_akhbar.jpg)
This is the third in a series on Pakistan’s broken public financial reporting system. The second article in these pages, ‘So, who owns the numbers? (July 20, 2026)’, showed that responsibility for public accounts is divided among several institutions.
This article asks the next question: why does the finance minister, who owns the budget process, not formally own the year-end financial statements?
Every June, the finance minister asks the National Assembly to approve taxation, borrowing and trillions in expenditure. The budget carries the authority of cabinet and parliament. But when the year ends, there is no comparable moment when the minister presents an annual report and says: this is what government collected, this is what it spent, this is how the result differed from the budget, and this is the financial position left behind.
The budget has an owner. The actual accounts do not.
Credit is due. Pakistan produces annual cash-based financial statements and Appropriation Accounts. Federal statements are prepared through the accountant general, Pakistan Revenues under the controller general of accounts, while the auditor-general audits them. On June 24, 2026, the finance minister laid the Appropriation Accounts for 2024-25 and the auditor-general’s reports for Audit Year 2025-26 before the National Assembly.
That is progress. But tabling is not ownership and the statements being tabled carry less credibility than the ceremony around them suggests.
The accounting machinery prepares the documents and lays them before parliament through the constitutional process. There is no statement that the cabinet approved them as the executive’s account, or that the finance minister accepted responsibility for their completeness, reporting boundary and controls.
This is not ceremonial. It is a fundamental principle that financial statements are management’s assertion, and management in the case of the government is the executive, the party that controls resources and makes fiscal decisions. The accountant prepares them for review and approval by the executive; the auditor tests them. Neither can assume the responsibility of the executive that raised and spent the money.
Even on a cash basis, the statements should therefore be financial statements of the government of Pakistan, not documents appearing to belong institutionally to the CGA. The CGA should assist the finance ministry in compilation and consolidation. Principal accounting officers should certify departmental balances and disclosures. The finance secretary should certify the reporting process and controls. The finance minister should sign on behalf of the government. The cabinet should approve and authorise their issue. The auditor-general should then provide independent assurance before the complete package is laid before parliament.
Appropriation Accounts tell parliament what it authorised under each grant, what cash expenditure was recorded, and where expenditure exceeded or fell below the final appropriation. They are essential for legislative control and compliance audit. But they are not a complete account of government finances.
Cash accounting records expenditure when payment is made, not when the obligation arises. Goods may be received before June 30, while payment is delayed until July. Contractor claims, electricity bills, subsidies and arrears may sit outside current-year expenditure. Maintenance can be postponed, making spending look lower while assets deteriorate. Pension obligations and guarantees can grow without appearing as current expenditure. The cash figures may be accurately recorded and still paint an incomplete picture.
The reporting boundary compounds this. Federal accounts capture transactions processed through the government accounting system, yet the public sector extends far beyond ministries to autonomous bodies, statutory funds, state-owned enterprises and special-purpose entities, which are not consolidated. A transfer to a state entity appears as expenditure, while that entity’s own assets, liabilities, losses and guarantees stay outside the statements entirely. Parliament sees cash leave the Consolidated Fund without seeing its full consequences across the wider government group.
Most fundamentally, Pakistan does not publish a credible consolidated statement of financial position – what the state owns and owes. Without that balance sheet, fiscal performance can look better through delayed payments, neglected maintenance, asset sales or losses quietly transferred to state-owned enterprises. The cash deficit may improve while the state’s net worth deteriorates.
Budget-to-actual reporting also needs substance. Federal statements prepared and submitted by CGA do compare budgeted and actual amounts, but major variances arrive with no ministerial explanation of their cause or meaning. A reported ‘saving’ may reflect efficiency. It may equally reflect delayed releases, failed procurement, project slippage, vacant posts, unpaid bills or an abandoned programme. Parliament needs a reconciliation showing original budget, supplementary grants, final authorised amount, audited actual, outstanding commitments and reasons for material variances, and what services were actually delivered for the money.
Excess and supplementary expenditure deserves particular attention. Article 84 of the constitution requires supplementary or excess budget statements where authorised provision is insufficient or expenditure has exceeded the grant. The mechanism is necessary, but retrospective regularisation can become a formality once the money is already spent. Supplementary grants have reportedly reached several trillion rupees in a single year, much of it presented to Parliament only for information after the fact, not for a vote. The Public Accounts Committee (PAC) should maintain a public register of excess expenditure: its causes, the officers responsible, and the time taken to regularise it.
Audit assurance must also become clearer. The auditor-general conducts certification, compliance and other audits, but the public-facing product is dominated by volumes of observations. Parliament needs a prominent, standalone opinion on the complete financial statements: what was audited, under which framework, what evidence was obtained, what qualifications arose, and whether the statements are materially reliable.
International practice offers a principle rather than one model. New Zealand’s whole-of-government statements include a balance sheet, comparison with budget forecasts, a signed statement of responsibility and an independent audit opinion. The UK consolidates thousands of public bodies in its Whole of Government Accounts, though repeated audit disclaimers over incomplete local-authority evidence show that consolidation without reliable underlying records is not enough on its own.
Reform should proceed in stages. First, the PFM Act should require annual financial statements of the federal government under a disclosed framework. Second, the cabinet should approve them, with the finance minister and finance secretary signing a formal statement of responsibility. Third, a statutory calendar should require preparation, audit and tabling within nine months of year-end.
Fourth, every report should contain a narrated reconciliation of original budget, revised estimates and audited actual, with material variances and excess expenditure explained. Fifth, Pakistan should retain cash reporting for budget control while progressively adding audited disclosures of arrears, pensions, guarantees and controlled entities, building towards accrual-based financial statements.
Cabinet approval would make the executive responsible for ensuring the statements are complete and fairly presented under the prescribed framework, while the auditor-general remains independent in deciding whether they can be relied upon.
The distinction is simple. The CGA is the government’s accountant. The auditor-general is its external auditor. Parliament is the forum of accountability. But the accounts must belong to the government whose decisions created them.
The next article in this series follows directly from the gap named here: what the country’s consolidated balance sheet would show, why it has never been built, and what it would mean for how lenders, investors and citizens judge the state.
Until the cabinet approves the accounts and the finance minister signs them, Pakistan will keep debating next year’s promises without disclosing what was actual expenditure, what the government owns and owes, and explaining and accounting for the previous year’s results.
The writer is a former managing partner of a leading professional services firm and has done extensive work on governance in the public and private sectors. He tweets/posts @Asad_Ashah
