPAC, with National Assembly legal advisors, revisit the legal requirement and
considerations to see if it is possible to attend only to those matters which have a high
probability of recovery of monies for the State. In the meantime, the PPAC should
engage temporary staff to review and summarize recommendations, and to deal with
some through correspondence with the Ministries in question.

Communication between Members and Staff. There appear to be weaknesses in
this area. For example, an important function of the PPAC is to ensure there is followup on the directives they issue to the government. While the PPPAC Members felt
there was poor follow-up in this area, the PPAC Branch was able to demonstrate a
follow-up system that they used and which they felt was largely effective. It seemed
the Members were unaware of some of the resources they do have at their disposal.
7

Strategic Planning. At present there is no formalized criterion by which the PPAC
plans and manages its work performance. The assessment recommends that the
Committee conduct an annual strategic planning process, whereby the Committee
agrees to its overall output and outcome objectives (both quantitative and qualitative),
and against this establishes its performance criteria and goals. The PPAC Branch
would participate in monthly meetings to discuss regular progress.

Annual Reporting. The Committee should produce an Annual Report about its
performance – both in terms of its National Assembly mandate and the specific
objectives it set in the strategic plan. Such a report – ideally available to the
parliament and the public – would contain a Chairman’s letter in which he gives an
overview of the Committee and its highlights over the year.
The report emphasizes that should the PPAC endeavour to undertake some or all of the
recommendations, all PPAC members be actively involved in its review.
.
8
1.1 Background Perspectives
The two inter-related background perspectives are presented to keep in mind universally
accepted perspectives throughout this PPAC assessment and the related formulation of
recommendations.
1.1.1. The nature and extents of Legislative Oversight
“The review, monitoring, and supervision of government and public agencies, including the
implementation of policy and legislation. From this definition the key functions of parliament
oversight can be described as:
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To detect and prevent abuse, arbitrary behavior, or illegal or unconstitutional
conduct on the par of government and public agencies. At the core of this function is
the rights and liberties of the citizens.
To hold government to account in respect of how taxpayers money is used. It detects
waste within the machinery of government and public agencies. This can improve the
economy, efficiency and effectiveness of government operations.
To ensure that policies announced by government and authorized by parliament are
actually delivered. This function includes monitoring the achievement of goals set by
the legislature and the governments own programmes.
To improve the transparency of governments operations and to enhance public trust
in the government which is in itself a condition of effective policy delivery.2
1.1.2. The nature and extents of the PAC oversight role
Within the wider Legislative Oversight ambit (explained above), the PAC provides a vitally
important oversight function in the legislative committee system. In many countries it is
recognized as the predominant oversight committee. Its objective is to improve the efficiency
and effectiveness of all government and public agencies, by:
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Providing a credible and independent review process of public spending and
governments control of public funds through the examination of appropriation
accounts (and financial statements) and audit reports;
investigating the use of public assets, resources and funds;
ensuring the process of enquiry is focused on evaluating financial management
performance (rather than on policy);
using its powers and authority to ensure its report, directives and recommendations
are influential: and,
challenging the adequacy of the corporate governance arrangements.3
2
Tools for Parliamentary Oversight – A comparative study of 88 National Parliaments. Hironori Yamamoto,
Inter-Parliamentary Union 2007
3
The above role is compiled from the authors’ study of 18 PACs across various developed and developing
countries.
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PART 2.
2.1. The Assessment Approach
2.1.1. Approach and Methodology
In order to carry out the assessment, it was necessary to collect a sufficiently comprehensive
body of relevant and representative information about the PPAC. This information, which
was identified in terms of a predetermined ‘framework of understanding’ as to what would be
required to meet the assignment’s sought-after outcomes, was gathered through empirical and
secondary sources – through person-to-person interviews and a wide range of relevant
existing documents. While some of the information used in the assessment was of a factual
nature, other was the considered opinions of key players in the greater PAC and PPAC
scheme-of-things.
Interviews conducted
Interviews with a few current Members of the PPAC were held because of their political
seniority, their representation across the political parties, the active role they play in the
PPAC and their considered opinions around PAC matters. Members were also encouraged to
express any other views regarding the effectiveness of the AGP and the Committee’s PPAC
Branch. The Members were also generally forthcoming with proposed solutions to perceived
PPAC problems. .
Clear differences of opinion and emphasis were expressed by various interviewees on a
number of PPAC related topics. This assessment has tried to accommodate all views and has
attempted to seek deeper understanding of such differences before compiling its
recommendations.
The Auditor General of Pakistan was an obvious source of relevant information - as
someone who observes the functioning of the PPAC on an ongoing basis through a
perspective which is both objective and relevantly professional. Not only does he have a well
informed understanding of the overall accountability chain and the role of each player, but by
virtue of his regular auditing activities is in a uniquely strong position to form opinions on the
effectiveness of the PPAC’s efforts towards improving financial management across
government. It is also suggested that, for keeping his staff motivated and purposeful, the AGP
has more than an incidental interest in the seriousness with which the PPAC deals with his
reports. The AGP was interviewed at the beginning of the information gathering process and
again at the end of the process.
The views of the NA Secretariat staff officials assigned to PPAC, as managers of the
‘administrative engine room’ of the PPAC, were also essential to the assessment exercise – as
was the consultants first hand observation of their work circumstances. Deeper exploration of
the PPAC Branch’s views together with an appraisal of its resourcing and infrastructure was
important. Other areas of enquiry included the nature of the communication between the
PPAC Branch and the Committee, the co-ordination of PPAC work planning, and the
‘follow-up’ systems which are employed. In addition to the core staff of the PPAC Branch,
the opinions of the acting manager of the unit and the acting Joint Secretary of the PPAC
were sought.
10
In view of the common interest the Ministry of Finance and the PPAC have towards
improving levels of financial management and also the PPAC’s obligation to various
“financial rules” produced by the MoF (see PPAC mandate), the team met with the Acting
Secretary for the MoF. This meeting also provided useful and relevant information on the
far reaching financial management reforms the MoF is developing.
The consultants met with a long standing former Chairperson of the adhoc PPAC to gain an
historic perspective of the PPAC and the origins of its cornerstone traditions. Guiding
principles necessary for an effective PAC were also deliberated upon in this meeting.
The co-author of this document, Muhammad Mohsin Khan, brought an informed perspective
as the former Deputy AG and former Controller General Accounts of Pakistan. He
provided domestic context to the international consultant through his wealth of relevant
background knowledge and considered views as to the effective functioning of the PPAC in
the bigger governance reality.
Observation of PPAC sub-committees
To deal with a large backlog of issues raised in AGP reports during the financial years prior
to the reestablishment of a democratic National Assembly in 2008 (see later section on
backlogs in section 2.5.1), the PPAC has formed three sub-committees. These subcommittees have been allocated a portion of the backlog work to fulfil the PPAC’s
responsibility in this regard.
It was therefore deemed useful to (where possible) attend sub-committee meetings to
undertake a first hand observation of the PPAC process insofar as it involves preparation
work by the PPAC Branch, scrutiny and interrogation by the PPAC Members, technical
support by the AGP’s office, etc.
Informal discussion/Information system demonstration
The team attended a special briefing on the new PPAC module of the NA’s computerized
administration system. Under the direction of the Acting Joint Secretary and Head of the
PPAC Branch, staff of the National Assembly Design and Implementation Team
demonstrated the facilities of the new computerized database and its administration capability
– and explained how this might assist the efficiency and effectiveness of PPAC.
The matter of an effective administrative and information system will be discussed in greater
detail under the “Assessment of Specific functional concerns…” section of this report.
Documentary sources of Information
A large volume of laws, books, papers, reports, and other documents were consulted and
perused as further means of information relevant to the assessment. The more important of
these have been listed in Annex X to this report.
11
2.1.2. The relevance of international Oversight perspectives
Pakistan has long applied the basic Westminster approach whereby the Executive-led
government accounts to Parliament (the National Assembly) and where the Parliament
exercises oversight over the Executive-led government. In this model the Parliament divides
itself up into various committees to efficiently undertake its wide range of oversight
responsibilities. From its earliest days, the model saw the need for a committee to oversee
government’s financial actions, and from this the PAC evolved. It’s the 150-odd years of
Westminster Parliamentary history which a growing number of countries have followed and
regularly shared their experiences and learnt from each other – gradually forming well
founded conventions and practices which have tried and tested value. It is this powerful body
of knowledge and experience that this assessment exercise leans on and refers to as it
conducts its analysis and formulates its recommendations.
However, while particular principles, institutional structures and relationships are generally
common across countries using the basic Westminster approach, it is accepted that there is no
single off-the-shelf model which can be mechanically imposed and implemented by any
individual country. While in Pakistan the nature of the constitutional democracy with its three
established arms of government and their respective and legally separate powers and
responsibilities conforms to world’s dominant public governance model, there exist domestic
differences related to separation of powers within the political and administrative tiers of the
government. In addition being a diverse country there are also cultural, religious and social
traditions and other considerations which are not homogeneous to the political landscape of
the country. These need to be taken into account when considering the application of the
constitutional model’s principles and practices – even in so far as these would apply to the
mandate and functions of a PAC.
2.2. An Assessment of the PPAC Mandate
2.2.1. The current mandate of the PPAC under the Rules of Procedure and Conduct of
Business in the National Assembly (2007).
Rule 203 Functions (of the PPAC)
1) The Committee shall examine the accounts showing the appropriation of sums granted by
the Assembly for the expenditure of the Government, the annual finance accounts* of the
Government, the report of the Auditor-General of Pakistan and other such matters as the
Minister for Finance may refer to it.
2) In scrutinizing the appropriation accounts of the government and the reports of the
Auditor-General of Pakistan thereon it shall be the duty of the committee to satisfy itselfa) That the moneys shown in the accounts as having been disbursed were legally
available for, and applicable to the service or purpose to which they have been
applied or charged
b) That the expenditure conforms to the authority which governs it; and
c) That every re-appropriation has been made in accordance with the provisions made in
this behalf under rules framed by Ministry of Finance.
3) It shall also be the duty of the Committeea) To examine the statement of the accounts showing the income and expenditure of state
corporation, trading and manufacturing schemes, concerns and projects together with
the balance sheets and the statements of the profit and loss accounts which the
12
president may have required to be prepared or are prepared under the provision of
the statutory rules regulating the financing of a particular corporation trading or
manufacturing scheme or concern or projects under the report of the Auditor-General
of Pakistan thereon.
b) To examine the statement of accounts showing the income and expenditure of
autonomous and semi-autonomous bodies, the audit of which may be conducted by
the Auditor-General of Pakistan either under the directions of the president or under
the act of Majlis-e-Shoora (Parliament) and
c) To consider the report of the Auditor–General of Pakistan in case where the president
may have required him to conduct the audit of any receipt or to examine the accounts
of stores and stocks.
4) If any money has been spent on any service during a financial year in excess of the
amount granted by the assembly for that purpose, the committee shall examine with reference
to the facts of each case the circumstances leading to such an excess and make such
recommendations as it may deem fit.
*Note: The Finance Accounts have now been replaced by the Financial Statements of the
Federal Government
2.2.2. Assessment of the PPAC’s Mandate
In many countries PACs use the concerns raised in the reports of their Supreme Audit
Institutions (Auditor General) as the main basis of their work. Further these PACs have
established their main oversight focus around those issues raised in Auditor General reports
about the spending of public monies (taxpayers’ money) by the government/government
agencies in their respective countries. From such observations it can be seen that the PPAC
mandate is substantially consistent with these central international tenets of approach and
practice.
The PPAC mandate has necessitated certain practices and procedures by the PPAC which
conform in fundamental respects with established international practices. This includes the
procedures whereby the PAC has the relevant government officials (Accounting Officers in
the main) account to the Committee for their performance (or lack thereof) - usually around
concerns identified by the Auditor General; and thereafter the procedure through which the
PAC produces a report which usually contains directives or recommendations which it
expects the government institutions concerned to respond to; and thereafter this report is
issued to the government institution concerned through the established parliamentary process.
The general assessment of the “rules” which dictate the PPAC’s operations is that these rules
do not in any serious way detract from the PPAC’s ability to perform as an efficient and
effective Public Accounts Committee. However few issues which became apparent in the
assessment of the PPAC mandate need discussion and perhaps modest changes to the PPAC
mandate. These issues concern the levels of current PPAC compliance with certain
responsibilities which:
a. Are specified in Rule 203, and/or
b. Are implied as necessary to the oversight role of the PPAC
c. While not specified in Rule 203, are considered to be important in PAC oversight
mandates in many other countries.
13
Issue 1
Observations made from a cross-section of Auditor General paras and from directives issued
in the name of the PPAC would suggest insufficient oversight attention given to the following
two requirements of Rule 203 - (2(a) and 2(c )). Note that these two instructions fall within
the PPAC’s obligation to scrutinise the accounts.
“...and applicable to the service or purpose to which they have been applied or charged”. (203
(2)(a)
“...every re-appropriation has been made in accordance with the provisions made in this
behalf under rules framed by Ministry of Finance.” (203(2)(c )
Understandably, the PPAC is limited in meeting the two obligations to the extent that the
AGP includes these in the scope of his routine audits i.e. it is simply not possible for the
PPAC to conduct such scrutiny across government departments itself. A more formalised
understanding needs to be established between the PPAC and AGP on these issues. Failing
such an understanding, it would be difficult for the PPAC to claim to be fulfilling these two
important aspects of its official mandate meaning that the rule in question should be
reconsidered.4
Recommendation – that the PPAC address any shortcoming in terms of their
responsibilities as per rule 203 (a), either by reaching an understanding
with the AGP as to the extent this can be included in his scope of work
and subsequent reporting, and where this cannot be included, then by
having the National Assembly reconsider the relevant aspects of its
Rule 203.
Recommendation - regarding the second responsibility referred to above (rule 203 (2) (c)
which concerns various financial rules, the PPAC should first confirm
the inclusion of this requirement in the compliance side of the AGP
audits. Secondly, PPAC Members should undertake some formalised
training on the content of: “The System of Financial Control and
Budgeting” (as issued by the Finance Division of the Pakistan
Government in September 2006), as well as the General Financial
Rules (GFR), Public Procurement Rules (PPR), etc. Such training
should prioritise understanding those particular rules which are often
violated and referred to by the AGP.
4
An explanation: In public sector governance convention the Auditor General is required to play a critical role
in the overall accountability arrangements. This includes supporting Parliament in key aspects of the oversight
role which the constitution instructs it to carry out on behalf of the country. Parliament, through its PAC, is
dependent on the Auditor General for most of the information it requires to carry out its particular mandate.
There are many examples across many countries where an Auditor General has extended the scope of his work
in order to accommodate PAC needs which go beyond the conventional financial audit. This has (as examples
over the years) given rise to various compliance and performance type audits. In individual countries there has
often been reason for Parliaments or PACs to ask their Auditor Generals to consider furnishing them with some
or other additional information which is required. There are obviously times when such requests cannot be met
by the Auditor General.
See also INTOSAI “LIMA DECLARATION OF GUIDELINES ON AUDITING PRECEPTS” Section 8
which, when referring to SAIO independence acknowledges Parliaments right to instruct SAI’s to perform
audits.
14
Recommendation – that there be discussion between the AGP and PPAC to ensure
alignment between their respective scopes of work insofar as it is
necessary for the PPAC to adequately deal with the responsibilities
raised above. Again it is appreciated that a full alignment is not always
possible. The approach to such a discussion could simply be conducted
against a carefully compiled outline of all the information the PPAC
requires to fulfil its mandatory obligations, including those obligations
which are reasonably implied. (See also first paragraph of “issue 2”
below.)
Issue 2
The Rule 203, as it is currently worded and interpreted, limits aspects of the PPAC’s depth of
oversight when compared to the broadening oversight role of an increasing number of PACs
in the developed and developing countries. PACs in some countries have in recent years been
given amended mandates which capture and specify the broadened scope of PAC
responsibilities while in other countries it has just been left to the PAC to take on a more
liberal interpretation of its mandate to address new emerging public accounts/public finance
realities.
In comparison, it would be fair to say that the PPAC’s mandate could limit the Committee’s
scope to scrutinise and oversee what should be regarded as a fuller and natural spectrum of its
oversight interests – which are a logical and necessary extension of the PPAC repertoire of
responsibilities.
This primarily would be necessitated by the modernisation, and therefore the expanding
nature, of the public sector’s financial management activities. And as such Executive
government actions expand, so too does the Legislature’s scope of its constitutional
responsibility. If in such a situation a PAC does not acknowledge the growing nature of the
public sector financial management regime, serious oversight and accountability gaps could
develop.
This is an important discussion and from the PAC point of view its central argument could be
framed in a number of ways. For example, international literature has on occasions stressed
that PACs should ask themselves how they can be effective (in terms of influencing the
overall quality of public sector financial management) as opposed to only trying to be
efficient (in terms of the routines through which they processes AGP reports). This
assessment concerns itself with both the efficient and effective aspects of the PPAC’s
performance, and in so doing hopes to promote a PPAC mind-shift which will cause the
Committee to think in terms of its potential influence on the financial management
outcomes of government.
As a vitally important vehicle through which elected Public Representatives seek to serve the
greater interests of the country, a PAC should be concerned with government’s overall
management of its financially based resources – and not just aspects of that management. As
such the PPAC should develop its range of oversight interests to extend beyond the
processing of a selection of the AGP’s paras. This would over time allow the PPAC to take a
more direct interest in (and be more influential in) issues such as:
15
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


