M

Additional Accountant General Pakistan Revenue,
Peshawar
CHAPTER NO. 1
INTRODUCTION
1.1. INTRODUCTION TO THE REPORT
The educational values of Institute of Management Studies (IMS) are quite

obvious. It promotes not only creative spirits in students and provides useful and
interesting knowledge to them, but also enable students to know about the numerous
activities involved in the real or practical life.
Eight weeks internship program is one of the part of our study and compulsory
requirement for the fulfillment of the Degree. Main purpose of this program is to make
students familiar with the practical work. The internship program provides a very good
opportunity for the students to know about the real working environment. Such practice
are very essential for students to develop their skills.
As we students are totally free to choose any organization for the internship. As for as my
self is concerned I am working as Senior Auditor in the office of the Additional
Accountant General Pakistan Revenues Peshawar since 02/2000. My internship will be
about the work experience which I got during my service.
I was appointed as Junior Auditor in above named office in 02/2000. The

requirement for such post was D.COM. After my graduation I was promoted as Senior
Auditor and since I am performing my official duties in the said office. During my
service I worked in different sections and familiar with some elementary understanding
of their operations and procedures.
1.2. Purpose of Study
Quaid-e-Azam College of Commerce,

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University of Peshawar.
Peshawar
This report is related with the working of Additional Accountant General (PR)
Peshawar, and to analyze it with the observations and also to compare it with the
Manuals, General Financial Rules, Codes. Constraining the ideal practice. This analysis
then leads to formulation of recommendations, which are in fact the remedial measures
against the discrepancies.
1.3. Scope of the Study
The main focus of the study is to describe the working and operational procedure
of the office of Additional Accountant General Peshawar, including the Pension, General
Provident Fund, Cheque, Accounts. and Payment sections In other words it is seen that
how the different branches of this office integrate and coordinate for the functioning of
this business system. As there are around about 28 different sections in the above named
office, as far as myself is concerned I worked in five sections which I have already
mentioned above.
Basically the data found in this report have been obtained from two sources:
1. Primary Data
2. Secondary Data
1.4. Primary Data
The foremost sources of primary data were my personal observations, experience

and interviews with the people related to the following offices.
i. Office of the Auditor General of Pakistan, Islamabad

ii. Office of the Controller General of Accounts, Islamabad
iii. Office of the Accountant General NWFP
iv. Senior Officers of Addl Accountant General (PR) sub office
peshawar.

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1.5. Secondary Data
It includes the Manuals Codes, Books, Journals (Performit), Technical Reports,

Magazines of the Pakistan Audit Department and working papers on different strategies
of the office.
Some data found in this report obtained from the office record of HAD/C&M
Section.

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CHAPTER NO.2
2. HISTORY OF AUDIT AND ACCOUNTS IN PAKISTAN
2.1. Brief History of Audit & Accounts Department
The British Government introduced the Audit & Accounts department in the sub-
continent when they took the control of this region. For keeping the accounts of the
Government, the office of the Comptroller was established in Calcutta (India) in the
undivided India. Later on to facilitate the Government departments, the British India was
divided in several regions, and the office of the Comptroller for Northern Region was
established in 1931 on Fort Road, Peshawar Cantonment, since then office of the
Comptroller General (Now Accountant General NWFP) is working here. After the
partition, the Government of Pakistan (GOP) adopted the 1935 Act for the interim period
until the preparation of its own constitution. The Government of India Act 1935 was
adopted by the Pakistan Government (Provisional Constitution) Order 1947. Then the
provisions contained in Articles 168 -171 of the Constitution of Islamic Republic of
Pakistan proclaimed on 12th April, 1973 and the Audit & Accounts Order 1973 also
strengthened the Pakistan Audit Department. After that in 1969, to facilitate the clients,
the Government Departments at the local stations, the District Accounts Offices/Agency
Accounts offices Scheme was introduced. The DAOs were opened in Districts of
Mardan, Abbotaabad, D.I. Khan, Kohat, Bannu, Swat and Dir at Timargarah in the year
1970.
Before 1989 both Federal and Provincial departments were dealt in Accountant
General Peshawar. Later on in 1979 another office that is Additional Accountant General
(PR) Peshawar was established, and the accounting matters of all the All Federal
departments have been given to the said office.
As I have mentioned earlier that AGPR stands for Additional Accountant General
Pakistan Revenues. It is the subordinate office of Accountant General Pakistan Revenues
Islamabad, who is the attached office of the Auditor General of Pakistan. Auditor General
of Pakistan comes under the Ministry of Finance.

