This document provides background information on the Public Accounts Committee (PAC) of Pakistan. It discusses how PAC originated in the UK in 1861 and was later adopted by other Commonwealth countries and Pakistan. PAC is a legislative oversight committee that examines public accounts to ensure accountability of the government. The first PAC was constituted in Pakistan in 1948 but never met. PAC exists to exercise oversight over public expenditures and hold the executive accountable to parliament. It relies on audit reports from the Auditor General. While PAC is part of the National Assembly, some adhoc PACs have functioned during periods of military rule in Pakistan's history when parliament was dissolved.

1. I
The Public Accounts Committee of the National Assembly of
Pakistan: A Comparative Study of Its Functioning during periods;
2002-2006 and 2008-2011
Submitted by
Faisal Hayat
NDU-GPP/M.P-09/F-060
Supervised by
Dr. Usman Mustafa
Department of Government & Public Policy
National Defence University, Islamabad-Pakistan

2. II
To my parents,

3. III
Acknowledgement
Foremost, my sincere gratitude to my Supervisor, Dr. Usman Mustafa for his continuous
support to my M Phil research for his patience, motivation, enthusiasm and immense
knowledge. Defiantly, it was his guidance that helped me all the course of research and
writing of this Dissertation.
My special gratitude also goes to Dr. Ilhan Niaz, for his unlimited support in reviewing
my initial chapters. My special thanks to Dr. Bashir Hussain, Dr. Sarfraz Hussain Ansari
and Asif Shah for their technical support, encouragement and insightful comments.
My sincere thanks to Honourable Nadeem Afzal Gondal, Chairman PAC, Honourable
Yasmeen Rehman, Member PAC and Honourable Riaz Fatyana, Member PAC for their
precious time and continued support to my research. I am equally thankful to all other
members for their interviews and response to my research questionnaires.
My utmost gratitude to PAC Secretariat, especially Moosa Raza Afandi, Additional
Secretary, Najma Saddiquee, Joint Secretary, Muhammad Mushtaq, DS Legislation,
Roomana Kakar, Deputy Secretary, Khaleeq Ahmed, Deputy Secretary, Sharafat Ali,
Section Officer, Salamat Ali, Section Officer and Shabbir Ahmed, Assistant, Haji Hattar
Librarian-NA for facilitating my access to PAC, for their briefings and providing with
necessary data.
I am so grateful to Mohammad Mohsin Khan former Controller General of Accounts and
Deputy Auditor General Pakistan for his technical support and guidance. I found him the
best guide with technical knowledge about auditing, financial oversight and PAC
operations among the persons I accessed for this study.
I am so grateful to my friends Hassan Choukhia, Afzal Tarar, Muhammad Maqsood,
Shahzad Rao, Bilal Maghrani, Asad Kamal, Iqbal Haider, Imran Haider and Sohail Ikram
for their encouragement and morale support.
I importantly thank my family especially my parents, brothers, sisters, wife, nephews and
nieces who missed my company most of the time and sometimes on very special
occasions.
In the end I cannot forget to acknowledge the contribution of Ahmed Bilal Mehboob and
Aasiya Riaz (PILDAT) who give me assignment to work for the most effective
committee of the National Assembly of Pakistan and I eventually got the idea to work on
the functioning of PAC. PILDAT assignment was done in a couple of weeks after
counting number of meetings of the National Assembly and Senate standing committees
and declaring PAC the most effective committee of the National Assembly on meeting

4. IV
for maximum number of times but my research just started to further investigate the
operations of PAC.

5. V
Table of Contents
Table of Contents---------------------------------------------------------------------------------------IV
List of Figures------------------------------------------------------------------------------------------VI
List of Abbreviations----------------------------------------------------------------------------------IX
Abstract-------------------------------------------------------------------------------------------------XI
Chapter 1
Introduction---------------------------------------------------------------------------------1
Chapter 2
Literature Review--------------------------------------------------------------------------9
Chapter 3
Methodology and Theoretical Framework-----------------------------------------22
Chapter 4
The Structure, Functioning and Role of PAC-------------------------------------28
Chapter 5
Colliding Facts------------------------------------------------------------------------61
Chapter 6
Challenging the Past-----------------------------------------------------------------101
Chapter 7
The culture of governance in Pakistan--------------------------------------------142
Chapter 8
Conclusion----------------------------------------------------------------------------160
Chapter 9
Making PAC Effective--------------------------------------------------------------161
Cited References------------------------------------------------------------------------------167
Annexure---------------------------------------------------------------------------------------176

6. VI
List of Figures
Figure 3.1. Survey Population and Response Rate 23
Figure 4.2. PAC Organogram 38
Figure 4.3. Channels of supervision 39
Figure. 4.3 Process MAP of PAC 46
Figure 4.4. Sitting Arrangement of PAC Meeting 47
Figure 4.5. Official Procedure for Approval of Actionable Points 49
Figure 4.6. Official Procedure for Approval of Actionable Points 49
Figure 4.7. AG relationship with PAC 54
Figure 5.1. Comparative Delay 60
Figure 5.2. Performance of MIC 64
Figure 5.3. Details of the Audit Reports examined by Mr. Zahid Hamid, MNA 66
Figure 5.4. Details of the Audit Reports examined by
Mr. Riaz Hussain Pirzada, MNA 68
Figure 5.5. Backlog Status 69
Figure 5.6. General Comparison of 12th & 13th PAC 70
Figure 5.7. Excess budget Statements examined by 12th PAC 80
Figure 5.8. Excess budget Statements examined by 13th PAC 84
Figure 5.9. Audit Paras Discussed V/S Directives Passed 89
Figure 5.10. Compliance Rate in Per centage 90
Figure 5.11. Quality of Clearance 90
Table 6.2. A perception of the respondent about the of the Best Chair
of 12th
and 13th
PAC 100
Table 6.3.Tthe perception of the Capacity of Committee Staff of
12th
and 13th
PAC 101

7. VII
Table 6.4. Availability of Research Facility 101
Table 6.5. Government Response to Committee Recommendations 102
Table 6.6. Government Implements Committee Recommendations 103
Table 6.7. Institutionalization of practices 103
Table 6.8. Improvements in the integrity of government information or data bases 104
Table 6.9. Legal action was taken against officials who contravene laws 104
Table 6.10. Disciplinary action was taken against officials who contravene
administrative guidelines 105
Table 6.11. Resistant to Political Pressure 106
Table 6.12. PAOs found hiding facts 106
Table 6.13. Adoption of latest Financial Oversight Developments 107
Table 6.14. The Committee institutionalized certain guiding principles
required to meet its objective 107
Table 6.15. Adherence to financial control of resources 108
Table 6.16. The policy of waste prevention 109
Table 6.17. The Committee promotes practices of economical use of resources 109
Table 6.18. Representation of Political Parties 110
Table 6.19. Ministerial Exclusion 111
Table 6.20. PAC focus on holding the government accountable for its
spending of taxpayer’s money and its stewardship over public assets 112
Table 6.21. Committee focus on administration of policy 112
Table 6.22. Reference to examine the Public Accounts 113
Table 6.23. Reference to examine all reports of the Legislative Auditor 114
Table 6.24. Power to call independent witnesses 114
Table 6.25. Power to investigate or review all past, current and committed

8. VIII
expenditures of government Organizations receiving funds from
the government and all state corporations 115
Table 6.26. Power to request the legislative auditor to perform specific
reviews or tasks 116
Table 6.27. Power to compel officials to attend and be held accountable
for administrative, performance even after they have left office 117
Table 6.28. Power to compel witnesses to answer questions 117
Table 6.29. Power to make recommendations and Direct Actions 118
Table 6.30. Power to hold press conferences and issue press releases 119
Table 6.31. Power to hold in camera meetings, if dealing with sensitive
or national security issues 119
Table 6.32. Power to review proposed legislation or amendments to the
Legislative Auditor’s Act 120
Table 6.33. Power to review the Legislative Auditor’s budget 121
Table 6.34. Power to choose subjects for examination without government
direction and advice 121
Table 6.35. Power to compel ministers to appear before the committee 122
Table 6.36. Powers to take Suo-Moto actions 123
Table 6.37. Powers to listen to Public Complaints and take action 123
Table 6.38. Powers to take action on media review 124
Table 6.39. Influence of PAC on the adequacy of the corporate
governance arrangements 124
Table 6.40. Influence of PAC recommendations/Directives on institutions 125
Table 6.41. Close working relationship between members from
different political parties 126

9. IX
Table 6.42. Advance preparation of members 126
Table 6.43. PAC’s scrutiny speed of budget statements/appropriations/
Accounts/Grants 127
Table 6.44. Quick and in time decisions 128
Table 6.45. Close working relationship with Auditor General 128
Table 6.46. Provision of independent technical expertise and research
support for hearings 129
Table 6.47. Formation of Sub-committees to deal with Backlog 129
Table 6.48. Strategic prioritization of items for committee review,
with time limits for stages of committee work like consideration of
departmental replies, reporting, implementation reports 130
Table 6.49. Transcripts kept of all hearings and meetings 131
Table 6.50. Committee appointed for the life of the Legislature or Parliament
and stays active between sessions 131
Table 6.51. Televised public hearings 132
Table 6.52. Report to the legislature annually, and ask for the report to be debated 133
Table 6.53. Comprehensive response to recommendations from the government 133
Table 6.54. Having committee members with at least 2 years of prior
Committee experience 134
Table 6.55. Having committee members with prior administrative or
business experience 134
Table 6.56. Extra pay or other incentives for members to participate in
hearings outside the normal legislative session 135
Table 6.57. Meeting place suitable for media and public access to hearings 136
Table 6.58. Incentives to encourage administrative action on committee

10. X
recommendations 137
Table 6.59. Effective follow-up procedures to determine if action has
been taken to implement the committee’s recommendations 137
Table 6.60. Good relations with other parliamentary oversight mechanisms
such as the budget committee 138

