AGP Questions Earnings of Officers Serving As Board Members in 60 State-Owned Entities

The Auditor General of Pakistan has inquired about the true sources of income and tax contributions of Ministry of Finance employees who serve on the boards of 60 state-owned enterprises even though these entities show no records of their earnings. While conducting an audit of the Ministry of Finance for fiscal years 2022-23 and 2024, AGP noted that there were 60 SOEs with Finance Division officers serving on their boards of directors, reported Express Tribune. AGP determined that officers of the Finance Ministry earn between Rs. 25,000 and Rs. 1.5 million as members of the BoDs. The federal audit report, which has yet to be submitted to Parliament, revealed that the Finance Division did not have a centralized record of approvals, meetings, fees, or remuneration for officers nominated by the Finance Division that was provided to the audit department. Records showed that the Ministry of Finance has 16 wings, but the auditors were given data on just four of them. However, the AGP inquiry found no details about the amount received as remuneration to members of the underlying SOEs’ boards of directors or the income tax deducted. In its defense, the Finance Division informed AGP that it simply nominates officials as directors on various SOE boards; however, the division or the government does not pay the officers’ compensation or board fees. The Finance Division further contends that because the fee is paid by the relevant SOE, the details of board fees are available to these firms. AGP has rejected this, arguing that the Finance Division nominates officials on various boards, and these members are formally appointed and working on behalf of the Finance Division, therefore the remuneration account must be controlled by the ministry itself.