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The Auditor General’s role and powers are established in the Constitution of
Pakistan 1973 (Articles 168 to 171) and defined further in the Pakistan (audit and
Accounts) order 1973. While retaining overall responsibility for the accounts of the
Federation and Provinces, this responsibility is delegated to the Controller General, in
order to maintain independence between the audit function and the accounting function.
2.2. Functions of Auditor General of Pakistan
Following are the main functions of AGP:
i. The Auditor General still certify the accounts compiled and

prepared by Controller General of Accounts (CGA) and submit these
certified accounts with notes comments and recommendation to the
president/Governor or the Designated District Authority as case may be
ii. Audit all the expenditure from consolidated funds of federation
and each of the Province.
iii. Audit all the transaction of the federation and provinces accounts.
iv. Audit all the commercial accounts kept by the order of the
President or Governor.
v. Audit all the receipt and expenditure of that body or authority
which is substantially funded by loans or grants.
2.3. Powers of Auditor General of Pakistan
Following powers are lies with the Auditor General of Pakistan.
1 To inspect the accounts of federation, Province or District including

treasuries and such offices maintaining initial or subsidiary accounts.
2 To require all relevant auditable documents to such place as he may direct
for his inspection.
3 To enquire or make such observations as he may consider necessary for
the purpose of audit.

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4 To audit including supplementary audit of the accounts of the companies
and corporations established in the public sector, provided the Governor of
Province or district authority to of the opinion that is necessary to do so in
he public interest.
5 To incur expenditure within the budgetary provision.
2.4. Rights of Auditor General

6 The office in charge of the auditee shall afford all facilities and provide
record for audit inspection in as conflict a form as possible.
7 Any person or authority hindering the auditorial functions of Auditor
General shall be subject to disciplinary action under E & Ali rules.
8 Audit all the receipts of Federation, Province and of District Govt: to
ensure that all such receipts have been properly and correctly deposited.
Preliminary Auditing (Pre-Auditing)

Post Auditing
These two functions were controlled/headed by the Auditor General of Pakistan

but after July 01, 1996 the Audit and Accounts Functions were separated from Pakistan
Audit Department, but the actual ordinance in this regard has been issued on July 1, 2001.
Now days, Controller General of Accounts is mainly responsible for maintaining

and compilation the accounts of the Federation, four provinces and the Azad Jammu and
Kashmir. He also submits the Annual Report of the accounts of the Federation and all the
Provincial Governments to the Auditor General of Pakistan for further submission to the
President of Pakistan in case of Federation and to the Governor of each Province in case
of Provincial Government.

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2.5. Accounting Against the Historical Background
2.5.1. Background
Accounting is a general sense, may be considered as a process in which

the transaction of an operating entity are documented, classified and recorded, for
the purpose of accumulating and providing financial information essential to the
conduct of designated activities. This definition may be expanded to include such
features as system design, which involves the3 development of recording methods
and necessary internal central; the documentation and verification of financial
transactions; the maintenance of records and books of accounts (book keeping);
the continuous testing of accuracy and propriety of the records, and of the
effectiveness of internal control (internal auditing), the periodic summary review
of transactions practices and procedures (external auditing).
Another definition in some-what different words is also there. Accounting

may be defined as the composite activity of analyzing, recording, summarizing
and interpreting the financial transactions of any economic enterprise.
Government accounting may be said to comprise these same activities for

a government entity that organized legislative, executive and judicial machinery
of the state, which by low governs and provides certain public services for
citizens in established geographical areas.
2.5.2. Origin of Accounting
Every since the dawn of civilization, bring in its wake the five and take of
goods of every day necessity, the concept of keeping of accounts and the related
records in one form or the other, has prevailed all through the ages. Responsible
men of even ordinary prudence have been well aware of the necessity of
maintaining records of incoming and outgoings. The records taking any shape,
according to the dictates of times, circumstances, and locations. It is not a fact of
the remote past that housewives kept a complete and up-to-date account of all that