11. XI
List of Abbreviations
AGP Auditor-General of Pakistan
ANP Awami National Party
APAC Adhoc Public Accounts Committee
CAA Civil Aviation Authority
CCAF-FCVI The Canadian Comprehensive Auditing Foundation-La
Fondation canadienne pour la vérification integrée
CEO Chief Executive Order
CDA Capital Development Authority
CGA Controller General of Accounts
CoD Charter of Democracy
CPA Commonwealth Parliamentary Association
DG Director General
ICG International Crisis Group
JCPA Australian parliament’s Joint Committee of Public
Accounts
KPMG KPMG is a global network of professional services firms
providing Audit, Tax and Advisory services.
MIC Monitoring & Implementation Committee
MMA Muthida Majlis-e-Amal
MNA Member of National Assembly of Pakistan
MQM Mutihida Qaumi Movement
NA National Assembly of Pakistan
PAC Public Accounts Committee
PAKPK Provincial Assembly of Khyber Pukhtunkhawa
PAO Principal Accounting Officer
PML Pakistan Muslim League
PML-N Pakistan Muslim League-Nawaz
PPP Pakistan People’s Party
PTA Pakistan Telecommunication Authority
UK United Kingdom
USAID United States Aid for International Development
WBI World Bank Institute
OECD Organisation for Economic Co-operation and
Development)
INTOSAI International Organization of Supreme Audit Institutions
RETA Regional Technical Assistance

12. XII
Abstract
The Public Accounts Committee of the National Assembly of Pakistan (PAC) is a
standing committee of the National Assembly- a legislative oversight committee that
holds the government to account for its use of public funds and resources by examining
the public accounts. Naturally a probing and regulating body, it performs financial
oversight while, examining the effectiveness of government programmes in achieving
their objectives. The PAC has an independent financial oversight role on National
Assembly’s behalf of the government and the public services. In performance of this task,
it is largely dependent on the information provided by the Auditor General in its audit
reports that reach the PAC vide Article 171 of the Constitution. In addition PAC takes
suo motu action on issues of public importance and also written public complaints.
The overall objective of the study is to identify the major problems, discrepancies and
failures relating to the performance of PAC, while counting the successes of PAC. In
order to achieve this objective a comparative study of functioning of the Public Accounts
Committee of the National Assembly of Pakistan during the periods: 2002-2006 and
2008-2011 is being done through this study
The study is largely based on McGee’s thought expressed in the Overseers and the
framework as defined by World Bank working paper by Stapenhurst, et.al., “Scrutinizing
Public Expenditures: Assessing the Performance of Public Accounts Committees” to
assess the performance of the PAC of the National Assembly of Pakistan.
The study revealed that PAC operations were restricted to years of backlog, inefficient
bureaucracy and political posturing. PAC is independent according to its mandate but still
leans heavily on the Auditor-General to prioritize areas of review. PAC has become a
platform to regulate the excess budget grants and to recommend settlement of paras. The
compliance rate is as low as 12 per cent on an average while 88 per cent of actions were
pending. (Monitoring and Implementation Committee 2012) The PAOs or the ministries
are continually violating the directives of PAC thus breaching the privilege of the
parliamentary committee. Leader of the Opposition who was the Chairman of PAC
according to Charter of Democracy resigned (November 27, 2011) on personnel stakes

13. XIII
while keeping the Office of the Leader of the Opposition burying the best practice of
financial oversight process, a sacred trust put on the shoulders of Opposition under the
Charter of Democracy.
The study also revealed that the state was spending much more on the institutions of audit
and financial oversight than their outputs the reported recoveries, financial management
and the impact on good governance. The study observed that certain audit practices like
highlighting of paras and audit sampling were quite ambiguous, and at the discretion of
the Auditor General.

14. 1
Chapter 1
Introduction
1.1 Background
The State is a major form of human political organisation that performs the critical
functions of establishing and sustaining order and collecting taxes, which, if not carried
out effectively, can lead to anarchy. Although states were greatly developed in earlier
periods of history with defined political setups, courts, tax systems and administrations,
democratic norms and constitutionalism are relatively recent phenomena (Niaz, 2010). In
South Asia, for example, rulers had a free hand over the resources of the state and the
people that resulted in chaotic conditions and wastage of taxes. In contrast, after
generations of political development, the British realised the importance of the proper
handling of state funds in order to combat fraud and corruption and to get the most from
the tax money. In 1857 a small group of the members of Parliament lead by Sir Francis
Bearing, recommended the creation of a committee to oversee the government accounts
to the parliament. William Gladstone, the then British Chancellor of the Exchequer,
initiated reforms and Public Accounts Committee (PAC) was established through a
resolution to structure and function in 1861 (Government of UK 2012). The practice
proved so effective that most of the commonwealth and other countries have adopted it
(McGee 2002).
In India, the Montague-Chelmsford Reform set the first PAC in 1921, chaired by the
Finance Member of the Executive Council and assisted by the finance department to
restrict the contradictory opinion and public criticism of the Executive (McIntyre, 1977).
The system continued till 1949.
In Pakistan, the first PAC was constituted on May 3, 1948 by Presidential approval to
adopt the Pakistan Constituent Assembly (Legislature) Rules (May 3, 1948) under section
38(3) of Government of India Act, 1935, read with the Pakistan Provisional
Constitutional Order, 1947. However, its meeting never took place (NA, 1985). The PAC
of the National Assembly of Pakistan is based on the basic Westminster Model of

15. 2
Democracy approach1
whereby the Executive-led government is accountable to
Parliament and the Parliament exercises oversight over the Executive-led Government
(USAID, 2009). The approach is largely based on learning lessons from the best practices
of tried and tested values among different democracies. In such a parliamentary system,
various committees are formed to overcome the legislative burden.
In addition to this, the institution of PAC in Pakistan existed even when parliament
remained dissolved, a minimum of six (6) adhoc PACs have functioned during military
rule which accounts for about half of Pakistan’s history. The PAC was normally chaired
by the Finance Minister till 1977 with the exception of Noor-ul-Amin, MNA,2
who
chaired 5th
PAC and then 2nd
adhoc PAC during Ayub Khan’s Marshal Law period (NA,
1985). In UK, since the origin of PAC, it is a convention that a Treasury Minister sits in
the committee meeting but does not participate in the debate (Government of UK, 2012).
Under General Zia, A.G.N. Kazi and Ghulam Ishaq Khan were the 4th
and 5th
Chairmen of
the adhoc PAC, respectively, Shahibzada M. Ali Shah, MNA, was appointed as the
Chairman PAC when General Zia established a democratic government during his rule
(Saeed, 1998).
Benazir Bhutto came into government in 1989 and appointed Hakim Ali Zardari, MNA,
from government party as the Chairman PAC. During the Benazir-Nawaz governments,
normally the PAC was chaired by the ruling party MNAs. On 25th
August 2000,
Musharraf formed 6th
adhoc PAC and appointed H.U. Beg3
as the chairman. While,
Musharraf held elections to give people a democratic government in 2002. The regime
established a proto-PAC to carry out the functions that would otherwise be performed by
1
The Westminster system is a democratic parliamentary system of government modelled after the politics of the
United Kingdom. This term comes from the Palace of Westminster, the seat of the Parliament of the United Kingdom.
The term, ‘Westminster model of democracy’ was developed by political scientist Arend Lijphart. The term
Westminster model interchangeably with majoritarian mode is used to refer to a general model of democracy. See
Arend Lijphart, Patterns of Democracy, New Haven, Yale University Press, 1999, p.9. This model of democracy is
defined as concentration of executive power in one party and bare majority cabinets, cabinets dominance, two-party
system, majoritarian and disproportional systems of elections, interest groups pluralism, unitary and centralized
government, concentration of legislative power in a unicameral legislature, constitutional flexibility, absence of judicial
review, a central bank controlled by the executive.
2
Noor-ul-Amin, MNA, was also from government party. He also has been Prime Minister of Pakistan from (December
7, 1971 to December 20, 1971) and Vice President of Pakistan from (1970-72).
3
Mr.H.U.Beg had an illustrious career in the civil service, holding various key positions for about five decades. He
served as secretary at several federal ministries and autonomous bodies and was the longest serving finance secretary.
Mr. Beg was a long serving distinguished member of the FAST-NU BoG. He was also chairman of the KASB Bank.
He passed away on December 9, 2009.

16. 3
the PAC in a parliamentary environment. Apparently, it was not any ideal condition,
however, being Parliament in abeyance, it is regarded a good practice in International
community. McGee (2002) acknowledges the existing of proto-PAC during Musharraf
regime saying the Government of Pakistan recognises the importance of PAC in good
governance and sound public sector accountability. However, the first Adhoc PAC was
first established in Pakistan in 1962 releasing the importance of public sector
accountability by Gen. Ayub Khan (NA, 1985).
The 12th
PAC was thus formed on 3rd November 2003 and Malik Allah Yar Khan, MNA,
from the government party was appointed chairman (National Assembly Secretariat,
2007). Generally it is observed that having a Government member as a chair could
indicate a lack of independence on the part of PAC from executive and consequently lack
of effective accountability and oversight. However, it is observed that in the Australian
context that a chair from the government can advocate that the PAC’s recommendations
be implemented by the government. Clearly this question of both the independence and
the implementation is empirical and can only be addressed by studying the actual
activities of the PACs (McGee, 2002).
The 13th
National Assembly first met on 17 March, 2008 but the PAC was formed on 19
September, 2008 with a delay of six (6) months and two (2) days. Ch. Nisar Ali, MNA
and the Leader of Opposition in National Assembly of Pakistan, was asked to chair PAC
for the first time in Pakistan as a Leader of the Opposition as is the practice in the
Westminster democracies respecting the Charter of Democracy (NA, 2007:Charter of
Democracy, Rule 15).
The purpose of the PAC in the parliamentary system of Pakistan is to identify wastage of
national wealth, tackling poor performance of departments and making the best use of
public funds, but the committee has become a probing body. Reports of the Auditor
General of Pakistan (AGP) and accounts of the Federal Government are referred to it for
a review. The review was not conducted in a timely and efficient manner causing a big

17. 4
backlog.4
The big backlog diverted the focus of successive PACs towards violations
concerning the previous government rather than focusing on the present one. The modern
democracies benefit from PAC in over-sighting their on-going projects and policies to
boost their delivery in a more efficient way but the case in Pakistan is different due to the
backlog and lopsided accountability meted out to the previous government’s projects. As
an example, the PAC of British Parliament has issued 62 reports in 2006-07 which
mainly include the work of government from major projects such as the Thames Gateway
and the preparations for the 2012 Olympics, administrative processes like helping
companies achieve their tax obligations and the implementation of child support reforms,
social issues like legal aid and anti-social behaviour, as well as timeless value for money
concerns such as procurement and employment programmes. These democracies are
working on Value for Money and Audit Performance concepts with a 90% of compliance
rate (Government of UK, 2012).
In case of Pakistan, during every period of democratic government the political leaders
politicised the civil servants for mostly ulterior motives. The original breaches in the
functional divisions of the state were made by elected representatives during the early
years of Pakistan. Heedless, the politicians used and abused the apparatus to secure their
personal power and wealth and drew the higher bureaucracy and the armed forces into
politics while punishing opposition leaders and dissenters through repressive legislation,
ordinances and the repeated imposition of governor’s rule (Niaz, 2010).With the
elevation of Ghulam Muhammad, a bureaucrat to cabinet post and the rise of Ayub Khan,
to the post of army chief, the politicians opened the corridors of corruption, mal-
practices, poor governance and the worse of all welcoming military to enter the politics
(Bhutto, 1973).
The three military takeovers, bureaucratic overstretch, introduction of local government
system at the cost of civil administration and unstable political governments of 1990s,
caused lasting harm to the state machinery. All these circumstances and the events
undermined the purpose of creation of PAC to oversight the institutions. The
4
PAC had formed three sub committees to deal this backlog of the last PAC. When Ch. Nisar Ali resigned as a
Chairman of PAC, they were up-to 2008 in dealing with the AGP reports and paras. (Please check the exact date that
they had cleared the back log to.

