Forensic audit: Sindh finance dept warns district account offices of prosecution over failure to provide pension records

KARACHI: The Sindh Finance Department took strict notice of the non-cooperation and non-production of records of pension benefits for forensic audit by the five district accounts offices to the audit teams of the Auditor General of Pakistan.

As per the official correspondence of the Sindh Finance Department, the additional district accounts officers of the five districts Hyderabad, Jamshoro, Matiari, Dadu, and Naushahroferoze were directed through official correspondence to provide the complete record relating to the pension benefits to the audit team for forensic audit, otherwise departmental actions would be taken against them.

The official letter added that the director general Audit, Sindh in April 2024, informed that despite requisitioning of auditable records of the said five districts time and again and requests followed by the reminders, the auditable records have not been provided to the audit teams.

The directives issued by the Sindh Finance Department said that the Auditor General of Pakistan has entrusted the responsibility to conduct such forensic audit with the director general Audit, Sindh at the request of the finance department, therefore non-production of the record will be considered as gross misconduct and a willful hindrance in timely completion of a highly important task and it may lead the responsible officers to be prosecuted under the Efficiency and Discipline (E&D) Rules 1973.

The officers of the said districts are strictly directed to extend their full cooperation with the audit teams and provide all requisitioned records to audit teams deployed to finish the task, without further delay, the directives added.

Earlier in 2022, the National Accountability Bureau (NAB) investigation revealed systemic anomalies spanning a decade in pension benefits in some districts of the province. As a result, the Sindh government directed the Auditor General of Pakistan (AGP) to conduct a forensic audit of pension disbursements from the Accountant General (AG) of Sindh and district accounts offices (DAOs) for the period spanning fiscal years 2011-12 to 2020-21.

The finance department emphasised the necessity of understanding the extent of misappropriation and establishing accountability for any irregularities in pensionary benefits. Specific attention has been drawn to fraudulent and illegal payments made through DAOs, particularly in district accounts office Hyderabad, Jamshoro, Naushahroferoze, Matiari, and Dadu which came to light during the NAB inquiry.

Historically, pension disbursement was managed manually by DAOs, AG Sindh, and the National Bank of Pakistan until the introduction of the Direct Credit System (DCS) through commercial banks. However, reports of irregularities surfaced in the fiscal year 2009-10 onwards, prompting internal investigations and departmental actions against the responsible officials.

Initially, considering private audit firms for the forensic audit, the finance department ultimately opted for the AGP’s involvement due to concerns over the firms’ lack of expertise in handling governmental pension systems. The decision aims to accurately determine the extent of financial mismanagement and to hold accountable those responsible.

The finance department has highlighted a Rs1.16 billion pension scandal, under investigation in Hyderabad alone, noting an annual pension burden of Rs160 billion on Sindh’s finances. The shift to involving commercial banks in pension disbursements from 2009 further exacerbated the identified systemic anomalies.

The sources privy to the Sindh Finance department told The News that at least Rs100 billion had been embezzled in pension-related funds in the province during the last decade. Though many officers of the different accounts officers were suspended, and terminated from their jobs, but almost all were later reinstated and got the same positions.