These findings are outlined in the AGP’s audit report for Defence Services accounts, covering the audit year 2023-24. The report reveals numerous audit objections, including non-recoveries, overpayments, procurement irregularities, state losses, and the failure to produce required records.
The audit scrutinized expenditures totaling Rs. 566.29 billion, encompassing the latter part of the 2022-23 audit and the early phase of 2023-24. A major issue identified by the AGP is the persistent non-compliance of the Defence Services with regulations, particularly regarding advance payments, improper distribution of financial powers, and breaches of public procurement rules. Additionally, the audit criticized the Defence Ministry’s management of a Rs. 1.563 trillion budget for the fiscal year 2022-23, which was subsequently increased to Rs. 1.592 trillion through supplementary grants.
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The report also emphasized the slow response to audit objections and directives issued by the Public Accounts Committee (PAC). Since 1985, the Ministry of Defence has only acted on 659 out of 1,974 PAC directives.
The audit uncovered instances where contracts were improperly split and awarded to favored contractors, often circumventing transparent bidding processes. Some procurements were made without proper advertisement, justified under the guise of being of a “secret nature.” The audit revealed that exemptions from public procurement rules, which only the Defence Secretary is authorized to grant, were not properly obtained in these cases.
Furthermore, the report highlighted a case within an Army formation where purchase orders were issued at rates nearly three times higher than the lowest bid. Irregular expenditures were also discovered at an Army School, where renovation and procurement activities were conducted illegally. The Departmental Audit Committee (DAC) recommended inquiries to assign responsibility for these irregularities and called for the regularization of unauthorized expenditures by the competent authority. However, by the time the AGP report was released, these directives had not been implemented.