18. 5
politicisation of civil servants and the institutions badly affected the good governance;
hence, PAC remained ineffective across the history of Pakistan always struck with big
backlogs, on the mercy of inefficient civil servants and political posturing. The Study
will, however, focus the functioning of the PAC during the governments from 2002 to
2011.
1.2. Statement of the Problem
It is the responsibility of a state to provide its citizens with freedom from poverty,
freedom from servitude and a quality of life free from injustice and tyranny. Corruption is
the worse obstacle in achieving these objectives. It hampers development process of a
country. Once in practice, corruption encircles all sectors of state into its sphere on the
cost of citizen’s rights. Transparency International reported a loss of Rs. 8500 billion in
corruption, tax evasion and bad governance during the first four (04) years of recent PPP-
led coalition government (The Jang 2012). While, during the Musharraf period such
losses reported were Rs. 2576 billion only in five scams of Privatization, Bank of Punjab,
Petroleum, Stock Exchange and Sugar Scandal only (APSN 2009). These figures create a
terrible impression of governments when state institutions like PAC, the legislative
oversight body, were functioning. Why were these losses not avoided or minimised? The
Musharraf regime formed adhoc PAC realising the importance of financial oversight over
institution in time when National Assembly remained dissolved but does it meant
anything. In a scenario, the functioning of PAC in both eras is important to be discussed
under this study.
1.3. Hypothesis
The hypothesis of this study is that under both governments, the Musharraf Regime and
the Pakistan People’s Party-led Coalition Government, the operations of the PAC were
restrained by years of backlog, bureaucratic inefficiency and political posturing.
1.4. Objectives of the Study
The overall objective is to identify the major problems, discrepancies and failures, while
listing the successes of PAC keeping in mind its mandate according to the Rules and

19. 6
Procedures of the National Assembly of Pakistan. The effort is to achieve this objective
through conducting a comparative study of functioning of the Public Accounts
Committee of the National Assembly of Pakistan during the periods: 2002-2006 and
2008-2011. However the specific objectives are;
 To explore which one of the selected PAC remained most active/effective during
its respective periods based on quality of clearance provided its capacity
 To outline obstacles in review process of public spending and government control
of public funds which PAC performs in cases related to the use of public assets,
resources and funds under two selected governments
 To study the process of enquiry on evaluating financial management performance
to identify wastes and poor governance
 To ascertain whether reports, recommendation and directives of PAC have any
influence in improving the performance of the institutions, strengthening internal
control and preventing re-occurrence (addressing of the weaknesses pointed out
on the system by AGP, PAC, PAO)
 To formulate a set of policy recommendations on the basis of major findings, in
the end to help make the process of legislative oversight effective enhancing
accountability and transparency
1.6. Significance of the study
After a thorough review of the relevant data, it is observed that there is little work
available on the functioning of PAC of the National Assembly of Pakistan, while, it’s
functioning is requisitely public, awareness of the performance of state organs concerning
accountability and oversight of state institutions can restore public confidence in
Government. A thorough study of the comparative functioning of PAC in the selected
periods is significant to this study. After the completion of this study, the research will be
able to fill the gaps in the existing literature on functioning, especially comparative
functioning, of PAC during two comparative/consecutive governments.

20. 7
Secondly, major findings and recommendations of this research will be helpful for the
institutions specially governmental and non-governmental organisations working and
interested in good governance and the operation of PAC in Pakistani jurisdictions.
1.7. Justification of the Study
Although, PAC is working for the last 64 years, it has achieved few of the assigned
objectives given its mandate. The idea of good governance in the state has largely faded
away; political institutions have weakened as a result of adversities and unethical
practices of insincere and disloyal leaders across the history of Pakistan. Constitutional
democracy was never given a chance to flourish while the political leaders politicised the
civil servants to use them for illegal and abusive practices. On the other hand, state
resources and properties were competitively grabbed by one or the other among the
circles of politicians. Those in power had tried their best to get the most from their
position and access to the state resources. The PAC, in the previous governments
remained under government control5
, so was its oversight over state finances. Under the
present government, PAC only functioned to criticise the political rivals and policies of
the previous government. The moment, it cleared the back log and was ready to start
taking up issues that arose during the tenure of the present government, the AGP was
changed and Ch. Nisar Ali Khan resigned as a Chairman PAC leaving the committee to
its fate.
1.8. Limitations of the study
Although PAC is working since 1948 but the main aim of this research is to compare and
identify the better functioning of one government over other during year 2002-2006 and
2008- 2011. The study do not systematically examine the functioning of PAC during the
other governments in different times other than selected for this study and terminates
with the resignation of Ch. Nisar Ali Khan as its Chairman on November 27, 2011.
5
PAC was mostly chaired by Finance Ministers or the Members of Parliament who belong to government party or the
trusted and obliged persons of the government (Bureaucrats etc.). While, in Commonwealth and other countries, it is a
practice that PAC will be chaired by the Opposition Leader which happened for the first time during recent PPPP-led
government, Who give a chance to Opposition Leader Ch. Nisar Ahmed, respecting international practices to chair the
Committee.

21. 8
1.9. Organisation of the study
Chapter 1 is a Brief Background of the study. Chapter 2 is a Literature Review and
provide the sum of net practices related to the functioning of PAC. Chapter 3 is
Methodology and the Theoretical Framework of the study. Chapter 4 discusses the
Structure, Functioning and Role of PAC and is a brief guide for Members, Secretariat,
Auditor General, PAOs and general public to know about the process of PAC operations.
Chapter 5 & 6 examine and compare different traits of the PAC during two periods.
Chapter 5 in detail consists of major observations of the study during selected period
while Chapter 6 is the discussion of the results of the survey conducted for this study and
provides the perception of the respondents. Chapter 7 is a discussion of the major
findings bases on the theoretical framework set in the Methodology. Chapter 8 is a
Conclusion of the study and Chapter 9 is a set of Recommendations for making the
process of legislative financial oversight effective while enhancing transparency and
accountability. The next chapter is a detailed review of the literature.

22. 9
Chapter 2
Literature Review
2.1 Introduction
Although there is big accumulation of literature pertaining to the formation, functioning
and operations of Public Accounts Committees (PACs) across commonwealth and non-
commonwealth (McGee 2002; Wehner 2003, Gay and Winetrobe 2003, Stapenhurst,
Sahgal, Woodley and Pelizzo 2005; Pelizzo and Stapenhurst 2007; Jacobs, Jones and
Smith 2007; Jacobs and Jones 2009), very little investigation is made of the comparative
functioning of PAC in Pakistan. The study observes the comparative functioning of 12th
(2002-2006) and 13th
(2008-11) PACs of the National Assembly of Pakistan realizing the
gap existing in the entire literature. PAC, primarily being a financial oversight committee
of any Parliament, plays a vital role in implementing Public Sector Accountability being
a significant component of the parliamentary machine ensuring governments functions,
their working practices, policies, actions, course of execution and use of public monies
(McGee 2002:31). No democratic government can properly function unless an
appropriate accountability is not carry out (Funnell and Cooper 1998; Watson 2004).
However, Jones and Stewart (2008).deemed accountability could be an outcome of the
allocation of praise or blame.
PAC in Pakistan has always been an important standing committee of the legislature (NA
1885), realizing the importance of financial oversight of public monies, adhoc PACs
were constituted when National Assembly remained dissolved in Pakistan. However, the
operations of PACs across the history of Pakistan were only formalities (NA 1885). A
review of literature (ICG 2010, 2004; Shafqat 2010; Niaz 2010; Chaudry 2011 and Altaf
2011) holds that arbitrary transfers of state servants, bureaucratic inefficiency and
political posturing were major restrictions in the way of good governance in Pakistan.
This weak structure of governance never allowed oversight and accountability institutions

23. 10
like Public Accounts Committee to properly function in order to strengthen parliamentary
oversight of resources and the governance.
2.2 PAC Role as an Institution
Aldons (1985); and Griffiths (2006) described PAC, naturally a standing committee of
the parliament, is regarded as a key financial legislative oversight committee assigned the
job of compliance of its directives and maintaining efficiency and good governance of
departments and agencies under its ambit. PAC’s major responsibility has been to
investigate the financial oversight of the resources allocated to a programme at budget
proposal level. Whereas the PAC plays an ex post facto oversight process at a secondary
level to check the regularity in spending of allocated monies as Wehner (2003) describes.
During the early nineteenth, the PACs were associated entirely with the public finances;
to examine government expenditures, mainly based on the information provided in the
Auditor General Reports, naturally working in close relationship with the Auditor
General, making certain that public money sectioned by the legislature had been
appropriately, economically and efficiently spent on defined projects and programmes.
PAC had another obligation of the non-enforcement limitations of PAC especially in
Pakistan due to absence of supportive financial legislation under Article 79 of the
Constitution, like the Financial Management Practices Act that exists in South Africa
where a government agency can be fined or an official jailed for violation for financial
rules. The audit courts in Europe and African countries are good examples of
enforcement of financial oversight.
2.3 Modern Methods of Accountability- Audit Performance and Value for
Money
Mulgan (2001) and Guthrie and Parker (1999), have introduced the development of
performance auditing for the purpose of getting rid of old technical accounting methods,
while focusing on its prospective of resistance to political influences. They started
undertaking performance auditing work, while, other are exercising powers to examine
budget estimates, described as an ex-ante facto. Now, they better spotlight modern
concepts like value for money which is economy; the minimizing of costs of resources

