Successive governments have attempted to improve the efficiency of Pakistan’s public services through structural reforms. Key among these has been the project to improve financial reporting and auditing (Pifra), which began in 1996.
The decades-long project followed a mid 1990s study by the World Bank that concluded the absence of accurate, comprehensive and timely financial information in Pakistan’s federal and provincial governments was hampering efforts to improve resource allocation, and to monitor and control expenditure, cashflow and debt management. The study also cast doubt on the quality of the financial data underpinning public sector management decisions and the macroeconomic dialogue.
As a result, the International Monetary Fund, the International Organization of Supreme Audit Institutions, the International Accounting Standards Board and the World Bank all urged the Pakistan government to act. It did just that with the Pifra reform programme, which aimed to create ‘a modern accounting system designed according to recognised accounting principles and standards and based on modern information technology’.
For the most part, senior finance officials are not professionally qualified accountants
Pifra’s achievements
The Pifra reforms split public sector auditing and accounting in Pakistan into two departments: the Office of Auditor General and the Controller General of Accounts.
With a new accounting model (NAM) offering a reform roadmap, a modified cash basis of accounting (longer-term items are recorded on the accrual basis) has been introduced. Commitment accounting, fixed asset accounting, new charts of accounts conforming to international standards, an asset register, a new budget classification system and government financial statistics have also been adopted.
Other achievements include an automated budgeting, accounting and reporting system for federal and provincial governments, and the training of more than 20,000 drawing and disbursing officers and accounting staff.
Pifra ran in three phases until 2014. It had three grand aims: to improve public sector accounting and financial systems, to enhance public sector accountability, and to grow the institutional capacity for economic policy-making and management.
Although the initiative was initially hampered by resistance to change in some quarters, considerable progress has since been made (see boxout). However, a lack of suitably qualified people to support the system persists.
For the most part, senior finance officials – assistant FDs, deputy FDs, director generals of finance – in Pakistan’s public entities are not professionally qualified accountants. They have no background in commerce, business studies or accounting. Lower down the hierarchy, mid-ranking officials are mostly university graduates but with limited understanding of public sector finance.
Best choice
ACCA members working in these services have to convince the bureaucrats that ACCAs are the best choice for finance departments. They have to work with officials and supervise them in a professional manner, and demonstrate that professional accountants – equipped as they are with the latest accounting and finance tools and techniques – can handle demanding roles in the finance department better than anyone else.
Several autonomous bodies and foreign-aided projects are now hiring ACCAs, as the deployment of professional accountants is currently seen as the most pressing need of all. The work ethic and strong technical accounting, finance and business backgrounds of ACCA-qualified accountants make them ideally suited to make public sector finance in Pakistan work efficiently and are worth employing even for more challenging roles. For ACCA members in Pakistan, the time has come: your country’s public services need you.