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was given to the neighbors and other in habitants of the locality as well as
relatives, on the occasion of happiness or sorrow; and the strange part of the story
is that all this accounts was maintained by them orally, with the aid of a
completely dependable and unfailing memory.
2.5.3. Accounting and the Righteous Caliphs
The great Caliphs Hazrat Umar and Hazarat Ali laid a great stress upon
the keeping of complete and correct accounts. They were careful about the work
and conduct of the collectors (Muhassils Tehsildars) and always keep an open eye
on their accounts, statements and returns regarding zakat and other items of public
revenue and expenditure. Hazrat Ali’s letter to one of his governor named Malik
Bin Ushtar, containing detailed directives about administration, speaks loudly
about the importance attached by him to the proper, punctual and regular
maintenance of accounts, as one of the essential requirements of an efficient
governmental system.

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CHAPTER NO. 3
3. NEED FOR GOVERNMENT ACCOUNTING
3.1. General
Accounting is the “language” employed to communicate the financial

information, such information is sought for a variety of reasons, owners and perspective
owners of a business enterprise need to know about its financial status and its prospects
for the future. Bankers and suppliers appraise the financial soundness of business
organization and weigh the risk involved before making loans or granting credit.
Government agencies are concerned with the financial activates of business organizations
for the purposes of taxation and regulation. Employees are also vitally interested in the
stability and profitability of the organization that employees them.
The managers of business enterprises need a wide range of data of every fact of
operation much of which is made available through accounting. The managers of small
business may be thoroughly familiar with all operating and financial details and hence
need relatively little accounting information. As the size of a business unit increases, the
manager becomes farther and farther removed from direct contact with day-to-day
operations. He must be supplied with timely financial information about various aspects
of the business. The growth of large business units and have the importance of
accounting in organization has given rise to the expression that accounting provides the
“eyes and ears of management”.
In the modern world fresh needs, social or economic are emerging everyday.
Government tries their best to respond to these needs. With this aim in view, they have to
assume new functions and activities. This new trend is particularly noticeable in the
developing countries. There the government provides direct support in development and
utilization of resources and sometimes even directly participate in the production process
in major sectors of economy. In such circumstances, a sound financial base for planning,
coordinating and carrying out various functions and activities is necessary. This, in turn,

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necessitates the use of efficient and modern methods in accounting for those functions
and activities.
Government accounting satisfies the needs of accountability and administrative

control of funds. Those responsible for the incurrence of expenditure have had to render
proper accounts of their park ranger and prove that the funds were spent in accordance
with the authority under which they were provided by the legislature. Not only that,
accounting is today needed to provide that various kinds of financial data which are
essential for such purposes as planning, program analysis and selection budgeting,
efficient management and control of cost. In simple words government accounting is
needed because of following reasons.
3.1.1. Legislative Requirement
Overall control and release of funds is exercised by the legislature. All

financial matters in government are subject to consideration, approval and review
by the legislature. The extent and nature of this control by the legislature may
vary among countries for a number of reasons and may also differ according to
the kind of activities involved. The fact, however, the executives propose remains
that plan of expenditure while these are reviewed, sometimes modified, and
approved by the legislature. The approved proposals are executed as an executive
responsibility, and operation are in the last process, subjected to a past review by
the legislature. Executive authorities carry out the responsibility, assigned to them
with the funds made available to them by the legislature. These authorities posses
no intrinsic power for raising revenue or incurring expenditure. In financial
matters, they exercise only the delegated authority, which comes from the
legislature, basic law or the construction of the country.
3.1.2. Accountability Requirement
The government servants, entrusted with the performance of financial acts,

of the various rungs of the governmental setup, are accountable to the extent of
their respective assignments. In order to demonstrate this accountability some

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mechanism is required. And it is these accounts, which prove the means of
measurement of the extent to which that accountability has been fulfilled.
3.1.3. Control of Funds Requirements
The preparations of complete and accurate accounts are also needed as

means to facilitate an adequate control on funds allocated for the several
purposes.
3.1.4. International Requirement
The maintenance of the correct, proper and complete and accurate in all
senses is required for the satisfaction of international bodies like the Internal
Monetary Fund (IMF), Aid to Pakistan consortium, Asian Development Bank
(ADB) etc.
3.1.5. Competition requirement
Again in order to provide a sense of healthy competition in the efficient

working amongst the several departments of the government, the upkeep of
accounts on correct lines, is essential.
3.1.6. Economic and social requirement
In the recent past, great stress has started to be laid on the economic
growth and the welfare of common man. With these added responsibilities, the
need to prepare accounts depicting the relevant activities of the government has
much increased so as to facilitate well-informed and well-conceived policy
decision
3.1.7. Commercial Accounting Vs Government Accounting
The principles of commercial and government accounting differ in certain

essential points. The main aspects of contrast are those of functions, principles,