24. 11
utilized for an activity with regard to appropriate quality, efficiency; is the ratio between
outputs and inputs, the maximum outputs from minimum inputs, and effectiveness; is the
relationship between the intended impact and the actual impact of an activity or product
(Johnson, 2010 and The House of Commons, 2005). However, the concept of
parliamentary accountability somehow remained a controversy and debate. Among the
conventional forms of accountability, was the concept of ministerial responsibility, where
ministers were directly accountable to parliamentary inquiries. Walter (2006).holds that
the concept remained under political test as governments re-defined and to a larger
degree abated the ministerial responsibility. The reason for lack of appropriate focus on
performance audit is the AGP’s concentration on compliance with authority audits that
have to be done in absence of an effective internal audit structure in the Governance set
up in Pakistan.
2.4 Conventional Accountability
The findings reported by CCAF-FCVI are consistent to the finding of Simon McInnes
research during the mid-1970s. In his research, McInnes examined the provincial
experience regarding legislative scrutiny of public expenditures. His study focused on the
standard functioning and proceeding of PAC, the role of AG in accountability process
and the relationship between PAC and AG, while discussing external factors which
influence PAC in performing its activities. McInnes (1977:39) significantly found that
PAC of one province was varying from the PAC of other province in many ways.
McInnes added that most of the PACs were functioning on conventional methods in 1975
and there was not any established system of proceedings.
Mulgan (1997) also challenged this concept, according to him, this is a pluralistic model
of accountability where accountability is a multi-dimensional phenomenon starting with
the new public management theory during the late 20th
century. However, regardless of
both the value of financial oversight committees to public sector accountability and the
varying political and administrative atmosphere that facilitates its function and
strengthens governance, there is a big gap in academic research on the functioning of
PACs in this prospective, including both common wealth and non-common wealth
countries, particularly in Pakistan. Normally, the existing works available are of a

25. 12
descriptive nature compiled by practitioners and politicians engaged in the PAC process
(McGee, 2002 and Watson, 2004) or by surveys conducted in the fields (KPMG, 2006
and Stapenhurst et al., 2005).
In a broader sense, a very significant academic study was by Degeling, Anderson and
Guthrie (1996) who carried out a content analysis of reports of the Australian
parliament’s Joint Committee of Public Accounts (JCPA) between the period 1914 and
1932 to study the activities involved in constituting the status and focus of a PAC. They
established that it was difficult to understand activities and outcomes of a PAC simply
with regard to purposes of its progenitors. They concluded that future studies are building
a link among accountability, accounting practices and PACs may be studied in an
analytical context of the concerned social and political environments (Degeling et al.,
1996: 47 and Jacobs and Jones 2009). While comprehending the earlier analysis of JCPA
into a study of demise in the early 1930s of JCPA and Victorian PAC, the study group
holds that both functionaries glided significantly from their deliberated job of financial
oversight to a legitimizing role.
Wehner (2003) and Newberry and Pallot (2005), in their studies highlighted the effects of
external factor on the functioning of PACs. Wehner (2003) arguments that regardless of
being a significant part of parliamentary structure and scrutiny process, the PACs are
largely dependent on external factors like political environment and resource provided.
The work of Newberry and Pallot (2005) recommended a pessimistic liaison among
PACs, accounting practice, and issues of parliamentary accountability. They further
argue that the introduction of the Public Finance Bill in New Zealand diluted
parliamentary oversight and control of spending in New Zealand. It highlighted a
significant question on the nature and independence of parliamentary finances and the
functions of PAC. A WBI survey of 51 PACs conducted by Pelizzo et. al., (2006)
resulted that broader mandate and freedom to set agenda were the successive factors of a
PAC. They also reported that 90% of Chairs acknowledged the authority of self-initiation
of agenda and choosing issues without any government meddling, was a successive factor
in PAC practices.

26. 13
2.5 Relationship of PAC and Auditor General
McGee (2002) produced a very effective publication on financial oversight and
accountability discussing the role of PAC and Auditor General with support of
Commonwealth Parliamentary Association. He worked to come-up with possible ways to
improve upshots through an effective use of PACs, while strengthening Auditor General.
His core identifications include; capacity building, independence, and information
exchange. Realizing the significance of the departmental capacity of the overseers for an
effective financial oversight of the government expenses, He upholds that the ability of
the three prime oversight institutions including the Parliament, the PAC and the Auditor
General to accomplish their oversight functions should be strengthened to the maximum.
He further says that it is also under the procedural ambit of PAC to work on the
strengthening of AG office to ensure effective accountability. AG office is regarded as
the main source of information for PAC working was also endorsed by Wehner (2003).
McGee (2002:31) also described that initially, PACs were constituted to ensure the
parliamentary follow up of Audit reports and compliance of its own Directives because of
a more common remit of PAC legal jurisdictions with Auditor General. He further
endorsed, while identifying the weakness of all three institutions involved in the financial
oversight process that better results can be achieved with the provision of required
staffing, resources, trainings and in time information. McGee also emphasizes that the
independent role of Auditors General from partisan and political influence is a successive
factor in its business. In order to perform its duties impartially, independence is the core
value for the Auditor General. McGee focused that availability of information and its
exchange among stakeholders was a successive factor in carrying out the business of a
PAC, he further stresses on the need of information exchange and sharing ideas while
keeping PAC fashioned with latest developments, changing standards and best practices.
The PAC and the Auditor General have a critical relationship in the course of public
sector accountability (Coghill, 2004; Jones and Jacobs, 2006; McGee, 2002; Stapenhurst
et al., 2005). Across the common wealth and non-common wealth jurisdictions PAC and
the Auditor General operate in coincidence and both are critical to financial oversight and
accountability holds (Jacobs and Jones 2006). Coghill (2004) argued that while

27. 14
accommodating rapport between PAC and an Auditor General are indispensable. He says
that this relationship might not overlap, necessarily transpiring effective governance as a
result when AG listen the views of PAC but never claim a caption of such views.
However, the point of significance is the trust of both Auditor General and PAC in
implementing and upholding a nonpartisan behaviour in their mutual trades. PAC should
be independent of the AGP in so far as the process of determining the nature of review
process prioritization. PAC can seek advice but decide on its own criteria rather than
AGPs irrespective of agreement or disagreement. In fact PAC should dictate the criteria
of prioritization. An effective decision support MIS is required in this case.
2.6 Agenda Setting-Who are the main Actors
This study also profited from the studies of Kingdon (1984 and 2003). He describes that
setting of policy agenda can leave critical inferences on the successive policy debaters
and the out springs. It is of significant that the agenda setter or the resource provider or
the source of inquiry to PAC has a greater role in shaping its role and it behaves as a tool
of governance and accountability of that political set up. It is very important to reason out
its focus of sources of inquiry necessarily in time. Despite a big resurgence in PAC
functioning in Pakistan since the late 2000, such activities have a limited scope because
of restraint resource supply or local political culture.
A central point of investigation in the PAC is how and by whom the agenda of PAC
proceedings is set and managed. It is also equally important to be aware of how different
institutional actors took part in the operations of efficient and effective public sector
governance and accountability, the roles of individual actors and their effects on
outcomes (Kingdon 2003; Ryan 1998). Kingdon (2003) describes that there are two
important factors which facilitate agendas to be set; the actors themselves, and the
processes involved in agenda setting. Deepening Kingdon’s (1984) work, Ryan
(1998:520) differentiate between the political agenda and the policy agenda, while,
defining political agenda as comprising on the broad issues which comes under the
jurisdictions of government functionaries and which are the basis of their functions, the
policy agenda relates to matters concerning policy formulation. In the Pakistani financial
reporting ambit, the main actors are PAC and the Auditor-General, while in developed

28. 15
countries like Canada and Australia main actors include PACs, AG, and the organized
accounting professionals, all of whom seek to influence the Australian or Canadian
political agenda, describes Ryan (1998). Political agenda is one of the significant areas
because PACs rarely address matters of policy overtly although; their activities are
patiently impinged on public policies.
An important question raised in this study is of the key actors that influence the political
agenda ‘who sets the agenda with respect to public sector accountability?’ The scope and
mandate of the PAC has a prospective that the agenda might be set by a number of
dissimilar sources. KPMG (2006) reported that other than a routine role of following up
of Auditor General’s Reports and the matters sometimes referred by the parliament ,
certain PACs took suo-moto actions on major issues of public importance, public
complaints, media reviews, showing powers to initiate self-enquiries. However Jacobs et
al. (2007) observed the relationship between AG and PAC largely depends on the
jurisdiction of that democratic setup. He also observed that PACs have the powers of
parliamentary review of audit reports but nearly half of the PACs are given the right to
refer matters to AG. While only few democracies give PAC the right to have a say in the
appointment of AG.
Jacobs et al. (2006) concluded that significant insights of the political and institutional
influences on PAC can be observed from its enquiries and operations and the judgment
that had control on its agenda. Jacobs et al. raised their apprehension on taking serious
the degree of independence to the functioning of PAC and the need for transparent
oversight, governance and accountability work of the PACs.
2.7 Independence of the PACs
There are other fundamental points of concerns about the independence of the PACs in
commonwealth countries. Jacobs et al. (2007) found that the government chairs in
Australian and New Zealand were 80%, while 70 % of the PACs in their study have a
government party majority. Another big number of PACs were found with ministerial
membership. However, McGee (2002) observed that a more than two third PACs of the
commonwealth countries were chaired by opposition party members. McGee (2002) also

29. 16
noted that government member chair have an effect of lack of independence of PAC from
executive, hence a lack of accountability and efficient oversight. McGee (2002: 66)
however, examined that a government member chair can better influence on the
implementation of PAC recommendation. Obviously, this is a critical question of both
implementation and independence that require a deep study of the activities of a
particular PAC. It might also be constructive to discuss the careers of PAC chairs as is it
often recommended being the chair of a PAC is a facilitating thing to the ministry. This
possibility remained the cornerstone of PAC history in Pakistan, from 1951 to 2000; the
PAC was chaired by Finance Ministers or the Finance Ministers for State. Mr H.U Beg,
Chairman 6th
adhoc PAC was a former Finance Secretary.
2.8 Relationship between Accountability and Governance
Another study of Canadian PACs was carried out by CCAF-FCVI initially in 2004, while
its final research report published in 2006. The report investigated accountability and
governance relationships among public oversight committees, legislative auditors, and
senior government managers, with particular focus on the functioning of PACs in relation
with these institutions. The report comes up with a structure of core powers and practices
to help strengthen the effectiveness of PACs. The report identified four significant factors
in Canadian PACs: i) each PAC is unique; ii) PACs must try to avoid partisanship to be
effective; iii) PACs should operate independently of government and should be curious
enough to ask probing questions; and iv) PAC proceedings can play a meaningful public-
education role. However, the report does not investigate any specific differences at PAC
level leaving it ambiguous that what are the powers of PACs in specific jurisdiction.
Hence, the comparison of individual PACs looks impossible. The report also detects that
there found no single model PAC because of the variances in structures and democratic
cultures of the legislatures and administrations of the diverse jurisdictions. However,
CCAF-FCVI reported a substantial disparity among the relationships between the
legislative auditor and PAC and between Principal Accounting Officers and PAC, in the
mandates of the committee, in the conduct of business, in reporting to the legislatures, in
follow-up of committee’s recommendations and in the rate of compliance.