The management and protection of public assets from loss, waste, and
misappropriation (buildings, motor vehicles, computers, stocks etc)
Financial performance (greater attention to PAC’s value-for-money reports,
observations of cost control or cost savings initiatives, scrutinising costing systems to
ensure budget are based on appropriate input-output efficiencies etc.)
The financial management systems and sub systems employed
Public sector salary system and controls – i.e. the largest area of public spending
Internal Control systems (including internal audit and Audit Committee activities)
Information Technology systems (including financial information security)
Risk management systems
Anti-fraud and anti-corruption initiatives
The qualifications of CFAOs and other officials who deal with public monies
Hiring and use of consultants
Funds transfer procedures and accountability considerations
The quality, relevance, and usefulness of accounting information and financial reports
Expenditure controls and accountability
The cost of ‘red tape’ and hidden bureaucracies within government
Tender/procurement/supply chain management practices
The nature of government documentation through which accountability is intended.
Notwithstanding the capacity question, it should be clear that engagement with such matters
(whether covered in an AGP Report, or by way of information requested directly by the
PPAC, or even by way of a PPAC investigation) would ultimately make the PPAC more
effective in influencing financial improvements across government. And in some instances it
would bring about an important ex ante dimension of oversight.
An appropriately expanded PPAC mandate would necessitate amendment(s) to rule 203 (1).
Recommendation – that rule 203(1) be amended by substituting the deleted words below
with the words which feature between the brackets.
203(1) The Committee shall examine the accounts showing the appropriation of sums granted
by the Assembly for the expenditure of Government, the annual finance accounts (now known
as “The Financial Statements of the Federal Government”) of the Government, the report of
the Auditor-General of Pakistan and other such matters as the Minister for Finance5 may
refer to it. (as may be relevant to exercising oversight over the economic, efficient and
effective spending of monies and the protection of assets belonging to the state).
Recommendation - That as part of the recommended training PPAC Members be
thoroughly engaged on international perspectives and practices on
matters of oversight over public finances within the new public sector
financial reform era.
5
Note: Deleting reference to the Minister of Finance would promote the constitutional principle of Parliament/Executive
separation. It would also leave the Minister with the more logical option of referring matters which might be of concern to
the AGP to investigate and report on.
16
Issue 3
As a general observation it is respectfully suggested that the wording of the PPAC mandate in
Rule 203 could be improved. What High Court Judges sometimes refer to as “inelegant”
wording, or “poor legalese” or “grammatically awkward” would describe parts of the said
rule. A reading of the equivalent rule/s in South Africa, Australia, Canada, and New Zealand
would indicate a clear and succinct style and approach.
Recommendation - That Rule 203 be referred to the National Assembly’s Legal drafters to
try and capture its directive and instructive substance in clearer and
reader-friendly terms.
2.2.3. The Related Development of Financial Management Reforms
An assumption of the assessment, based on historical information, was that the Pakistan
public sector had initially been slow to respond to the new government financial management
reforms which began in earnest in the mid 1990s and which have now been enthusiastically
pursued by so many other countries. The types of reforms we are referring to generally
include:












the modernization of financial management systems and practices, including supply
chain procurement practices
full strategic planning exercises
conversion to performance-based budgeting
activity-based costing
advanced computer-based management information systems
improved report driven accountability (and wider disclosure requirements)
more comprehensive governance arrangements
comprehensive internal control and risk management arrangements
accrual accounting for factual and relevant management information
a clearer and tougher sanctions regime
flattened structures with a devolution of responsibilities down to the various
management levels, and
the paradigm shift from thinking as ‘administrators’ to thinking as ‘managers’.
It is evident that the MoF has now moved into an impressive reform programme which will
result in many of the reforms mentioned above being introduced into Pakistan’s government
institutions. These reforms give officials performance goals and the requisite authority and
responsibility to pursue these performance goals. But because this necessitates giving these
managers more decision-making discretion, it also allows for greater risks to public resources
as managers could make bad decisions. The reforms (amongst other things) try and counter
the risks by imposing sophisticated systems (financial management systems, internal control
arrangements etc), sanctions, and greater accountability obligations on managers.
To facilitate this greater accountability, the reforms include improved production of accurate,
relevant and timely information. By amending Rules of Procedures as suggested earlier, the
PAC can take advantage of its greater oversight power to utilize these reforms.
17
This assessment looks at the specific and the general issues of the PPAC to produce a shortterm plan of implementable recommendations, which would attempt to deal with immediate
challenges and in so doing which would hopefully see the PPAC experiencing increased
functionality and effectiveness immediately. And then to present a number of longer term
recommendations to take the PPAC further into the reform stages of its journey.
Recommendation - That, after some initial training on the nature and intentions of the
international financial management reform experience, the PPAC then
engage the MoF in regular briefing and discussion sessions to remain
abreast of these important Financial Management System
developments. Also the PPAC invites the AGP and possibly outside
financial management experts to these meetings to get their views and
advice on the changes which are being introduced.
There is also the related issue of Financial Management Law. This is the law enacted in 40
countries which have modernized their financial management regimes. It guides all public
officials about systems, arrangements, standards, etc. which must be applied and properly
adhered to. The logic is to do away with a predominance of rules and regulations to ‘allow
managers to manage’ and to capture the essential and cornerstone systems, accountability
arrangements, etc. Laws are by their nature far more powerful and enforceable than rules and
regulations issued by a Ministry and course bear far greater consequences for those who
disobey them. A modern Financial Management Act gives a PAC stronger basis to exercise
oversight and hold government institutions and their officials to account for their actions and
financial performance.
Recommendation - That the Financial Management systems and other related reforms
currently being developed (together with the prescribed responsibilities
and obligations of government organizations and their officials) be
codified into law (as per international practice). That such a
requirement and its related considerations should be discussed between
the PPAC, the MoF and the AGP in view of its relevance to
accountability and oversight arrangements and obligations.
2.3. An Assessment of the General Functionality of the PPAC
Overall the Committee has been quite functional and purposeful in the way it has pursued its
oversight responsibilities. This notwithstanding the newness of the Committee and the heavy
burden of backlog work it has inherited.
There is a degree of organization and systems, wherein fairly sound procedures and practices
are being maintained. This has allowed for a strong work throughout over the past ten
months. The PPAC has some hard-working Members, who are clear on the oversight role of
the PPAC and strongly committed to fulfil this role. While it is acknowledged that the
Members interviewed were amongst the more senior and established MNAs, their knowledge
of, and interest in, the role PPAC was generally sound and well developed.
The Members appeared receptive to practical changes which could realize an effective PAC.
While it is regrettable that the PPAC Chairperson was out of the country at the time of the
18
assessment, he is projected as someone with the intuitional knowledge and leadership
necessary to lead the PPAC through a process of important and successful change.
Other significant PPAC achievements include its adoption of the international convention
which allows for a senior Member of an opposition party to Chair the Committee. And as
important is the non-partisan approach, the Committee has quickly developed towards its
work and related decision-making.
The PAC Branch, which will be discussed in greater detail, is a unit which has accumulated
an impressive amount of relevant experience over the years. Its staff, who despite some
difficult work circumstances, have shown that they are able to offer the PPAC generally
reliable support services through their dedication and the long hours they are often required to
work.
Together with the AGP’s supply of ‘technical’ support, the PPAC and its office seem to have
synchronized important aspects of their work through an established set of routines and
processes. The PPAC is functional in a mechanical sense and much of its work tends to flow
in an efficient manner.
In a number of important respects PPAC practices conform to those prioritized by many other
PACs in the international sphere. These involve the PPAC’s authority to issue directives,
investigate matters of concern, question witnesses from government and private sectors, call
Principal Accounting Officers and Members of the Executive to account. The PPAC appears
generally aware of these powers and applied them from time to time. However, the authors
believe the recommendations regarding a broadening of the PPAC mandate could offer the
PPAC wider scope to express its authority.
Recommendation - For the PPAC to go forward with confidence and ambition, it is
important that it recognizes what it has achieved to date and fully
understand how it has achieved this – including looking at the
Committee’s functional strengths which this assessment identifies. It is
therefore recommended that any PPAC decision to engage this report
and its content should involve all PPAC Members. They should look
critically at the assessment and where in agreement should strive to
take the recommendations forward. This will help build a unified and
involved Committee jointly taking ownership of the Committee’s
responsibilities and the plans and objectives it adopts to become more
efficient and effective.
2.4. An Assessment of the AGP – In Relation to the PPAC
Almost all countries have a Supreme Audit Institution (SAI) responsible for the audit of
government‘s financial records and for its compliance with relevant laws and regulations.
While the vast majority of these institutions belong to international bodies such as the
International Organization for Supreme Audit Institutions (INTOSAI) and subscribe to
INTOSAI’s high audit standards, there has been anecdotal evidence of such institutions in a
number of countries failing to maintain good audit standards and therefore not being able to
produce reliable findings.
19
Pakistan is extremely fortunate in this regard as its Auditor General is maintaining an
institution which not only meets its legal mandate and the internationally prescribed audit
standards, but is consistently reappraising its audit role to better serve the interests of public
accountability and improved standards of financial management across government.
The PPAC should be aware of just how well it is being served by the AGP and should go
forward with confidence in the knowledge that its principle source of work is reliable and
relevant.
2.5. An Assessment of Specific Functional Concerns Regarding PPAC
These following issues to some degree or other inhibit the PPAC’s ability and desire to
become more efficient and effective. Each of these issues has therefore been carefully studied
and together with the valuable advice gathered through the assessment process as well as
reflection on international practice, recommendations are formulated for the Committee’s
considerations.
2.5.1. Backlog of Audit Paras
Assessment -
This “backlog” issue is the mountain which makes the real forward
journey of the PPAC difficult to embark upon. It significantly
interferes with the PPAC functioning and distracts its attention from
more current issues - and is likely to continue to do so for some time
(current estimates vary from between nine months to two years). The
situation causes an overall workload which far exceeds the PPAC’s
work capacity. The AGP has expressed concern that this could lead to
PPAC fatigue.
At the time of writing this report the backlog amounted to 21,433 audit
paras:
Audit Year to which report relates
Unexamined Audit Observations
1989-90
1,823
1990-91
1,613
1991-92
1,810
1992-93
1,310
1994-95
1,605
1997-98
4,009
20
1998-99
2,635
2001-02
2,306
2002-03
1,757
2003-04
1,312
2004-05
1,253
2005-06*
1,464
TOTAL
21,433
A related matter is the current use of sub-committees to process
backlog paras. The subcommittees typically consist of only three
members, which make recommendations concerning the respective
directives. The rest of the PPAC Members therefore have little or no
knowledge of the actual paras, or the directives issued in the name of
the main Committee. The authors recommend that there be greater
discussion by the whole Committee around these directives before they
are issued.
While the extraordinary efforts being made by the PPAC to deal with
the backlog must be acknowledged, the question is what else can be
done to accelerate the backlog clearing process.
Recommendation – Revisit legal requirement and considerations that cause the PPAC to
engage these previous era issues. Do this with a view towards
establishing if it is possible to attend only to those matters which could
lead to recovery of monies for the State. Seeking an opinion from the
National Assembly legal advisors on how the National Assembly
might grant a criteria-based immunity from the pre-2008 era on the
justification that this otherwise compromises the PPAC’s effectiveness
in dealing with current issues.
Recommendation – Use written correspondence with the government institution concerned
to clear up some of the questions raised during review of backlog
paras. Letters would be drafted (standardized where possible – with
help of the AGP’s office and PPAC Branch) for signing by the
Chairperson. The PPAC Branch would set up a system to monitor
21
these letters, issue follow-up letters where necessary, and to keep the
PPAC informed of progress.
Recommendation - Allocate two additional temporary staff to the PPAC Branch –
specifically for “backlog” work. Perhaps a retired accountant from the
AGP and secretarial assistant with the processing of the backlogs and
perhaps facilitating the recommendation made below regarding the use
of correspondence. Note, the PPAC Branch have expressed the view
that with two extra staff they believe the backlog could be cleared in a
little over six months.
2.5.2. PPAC Performance and Accountability System.
Assessment -
At present there is no formalized criteria by which the PPAC plans and
manages its work performance. It could improve focus and
effectiveness if it works to predetermined plans which incorporate
performance goals – against which the organization has to account.
Such a system also gives greater direction and motivation to all
concerned within the organization.
Recommendation - To hold a PPAC planning workshop at the beginning of each year at
which the Committee agrees to its overall output and outcome
objectives (both quantitative and qualitative), and against this
establishes its performance criteria and goals and its broad workplan
(include audit reports and other initiatives – as proposed earlier in this
report) for the year ahead. This has to be documented in a Strategic (or
Business) Plan. The Plan should include:
o The PPAC mandate
o A vision and mission statement (which flows from the
mandate)
o Objectives and goals (which promote the Committees
vision)
o A summary of a SWOT6 analysis exercise (to assess the
positioning of the Committee in
relation to its
responsibilities)
o Resource requirements
o Work schedule (hearings, other enquiries etc.)
o Method of Committee work
o Method of monitoring and evaluating
o Performance measurements/criteria
Examples of performance criteria, which promote the required work
volumes and the Committees objectives and goals, could include:


6
% of audit reports scrutinised
% of audit reports processed
Strengths Weaknesses Opportunities Threats
22

















