Government of Pakistan Ministry of Commerce F&A (Wing) ><><>< SUBJECT: MECHANISM IN THE MINISTRY WITH REFERENCE TO AUDIT REPORTS

1. Reference PAC meeting dated 16th November, 2012. 2. In the reference meeting Chairman PAC issued a direction to devise a mechanism in the Ministry to deal with the Audit paras and compliance thereof. PAC desired a briefing on the issue after 15 days. On the request of the Secretary Commerce, Additional AGP consented to depute a Senior Officer to assist Ministry of Commerce in developing e-based system of Audit. 3. With reference to the above direction of the PAC an internal meeting between JS (Admn) DS (FT), DS (Admn-II) and SO (F&A) was held on 28th of November, 2012. 4. During the above mentioned internal meeting Deputy Auditor General (DAG) was consulted, telephonically, regarding devising a Mechanism for Audit Reports / Paras. DAG responded that the Ministry is to, itself, develop a mechanism and Auditor General Office will depute a Chief Finance and Accounts Officer (CFAO) for steering of the mechanism. 5. On conclusion of the meeting JS (Admn) desired for a working paper for the briefing of the Secretary 6. Accordingly it is submitted that mechanism regarding Audit reports has been clearly described in the System of Financial Control and Budgeting, 2006, the same is reproduced below: According to System of Financial Control and Budgeting as notified by the Finance Divisions O.M. No.F.3 (2) Exp.III/2006 dated 13th September, 2006 in each Ministry/Division, there shall be a Chief Finance and Accounts Officer (CFAO) equivalent to Joint Secretary or Deputy Secretary under the Principal Accounting Officer who shall assist him and report to him as part of his team. The CFAO shall have supporting officers, staff and facilities as may be necessary. Amongst other Duties and Responsibilities CF&AO shall be responsible for the work relating to PAC, DAC and audit observations on Appropriation Accounts and Audit Reports, ensuring compliance with the PAC observations and recommendations. He shall assist the Principal Accounting Officer, prepare necessary Briefs for PAC/DAC and attend the meetings of the PAC and DAC

alongwith the Principal Accounting Officer in the case of PAC and Additional Secretary/equivalent officer in the case of DAC. However, regarding appointment of CFAO, the Auditor General of Pakistan shall propose three names of officers in BS-20 out of which the Secretary Commerce may select appropriate officer. Further, the Secretary Commerce shall have input in the peer recording of CFAO and the CFAO may correspond with the Secretary Commerce through an officer nominated by the Secretary Commerce.

7. On the other hand the prevailing setup regarding Audit Reports and PAC/DAC meeting is enlisted below:i. F&A section working under the supervision of DS (Admn-II) is responsible for coordinating the working regarding the DAC & PAC matters. ii. F & A section keeps the record of all the Audit Report on the accounts of the Ministry and its attached department. iii. F&A section is assigned the responsibility of conducting internal audit of the Ministry and its attached department.

8. Computerizing of record relating to Audit Paras and PAC / DAC meetings thereon is already in process and F & A section has computed compilation of almost all the available minutes of the PAC / DAC meetings and paras relating to the ministry and its attached departments. 9. However in order to further strengthening of the system IT experts can be consulted for devising on e-based monitoring system of Audit Reports/Paras that will be available on the internet and can be accessed by relevant officers. 10. At present Audit Reports from 1996-97 to date are available in computerized form. F&A section is in a position to generate summary regarding the outstanding audit paras relating to the Ministry of Commerce. 11. To summarize Ministry is following the New System of Financial Control and Budgeting, 2000 wherein F & A section was responsible regarding Audit Reports / Paras and PACs / DACs thereof. Whereas in terms of System of Financial Control and Budgeting, 2006 Chief Finance and Accounts Officer (CFAO) equivalent to Joint Secretary or Deputy Secretary is to be deputed to streamline the working regarding Audit reports / Paras. 12. For e-based system of monitoring the Audit Paras and their status, IT-experts deputed in the Ministry would be consulted. 13. Submitted for information and consideration please.