30. 17
The institutions of PACs are the landmark of effective financial accountability and
governance in the public sector. Public accounts committee is the oldest and the most
significant standing committee in any parliamentary committee system due to its
responsibility and the set of powers it exercise, hence, it has a critical role in ensuring
public sector accountability and effective governance.
2.9 Assessment of PAC Performance
In the recent studies include Stapenhurst et al (2005), a working paper on the assessment
of PAC performance, thus deepening McGee’s (2002) analysis of PACs. The report
explores PAC success and identifies factors affecting its performance. The study was
based on data collected by WBI in 2002, where a survey questionnaire was sent to 51
parliaments in Commonwealth countries in Asia, Australasia, Canada and the United
Kingdom. The WBI report observed that availability of information and non-partisan
were critical success factors of the PACs as ascribed by McGee. The survey also resulted
that two other factors were equally important including the institutional design of the
PAC, and the PAC’s operational model. The report observed the extant of
institutionalization and the nature of powers and mandate of a PAC directly contribute to
its effectiveness. The results of the survey reached to the conclusion that a greater focus
of PACs on government’s financial activity and accountability were important rather on
the assessment of the content of the government’s policies. The study holds that the PAC
empowered to probe all past and present government expenses was at a best practice,
however, PAC better benefit from examining ongoing projects. PACs should also be
empowered to making departments and government implement its directives. Most
importantly, the report pays greater focus on close working relationship of Auditor
General with PAC. The report further proves that the behaviour of PAC members and the
functioning of the committee are successive factor other than the institutional design of a
PAC. The practices identified by Stapenhurst et al, further include, a non-partisan fashion
and consensus among members, preparation of Members prior to a meetings, keeping of
the transcripts of meetings by PAC secretariats and publishing of Committee conclusions
and recommendations on PAC website and in press and involving the public and the
media. The paper also gives in its end the 17 aspects of an ideal committee.

31. 18
Jacobs et al, found that there were three categories on the result of their investigation of
148 reports produced by PACs in around nine Australian Jurisdictions over a period of
four years’ time. The categories comprising firstly, those PACs for which the prime
agenda was the follow-up of Auditor-General reports, secondly, the PACs for which self-
initiated inquiries was the principal activity and thirdly the PACs who pay equal
concentrations to Auditor General reports and the self-initiated inquiries. The third
category being an interesting and exceptional case with a balance between follow-up
enquiries and self-initiated enquiries was regarded the best practice. He concluded that
the inclination of interpreting a balance of activity between both the PAC and the AG is a
positive sign of independence constitutionally provided.
A need assessment report of the USAID (2009) observed that the operations of PAC of
the National Assembly of Pakistan were restricted by a backlog of nine (09) years.
However, the 12th
PAC, previous to the recent one inherited a backlog of twelve (12)
years. The USAID assessed that this “backlog” issue is the mountain which makes the
real forward journey of the PAC difficult to embark upon. The report argued that it
significantly impedes with the committee functioning and absorbs its attention from more
current issues and is likely to continue to do so for some time. The report also added that
the situation causes an overall workload which far exceeds the PAC’s work capacity. The
AGP has expressed concern that this could lead to PAC fatigue, the report described. The
report also found that the use of sub-committees was the best tool to deal with the
backlog. The report also recommended that backlog could also be dealt with by attending
only to those matters which could lead to recovery of monies for the State and by
engaging extra staff to clear the backlog.
2.10 Classification of the range of structures, responsibilities and working
practices of a PAC
A report was published by KPMG jointly with La Trobe University, on PACs of
Australia and New Zealand in 2006. The purpose of the report was to classify the range
of structures, responsibilities and working practices, and is regarded by Rick Stapenhurst
and Cindy Kroon as the first exhaustively comparative work of PACs in all Australian
and New Zealand jurisdictions. Premise of the study is that “one size does not fit all”; the

32. 19
structure, terms of proceedings and the operational models vary from one PAC to another
and there is no set of unique practices to follow in constituting an effective PAC.
However, a number of operations and working practices adopted or developed by
individual jurisdictions can be matching and beneficial to other jurisdictions. The study
group observed a variance in rules, practices, and outcomes, differentiating each PAC
from other.
Stapenhurst and Kroon (2008) conclude after observing various studies that no ideal PAC
exists, but there are a number of good practices of PACs that can be adopted by other
PACs to improve and to be more effective. They also believed that the existing literature
discusses numerous practices, but none of them identifies working practices of individual
PACs. They resulted that there was no study that investigated data of individual PAC and
practices adopted to be unique.
2.11 Governance and Accountability Crisis in Pakistan
International Crisis Group-ICG, in 2004 reported the state of devolution of power in
Pakistan during Musharraf regime. The study reported the political tactics, a military
ruler adopted to enhance his military rule on the cost of state institutions. The overt aim
of the Devolution of Power Plan was to empower the impoverished but in practice, the
plan undercut the established political parties and provincial powers were drained away,
doing no effort for corruption or accountability at local level. The report noted that apart
from strengthening democracy, the reforms, strengthened military rule, raising risks of
internal conflict and institutional clash. The core objective of regime legitimacy and
survival was enriched utilizing the Local governments to; i) depoliticize governance; ii)
create a new political elite to challenge and undermine the political opposition; iii)
demonstrate the democratic credentials of a regime to domestic and external audiences;
iv) undermine federalism by circumventing constitutional provisions for provincial
political, administrative, and fiscal autonomy. ICG also reported that District Nazism
poured public funds and other state resources to boost pro-Musharraf rallies during the
presidential referendum in April 2002 and to support the PML-Q’s parliamentary
candidates in the 2002 national elections. By that time, PAC was somehow functional,

33. 20
but was assigned with a big backlog of past 12 years; no attention was paid to oversight
these mega corruptions scandals.
A recent study from a Pakistani author Ileana Niaz, appeared in 2010. The study is based
on fabulous amount of original sources and a strongly argued analysis of the sixty years
of Pakistan’s governance. The study attempts to enlighten Governance crisis in Pakistan
in historical and philosophical requisites. Niaz argues that the exercise of power has
reasserted and produced deterioration among the attitudes of ruling elites because of
South Asia’s native orientation. He further his argument that during the past sixty years
of independence from British rule the mind set and attitude of state functionaries and
political Jirga’s has been turning out to be more arbitrary, proprietorial and delusional.
Niaz fears the consequential corrosion in the intellectual and ethical superiority of the
state machinery has become a moral hazard to Pakistan. A decline is noticed, author says,
in the capacity of state to prosperous and uphold good governance according to its
described constitutional mandates. The study reported the worse political and
bureaucratic behaviour towards Pakistani state saying that rulers are treating state as their
personal estate while the servants of the state are tuned to be personal servants of the
powerful members of the executive. He concludes that this arbitrary exercise of power
has been materialized as an overriding rule and discouraging the institutional and
psychological moralities and practices originally inherited from British Empire.
Another recent study ‘Political Administrators’ is a story of the civil service of Pakistan,
written by Aminullah Chaudry in 2010. The author, describing the politicization of civil
servants says since everything is possible in Pakistan, it didn’t surprise him, being DG
CAA and Secretary Aviation, performing superhuman feat of hijacking an airborne
aircraft carrying the chief of army staff, on the orders of the then Prime Minister.
Chaudry describes that out of sixty five years since independence, for the thirty-three
years, the country has been ruled by military dictators. For the remaining thirty years, it is
observed that the politicians ranging from the autocratic to the corrupt; from the inept to
the clueless. He augmented that these fluctuations between dictatorship and democracy
could have been absorbed by a country with a functional and reasonably neutral civil
service. He added that Pakistan inherited well-oiled machinery called bureaucracy from

34. 21
British but within no time its Pakistani successors forged an alliance with the army and
actively undermined the democratic process. Chaudry goes ahead saying that after break
up of Pakistan in 1971, the bureaucracy aligned with Zulfqar Ali Bhutto and on the event
of the coup of 1977, putting all its weight behind General Ziaulhaq. He further argues
that this flip-flop continued through the so called democratic regimes of Benazir Bhutto
and Nawaz Sharif, and the military regime of General Pervaiz Musharraf. He concludes
that the institutional decays occasioned by these shenanigans did incalculable and
possibly irreversible damage to the civil service in Pakistan resulting bad governance at
large.
Another story of Pakistan’s dismal governance is written by Saima Iltaf (2011). In her
study, she uncovers the bureaucratic inefficiencies. Her study is about the forces of a
country which are set in motion when huge monies flow into the coffers of countries like
Pakistan whose decision makers never consider themselves accountable to their people.
The story is a routine of government offices, the bureaucrats and their decision making.
She discusses the attitudes of these decision makers towards good governance and
development.
The literature discusses the different traits of different PACs in common wealth and non-
commonwealth jurisdictions but there found a very little work on the functioning of PAC
of the National Assembly especially during the recent government. However, the present
study assessed the comparative performance of PAC during Musharraf regime and the
PPP-led Coalition government. The next chapter is a Methodology and Theoretical
Framework of the study.