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methods and purposes. The main function of a commercial concern is to trade i.e.
to take part in production, manufacturing or inter change of goods or commodities
between different groups or individual and thereby to make profit. On the other
hand, the function of government is to govern a country and for the discharge of
that function to administer the several departments of its activities in the best
possible way.
As far as the principles are concerned, a non government commercial

concern deals preliminary with the utilization of capital for the purpose of making
profit and it is interested to see at intervals how it stands in relation to its debtors
and creditors whether it is gaining or losing, what are the sources of its gain a
loss, and whether it is solvent or insolvent. In order to obtain ready answer to
these questions, the concern has to keep a system of detailed account. In respect
of each person dealt with, each class of asset held, each article dealt in, it
maintains a separate account so that the result of the transactions in each case may
be ascertained.
On the other hand, the activities of a good Government in any country are
determined by the needs of the country. The main branches of its activities being
known, it is a matter for decision what expenditure will be necessary during any
year in carrying out, these activities. After a decision has been reached on these
points, it becomes necessary to determine how to raise sufficient money to meet
that expenditure.
The classification in the accounts of the transactions of the Federal and

Provincial Governments is determined firstly by the administrative classification
of the activities and secondly by the classification of the nature of the
transactions. The accounting is, therefore, more elaborate than that followed in
commercial accounts. But the immediate objective of Government Accounts is
not to ascertain the gain or loss on the transactions of the Government as a whole
in carrying out these activities.
In the two cases the methods utilized for preparing accounts also differs. It
is the Generally Accepted Accounting Practices (GAAP) in the commercial world

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to maintain accounts books by the “Double Entry” system, which in based on the
fact that is every transaction or financial change two parties or accounts are
involved, one giving and the other receiving. Under that system every transaction
requires two entries in the books, one against the party or account giving and the
other against the party or account receiving.
The mass of the Government Accounts is kept by single entry. Single

entry system means a system under which single effect of financial transaction is
recorded in book of accounts. For example when revenue3 is realized only receipt
entry is recorded and its corresponding effect is not exhibited. Similarly when a
payment is made only the entry concerning the payment is recorded.
Non-Government commercial accounts are designed to show how much

money the concern can put in to the pockets of the proprietors consistently with
the maintenance of a profit earning standards of the concern. In contrast to this,
Government Accounts are designed to enable government to determine how little
money it need take out of the pockets of the tax payers in order to maintain its
necessary activities at the proper standard of efficiency.
3.1.8. Comparison
The contrast should not be stressed two much. There are some common
points as well. In meeting the diverse and complex informational needs of the
various groups interested in the governmental activate, the governmental
accounting utilizes many of the accounting concepts, conventions, practices and
procedures applicable to private business enterprises. Such generally accepted
broad accounting concept as consistency, objectively, cost, full materiality and
conservatism have relevance for most governmental accounting operation as they
do for accounting in privately owned enterprises.
Then there is and should be a general uniformity in the terms and accounts
titles used in both commercial and governemental accounting. Stated differently,
accounting terms, which have been established, and general accepted meaning in

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accounting for profit enterprises will usually have the same meaning in
accounting for governmental entities.
A third general area of similarity between accounting for Governments

and profit-oriented business is in the nature of the entire process. In governmental
accounting, as in commercial accounting, the accounting process begins with the
recognition and analysis of primary transaction documents. This, in turn, followed
by journalizing and posting to ledgers. The final step is summarization of ledger
information and preparation of final statements.
3.2. General Outlines of the Govt: Accounting System
Following steps are involved in the general accounting system of the Government.
RECEIPTS: All receipts in behalf of he Federal and Provincial Govts: are paid
into the bank, and the accounts of these receipts are passed on the Distt:
treasury/DAO/AAO by the bank along with supporting chalans etc, where the initial
accounts of these receipts (except these mentioned below) are dept at the
treasury/DAO/AAO. The total amounts under the relevant heads of accounts are then
noted in the monthly each accounts and the cash account passed on to the AG’s
concerned;
The receipts realize in the Railways, Defence, Post office, T&T, Public works,
Forest and any other deptts: authorized in this behalf are paid into the bank in lump sum
and are accounted in the treasury cash a/cs mearly as receipt, and their detail accounts
are dept by the department concerned.
3.3. Payments:
Payments in Pakistan on behalf of the Federal and Provincial governments are

ordinary made at a treasury/DAO/AAO or bank. At the main offices payments are made
by cheque and increase of pay and allowances of officers and establishment etc are paid
at banks other than State Bank Of Pakistan, in cases where payrolls have been

