The Auditor-General of Pakistan (AGP) has reported financial irregularities and other audit observations with a cumulative financial value amounting to Rs551 billion in the accounts of Khyber Pakhtunkhwa government. The major findings related to unauthorised expenditure, excess payments, misappropriation and mismanagement of funds, and other financial and procedural matters. The findings are contained in the AGP's Audit Report for 2023-24.

In the departmental classification of reported fraud, embezzlement and misappropriation, the Environment Department recorded Rs217.923 million, Health Rs196.133 million, Communication & Works Rs173.197 million, Local Government & Rural Development Rs23.962 million and Housing Rs1.568 million. The AGP's thematic audit of foreign debt management also raised concerns over financial planning and borrowing. It noted that Rs353.140 billion in loans were obtained without project preparation, while Rs10.084 billion was irregularly retained from ongoing projects.

Receipts of foreign-aided projects amounting to Rs21.715 billion were also understated. The Public Accounts Committee of the KP Assembly has started scrutinising the report under the chairmanship of the speaker, with departments directed to produce relevant documents. The KP government said that the majority of audit observations related to procedural lapses, lack of approvals and non-availability of relevant documents, which would be settled before the Public Accounts Committee (PAC).

It said the remaining amounts would be recovered from the officials held responsible. According to the report, the largest observation involved Rs355.706 billion in unauthorised payments, expenditure and retention of money in 54 cases. Misappropriation, mismanagement of funds and misclassification of developmentexpenditure accounted for Rs84.837 billion in 12 cases, while losses of Rs35.457 billion were identified in 181 cases.

The audit also identified Rs24.494 billion in unjustified or unverified payments and expenditure and understatement of receipts, Rs16.065 billion involving non-production of auditable records, Rs14.825 billion in irregular payments, expenditure and release of funds and Rs11.067 billion under-deduction, deposit and realisation of funds. Among other major findings, Rs3.525 billion was linked to illegal retention of public money and inadmissible payments, Rs3.434 billion to non-transparent procurements, appointments and contracts, Rs2.718 billion to wasteful expenditure and Rs1.703 billion to overpayments.