35. 22
Chapter 3
Methodology and Theoretical Framework
3.1 Methodology
The present study deals with comparative functioning of the PAC in the selected period
(2002-2011). The Study is based on Qualitative Research and as it is a study of two
consecutive periods, the research design is a Penal Study. Consequently, the approach
adopted was primarily analytical and chronological with an element of interpretation. In
an effort to compare the functioning of 12th
and 13th
PAC to their mandates as set in the
Rules of Procedure and Conduct of Business in National Assembly, 1992, and the Rules
of Procedure and Conduct of Business in National Assembly, 2007, respectively
(National Assembly of Pakistan, 1992 and 2007). The study orients towards explaining
how PAC is working as a probing body rather an accountability institution holding
executive authorities/spending ministries and revenue earning agencies of the
Government accountable for performance in terms of its mandate.
3.1.2. Survey Research
A survey was conducted to articulate comparative views of the parliamentarians of 12th
and 13th
National Assembly adopting World Bank Institute’s instrument used in its
appraisal of 51 democracies in 2002 (Stapenhurst et. al., 2005.) with certain changes
suitable to local parliamentary ambiance. Naturally, the present study being comparative
one, same indictors were chosen for assessing both 12th
and 13th
PAC of the National
Assembly of Pakistan. Hence two Questionnaires were used having same indicators but
different time period; one for 12th
PAC and the other for 13th
PAC. A total of 75
Questionnaires were sent to the whole population consisting Members of PAC, PAC
Staffers, AG Office, Media persons and other stakeholders for this study. However,
greater importance was given to those members who served both PACs, staffer who
served both PACs and media persons who observed the operations of both PACs. The
Questionnaires were personally distributed with the request to fill and return to the whole
population of the 12th
and the 13th
PAC. However the response rate remained 57 per cent.

36. 23
The population and response of the members of 12th
and 13th
PAC is depicted at Figure
3.1. The maximum response was received from the 13th
PAC which was 54 per cent as of
30 per cent of 12th
PAC.
Figure 3.4. Survey Population and Response Rate
A total population of 75 persons was selected for this study that include 41 MNAs, 10
PAC Secretariat Staff Members, 12 from Auditor General Office, 8 media persons and 4
others. The total response for the whole population remained 57 per cent making a total
of 32 respondents out of which include 13 MNAs, 6 PAC Secretariat Staff, 5 from AG
office, 6 media persons and 2 other.
3.1.3. Interviews
Besides, the questionnaires were distributed to the concerned stakeholders of PAC;
twenty one semi-structured interviews were also conducted from the members of the
PAC, staffers of the PAC, AGP and media persons. The details of the persons
interviewed are as under;
1. Mr. Nadeem Afzal Chan, Chairman PAC
2. Mrs. Yaseem Rehman, MNA, Member PAC
3. Syed Haider Abbas Rizvi, MNA, Member PAC
4. Sardar Ayaz Sadiq, MNA, Member PAC
0
10
20
30
40
50
60
70
80
Total
Population
12th PAC
Response of
12th PAC
Total
Population
13th PAC
Response of
13th PAC
Total
Population of
Both
Total
response of
Both
18
3
23
10
41
13
4 2
6 4
10
66
2
6 3
12
54 2 4 4
8 6
2 1 2 1 4 2
34
10
41
22
75
32
30% 54% 57%
MNA Staff AG Media Others total % of Total Response rate

37. 24
5. Mr. Riaz Fatyana, MNA, Member PAC
6. Mr. Saeed Ahmed Zafar, MNA, Member PAC
7. Bagum Shahnaz Sheikh, MNA, Member PAC
8. Mr. Moosa Raza Afandi, Additional Secretary, PAC
9. Ms. Najama Saddiqui, Joint Secretary, PAC
10. Mr. Muhammad Mushtaq, Deputy Secretary-Legislation
11. Mr. Muhammad Khaleeq Ahmed, Deputy Secretary, PAC
12. Sayed Fayyaz Hussain Shah, Deputy Secretary, National Assembly
13. Mr. Muhammad Mohsin Khan Former Controller General of Accounts,
Government of Pakistan and former Advisor to PAC.
14. Mr. Sharafat Ali, Section Officer, PAC
15. Mr. Salamat Ali, Section Officer, PAC
16. Mr. Inamulhaq, Section Officer, PAC
17. Agha Muhammad Asif, Superiendent/ Section Officer, PAC
18. Mr. Muhmamd Shbbir, Assistant, Main PAC Branch
19. Mr. Haji Hattar, Librarian, NA Library
20. Mr.Muhammad Arshad, Audit Officer-PAC Auditor General of Pakistan
21. Mr. Rouf Kalasra, Anchor Person
22. Mr. Tahir Khalil, Media Person
23. Mr. Saddique Sajjid, Media Person
3.1.4. Documentary Sources of Information
The basic sources used for this study are declassified PAC records held by the PAC
Secretariat, private papers, audit report issued by AGP, PAC reports. The study benefited
from a number of reports produced by International Institutions such as WBI, CPA and
USAID on the subject. A number of laws, books, papers, reports, newspapers and other
documents were also surfed and examined to compare the performance of PAC during
selected governments.

38. 25
3.1.5. Focal Discussions and PAC Meetings
PAC meetings were regularly attended during the course of this research to empirically
observe the functioning and operations of PAC and to observe the participation of PAOs
and the AG. Internal Meetings of PAC (Pre-PAC) and its meetings with different
delegations like USAID etc were also attended to better understand its operations. In this
connection, the department of GPP requested the Joint Secretary PAC for a permission to
observe the operations of PAC and to attend its meetings which was permitted by PAC
Secretariat. Later On, Nadeem Afzal Chan, the new Chairman, facilitated a lot in research
activities and made easy access to data and practical activities of PAC during his
Chairmanship.
3.2. Theoretical Framework
The theoretical framework of this study is mainly based on two recent and important
works; McGee’s (2002), ‘the Overseers’ and the World Bank Policy Research Working
Paper ‘Scrutinizing Public Expenditures: Assessing the Performance of Public Accounts
Committees’ written by Stapenhurst et al., (2005). McGee dealt with the two very
important aspects of financial oversight namely the Auditor General and the Public
Accounts Committee, while the World Bank paper further deepened McGee’s analysis of
PAC.
3.2.1 The Overseers- by McGee David
McGee’s work was based on the views of a study group organized by Commonwealth
Parliamentarians Associations (CPA) that investigated practices across the
commonwealth concerning roles and functions of PAC and AG and their relationship.
The Study assessed the working practices of PACs and whether they are delivering as
important guarantors of good governance (McGee, 2002). The main individual
conclusions and recommendations of the Study are annexed (See Annex-I)
The study group tried to distil the practices into checklists of deliberations for
Parliaments, recognizing that there is no one organizational form that a PAC will take
considering social, economic and political factors across countries. The group also

39. 26
discussed and tried to define a modern rationale for PACs which is necessitated by and is
based on the international dimension that results from a greater inter-dependability of
nations that has brought in its wake greater challenges to good government (Stapenhurst
et. al, 2005).
McGee (2002) identified potential courses of action to improve outcomes through more
effective use of PACs. Three major finding of the study include:
 Capacity Building: the need to improve the ability of Parliaments and
their PACs to carry out their functions by being provided with adequate
resources, training and access to relevant expertise
 Independence: that they be free from political or legal constraints that
could inhibit them from carrying out their duties diligently
 Information Exchange: that PACs have the means to exchange
information and ideas so as to keep them up-to-date with important
developments, changing standards and best practices as they emerge
3.2.2 Scrutinizing Public Expenditures: Assessing the Performance of Public
Accounts Committees by World Bank Institute
World Bank working paper by Stapenhurst, et.al., While, defining the greater successes
of PAC, identifies impending factors effecting PAC performance based on the data
collected by World Bank Institute in 2002 on a Survey Questionnaire sent to 51 PACs of
Commonwealth including UK, Canada, Asia and Australia. The paper identified
imminent factor for a PAC was focus on government’s financial activity rather than its
practices, the power to investigate all past and present government expenditures, the
power to follow up on government actions in response to its recommendations, and its
relationship with the Auditor General. They give a comprehensive framework for
assessment of PAC performance, consisting of very important three dimensions;
 Activity level - the measurement of events and input resources used such as:
 keeping up to date with legislative auditor’s reports,
 costs and time of staff, members, witnesses and others involved.

40. 27
 Output level - the immediate visible results of work the committee does like:
 recommendations made, followed up and implemented
 Outcomes level - durable improvements in public administration such as:
 increased economy, efficiency or effectiveness of government programs
 better compliance with laws or regulations,
 improvements in financial and control structures, such as prosecution of
wrongdoers, stronger powers for legislative auditor
 more accurate, timely government information
 enhanced public awareness of government programs
 enhanced legislative knowledge about the state of the management of
programs
Along with these indicators the study also discussed, whether PAC infect dealt with the
issues of importance reaching to its root cause or it generally investigate the symptoms of
the problems such as corruption. The study also gages the deterrence effect of PAC on
the attitude of PAOs or the departments. They argued this an aspect of performance
“relevance”. They also described an “Ideal Committee” (See Annex-II).
The present study incorporated both these works by McGee and the WBI to check the
performance of 12th
PAC (2002-2006) and 13th
PAC (2008-2011) of the National
Assembly of Pakistan. The study focuses on the comparative functioning of both PACs
during the governments, the Musharraf Regime and the Pakistan People’s Party-led
Coalition Government. The study finds some winning points on the basis of a comparison
on equal indicators and sees whether any of two PACs institutionalized those
developments. The next chapter is the Structure, Functioning and Role of PAC, a guide
for Members PAC, PAC Secretariat, Auditor General, PAOs and other stakeholders.

