Audit report identifies Rs3.41bn worth of irregularities in health sector

ISLAMABAD: A recently released report by the Auditor General of Pakistan (AGP) has identified irregularities worth Rs3.41 billion in various ancillary departments of the Ministry of National Health Services (NHS), it emerged on Thursday.

The report, available with Dawn, found fraud, embezzlement and misappropriation amounting to Rs28.41 million, procurement-related irregularities worth Rs1.779bn, and irregularities in the management of accounts maintained with commercial banks involving about Rs1.484bn. However, Rs127.27m was recovered following the intervention of the audit department.

Pakistan Nursing Council

According to the report, the Pakistan Nursing and Midwifery Council (PNMC) refused to have its accounts audited, in violation of orders issued by the Supreme Court of Pakistan (SC) in its July 8, 2013 judgment.

In response to the audit intimations, the PNMC, referring to letters dated March 31, 2023, May 15, 2024, and May 21, 2025, stated that it was an autonomous body that generated its own revenue through various activities and services and did not receive financial grants from the government.

The matter was reported to the secretary of the Ministry of NHS, who directed the PNMC to provide all auditable records. However, according to the report, the records were not provided by the management

The audit took the view that “the stance taken by the management is in violation of the orders of the Supreme Court of Pakistan and attracts Section 14(3) of the AGP Ordinance, 2001”. It added that, as the PNMC was established and controlled by the federal government, it fell within the audit jurisdiction of the AGP.

The audit recommended that disciplinary action be taken against the officers involved in obstructing the AGP’s audit functions and defying the SC’s order, and that the auditable record be provided.

Federal Directorate of Immunisation

The audit also identified the procurement of vaccines at higher rates due to non-compliance with the federal cabinet’s decision, which had an impact of Rs1.109bn.

Under Section 21 of the PPRA Ordinance, 2002, the Public Procurement Regulatory Authority (PPRA) granted an exemption for the procurement of EPI vaccines from the applicability of the Public Procurement Rules, 2004, in line with a federal cabinet decision dated November 23, 2016, according to the report.

“Rule 38 B(2) of the Public Procurement Rules, 2004, states that the procuring agency shall make a decision with due diligence and in compliance with general principles of procurement such as economy, efficiency and value for money,” the audit said.

It noted that the management of Islamabad’s Federal Directorate of Immunisation (FDI) purchased Pentavalent and Tetanus Diphtheria (TD) vaccines through open competition and incurred expenditure of Rs3.233m during the financial years 2022-23 and 2023-24.

Human Organ Transplant Authority

The audit further revealed that Islamabad’s Human Organ Transplant Authority (HOTA) had kept Rs38.782m in public funds in a current bank account after the close of the financial year.

The report cited Clause 37 (1) of the Public Financial Management Act, 2019, stating that the “revenues collected by an autonomous entity, which arise from any Act or statutory instruments of the Federal Government, shall be deposited in the treasury single account (TSA)”.

It also highlighted Clause 4(3) of the Cash Management and Treasury Single Account (TSA) Rules, 2024 as saying that bank accounts opened before the rules took effect were to be jointly reviewed by the finance division and division concerned, with accounts found non-essential for functioning to be closed. The balance in those accounts was to be transferred to the Federal Consolidated Fund or the Public Account as prescribed in the Federal Treasury Rules, it stated.

The audit observed that the HOTA retained an amount of money in a current account at the National Bank of Pakistan as of June 30, 2024.

“The account has not been reviewed or closed in accordance with Clause 4(3) of the Cash Management and TSA Rules, 2024, nor has the balance been surrendered to the Federal Consolidated Fund,” it pointed out.

It stated that the unauthorised retention of public funds outside the TSA “undermines the principles of centralised cash management and fiscal transparency … and violates statutory requirements, and increases the risk of mismanagement or misuse of public money”.

According to the report, HOTA replied that the account had been maintained with the approval of the Finance Division since 2013. The audit, however, termed the reply “not tenable”, stating that with the promulgation of the Public Financial Management Act and the Cash Management and TSA Rules, earlier administrative practices had been superseded.

The audit recommended that HOTA immediately initiate a joint review of the current account with the Finance Division in line with the TSA Rules, and take prompt action to transfer the retained balance to the Federal Consolidated Fund or the Public Account.

Polyclinic Hospital

Irregularities worth Rs508.4m were also found in the procurement of drugs and medicines by Polyclinic Hospital.

“Para 11 of GFR, Vol-I states that each head of a department is responsible for enforcing financial order and strict economy at every step. He is responsible for observance of all the relevant financial rules and regulations both by his own office and by subordinate disbursing officers,” it stated.

The management of Polyclinic Hospital incurred expenditure on the procurement of drugs and medicines (including tablets, syrups, injections and surgical consumable items) on a “local purchase” basis from an Islamabad pharmacy during FY24–25. The audit observed that there was no government-approved policy for the procurement of drugs, medicines and surgical items on a local purchase basis.

The report said that records of requisition and demand slips from different hospital wards for the procurement of these items were not maintained by the FGPC, and that patient-wise records of receipt and issuance of drugs, medicines and surgical consumables procured on a local purchase basis were not available with the hospital management.

Other irregularities

The report also identified irregularities worth Rs15.174m and the unauthorised procurement of MRI software worth $0.35m at the National Institute of Rehabilitation Medicines.

At Lahore’s Sheikh Zayed Medical Complex, it identified “fraudulent” payment of the consultant’s share amounting to Rs28.41m and the irregular transfer of Rs1.445bn from the assignment account to commercial bank accounts.

Health Ministry spokesperson Sajid Shah, while talking to Dawn, said that it was routine for a number of objections to be raised during every audit.

“However, the ministry responds to them and most of the paras are settled. The ministry and its ancillary departments will submit replies at appropriate forums,” he said. ...