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computerized, and at DAO/AAO on pay orders to bank made on the bill submitted by
drawing and disbursing officer (DDO)
In some departments the departmental officers, for example provincial forest

deptts: post offices defence deptts; are authorized to withdraw sums in lump from
treasury/bank for making payments. In these cases detailed a/cs of these payments are
kept by the deptts: concerned and these are submitted to their respective accounts office.
3.4. Sorting:
All the receipted challans/demands are accepted separately for federal and
provincial governments by the treasury/bank are forwarded to the Distt: Accounts
Office/treasury for accounting process. Similarly the paid vouchers after cash payments
are in listed and forwarded to treasury/DAO/AAO. In main office the paid vouchers after
issue of cheques are forwarded to compilation section by computer cell. All the vouchers
are soughted deptt: wise head wise, Accounting unit wise.
3.5. Compilation:
The receipted challans are soughted accounting unit wise and in some cases initial
and subsidiary register are prepared. Minor head wise and detail head wise total are
posted in the cash a/c known as monthly cash a/c and forwarded to the AG office for
compilation at the end of the month; Paid vouchers received from bank by
treasury/DAO/AAO are soughted heads and service heads is done and lists of payment
prepared and forwarded to the accounts office at the end of gthe month. In the accounts
office the compilation of debit heads and service heads is done by computer where the
a/cs have been computerized.
3.6. Preparation of Classified Abstract:
As the cash a/cs are passed and prepared at DAO/AAO/treasury and not at the
main office, the figures are posted in the classified abstract and sent to book section for
posting in the monthly detail book, consolidated detail book and register of major head

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totals. From the list of payments posting is done in he departmental classified abstract of
payments along with compiled a/cs of payments made in the a/cs office. The figures are
then posted in the monthly detail book, consolidated detail book and register of major
head totals. From the monthly a/cs so posted a copy of the a/cs is prepared and sent ti the
govt: concerned every month.
3.7. Appropriation Accounts:
From the yearly consolidated abstract of major heads total of the expenditure, the
appropriations accounts are prepared. Separate accounts for federal and provincial
governments by the respective AG;s are prepared.
3.8. Finance Accounts:
From the yearly accounts of receipts and payments and total of debit deposits and
remittances transactions the finance accounts are prepared.
3.9. Proforma Accounts:
Some deptts: of Govt: have been declared as commercial or quasi- commercial

character like an industry or workshop. It is necessary that their financial results may be
visible in normal commercial forms, so that their operational results, cost of service and
out put/ product may be accurately known.
This requires that in addition to normal Govt: accounts suitable capital,

manufacturing, trading, profit and loss accounts and balance sheet may be dept on a
proforma basis out side the general accounts or Govt: the deptt: concerned prepares
annual accounts adopting proforma of commercial a/cs
These are maintained by the deptt: in such form as may be agreed upon between
the auditor general and the federal or provincial govt: is concerned. Actual transaction
entering these accounts find a place primarily in the regular accounts excepting

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adjustments carried out to include total income and liabilities etc. These accounts are
additional as well as separate from the govt: a/cs.
3.10. Differentiate Between Appropriation Finance and

Combine Finance and Revenue A/cs:
The difference b/w Appropriation Finance and Combine Finance and Revenue
a/cs is given below:
The appropriation accounts are the compilation of accounts of disbursement.
The appropriation accounts are prepared separately for each provincial govt: and
federal govt:
Separate appropriation accounts of civil deptts: post office,T&T, railways and

defence deptt: are prepared.
It is prepared for the expenditure incurred during a financial year that is

commencing from first july of the year ending 30th June of the following year.
All the appropriation accounts are submitted along with audit report there on
printed separately from the accounts or with the appropriation accounts in he same
volume.
It is complete statement of federal govt: or provincial govt: annual disbursement.
These accounts are prepared by the AGPR and provincial AG’s on behalf of
Auditor General fromj the accounts dept by them and by the authorities declared
responsible for preparation of the same and sent to govt: concern for submission before
the legislature.
3.11. Finance Accounts:
The Finance Accounts are the completion of receipts, disbursement and of asses
and liabilities etc of the accounts of each govt: separately.