% of appropriation accounts scrutinised
Number of issues other than audit reports dealt with
Number of investigations initiated
Number of PPAC meetings held
Number of hearings held
% attendance of Members
Number of directives passed
Number of directives satisfactorily responded to
Number of directives implemented by institution
concerned
Initiatives taken to save or recover money
Amount of money saved or recovered
Number of PPAC debates/report backs in the NA
Visits to government institutions/departments
Interaction with media
Media coverage
Education and training for Members
Education and Training for PPAC Branch
Note: certain of these criteria relate to improved efficiencies within the
Committee and others to its effectiveness in influencing improved
financial management within government institutions. These should be
initially set at the level of performance possible for the PPAC to
achieve at this stage of its progress. A range of more critical indicators
could be introduced in subsequent years in keeping with the progress
the Committee continues to make.
Recommendation
At the end of each year the PPAC Branch should compile a PPAC
Annual Report for approval by the Committee. This Annual Report will document the
Committee’s performance both in terms of its National Assembly mandate and the specific
objectives it set itself. It should also list the institutions which it engaged with over the year.
Ideally, it should contain a Chairman’s report in which he gives an overview of the
Committee and mentions its highlights over the year.
(Note: The report currently produced for the National Assembly after the end of each year is
more of a summary of the PPAC’s engagement with AGP paras over the period.)
2.5.3. PPAC Independence
Assessment
The Assessment exercise indicated that the PPAC maintains an
appropriate distance between itself and the Executive and senior
government officials, i.e. that these parties do not influence the
PPAC’s deliberations, actions or decisions. The matter of an
appropriation separation of roles and responsibilities between the PAC
and the AGP does however give rise to discussion and some possible
repositioning – once the PPAC has become more established.
23
An international corporate governance position advocates the external
auditor stand back from the oversight and accountability process once
the annual audit report has been produced and handed over to the
Overseers (the Board/ the Legislature). However due to certain PPAC
shortcomings, the AGP involvement continues far into the oversight
process. The AGP not only (in effect) decides on which issues the
PPAC should deal with and which it should not. The AGP further
(through the AGP produced briefing document) leads the Committee
through the hearing by determining the essential questions Committee
Members should raise. After the hearing, the PPAC Branch produce a
report containing proposed PPAC directives which are then (in effect )
agreed to by the AGP before being sent to the Principal Accounting
Officer. The AGP is then involved in appraising the PAO responses to
these directives.
To be fair, PAC situations where the AG becomes overly supportive in
the responsibilities of the PAC exist to some degree or other in a
number of countries. This is especially true of situations where a PAC
is under resourced and has limited technical capacity, which is the case
with the PPAC. As it would be unrealistic to expect a PAC to become
altogether technically self-reliant, it should be accepted that the AG
involvement and influence will continue to some extent after the
completion of the AG audit.
However, it would be in the interest of a PAC to improve its technical
capacity to participate actively in analysis and decision-making around
matters which are in its sphere of responsibility. There are some
exemplary examples of PAC Members in other countries who sought
and acquired high levels of expert knowledge they used in the
technical contemplations of their PAC work.
Recommendation – For Members to make the time and effort to attend the Education and
Training which is proposed in a recommendation regarding short-term
interventions in this report.
Recommendation - For Members to take greater initiative towards studying, analyzing and
asking questions around audit reports and appropriate accounts.
Recommendation - Hold briefing sessions with the AGP prior to hearings, in which the
issues at hand are discussed and fully contemplated. This will
gradually deepen the Members’ understanding of many of the issues
they are meant to deal with.
2.5.4. PPAC Members Training
Assessment -
The need for Members’ education and training has been highlighted on
a number of occasions in this report thus far.
24
A perusal of the many instances of poor financial management raised
in recent AGP reports together with indications that there could be
high levels of public sector fraud and corruption in Pakistan, place
additional responsibility on the PPAC as a body which has the mandate
and authority to look into and challenge such situations. Whether this
is done through AGP reports or through other PPAC initiatives, it
requires that the Committee (through its Members and any other expert
resource it might have) be in a position to adequately understand the
problems and what influence they might bring to bear to help improve
the situation. This requires that the level of the Member’s relevant
knowledge and understanding be constantly expanded.
Recommendation - Develop training courses covering subject matter relevant to the needs
of PPAC Members. These courses be documented in a learner-friendly
way and that regular workshops be held in which the subject matter is
explained and discussed through suitable experts and instructors. The
course materials to be developed should include the following subject
matter:
o Public Financial Oversight and PACs - and the potential
impact on the effectiveness of government
o Financial Management principles and practices
(including systems)
o The new Accounting and Audit Models of the
Government of Pakistan
o The Project for Improving Financial Reporting and
Auditing (PIFRA)
o Accounting principles and practices
o Procurement practices and procedures
o Auditing principles and practices
o The scope of the Public Sector Audit
o Governance and Ethics - principles and practices
(including the nature and purpose of accountability
arrangements)
o Public sector organization and function
o The scope and nature of fraud and corruption in the
Public Sector
o The scope and nature of waste, inefficiency and fruitless
expenditure in the Public Sector
o Analytic and investigative ability/skills (for PACs)
o Questioning, cross examination techniques (for PAC
hearings)
o Directive/report writing technique (for PACs)
o Various rules (see N/A rule 203 (2)(c ) which requires
that PPAC Members know and understand the GFR’s
etc.) Particular attention given to the more ‘material’
and most often violated rules.
o Any laws relevant to the PPAC work
2.5.5. PPAC Audit/FM expert support
25
Assessment -
In addition to the need for Members’ technical training as proposed
above, the assessment makes the following observation.
The management of finances in big government institutions is onerous
and complex. It can take years of relevant study and experience for
someone to be sufficiently competent to fully understand the financial
affairs of these institutions. PACs are regularly confronted with
problems which arise in government institutions, the nature of which
require an expert level of knowledge if they are to be sufficiently
understood and responded to. Raising the Members’ knowledge and
understanding levels through education and skills training is vitally
important, but is sometimes not sufficient to bring Members to a level
where they can fully deal with complicated financial management,
accounting and related problems. Hence the following
recommendation:
Recommendation – That the PPAC be served by its own financial management expert(s).
Possibly an individual or two (maybe retired Pakistan Audit and
Accounts Service Officers) located in the PPAC Branch who would
advise the Committee in prioritizing audit paras and other financial
management related issues to optimize the use of the Committee’s
limited resources – especially time. The expert(s), in conjunction with
the AGP, would also be involved in briefing the PPAC prior to hearing
and in identifying what issues should be pursued through PPAC
directives. The expert(s) could also play a leading role in transferring
expertise to the PPAC Members and the facilitation of the Members
education programme recommended elsewhere in this report. However
it should be ensured that the PPAC did not simply shift its dependency
from the AGP to the Committee expert(s).
It is argued that having such expertise at hand together with the
education and training provided to PPAC Members will empower the
PPAC to make considerably better use of AGP reports and take more
initiative in dealing with the reported weaknesses that allow for poor
financial management and corruption in government institutions.
2.5.6. Preparation for PPAC Hearings
Assessment –
Currently there is little or no formalised PPAC preparation prior to
hearings. Members frequently go into hearings without being
adequately informed/briefed on the issues around which the hearing is
to take place – even where an advance briefing document has been
issued by the AGP’s office. Some Members feel that AGP’s briefings
are received too late – sometimes just before the hearing and others felt
that the AGP briefings are too ‘technical’. A further view was that the
PPAC should have its own expert(s) to help prepare Members for a
hearing and to help them better relate to the AGP’s paras and briefing.
26
Understandably, where there is weak preparation, or no preparation, it
allows for the invited PAO with his/her vast inside knowledge of
institution to confuse, mislead or evade the Members’ probings. This
amounts to weak oversight.
There is a mistaken understanding in some quarters which believe the
PPAC should limit itself to the role of Judge at a Committee hearing –
where the AGP acts as a prosecutor and the PAO as the accused. The
constitutional and PACs perspective elsewhere in the world would
strongly disagree with that view. It amounts to an abdication by the
PAC of its scrutiny and oversight responsibility - and of course
excuses Members from serious preparation for a hearing.
Recommendations - For Members to deepen their understanding of their role as overseers
given the practical involvement, this imposes on them in the gathering
of evidence in a hearing situation.
Recommendation - For the PPAC to establish a planning routine which involves Members
meeting prior to a hearing to prioritise areas of concern; develop
leading and follow-up questions; to agree on the outcomes the hearing
should seek to achieve if it is to be considered to be a successful
hearing; and maybe to allocate specific areas of enquiry to individual
Members to deal with, etc. AGP personnel to be present at these
planning sessions to give brief and assist Members understand any
technical issues.
2.5.7. The Hearings - Procedure
Assessment
While good planning and preparation is essential for a successful
hearing, so too is the way in which the actual hearing is conducted.
The hearings can become unproductive if no predetermined outcomes
are borne in mind, if participants speak at cross purposes, become
argumentative or evasive, or if issues are not purposefully pursued to
their conclusion. The Chairman therefore has a vital but often difficult
role to play in keeping the deliberations focused and directed.
Members and other participants should respect the order established by
the Chairman and not interject and speak without being recognised by
the Chairperson etc. At a particular sub-committee observed by the
Consultants, there were a number of discussions simultaneously taking
place at certain stages of the hearing and even an angry dialogue
between the AGP representative and a government official.
Recommendation - The PPAC needs to develop procedures to make the hearing
constructive and purposeful. There should be predetermined issues of
concern which the hearing is to concentrate on, and an understanding
of the evidence and outcomes sought – which the Chairman should be
pre-briefed on. Training for Members which equips them to develop
cross questioning skills and the ability to ‘build a case’ through asking
strategic questions should be undertaken.
27
Recommendation - Produce a guide to PAO’s regarding their cooperation in a hearing. An
extremely useful “Guide for Accounting Officers, Ministers and Other
Persons appearing before the PAC” has been developed and applied in
South Africa.
2.5.8. Follow up Routines/System
Assessment -
The matter of PAC ‘follow up’ on its recommendations/directives has
been an intensely discussed topic at a number of international PAC
conferences. It is a common experience across countries that
government institutions tend to ignore such PAC interventions if they
know that the PAC is weak on, or is unlikely to follow-up. When these
directives and recommendations are ignored, the whole oversight
process can be undermined and the value of hearings, which gave rise
to the directives, can lose considerable value.
This assessment exercise was left with some uncertainty as to the
extent of follow up there is regarding the directives the PPAC issues to
government institutions (as well as follow-up on documents and other
forms of information that PPAC Members might have requested from a
government institution – usually during the course of a hearing with
that institution). Members interviewed cited examples of poor followup but on the other hand the PPAC Branch was able to demonstrate a
follow-up system that they used and which they felt was largely
effective. This appears to be another area of poor communication
between the PPAC and the PPAC Branch.
Recommendation - That a system of progressive reporting be introduced wherein the
PPAC Branch list and date-link each directive and follow-up action
taken and response received. This report, which could be in a spread
sheet format, should be regularly updated and issued to PPAC
Members on a weekly or bi-monthly basis. Members should be taking
the initiative to query any follow-up matter arising from this report e.g.
a missing response to a directive. See proposed ‘Status Report’ in the
‘Eight month Work Plan’ part of this report.
Recommendation - That PPAC Branch to ensure that the soon to be introduced PPAC
computerised MIS module be equipped to capture and report on PPAC
directives/recommendations issued, and their follow-up status. Once
satisfied that this new facility is producing complete and correct
‘follow- up reports’, the system in the preceding recommendation can
be discontinued.
2.5.9. Other PPAC Engagements/Meetings
Assessment -
Information available to this assessment indicated that virtually no
PPAC meetings of Members are held – besides those that concern
hearings. Further the Member attendance at the Hearings is often very
low. The cohesiveness, motivation and general functioning of the
28
PPAC could be promoted by the holding of particular agenda driven
meetings – which a majority of Members should attend.
Recommendation - In addition to the Annual Strategic Planning workshop and the pre
hearing preparation meetings already referred to, there could be a
monthly meeting to discuss other ‘internal business’. Importantly at
such meetings Members could:
o exchange new ideas and experiences and brainstorm
relevant issues
o reflect on their performance to date against performance
goals/criteria set in the Committees Business/Strategic
Plan
o conduct ‘post-mortems’ around recent hearings and
discuss improved methods for future hearings
o propose directives, which could then be discussed,
debated and then passed by the Committee before being
sent to the various government institutions (through the
NA process)
o receive and discuss the latest ‘Status Report’ (as earlier
recommended) from the PPAC Branch
o attend to any other administrative matter etc
Year of Audit
Report
Total
Directives
Full
Compliance
Partial
Compliance
Nil
Compliance
2000-01
1133
429
165
539
1999-00
903
261
103
539
1997-98
337
66
24
287
1996-97
657
278
28
361
1995-96
159
34
49
77
1994-95
82
24
24
46
1993-94
329
94
102
133
1990-91
57
8
12
37
1989-90
58
-
-
-
1988-89
81
01
05
75
1987-88
26
08
09
9
Total
3822
1203
513
2149
%age
100%
31%
13%
56%
1