41. 28
Chapter 4
The Structure, Functioning and Role of PAC
4.1 Introduction
The present chapter the Structure, Functioning and Role of PAC, is a guide for Members
of PAC, PAC Secretariat, Auditor General, PAOs and other stakeholders The Public
Accounts Committee of the National Assembly of Pakistan (PAC) is an institution that
oversight financial matters of state on parliament’s behalf. PAC carries out examination
of the accounts of the Federal Government, complied by the Controller General of
Accounts (CGA) and the Auditor General of Pakistan (AGP). The present PAC is the 13th
Public Accounts Committee of Pakistan since its formation on 14th
April, 1948 (PAKPK,
2011).
The structure and functioning practices of PAC are primarily patterned after Westminster
approach. In the recent decade, it seemed, the PAC has adopted a number of
internationally recognized best practices to make its working effective. The efficiency of
the current PAC is credited to the practice of the appointment of the Leader of the
Opposition as its Chairman, for the first time in the history of Pakistan, under charter of
democracy signed by the leaders of the two major political parties of Pakistan; Benazir
Bhutto and Nawaz Sharif (Charter of Democracy, Rule 15).
The 18th
amendment have widened the scope of PAC oversight over state corporations,
trading and manufacturing concerns, development schemes and projects, autonomous and
semi-autonomous bodies, putting under the ambit of Auditor- General (Rehman 2012).
4.2 Background
PAC is a standing committee of the lower house, the National Assembly of Pakistan like
many other countries. PAC was established to exercise under rules 51 and 52 of the
Manual of Business in the Legislative Assembly of undivided India adopted as verbatim
in the constitution Assembly (Legislature) Rules with some minor variations in 1948
(NA, 1985). The Rules 51(1) stated;

42. 29
“As soon as may be after the commencement of the first session of the Assembly, a
Committee on Public Accounts shall, subject to the provisions of this rule be
constituted for duration of the Assembly for the purpose of dealing with the
appropriation accounts of the Government of Pakistan and the reports of the
Auditor General thereon and such other matters as the Finance Ministry may
refer to the Committee”. (NA, 1985, P.76)
4.5 Oversight Perspectives
Parliamentary Control over public monies in Pakistan is exercised at two levels (National
Assembly Secretariat, 200?), first is the proposal stage, where government on the end of
every fiscal year comes forth with a budget proposal to get through the financial jiggle of
the public representatives in order to implement its programmes and policies for
upcoming year by overseeing the policy preparation. Second is the control over the
expenditure of public money. Here, PAC plays a watchdog role of oversight and
examines the accounts of the Federal Government compiled by the CGA and audited by
the AGP. The process assigns responsibility to the public representatives to keep a check
on public expenditures by overseeing the execution and implementation of a given
policy. This is an ex post facto responsibility.
In order to assess Parliamentary control over public monies, two inter-related universally
accepted background oversight perspectives of PAC are vital (USAID, 2009).
4.5.1 The nature and extents of the PAC oversight roles
Generally determined a predominant oversight committee in Westminster democracies,
the PAC provides a critical oversight function in the legislative process within its defined
Legislative Oversight ambit to improve the efficiency and effectiveness of all
government and public agencies. Key functions include;
 Providing a plausible and autonomous review process of public spending
and governments control of public funds through the examination of appropriation
accounts and audit reports
 Investigating the use of public assets, resources and funds

43. 30
 Making sure the process of enquiry has greater focus on evaluating
financial management performance (rather than on policy)
 Ensuring its reports, recommendation and directives are influential, using
its powers and authority
 Challenging the adequacy of the corporate governance arrangements.
4.6 The Committee System in the Parliament of Pakistan
The best practice around the world is that the legislative oversees the performance of the
executive through a mechanism of Standing Committees. A great number of modern
democracies have provision in their constitutions and parliamentary rules and procedures
for setting up Standing Committees to review the financial and administrative operations
of the executive departments and agencies.
The Committee System in the Parliament of Pakistan is based on the basic structure of
Westminster and the lessons learned from the best practices of committee systems of the
developed democracies (NA, 1985). A good effort remained always there to copy the
American committee system (Hussain 2012). Across the parliamentary democracies,
different committee systems are in practice to lessen the legislative burden of the house
and to provide technical support based on a detailed discussion at committee level. In
Pakistan, the system of Standing Committees is governed by the Rules and procedure and
Conduct of Business in the National Assembly, 2007. The Public Accounts Committee is
a Standing Committee which plays a vital role in financial oversight and accountability of
the executive.
The Committee System in the Parliament of Pakistan consist of thirty five (35) Senate
standing committees and forty six (46) National Assembly standing committees including
PAC, one (01) Select Committees of the National Assembly, nine (09) parliamentary
committees and eleven (11) Special Committees consisting of members both from the
Senate and the National Assembly (NA, n.d) . The number of committee in the
Parliament of Pakistan varies from time to time depending on the need and requirement
of the parliamentary process. The Secretary National Assembly controls all the Standing

44. 31
and other committees, then, there are Joint Secretaries, each one of them control the two
major branches, Standing Committees Branch-I and Standing Committees Branch-II,
sharing the assignment of half of the standing committees of the house.
Legislative committees in the parliamentary system of Pakistan are regarded as the core
functionaries and are contributing a lot in the legislative business.
4.6.1 Difference among PAC and Other Standing Committees
Constitutionally, the Public Accounts Committee is a standing committee like other
standing committees of National Assembly but it has certain powers and responsibilities
which distinguish this committee on other standing committees of the National Assembly
of Pakistan. The major points of distinction include;
 All standing committees of National Assembly deal with the affairs of
their respective ministry, while the PAC ambit all ministries/departments/agencies
working under Federal Government. Further, review of performance of
government agencies under the standing committees other than PAC is
discretionary whereas PAC has to look into each audit observation that may
pertain to all the Ministries.
 The PAC had a responsibility of legislative oversight of public monies to
regulate spending of ministries/departments/agencies while other standing
committees are concerned with general affairs of ministries. The control over
public monies gives PAC a pre-eminent position in the committee system of the
National Assembly of Pakistan.
 The main purpose of the creation of PAC was to ensure the parliamentary
follow up on Auditor General’s reports to regulate public spending (McGee,
2002). The jurisdictions of PAC are more in common with Auditor- General’s
ambit than does that of the other committees (McGee, 2002).
 PAC recommendations are regarded its Directives which are binding on
ministries, departments and agencies, while other Standing Committees of

45. 32
National Assembly can only give recommendations to National Assembly which
are not binding rather a set of suggestions.
4.7 PACs in Pakistan
Since its formation in 1948, the recent PAC is the 13th
one. While, six (06) adhoc PACs
have also functioned in Pakistan. The adoption of adhoc PAC shows the importance of
financial oversight in the country. A brief detail of the PAC background is given in the
introduction. The list of Chairs of PAC is annexed (Se Annex-III). PAC have functioned
for a total period of twenty two (22) years, six (06) months and two (02) days, while, the
adhoc PAC remained functional for a total of sixteen (16) years and seven (07) days.6
Although PAC existed across the history of Pakistan, sometimes it remained less
effective. Its development is associated with time and changing circumstances. PAC is
largely transforming its role from a probing body to its supervisory role increasing
efficiency and effectiveness of programs to achieve her defined objectives (Rehman,
2012). Being a standing committee, the PAC has the power to investigate and examine all
the issues referred to it by the legislature and the issues of public importance (Rehman,
2012).
4.8 Audit Reports of PAC
PAC after a complete scrutiny of audit paras prepared by AG and referred to PAC by
National Assembly is laid back to National Assembly in a form of annual audit report of
PAC. Such reports contain directives of PAC for compliance.
4.8.1 Audit Reports completed and laid before the NA
Till to date, PACs and the APACs together have completed and laid before the National
Assembly thirty (30) Audit Reports. The report of the Year 1993-1994 is ready for
printing. The report of monitoring and Implementation Committee of PAC for the years
2011 is sent for approval to the main PAC. (See Annex-III)
6
The information is obtained from termination letters of different governments found in the file containing
letters of Assemblies Termination available at Library of the National Assembly of Pakistan and the PAC
reports also available at NA library.

46. 33
4.8.2 Pending Audit Reports
A total of eight (08) audit reports are still pending. Three reports (1998-1999, 2002-2003,
2003-2004) were assigned to Special Committee II, chaired by Mr. Zahid Hamid, MNA.
While, three reports (2004-2005, 2006-2007 and 2007-2008) were assigned to Special
Committee III chaired by Mrs. Yasmeen Rehman, MNA. The audit reports of the years
2009-2010 and 2010-2011 were being examined by the main PAC. (See Annex-IV)
However, another four (04) reports (1981-1982, 1982-1983, 1983-1984 and 1985-1986)
were still in backlog list.
4.9 Role of Adhoc PACs (APAC)
When National Assembly remained dissolved in Pakistan, the Chief Executives, while
realizing the importance of financial oversight of the public monies, introduced proto-
PACs (APAC). Consequently, Adhoc PACs were invariably set up, during the interim
governments to examine the Federal Accounts and the Auditor General Reports (NA,
1985). The First APAC was introduced by Yahya Khan, the then Chief Marshal Law
Administer, on 3rd
march, 1960 (NA, 1985). A minimum of six (06) APAC have
functioned in Pakistan (PAKPK, 2011). The sixth and the last APAC was constituted on
25th
august, 2000 (Finance Division, 2000). It was validated by the Chief Executive
(CEO, 2001). So for APACs have produced four (04) Reports.
4.10 Functions of PAC
PAC performs its functions under powers as given by the Rules of Procedure and
Conduct of Business in the National Assembly (2007) and the Constitution of the Islamic
Republic of Pakistan.
4.10.1 Powers of PAC
The PAC scrutinizes the Appropriation Accounts of the Government provided in the
reports of the Auditor General of Pakistan. It is the duty of the committee to satisfy itself
while doing so according to the current mandate of the PAC under the Rules of Procedure
and Conduct of Business in the National Assembly (2007) ( See Annex-IV). PAC has
additional and more specific powers to perform its tasks, such as power to examine the

47. 34
public accounts, the comments on the public accounts, and all reports drafted by the
auditor general. The PAC has the power to conduct, directly or indirectly, investigations;
to receive all documentation it considers necessary to adequately perform its functions; to
invite government members to attend its meetings and to respond to PAC members’
questions; to publicize its own conclusions; to report to the legislature; and to suggest to
government how to modify its course of action when necessary.
4.10.2 Basis of PAC Functioning
The PAC is designed to better examines the accounts for the appropriation of sums
granted by the National Assembly for the expenditure of the government policies and
programmes for the annual finance accounts, the report of the Auditor-General of
Pakistan and other matters of public importance referred by the Minister for Finance
(NA, Rule 203(1)). The PAC scrutinizes the appropriation accounts of the government
and the reports of the Auditor-General of Pakistan to its best satisfaction that the moneys
disbursed in the accounts were legally available and applicable to the service or purpose
to which they have been applied or charged (NA, Rule 203(2)a). The PAC also confirms
that the appropriate authority is governing the expenditure (NA, Rule 203(2)b). The PAC
ensures while its oversight process that every re-appropriation has been made in
accordance with the provisions made in this behalf under rules framed by Ministry of
Finance (NA, Rule 203(2)c).
4.10.3 Examining the Statement of the Accounts
The PAC is mandated 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 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 (NA, Rule 203(3)a). It is also under its constitutional mandate 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