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These accounts are also compiled for each provincial and federal government
separately.
The accounts of defence, railways, post office and T&T deptt: are included in one
volume of finance accounts of federal, civil and separate finance accounts for each
province are prepared.
These are also prepared on financial year basis and are prepared for the
proceeding year.
The finance accounts are submitted along with audit reports there on printed
separately from the accounts or with the finance accounts in the same volume.
It is the complete statement of federal govt: or of each provincial govt: annual

receipts and disbursements.
These are prepared by the AGPR and provincial AG’s from the accounts dept by
them and sent to govt: concerned foe submission before the legesilature.
3.12. Combine Finance and Revenue Accounts:
It is also the compilation of receipts, disbursement and assets and liabilities of all
the governments both federal and provincial.
It is the compilation of all the federal and provincial governments accounts, in one
volume.
These are also prepared for the last proceeding year;
No audit report is added to it.
It is a complete statement of financial transactions for the whole country.
It is prepared by the Auditor General of Pakistan.

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CHAPTER NO. 4
4. INTRODUCTION OF THE DEPARTMENT
4.1. Auditor-General of Pakistan
4.1.1. Constitutional Mandate and Status – AGP

Auditor-General of Pakistan (AGP) is the head of Supreme Audit
Institution (SAI) of the country and is appointed by the President. Articles 168 to
171 of the Constitution of the Islamic Republic of Pakistan, 1973 provide a
constitutional status to the Auditor-General and his Department. The articles read:
Article 168:
“There shall be an Auditor General of Pakistan, who shall be appointed by the
President.” “The terms and conditions of service, including the term of office, of
the Auditor General shall be determined by Act of [Majlis-e-Shoora
(Parliament)] and, until so determined, by Order of the President.”
Article 169:
“The Auditor-General shall, in relation to (a) the accounts of the Federation and
of the Provinces; and (b) the accounts of any authority or body established by the
Federation or a Province, perform such functions and exercise such powers as
may be determined by or under the Act of Parliament and, until so determined, by
order of the President.”
Article 170:
“The accounts of the Federation and of the Provinces shall be kept in such form
and in accordance with such principles and methods as the Auditor-General may,
with the approval of the President, prescribe.”

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Article 171:
“The reports of the Auditor-General relating to the accounts of Federation shall
be submitted to the President, who shall cause them to be laid before the National
Assembly and the reports of the Auditor-General relating to the accounts of a
Province shall be submitted to the Governor of the Province, who shall cause
them to be laid before the Provincial Assembly.”
4.1.2. Corporate Vision & Mission - AGP

“Our Vision is to become a model Supreme Audit Institute. Our Mission is
to serve public interest by ensuring prudent use of resources by public managers,
to guard against wastage; extravagance and inefficiency, to steer public sector
performance; and to act as a catalyst in enforcing accountability”.
For fulfilling the mission, we shall strive to:
a. Ensure and sustain our independence;

b. Achieve excellence in the audit management process;
c. Enhance our audit capabilities;
d. Ensure sustained development of the knowledge base and skill level of our
staff;
e. Ensure application of International Standards to our audit methodology;
f. Keep an up-to-date profile of our auditees; and
g. Work in close liaison with other accountability agencies
4.1.3. Powers and Functions of the AGP under the New

Ordinance - 2001
The powers and functions of the Auditor General were governed by

Pakistan (Audit & Accounts) Order 1973, till 30th June 2001. A new Ordinance
was promulgated on May 17, 2001 to become effective from July 1, 2001 to
replace the Order of 1973.