Recommendation - Such meetings should involve the PPAC Branch, which should report
back on their administration matters insofar as these affect the
Committee. Problematic issues at the PPAC/PPAC Branch interface
can be discussed and resolved.
29
Overall, this would lead to improved communications between the
PPAC and its PPAC Branch.
Recommendation - That the PPAC Chairman engages Members whose attendance and
general involvement in PPAC hearings and other Committee business
is poor to seek their participation. Their participation, together with the
Members training proposed in this report, could result in a
substantially strengthened PPAC.
Recommendation - The Chairman to initiate and lead a discussion around the distraction
and diversion that participation of PPAC Members in various other
National Assembly committees causes. It is clear that a good number
of PPAC Members are not able to properly respond to the demands of
the PPAC and its high workload due to other committee commitments.
There are countries in which PAC members may only be members of
that particular committee.
Recommendation -
Owing to the task at hand and magnitude of work, the PPAC Chairman
may consider to champion with the National Assembly Speaker that
PPAC members not be assigned other committees to provide them the
time and opportunity to concentrate on PPAC work.
2.5.10. PPAC Method of Work
Assessment
It would appear that work carried out by the PPAC Members consists
mainly of the processing predetermined audit paras - through the
process of a hearing. This report, its assessments and recommendations
have thus far argued that the PPAC role is considerably wider than
what is currently exercised – as is the range of the subject matter it
should cover and the sources it should be looking to in obtaining
relevant subject matter. The report has also proposed a number of
PPAC practices and procedures which could help the Committee to
take on its fuller mandate in a systematic and well managed way –
including planning, organizing, preparation, appraisal methods and
routines. Taking all of this into account, the following
recommendations are made.
Recommendation – A proposed ‘method of work’ document to be written in which
guidance is given to Members as how best to establish and prioritise
their various areas of work responsibilities, and what step-by-step
processes should be followed by the Committee to methodically
address its wider responsibilities.
Recommendation - Once the ‘method of work’ as recommended above has been
documented and is considered to be practical and feasible, reproduce
this in a PPAC Members Handbook. The Handbook will also include
other relevant information about the Committee e.g. the PPAC
Mandate, Public Finance, Accounting and Audit terms, the typical
financial misdemeanours found in government, the PPAC best practice
options for dealing with these typical situations, etc.
30
2.5.11. The PPAC Branch
Assessment
There appears to be some perceptual disconnect between the PPAC
and its Branch. The Committee feels that the Branch’s service to the
Committee is lacking in certain respects. However, the Branch feels
that under the circumstances of an increased workload (i.e. government
departments increased from 40 to 60 in 2008) and a reduced staff
compliment - that the service they give to the PPAC is reasonably
good. (e.g. they have organized and processed 40 hearings in the past
ten months). The Branch feels that many of the PPAC Members keep
them at too much of an arm’s length and this accentuates problems,
which are in the first instance caused by the lack of regular and
formalized communication between the Committee and its Branch.
Here it is believed that the PPAC should take more initiative to create
better lines of communication.
In addition to its shortage of personnel numbers, the Branch has to rely
on inadequate equipment to do their work. All this regularly leads to
Branch staff having to work extremely long hours during the sessions
in which the PPAC sits.
Recommendation – To establish better communication arrangements and lines of
instruction between the Branch and the PPAC Members. The regular
‘internal business’ meetings proposed earlier in this report would go
some way towards establishing effective communication arrangements.
Regular meetings between the Chairman and the Branch would
encourage staff and also improve the situation.
Recommendation - Discussion between the PPAC and the Branch should be held regularly
to reconsider the PAC Branch’s organogram and staffing requirement.
Reconsidered Job descriptions for officers of the PPAC Branch could
be proposed and a Service Agreement of sorts could be developed in
order that the Branch knows exactly what the Committee expects of it.
Recommendation – Improved resourcing of the Branch by way of a new heavy duty
photocopier, scanner, printer, fax machine (which has a multi recipient
facility), and laptops with an independent email facility.
Recommendation - More direct involvement in work planning and scheduling by the
PPAC Branch would further harmonise its functions with that of the
PPAC. This could be achieved through the earlier proposed PPAC
planning and preparation meetings.
Recommendation - As per the newly established organogram and staffing requirement, the
recruitment of additional staff should be motivated through the
appropriate NA channels. This would assist the PPAC Branch to keep
more up to date with production of the verbatim transcripts of hearings,
the issuing of minutes for confirmation (which there were some
31
complaints about), and the forwarding and follow-up on responses to
Committee directives.
Recommendation - A needs assessment should be conducted about the skills training
requirements of PAC Branch staff.
2.5.12. PPAC Data Module of NA MIS
Assessment
The proposed introduction of a computerized MIS module and
dedicated for the use of the PPAC is a significant development. It will
in a number of important ways promote the Committees efforts to lift
its levels of efficiency. Very few PACs worldwide have yet introduced
a database/MIS/work monitoring system which is as integrated as what
this PPAC module proposes to be.
This system, once introduced and fully implemented, will become the
operating center of the PPAC Branch with maybe over half of its work
being facilitated through the module. Mr M. Mohsin Khan, former
Controller General, is undertaking an objective appraisal of this new
module and its potential benefit for the PPAC. A preliminary report on
his MIS proposals is annexed to this report.
Recommendation - If staff may be added, priority should be given to those qualified to
capture and input data.
Recommendation - All members be issued with laptops with the software necessary for
them to access the information of this module while outside of the NA
precincts. This is to facilitate their planning, preparatory and follow-up
work.
Recommendation - All PPAC Members and members of the PPAC Branch be fully briefed
and trained on the system and be given the training necessary for its
full utilization.
Recommendation - All AGP reports, briefings etc. be available to the PPAC through this
system.
Recommendation - Services of a sufficiently knowledgeable consultant be secured to
oversee the above recommendations.
2.5.13. Media Relations and Transparency
Assessment
Public accountability is extensive when facilitated through the mass
media. If a PAC becomes newsworthy as being a courageous, diligent
and hardworking oversight committee which shows strong intolerance
and indignation towards poor use or misuse of public resources, a
dynamic communication system can develop and feed on itself –
whereby the PAC becomes more and more formidable in the mind of
the public. This causes government institutions to increasingly take the
32
PAC seriously and to try and avoid incurring its disapproval i.e. by
improving its financial management actions.
It is to the PPAC’s credit that their hearings have been made open to
the media.
From a survey of media coverage of PPAC deliberations/hearings over
the past ten months, there emerges an image of a tough, rigorous and
effective PPAC in the making. For this media interest to be sustained
and even heightened, the PPAC will increasingly need to add
substance to its sharp public utterances and activities by demonstrating
its deeper understanding of the issues and its educated ability to probe
and dig out factual evidence to reveal any shortcomings in
government.
Conversely, if the media at some point come to believe the PPAC is
just going through the oversight motions and is more about style and
sound bites than actual scrutiny substance, the media will after a while
lose interest in the Committee – which will cost it much of its
influence. This report does not suggest that this is the case but simply
wishes to promote the PPAC towards development of its knowhow and
skills to become recognized as an increasingly potent oversight force.
To paraphrase a wise old retired Auditor General, while a PAC might
not have the powers to instruct government, by becoming ‘formidable’
in the eyes of the public it gains an authority that causes government to
nonetheless treat its directives as instructions.
Recommendations – Whenever the PPAC is confronted by an issue it believes to be of
significant public interest, it should study the situation carefully,
decide on a PPAC course of action, and where appropriate give a
media briefing on the matter. Through such meetings with the media
the PPAC (and its Chairman in particular as its chief spokesperson)
should try and develop an understanding with key media parties as to
their joint responsibility regarding public accountability – and how
they can best cooperate in this regard.
Recommendation - The media should be encouraged to report on the PPAC’s planned
performance objectives at the beginning of a year and on the PPAC’s
performance achieved at the end of the year. Thus, in promoting its
own public accountability, the PPAC has the credibility to bring
pressures on government institutions to follow its example.
Recommendation - The PPAC should use the website, being developed with assistance of
PLSP, to create greater interface with CSOs and receive public input.
The website should be regularly updated on the work of the Committee
and reports should be uploaded for public scrutiny.
PART 3
33
3.1. Short-Term Workplan for Assistance
Flowing from the assessment and its recommendations, PLSP requested development of an
approximately eight-month workplan for consideration and possible implementation by the
PPAC. This would involve harnessing those recommendations which could improve and give
impetus to a strategic range of PPAC oversight capabilities. These would need to be crafted
into a coherent plan which could be managed as a project to ensure its methodical
introduction.
The recommended workplan focuses on establishing ways and incorporating the systems and
procedures in which to do the basics professionally and strategically - and from there to
incrementally improve upon these basics. In other words the workplan is unlikely to be
premised on any radical or impractical.
Also, the plan subscribes to the understanding that aid programmes such as that of the PLSP
would wish to go beyond simply supplying material resources which have been identified as
needed, i.e. not simply an exercise of throwing money at problems. Rather that the plan
should expound upon its practical application and indicate how this plan (if funded) should be
implemented and how it would actually contribute towards the functional development of the
organization concerned and the people who are important to its success.
It is understood that this workplan will be critiqued firstly by the PLSP and then by the
Chairman of the PPAC to accommodate improvements these parties might wish to see
incorporated into the workplan7. Thereafter the Plan will be presented to the full PPAC. The
plan in the form of a range of proposed actions, as outlined below, will therefore not go
further at this point then to present its logical basis, its proposed developmental actions and
the sequencing of these actions. Once final considerations are forthcoming as to the content
of the workplan, a date specific Gantt chart and critical path plan can be incorporated into a
project format – through which to guide the implementation of the proposed activities.
Short-term Recommendations
3.1.1. Dealing with the backlog
The backlog obligation of the PPAC constitutes a debilitating diversion, making it difficult
for the PPAC to focus on its progress as a committee and the type of organization it needs to
develop. A substantial amount of the PPAC time is taken up by backlog work and this, by
virtue of its sub-committee approach, tends to fragment and disorganize the Committee. It is
imperative that the backlog is cleared with greater urgency.
Action 1.
Addressing the Backlog. Revisit the legal requirement and whatever other
considerations that cause the PPAC’s obligation to engage these previous era issues with a view towards establishing if it is possible to attend only to those matters which
could lead to the recovery of monies for the State. Seeking an opinion from the
National Assembly Legal advisors as to how the National Assembly might grant the
PPAC a qualified immunity (i.e. only to deal with specific issues) from having to deal
with all the pre 2008 era paras, on the justification that this backlog work otherwise
compromises the PPAC’s effectiveness in dealing with the more current issues.
7
Copy of the Assessment will also be provided to the AGP
34
Action 2.
The use of correspondence. This would entail a process of going through all the
backlog paras and establishing as many as possible of these that could be dealt with
through correspondence with the government institution concerned. This is likely to
account for most of the backlog paras. Letters should be drafted (standardized where
possible – with help of AGP office and PPAC Branch) for signing by the Chairperson.
The Branch should set up a system to monitor these letters, issue follow-up letters
where necessary, and keep the PPAC informed of progress.
Action 3.
Employ two additional local consultants who will be located within the PPAC Branch
and dedicated to the task of facilitating an accelerated through-put of backlog paras.
They can be a retired accountant from the AGP and a secretariat assistant. Together
with actions 2 and 3 below, the aim should be to complete the deadline within six
months.
With a plan in place to remove the backlog from the PPAC’s agenda, the workplan should
turn its attention to pursuing the Committee’s raised level of proficiency.
The underlying approach of the workplan is to drive consensus and motivate the PPAC as to
its oversight mission and also to convince it of the need to develop a team-like spirit through
its shared vision and mission - if it is to achieve its objectives. And as with team-like
structures in any other endeavour, the more organized the team becomes and the more its
players improve their levels of knowledge and skills, the greater the team’s chances of being
successful.
The Committee must aim to develop a self-identity and self-belief which is respected by
government and the public at large. Any recommendation or workplan is likely to
underachieve unless driven by a Committee which is motivated, ambitious and a strong sense
of the positive impact it can make on government. This places a strong leadership
requirement on the Chairperson and senior Members of the Committee
3.1.2. Building the PAC Team and its Sense of Mission
Action
A well-planned and skilfully facilitated workshop should be held for which attendance by
Members is mandatory. The workshop should seek three essential outcomes:
i.
To begin building the identity of the Committee by having all its Members
commit to a well-defined vision and mission statement – as well as to the
objectives the Committee would need to pursue to achieve these.
ii.
To conduct a modern strategic planning session (and draw up a PPAC
Strategic Plan) in which the above objectives are reduced to practical actions
via a date-linked work schedule which accounts for the AGP’s paras to be
dealt with for the rest of the year and for any other tasks the Committee wishes
to complete in this period. This will become an annual exercise.
35
iii.
Against the commitment made in i. above and the work agenda decided upon
in ii. above, the Committee should set performance standards and criteria they
believe are necessary to achieve these aims. These could include:

% of audit reports processed

% of appropriation accounts scrutinised

Number of issues other than audit reports dealt with

Number of investigations initiated

Number of PPAC meetings held

Number of hearings held

% attendance of members

Number of directives passed

Number of directives satisfactorily responded to

Number of directives implemented by institution concerned

Initiatives taken to save or recover money

Amount of money saved or recovered

Number of PPAC debates/report backs in the NA

Visits to government institutions/departments

Interactions with media

Media coverage (number of reports)

Education and training for Members

Education and Training for PPAC Branch
Targets should be set against such criteria and incorporated into the Committee’s Strategic
Plan. As this would be the first strategic planning exercise, the PPAC should not be too
ambitious in its intended achievements. The exercise should be used as part of the team
building, mission building initiative and to establish a sense of its growing oversight
effectiveness – and the pressures this intends bringing to bear on poor financial management
and corruption i.e. growing the teeth of the National Assembly’s finance watchdog.
3.1.3. Raising the PPAC’s Work Processing Efficiencies
A central feature of PACs is the high volumes of work they are obligated to deal with.
Regrettably, the vast structures of governments and their many different departments and
institutions seem never able to achieve faultless audits – hence the hundreds of audit findings
that need oversight attention every year. And as discussed earlier, there are a range of other
oversight obligations in addition to audit paras which would add to the workload of a PAC.
Just like any organization which routinely processes high volumes of work (e.g. production
line type factories), the degree of organization, of teamwork, of work planning, of decisionmaking criteria, of regular and reliable information, of internal disciplines, and of continual
reappraisal of the organizations performance – are critical to the efficient processing of the
work.
It appears insufficient thought has thus far been given by the PPAC towards the internal
mechanics of its work processing obligations. The assessment suggests the net effect of this
has been to reduce the Committee’s actual scope of work, and causes some self
marginalization of the Committee - whereby the AGP finds itself having to give stronger
support to the Committee than is perhaps advisable. This concerns the AGP’s assistance with
the PPAC’s preparatory work for hearings and the AGP’s assistance with the PPAC’s post
36
hearing work i.e. the production and follow-up of directives. In other words the Committee
Members’ activity is currently largely limited to the attending of hearings.
Action
To broaden and deepen the Committee’s involvement in the overall PAC process, it is
proposed that the Committee draw up a plan for greater involvement – by all of its
Members. This plan could be called the Committee’s ‘Method of Work’ – a term used by
some PACs in other countries. The method of work should be documented and accorded
‘official’ status by the Committee – as being ‘the way things must be done’. As with the
Strategic Plan referred to in the previous section, this Method of Work plan will be
developed and improved over time. But the first plan, which could be modelled on that of
another suitable country, could be drafted by an appropriate expert and, after discussion
within the PPAC, be adopted and implemented. It is proposed the first of such documents
only address the ‘processing’ of the AGP paras – as this is, and will always be, the
overwhelming bulk of the Committee’s work. The four key components of the Method of
Work’ will be:
i. Work prioritization. The PPAC Branch should assemble and bring all the AGP
issued reports to regular work planning meetings. The PPAC should peruse each
of these reports and discuss its content with the AGP – who should be present.
The PPAC should make a decision on each report e.g.:
a. no action necessary,
b. limited action necessary - such as
engaging a para in correspondence with a
PAO or requesting an assurance
regarding a particular issue,
c. a hearing is necessary
d. any other action which is necessary
The PPAC Branch should develop a record listing every AGP report and the day it is
received by the PPAC. This record should have a range of columns recording every
action taken in respect of each of those reports – right up to the action which indicates
that a full PPAC process has been concluded and the issues arising out of a particular
report have been dealt with by the institution concerned. The report, which should be
regularly updated and presented to PPAC Members, could be called the PPAC Status
Report. This recording system is likely to be superseded by a report of similar content
generated by the new PPAC computerized database MIS module, which is currently
being developed.
ii. Preparation for PPAC Hearings. For the PPAC to establish a planning routine
which involves Members meeting prior to hearings:
 to prioritise its areas of interest/concern
(and intended engagement),
 to develop leading and follow-up
questions,
 to agree on the outcomes the hearing
should aim to achieve if it is to be
considered to be successful,
 to allocate specific areas of enquiry to
individual Members to deal with
37


to apply other evidence gathering
strategies etc.
AGP personnel to be present at these
planning sessions to brief and assist
Members to understand any difficult
technical issues.
iii. Holding effective hearings. The PPAC should develop hearing procedures to make
the hearing constructive and purposeful. The predetermined issues of concern and
the evidence and outcomes sought by the Committee will need to be skilfully
facilitated by the Chairman.
Action
Training for Members, who are well prepared for the hearing, should be
undertaken to help them develop cross questioning skills and the ability to ‘build a
case’ through posing strategic questions to the government officials present. This
training could be given by an experienced trial lawyer.
PAOs should be advised in advance of the areas (not the actual questions) which
are of interest to the Committee and likely to be the focus of the Committee’s
questions. They should also be reminded of their accountability obligations – to
better ensure that they come properly prepared to the hearing. A standard
guideline document should be developed to advise the PAO of the PPAC’s
expectations in this regard. This could be modelled on the successful ‘Guidelines
for Accounting Officers, Ministers and Other persons appearing before the PAC’,
which is used in South Africa.
iv. Follow up routines/systems. Government institutions soon come to register that a
PAC is weak on following-up on its concerns and directives if this is the case. It is
likely to take the oversight pressure off a particular government institution to
actually make the corrections and recover situations which the Committee had
focused on. It also earns the Committee a reputation as the financial watchdog that
only knows how to bark. To have the resolve and sense of purpose to sustain the
Committee’s attention regarding a government institution’s problems until they
are resolved is often the difference between an effective and ineffective PAC.
Action
A system of progressive reporting (i.e. the ‘status Report’), proposed in the ‘Work
prioritization’ section above, should be introduced wherein the PPAC Branch list
and date-link every directive, follow-up action taken, and response received. This
report, which could be in a spreadsheet format, should be regularly updated and
issued to all PPAC Members on a weekly or fortnightly basis. Members should be
obligated to query any follow-up matter arising from this report e.g. a missing
directive.
PPAC Branch should try and ensure that the soon to be introduced PPAC module
of the National Assembly Management Information System be equipped to
capture and report on PPAC directives/recommendations issued, and their followup status. Once satisfied that this new facility is producing complete and correct
38
‘follow-up reports’, the system in the preceding recommendation can be
discontinued.
3.1.4. Add to PPAC Effectiveness through Member Training and Education
The best organizational and procedural systems will come to naught if the PPAC Members
are not able to do what it takes to exercise effective oversight over government. Members are
best equipped to undertake their oversight role if they have the knowledge, understanding and
skills which are necessary. Without relevant training, Members will not be as effective as
they need to be - meaning the AGP has to remain more of a support function to the
Committee than is good for the check-and-balance requirement of the established
accountability chain.
Action
Taining courses which cover subject matter relevant to the needs of PPAC Members be
developed by appropriate experts. These courses should be documented in a learnerfriendly way and regular workshops should be held in which the subject matter is
explained and discussed by suitable experts. The course materials to be developed could
include the following subject matter:
o Public Financial Oversight and PACs - and the potential
impact on the effectiveness of government
o Financial Management principles and practices
(including systems)
o Salient features of the New Accounting and Audit
Models Project for improving Financial Reporting and
Auditing (PIFRA)
o Accounting principles and practices
o Procurement practices and procedures
o Auditing principles and Practices
o The scope of the Public Sector Audit
o Governance and Ethics - principles and practices
(including the nature and purpose of accountability
arrangements)
o Public sector organization and function
o Scope and nature of fraud and corruption in the Public
Sector
o Scope and nature of waste, inefficiency and fruitless
expenditure in the Public Sector
o Analytic and investigative ability/skills (for PACs)
o Questioning, cross examination techniques (for PAC
hearings)
o Directive/report writing techniques (for PACs)
o Various rules (see N/A rule 203 (2)(c ) which requires
that PPAC Members know and understand the GFR’s
etc.)
o Any laws which are relevant to the work of the PPAC
o Etc.????
39
3.1.5. Add to the PPAC Efficiency and Effectiveness through Improvements to
the PPAC Branch
There is much lacking in the working relationship between the PPAC and its staff. From the
side of the PPAC Branch, it seems that better communication with the Committee and better
resourcing of the Branch would go a long way towards improving the level of function
between the PPAC and themselves.
Action 1.
Establish better communication arrangements and lines of instruction between the
Branch and the PPAC Members. Regular ‘internal business’ meetings would help
achieve the necessary communication. Regular meetings between the Chairman and
the Members of the PPAC Branch could also improve the situation.
Action 2.
Discussion between the PPAC and the PPAC Branch should be held to reconsider the
PPAC Branch’s organogram and staffing requirement.
Action 3.
As per a newly established organogram and staffing requirement, the recruitment of
additional staff should be motivated through the appropriate National Assembly
channels. The additional staff would among other things assist the PPAC Branch to
keep more up to date with production of the verbatim transcripts of hearings, the
issuing of minutes for confirmation, and follow-up work.
Action 4.
A Service Agreement of sorts could be developed for the PPAC Branch to know
exactly what the Committee expects of it – and for the Committee to know exactly
what the PPAC Branch services entail.
Action 5.
New job descriptions for Members of the Branch could be drawn up against the
organogram and the service agreement.
Action 6.
Improved resourcing of the PPAC Branch through the acquisition of new office
equipment. A new heavy duty photocopier, printer, fax machine which has a multi
address facility, and laptops with an independent email facility – would add to the
PPAC Branch’s productivity.
Action 7.
Direct involvement in work planning and scheduling by the PPAC Branch would
further harmonise its functions with that of the PPAC. This could be achieved through
the PPAC Branch’s participation in the earlier proposed PPAC planning and
preparation meetings.
Action 8.
A needs assessment should be conducted as to the skills training requirements of
PPAC Branch staff. From this training opportunities should be made available.
40
Action 9.
The PPAC should employ its own financial management expert/s. Possibly an
individual or two (maybe retired accountants or officers from the Pakistan Audit and
Accounts Service) who would be located in the PPAC Branch to advise the
Committee on prioritization of audit paras and other financial management related
issues. The expert(s), in conjunction with the AGP, would also be involved in briefing
the PPAC prior to each hearing and in identifying what issues should be pursued
through PPAC directives. The expert(s) could also play an important part in
transferring expertise to the PPAC Members.
Having such expertise at hand and together with the education and training proposed
for Members will empower the PPAC to make considerably better use of AGP reports
and take initiative in dealing with the reported weaknesses that otherwise lead to poor
financial management and corruption in government institutions.
The current introduction of a computerized MIS database dedicated for the use of the PPAC
is a significant development. It will promote the Committees efforts to lift its levels of
efficiency. Very few PACs around the world have yet introduced a database/MIS/work
monitoring system which is as integrated as what this proposes to be.
Once introduced and fully implemented, this system will become the operating centre of the
PPAC Branch, with maybe as much of its work being facilitated through the module. Mr. M.
Mohsin Khan, former Controller General, is undertaking an objective appraisal of this new
module and its potential benefit for the PPAC.