48. 35
Pakistan either under the directions of the president or under the act of Parliament (NA,
Rule 203(3)b).
4.10.4 Annual Financial Statements (Finance Accounts of the Federal Government)
Finance Accounts are required to be reviewed by PAC (NA Rule 203) now called Annual
Financial Statements of the Federal Government. The two key accounts prepared by the
Controller General of Accounts, certified by the Auditor-General and submitted to the
President are (The Constitution of the Islamic Republic of Pakistan, Article 171):
1. Appropriation Accounts
2. Annual Financial Statements of the Federal Government (former Finance
Accounts).
These accounts are certified by the Auditor-General. The AGP gives an Opinion on both
the accounts. The opinion on the Finance Accounts/Annual Financial Statements has also
to be reviewed by PAC conforming to international best practice. The AGP can give the
following types of opinion on both the accounts.
a) Unqualified Opinion: The accounts present a true and fair picture of the
government account balances shown in these accounts.
b) Qualified Opinion: The accounts present a true and fair picture subject to the
following observations: (These are stated)
c) Adverse Opinion: The accounts do not present a true and fair picture and as
such cannot be relied upon.
d) Disclaimer: AGP is unable to give an opinion because (various reasons
given) e.g. non-production of record or other inabilities. This is a serious
situation that PAC needs to look into like the previous one.
Important points to note regarding Finance Accounts/Annual Financial Statements are:
a) They are prepared every year by Controller General of Accounts and submitted by
the Auditor-General every year under Article 171 to the President and laid before
the Parliament.
b) They are forwarded to PAC by AGP for review under Article 203 of the PAC
Rules.
c) They have to be examined by the PAC but have not been examined so far except
perhaps once. There is no reason for this although PAC has been verbally advised
in the past that these must be reviewed.
d) The Annual Financial Statements, as against the Appropriation Accounts that
contain only an account of the expenditure under various grants contain the
following information:

49. 36
i) Statement of Cash Receipts and Payments
This contains Total Receipts in Federal Consolidated Funds and Public
Account as well as Payments out of both Federal Consolidated Fund and
Public Account. It contains the opening cash balance of the Government plus
receipts minus disbursements and the closing cash balance.
ii) Statement of Cash Flows (during the financial year)
This contains:
a) Cash Flows from Operating Activities
b) Cash Flows from Investing Activities
c) Cash Flow from Financing Activities
d) Net increase/decrease in cash
iii)Statement of Comparison of Budgeted and Actual amounts of Receipts
(Revenue and capital) and payments by the Functions ( General Public
Service, Defence Affairs, Economic Affairs, Public Order & Safety Affairs,
Education Affairs and Services, Health affairs and Services, Housing and
Community Amenities, Recreation Culture and Religion, Social Protection,
Environmental Protection).
iv)Statement of Comparison of Budget & Actual Expenditure by Divisions of
the Federal Ministries.
v) Statement of Appropriation of grants by OBJECT DIVISION-WISE (Pay
and allowances, operating expenses, purchase of assets, repairs/maintenance,
loans write-off, retirement benefits etc.)
vi)Statement of Appropriation of Grants by OBJECT on accounts of expenditure
charged upon the Federal Consolidated Fund.
vii) A Balance Sheet of the Federal Government is also available in the Annual
Financial Statements.
viii) In note 30 of the Annual Financial Statements the Auditor-General has stated
that these are one of the principal accounts certified by him and submitted
under Article 171 of the Constitution to the President.

50. 37
4.10.5 Presidential Obligation
The PAC also 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 (NA, Rule 203(3)c).
4.10.6 Excess Spending
In a case when any amount of money is spent on any service during a financial year
greater than the actual amount granted by the National Assembly for that purpose, PAC
examine and scrutinize such matters on the basis of related facts according to
circumstances of that excess and issue its recommendations (NA, Rule 203(4)). PAC
work on zero saving, zero excess basis which means appropriate money should be
allocated to policies and programmes (PAC Officer, 2011). The practice of wrong
estimates given by ministries at proposal level and excess allocation to supplementary
grants that is not spent to the concerned program in due time is regarded as an aspect of
bad governance.
4.10.7 Time period for submission of Reports
The PAC is obligatory to submit its reports to the Parliament within a period of one year
from the date of its reference to the committee by the same house (NA, Rule 203(5). The
committee can also seek its extension from the National Assembly up to certain period
and if granted then to submit on the extended date specified in the motion. However,
PAC will request for an extension in the time for the presentation of the report to be
asked for before the expiry of the time allowed under the rule. In practice, it happens very
rare. A general condemnation may be given is by the house on submission of delayed
report (PAC Officer, 2011).
4.10.8 Continuity of the Proceedings
In case of dissolution of the assembly, any report, memorandum or note that the
Committee may have prepared, or any evidence that the Committee may have taken
before dissolution, shall be liable to be made available to the new Committee (NA, Rule
204). However, other than anything contained in mandate, the public Accounts

51. 38
Committee will proceed from the stage where the previous Committee left the
proceedings before the dissolution of the Assembly (NA, Rule 205).
4.10.9 Magisterial Powers of PAC
In general provision of the standing committees of the National Assembly, PAC has
certain magisterial powers:
 Powers to take evidence or call for papers, records or documents;
PAC have power to require the attendance of persons, production of documents or
records if it is considered necessary for the discharge of its duties considering it
has no harm to national security. In case of a question of the relevancy of a
document or a person, the final authority is speaker of NA to decide (NA, Rule
227(1)).
 Summoning a Witness; PAC have the power to summon a witness by an
order signed by Secretary to appear before the committee (NA, Rule 227(2)).
 Invitation or Summon to a member or Person; PAC have power to
invite any member or person relevant or who has an interest in relation to any
matter under consideration in PAC and to hear expert evidence and to hold public
hearing (NA, Rule 227(3).
 Power of Civil Court; PAC have powers, subject to clause (3) of Article
66, vested in civil court under Code of Civil Procedure, 1998 (Act V of 1908) for
enforcing the attendance of any person and compelling the production of
document (NA, Rule 227(4).
These powers enable PAC to fix responsibility on any person or department to produce
witness or to appear before PAC. In case of non-implementation, PAC has certain powers
to refer such cases to NAB, FIA or police or to write displeasure against concerned
department/PAO to Prime Minister.

52. 39
4.10.10 Rule Position
General rules of standing committees of the National Assembly along with the specific
rules provided to PAC are practiced for its functioning given in the Rules of Procedure
and Conduct of business in the National assembly, 2007 and the Constitution of the
Islamic Republic of Pakistan 1973 as amended time by time.
4.10.11 Status of PAC
Ideally, PAC is regarded as an important standing committee of parliament as it has the
responsibility of financial and audit oversight; therefore, it plays an effective role in
curbing corruption and recovering amounts wrongly spent by the Ministry/Division. The
importance of PAC has grown over the time due to the responsibility assigned to it being
highly technical, specialized and sensitive in nature.
Figure 4.5. PAC Organogram
Source: PAC Organogram as discussed with PAC Officers
Secretary
National Assembly
Addl. Secretary
( Committees)
Addl. Secretary
(PAC)
Joint Secretary
(PAC )
Implementation
Cell
DS
SO SO
Branch
PAC
(Main Branch)
DS
SO SO
Branch
Special Committee
II
DS
SO
Branch
Special Committee
III
DS
SO
Branch
Addl. Secretary
(Admin)
Addl. Secretary
(Ligeslature)
Addl. Wings of PACAddl. Wings of PAC

53. 40
4.10.12 Constitutional Link-Reference to PAC
Annual Audit Reports along with Accounts are submitted by the Auditor- General of
Pakistan to the President under Article 171 of the Constitution. X The Federal Minister
for Law, Justice and Parliamentary Affairs then presents the report to the National
Assembly (NA, Rule 171). The Speaker of the National Assembly refers them for a
detailed scrutiny to the PAC (NA, Rule 177). The AGP refers such reports to the
President on an annual basis.
4.11 Sub-Committees of PAC
The PAC is empowered to appoint one or more Sub-Committees, each having the powers
of the whole committee, to examine any matter referred to it (NA, Rule 224).
Subsequently, the report of sub-committee after approval by the whole committee will be
considered to be the report of PAC.
Sub-committees of PAC are sometimes assigned a whole report to review, while, many
sub-committees are constituted to review only few paras who meet once or twice. Sub-
committees of PAC have been useful tools to update its business. The culture of
inheritance of big backlog to every committee has been a practice in Pakistan. The use of
committees and especially the sub-committees in parliamentary system of Pakistan is
gaining importance.
Although the 12th
PAC constituted many sub-committees but their role remained less
effective. They were expected to be the major tools in clearing the backlog of twelve
years but the sub-committees of the 12th
PAC produced only one report for the year 1995-
1996.
4.11.1 Constitutions of Sub Committees
The sub-committees of the PAC work on the same Rules of NA and the Constitution of
Pakistan which provide for functioning of PAC.

54. 41
4.11.2 Channels of Supervision
The channel of supervision of the PAC of the National Assembly of Pakistan is as under
and is depicted at Figure 4.2.
Figure 4.6. Channels of supervision
Source:. Channels of supervision as discussed with PAC Officers
4.11.3 PAC relationship with the Auditor-General
PAC is a tool of parliament to ensure governmental accountability. The information
required for the functioning of PAC is provided by Auditor- General that ensures the
adequate use of public resources by its audit. The relationship between PAC and Auditor
General is intertwined and both are essential components of the democratic
accountability (McGee, 2002). Despite their close working, Auditor- General sends its
reports to the President being the office of the Executive. President refers its reports to
Parliament from where they are referred to PAC. McGee Study Group (2002) expressed
that the Auditor General should be a Parliament’s office due to its working association,
independent from Executive.
Nevertheless, PAC is not confined only to Auditor General Reports. PAC can pursue
matters of public concern regardless of the consideration that these matters are the subject
of Auditor General Report or not.
Speaker
Chairman (PAC)
Secretary
Additional Secretary
Joint Secretary
Deputy Secretary
Section Officer
Superidentent
Assistant