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Some salient features of the Auditor- General’s (Functions, Powers and
Terms and Conditions of Service) Ordinance, 2001 are explained below:
Certification of Accounts prepared by CGA-Section 7

“The Auditor General shall, on the basis of such audit as he may consider
appropriate and necessary, certify the accounts, compiled and prepared by
Controller General of Accounts or any other person authorized in that behalf, for
each financial year, showing under the respective heads the annual receipts and
disbursements for the purpose of the Federation, of each Province and of each
District, and shall submit the certified accounts with such notes, comments or
recommendations as he may consider necessary to the President or the Governor
of a Province or the designated District Authority, as the case may be”
Audit Jurisdiction-section 8
The Auditor- General shall-
• audit all expenditure from the Consolidated Fund of the Federation and of
each Province;
• audit all transactions of the Federation and of the Provinces relating to

Public Accounts;
• audit all trading, manufacturing, profit and loss accounts and balance
sheets and other subsidiary accounts kept by Order of the President or of the
Governor of a Province in any Federal or Provincial department; and
• audit, subject to the provisions of this Ordinance, the accounts of any
authority or body established by the Federation or a Province.
Audit of Receipts and Expenditure

Audit of receipts and expenditure of holders of authorities substantially financed
by loans and grants-section 9
“Where any body or authority is substantially financed by loans or grants from

Consolidated Fund of Federal Government or of any Province or of any district,
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the Auditor General shall, subject to the provisions of any law for the time being
in force applicable to the body or authority, as the case may be, audit the accounts
of that body or authority”.
Audit of receipts of Federation or of Provinces or of Districts-

section 12
“The Auditor General shall audit all receipts which are payable into the
Consolidated Fund or Public Accounts of the Federal Government and of each
Province and in the accounts of each district and to satisfy himself that all such
receipts which are payable into the Consolidated Fund, Public Account or any
District Account have been properly and correctly deposited and rules and
procedures relating to which receipts are being fully observed and the systems
are in place to ensure proper assessment and collection of government receipts”.
Audit on accounts of Stores and Stock- section 13

“The Auditor General shall have authority to audit and report on the accounts of
stores and stock kept in any office or department of the Federation or of a
Province or of a district”.
Audit of companies and corporations established in the public

sector- section15
“The Auditor- General shall perform functions and exercise powers in relation to
the audit including supplementary audit of the accounts of public sector
companies in accordance with the provisions of the Companies Ordinance 1984
(XLVII of 1984)”.
Audit of accounts of certain authorities or bodies- section 16

“Save as otherwise provided, in section 11 where the audit of the accounts of any
body or authority has not been entrusted to the Auditor General by or under any
law, he shall, if requested so to do by the President, or the Governor of a

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Province, as the case may be, undertake the audit of the accounts of such body or
authority and shall have, for the purposes of such audit, right of access to the
books and accounts of that body or authority”.
4.2. Controller General of Accounts
"Controller General" means the Controller General of Accounts appointed by the

President amongst the officers of the Accounts Group and shall be a BPS 22 officer.
4.2.1. Functions
a. To prepare and maintain the accounts of the Federation, the Provinces and
district governments in such forms and in accordance with such methods
and principles as the Auditor-General may, with the approval of the
President, prescribe from time to time;
b. To authorize payments and withdrawals from the Consolidated Fund and

Public Accounts of the Federal and Provincial Governments against
approved budgetary provisions after pre-audited checks as the Auditor-
General may, from time to time, prescribe;
c. To prepare and maintain accounts of such organizations and authorities

established, set up or controlled by the Federation or Provinces as may be
assigned to him by the President or, as the case may be, the Governor of a
Province;
d. To lay down principles governing the internal financial control for

Government departments in consultation with the Ministry of Finance and
the Provincial Finance departments as the case may be;
e. To render advice on accounting procedure for new scheme, programs or

activities undertaken by the Government concerned;
f. To submit accounts compiled by him or any other person responsible in that

behalf, after the close of each financial year, to the Auditor-General,
showing under the respective heads the annual receipts and disbursements

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for the purpose of Federation and of each Province within the time-frame
prescribed by the Auditor-General;
g. To provide, in so far as the accounts compiled by him permit, to the Federal

Government or, as the case may be, the Provincial Government or, District
Government such information as such Governments may from time to time
require;
h. Develop and maintain an efficient system of pension, provident funds and

other retirement benefits in constitution with the concerned Government;
i. To co-ordinate and ensure resolution of audit observation of the Audit

Department with the concerned departments; and
j. To prescribe syllabus, standards and provide facilities fro the training of

officers and staff under his administrative control
4.2.2. Offices under the direct supervision of CGA
The Controller General shall have such offices at the Federal, Provincial
and district levels and the Federal Government and the respective Provincial
Government may notify such officers working in these offices as for the purpose.
Until such time the offices of the Controller General specified in sub-
section (1) are notified the following accounting organizations shall work under
the Controller General, namely: -
a. The Accountant General of Pakistan Revenues and its sub-offices;

b. The Military Accountant General and its sub-offices;
c. The Offices of the Provincial Accountants General of each Province and the
offices subordinate to them;
d. The Chief Accounts Officers of the departmentalized accounting offices;
and
e. Any other departmentalized accounting organizations as well as their sub-
offices.