Action
That in any new staffing considerations for the PPAC Branch, recognition is given for
the need for additional data capturing staff given the high volume of regular
information input the new system will require for it to be optimally used.
That all Members be issued with laptops with the software necessary for them to
access the information of this module.
That all PPAC Members and members of the PPAC Branch be fully briefed on the
system and given the training necessary for its full utilization.
That all AGP reports, briefings etc be available to the PPAC through this system.
That the services of an appropriate consultant be secured to oversee the above
Recommended actions.
3.1.6 Add to PPAC’s Facilitation of Public Accountability through Good Media
Relations and Transparency
Upon receipt of the Auditor General’s report sent under Article 171 of the Constitution, the
PPAC should place it upon the website. Its submission to parliament already makes it a
public document. In addition, strong media coverage also adds immeasurably to a PAC’s
influence on government.
From a survey of media coverage of PPAC deliberations/hearings over the past ten months
there could be the beginnings of an image of a tough, rigorous and effective PPAC in the
making. For this media interest to be sustained and heightened, the PPAC will increasingly
need to add substance to its sharp public utterances and activities by demonstrating its deeper
understanding of the issues and its educated ability to probe and dig out factual evidence to
reveal any shortcomings in government.
41
Action
The PPAC should develop and actively employ a ‘Media Strategy’ to maximize its
opportunities for positive coverage. Whenever the PPAC is confronted by an issue
which it believes to be of significant public interest, it should study the situation
carefully, decide on a PPAC course of action, and where appropriate give a media
briefing on it. Through such meetings with the media the PPAC (and its Chairman in
particular as chief spokesperson) should try and develop an understanding with key
media parties as to their joint responsibility regarding public accountability – and how
they can best cooperate in this regard.
The media should be encouraged to report on the PPAC’s planned performance
objectives at the beginning of a year and on the PPAC’s performance achieved at the
end of the year. In promoting its own public accountability, the PPAC has the
credibility to bring pressures on government institutions to follow its example.
Note the earlier ‘action’ which proposes ‘media relations’ is a recommended part of
Members training.
3.4.7 Improving the Accountability of the PPAC itself – through an Annual
Report
Action
At the end of each year the PPAC Branch should compile an Annual Report on the
Committee’s performance in terms of its National Assembly mandate and the specific
objectives it set itself. In addition to accounting against the above performance criteria
(set at the Strategic Planning workshop at the beginning of the year in question), the
Annual Report could give details of the Chairman and the Members of the PPAC as
well as the PPAC Branch. It could also list the institutions which it engaged with over
the year. It could contain a Chairman’s report giving an overview of the Committee
and relates the PPAC’s highlights during the year.
(Note: The report currently produced for the National Assembly after the end of each
year is more of a summary of the PPAC’s engagement with AGP paras over the
period.)
PART 4.
4.1. Longer-Term Interventions
Most of the Actions proposed in the ‘short-term workplan’ will remain ongoing issues and
therefore extend into the longer term considerations of the PPAC.
However, not knowing how well the PPAC will succeed with the introduction of the initial
eight month work plan and not being able to predict the lessons it will learn, it is difficult to
predict with any certainty what needs the Committee might have in the longer term. It would
therefore be advisable to not be too ambitious with longer term recommendations at this
stage. However, there are a few areas in which we can be fairly confident that the PPAC
42
would welcome outside assistance once its shorter terms reforms/improvement have become
established. Reference to these areas will be couched in terms that suggest a possible project
– for which outside support would seem necessary.
Project 1.
Hire a constitutional or other appropriate expert(s) to do an assessment of the full
constitutional oversight obligations of the National Assembly, and within that
exercise to establish the logical extents of the PPAC mandate - which should then be
assessed against the current NA Rule 203.
Project 2.
Sponsor those PPAC Members who have completed the education and training
courses proposed in the ‘Short-term Workplan’ and who now wish to further their
education in key subjects which have particular relevance to their PPAC work.
Project 3.
For the Services of an outside expert to be employed to produce a ‘PPAC Members
Handbook’ as is proposed in the recommendations of this report.
Project 4.
For the Services of an outside expert to be employed to produce a ‘Guidelines for
Principal Accounting Officers, Ministers, and Other persons appearing before the
PPAC’ booklet as is proposed in the recommendations of this report.
Project 5.
Fund the establishment of a modern filing system for the extensive records maintained
by the PPAC Branch.
Project 6.
Fund for the establishment of a small reference library for PPAC Members
comprising publications which bear relevance to the Committee and which could help
develop their PAC related knowledge and understanding.
Project 7.
Sponsor PPAC study tours to visit and hold discussions with PACs in other countries
Project 8.
Assist the PPAC to establish an involvement in the fledgling PAC Associations which
comprise East Asian country members and to attend the Associations conferences.
Project 9.
Sponsor a PAC conference in Pakistan which focuses on topics of particular relevance
to the PPAC.
43
APPENDICES
44
Appendix 1.
List of Interviewees
Mr. M. Mohsin Khan – Co Consultant (Local)
Mr. Tanvir Ali Agha - The Auditor General of Pakistan
Mr. Sardar Ayaz Sadiq - MNA and PPAC member
Mr. Khwaja Asif in Lahore - MNA and PPAC member
Ms. Yasmin Rahman - MNA and PPAC member
Ms. Rubina Faisal - Section DG in the AG’s office
Mr. Tahir Hanfi – Diretcor General Library & Research and Acting Joint Secretary PPPAC
Section - National Assembly
Mr. Khan Ahmed Goraya - Executive Director of PIPS
Mr. M.A. Soomro - Deputy Secretary PPAC Section
Mr. Sharafat Ali – Section Officer, PPAC Section
Mr. Khaleel Ahmed – Section Officer PPAC Section
Mr. Fayyaz Hussain Shah – Section Officer PPACA Section
Mr. H. U. Beg - Former Chairman of PAC
Mr. Ayub Tarin - Acting Secretary of Finance Ministry
Ms. Carmen Lane – Deputy Director, USAID - PLSP
Mr. Aizaz Asif – Legislative Oversight Advisor, USAID - PLSP
45
Appendix 2.
List of international documents
Stapenhurst, Sahgal et al. Scrutinizing Public Expenditures –Assessing the Performance of
Public Accounts Committees, 2005 WBI
Wehner, Joachim. Principles and patterns of financial scrutiny: Public Accounts Committees
in the Commonwealth, 2003. Frank Cass Journal. LSE
McGee, David G.. The Overseers – Public Accounts Committees and Public Spending. 2002.
Pluto Press
Numerous publications from various countries – to be listed.
46
Appendix 3.
List of Domestic documents
The Constitution of the Islamic Republic of Pakistan,
Rules of Procedure and Conduct of Business – The National assembly of Pakistan 2007
Various sets of rules produced by the Ministry of Finance,
Public Account Committee Annual Report 2003 -04 (2001) (A summary of AGP para’s
addressed over the year),
Various documents produced by M. Moshin Khan
Audit Report on the Accounts of the Federal Government – (Civil). Audit Year 2005-06
Audit Brief on Special Report on the Accounts of NTL 2005-06 for PAC Sub Committee
meeting to be held on 4 July 2009. Ministry of Information Technology (IT&T Division)
Audit Brief for Sub-committee on M/O Education. Actional point of PAC, Audit Para’s 6.3 Pg
19. To be discussed on 13 July 2009
-more to be listed
47
Appendix 4.
A Technical Needs Analysis on the Design of a
Management Information System for PPAC
Branch
BY
MOHAMMAD MOHSIN KHAN
Consultant DAI/USAID
48
Background
The Pakistan Public Accounts Committee (PPAC) Branch, Islamabad, faces a tremendous challenge as
a support service to Pakistan's key accountability institution. It is absolutely essential that it provides
an excellent service delivery to all the Members of PPAC. It has to ensure a well managed, integrated
and coordinated effort to attend to the information flows from multiple players in the accountability
process primarily under Article 171 of the Constitution, the CGA and AGP Ordinances and its own
Rules of Business. The Branch receives every year audit reports of the Auditor-General forwarded to
the National Assembly and to PPAC under Article 171 of the Constitution and Rules of Business of
the National Assembly. It also receives information/reports/communication from the multiple
stakeholders in the accountability process linked to the working of PPAC. The information handled
by the Branch currently includes:
1. Record of the proceedings of PPAC
2. Sending of directives issued by PPAC to concerned agencies and , recording of feedback
on compliance
3. Handling/Preparation of briefs for PPAC Members
4. Issuing agenda for PPAC Meetings
5. Maintaining record of recoveries at the instance of PPAC
6. Providing research information to PPAC Members
7. Maintaining of data of members
8. Referring of cases by PPAC to FIA and NAB
9. Attending to other information requests by Members
10. Handling of correspondence with PAOs, AGP, CGA and other agencies.
It is quite evident that the Branch needs an efficient and effective Management Reporting
System (MRS) backed by a sound Management Information System (MIS).
Existing MIS-Specifications
Presently, the PPAC Branch is linked to main server of the National Assembly Secretariat. The servers
are branded viz SUNFIRE V 440 with Oracle 10 G Application. The LAN is supported by 10 PCs.
Presently there is a PPAC support database available. The system affords a multi-dimensional search
49
facility. PCs available with PPAC Branch are branded viz /DELL/ACER Pentium 4 with 2.8 Ghrtz
processing speed, 256 RAM and 40 GB Hard Disk.
Existing MIS-Assessment
The IT hardware specifications at the moment match the requirements of PPAC management
reporting system (MRS) but may need a review as the database increase in volume and linkages. The
existing MRS is a good beginning as it has by and large addressed users' needs. The systems, for
example, affords sorting of information on actionable points, cases sent to NAB, status of meetings
of main and sub-committees, departmental replies etc. There is however a room for improvement to
also address re-engineered vision and objectives as proposed in the business plan as under.
Business Plan of the Proposed Management Reporting System
Discussions with some of the PPAC Members, including those who are a part of the sub-committee
specially constituted for the PLSPs project, reveal the need for a more sophisticated MRS to also
function as research centre and one which is linked to the Auditor-General's Audit Management
Information System.
Objectives of this proposed MRS would be:
1. To enable the PPAC Branch and its Members to effectively use the MIS to meet their
operational requirements for an efficient and effective service delivery.
2. To enable PPAC to formulate its annual as well as its strategic plan and monitor its
implementation.
3. To enable the PPAC Branch operate an automated documentation library that would
essentially facilitate real time online reproduction of documents, sortable by:
 The Ministry/Division/Attached Department/Autonomous Body
 Year of Audit
 Category of Audit Para
50
 Amount of Audit Para
 Title of Audit para
4. To make available:
 Any other essential documentation from the Auditor-General, including briefs
appropriately categorized.
 Year-wise Appropriation Accounts and Annual Financial Statements
 Actionable points on examination of Appropriation Accounts and Annual Financial
Statements: Grant-wise and entity-wise.
 Record of the proceedings of PPAC and sub-committee
 Record of compliance on Directives issued by the PPAC. Entity-wise, year-wise with
compliance status.
 Minutes of the Departmental Accounts Committee (DAC), including directives issued,
and status of compliance.
 Gist of audit paras dropped in DAC meetings with reasons for dropping
 Directives recorded on the proceedings of Main and sub-committees and compliance
status.
 Entity profiling of all Ministries, their divisions and important attached departments.
This profiling would also be linked to the Auditor-General's Audit Management
Information Systems (AMIS) currently being developed. The profiling exercise would
attach a risk rating to these entities (High, Medium, Low).
 Linkage with databases of other agencies on relevant information exchange is also
recommended.
For example FIA/NAB on cases referred by PPAC to these
organizations and other information on financial crimes committed by government
officials who can be linked to the audit reports also.
 Information data bank containing all essential documentation material relevant to
building PPAC's capacity. (Constitution and allied documents, General Financial Rules,
Treasury Rules, AGP and CGA Ordinances, Revised System of Budgeting and Control,
Essential Departmental Codes, legislation relating to public sector enterprises, relevant
O.M.s etc.)
51
 Display of the PPAC’s Agenda on screen on a real-time basis for ongoing and
forthcoming meetings.
 Accessibility/ distribution of documents to all stakeholders simultaneously.
 The Appropriation Accounts and Annual Financial Statements sent to PPAC through
the process described in Article 171 of the Constitution of Pakistan and
 Annual budget documents.
 Research findings on best practices
 Scanned newspaper reports on the proceedings of PPAC and related newspaper
articles, reviews, surveys, letters to editors relating to accountability issues linked to
work of PPAC.
 Results on the Directives and any follow-up action.
 Display of the PPAC’s Agenda on screen on a real-time basis:
1.
Ongoing, and
2.
Forthcoming
5. To enable PPAC Branch to also ensure:

Accessibility/ distribution of documents to all stakeholders simultaneously

Web accessibility

To make available the facility of auto alert messages to all parties (PPAC members
AGP, CGA , PAOs) concerned through:
1. e-mails
2. SMS, etc.

That system output conforms to a workflow design.
5. Training assistance of local PPAC staff should be ensured to enable them to handle the
workflow
6. The system should further assist the PPAC Branch in
52
i)
preparation of the Annual Report of the PPAC
ii)
use of
the Web to all access the websites of government departments and
agencies.
iii) to manage the HRD aspect of PPAC and its Branch, including calendar of courses,
visits abroad, seminars/workshops to be arranged or attended.
iv) To make available on a need basis video/teleconferencing facility.
7. To create appropriate linkages with databases of provincial PACs.
Solution-Salient Feature of Strategy for Installation of MIS
In view of the users' need assessment under the USAID-PLSP Project, a Management Information
System (MIS) exclusively designed for the Federal PPAC is the optimal solution already being utilized
in many countries successfully catering for such needs. Appropriate technology including hardware
and software that has to be acquired to meet the business requirements of PPAC.
SCOPING
The scope of MIS extends to PPAC and the linked organizations in the Legislative Oversight
Framework. The Public Accounts Committee is a select Committee of the Parliament that examines
the Accounts of the Government and the reports of the Auditor-General thereon. The accounts are
prepared by the Controller General of Accounts under the Controller General of Accounts Ordinance
2001. They are audited by the Auditor-General of Pakistan under the provisions of the AuditorGeneral Powers and Functions Ordinance 2001. The audited accounts viz. the Appropriation
Accounts and the Annual Financial Statements are, under Article 171 of the Constitution submitted
to the President who causes them to be laid before the Parliament. The Parliament every year
passes these audited accounts to the PPAC for examination as per its mandate. (The Annual Financial
Statements, formerly the Finance Accounts, have never been examined by the PPAC). The
information exchange primarily takes place amongst these three institutions. However, there are
multiple stakeholders in the process, including other key accountability agencies, the media,
53
educational institutions, donors etc.
Design of any MIS support for PPAC must take these
stakeholders into account. A diagrammatic representation of this linkage is as under.
Public Accounts Committee
Other
Ministries
Stakeholders
and
Department
s
AuditorGeneral
Controller General of Accounts
54
Business Blueprints
A business blue print (BBP) would be produced to document the As-Is and To-be processes of the
MIS, complete with flow diagrams. This would also include estimated timelines for deliverables. A
comparative would also be produced to enlighten the estimated cost analysis for the infrastructure’s
procurement. Assistance by the consultants would be provided for quality in accordance with the
agreed terms and duties.
Documentation Library
Two major modules would be involved in the MIS’ documentation library:


Documents Archival System
o
Keying-in fresh PPACs proceedings/ documentation at real time basis
o
Inputting PPACs aging proceedings/ documentation
o
Retrieval of (any) PPACs proceedings/ documentation instantly
o
Scrutiny of (any) PPACs actionable point instantly
o
Retrieval of PPACs Directives
o
Retrieval of Directives implementation Status
o
Help Desk to log issues/ concerns/ etc.
Workflow (of proceedings/ documentation once the MIS is established)
Procurement Needs
The procurement for an MIS usually comprises the following. Many of the items have been procured
the needful for the rest has to be done:
A. Hardware
55
B. Software
C. Traning Packages
D. Back up/ Diaster Recovery
E. Workflow
F. Help Desk
G. Other Misc. Related Items
Brief Description is as under.
A. Hardware
o
Server
o
PCs/ Workstations with monitors
o
LAN/ WAN Connectivity
o
Printers
o
Large screen monitor
o
Scanners

High speed/ high volume/ feeder type

Normal speed/ regular volume
B. Software
o
o
o
Server’s Operating System

MS-Windows

Linux
Workstations’ Operating system (can be the same as the server)

MS-Windows

Linux
Workstations related

MS-Office

Adobe Acrobat
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o
Database
o
Anti Virus

Norton

Kaspersky, etc.
o
Web related
o
Workflow related

o
Custom Program
Scanner related

Informatica

Omni
C. Training Packages
o
Expert Level
o
End Users
o
Training and Users’ manuals for above
D. Business Continuity Plan and Disaster Recovery Plan
This would essentially entail availability of:
i. UPS
ii. System Security related recommendations
iii. Backup media & methodology
E. Workflow
Documentation of work flow processes is essential to enable determination of critical steps
so that effective system functioning is ensured.
57
F. Help Desk
An internal help desk facility would enable the MIS staff to provide assistance in case any
problem is faced by the users.
Success Factors
The effectiveness of the existing/proposed MIS is dependent on the availability of:
a) Computer literate staff that have to input data. It is strongly recommended that PPAC
Branch should not have a two tier information input staff support. The Section Officer, who
is responsible for generating certain information, should himself/herself be able to input
data rather than giving it to a 'typist'. This would not only save time (the 'typists are
sometimes on leave) but also ensure simultaneous validation checks.
b) Computer literate users. The PPAC Members should be able to retrieve whatever
information they desire from the system. For this it is essential that they also receive
training on how to use the computer for work facilitation. This is not to indicate any lengthy
exercise.
c) Existing staff trained (or qualified additional staff hired) to input research information on
the database. Competency skills include ability to access internet sites for relevant
information and transferring it into the PPAC database.
d) Information needs assessment should be a continuous process and the system should
ensure it.
58