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The Controller General shall be the administrative head of all the offices
subordinate to him with full authority for transfer and posting within his
organization.
4.2.3. Reports
From the accounts directly kept or maintained by him or by accounts
officers subordinates to him, and from the accounts kept and maintained by other
entities, including self-accounting entities, the Controller General shall:-
a) Prepare each year the appropriation and finance accounts and such other
accounts as may be prescribed by rules for submission to the Auditor-
General on such dates as may be specified by him;
b) Prepare and submit to the Auditor-General for each financial year a

Consolidated and General Financial Statement incorporating the summary
of the accounts of the Federation, all provinces and district authorities. The
Auditor-General, after authentication, shall forward the same to the Federal
Government, Provincial Governments and district authorities;
c) Prepare and submit to the Federal, the respective Provincial Governments

and the Auditor General, statements and summaries of monthly or quarterly
accounts as on such formats as may be prescribed by rules.
4.3. Accountant General NWFP

Accountant General N.W.F.P., Peshawar is a provincial office of the Controller
General of Accounts, which has been performing delegated functions on behalf of
Controller General of Accounts ever since its inception. Created primarily for keeping
and maintaining the accounts of the provincial government, this office has been
performing function in accordance with provisions of the Constitution of the Republic of
Pakistan, 1973 and the Presidential Order 2001.
The Accountant General N.W.F.P., Peshawar being a provincial office of the

Controller General of Accounts is, therefore, primarily entrusted with delegated power
that devolved on Controller General of Accounts vides Article 169 of the Constitution.

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As such, this office is required to perform the following function on behalf of the
Controller General of Accounts, viz.
i. Maintenance and keeping of main as well as subsidiary accounts of the Government of

N.W.F.P., and any authority established by the Government of N.W.F.P as the case
may be.
ii. Preparation of Annual Reports as Appropriation and Finance Reports with concurrence
of the Auditor-General of Pakistan for onward submission to the Governor of
N.W.F.P of the province or to the President of Pakistan in the case of federation.
iii. Pre-Audit or check of all bills/claims of the Provincial Government pertaining to a given
financial year through payroll, funds and pension sections.
Besides all the three main functions, the Accountant General also performs the
following function.
a) General supervision of various sections of main office at Peshawar, monitoring and

coordination of 24 districts and 7 agency accounts officers in NWFP.
b) Finalization of Pension Cases.
c) Maintenance of G.P. Fund Accounts.
d) Pre audit of personal claims of all gazzetted/non gazzetted.
e) Maintenance of deposit register, personal ledger account and refund of lapsed
deposit of non-developed Departments.
f) Payment of various loans and advances, Civil advances and permanent advances of
non-developed departments at Peshawar and issue of cheques after processing
claims on this account at State Bank of Pakistan at Peshawar.
g) Compilation of monthly accounts
h) Consolidation of account (budget head wise)
i) Preparation of monthly Civil Accounts after consolidation and its submission to
Finance Department, Go NWFP.
j) Preparation of Finance Accounts of Provincial Government of NWFP of each
financial year and their submission to Finance Department as well as Controller
General of Accounts, Islamabad

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Peshawar
k) Preparation of Appropriation Accounts of Provincial Government of NWFP of each
financial year and their submission to Finance Department as well as Controller
General of Accounts, Islamabad
l) Discussion of Finance Accounts and Appropriation Accounts in the meeting of
Public Accounts Committee Government of NWFP.
m) Earmarking of Funds for House Building Advance, Motor Car Advance, Scooter
Advance and Cycle Advance.
n) Issuance of NOC and to authorize opening of Assignment Account at National
Bank of Pakistan and PLA’s at District/Agency Accounts offices in NWFP.
o) Monitoring of District Government Accounts and Devolution plan and submission
of various M.I.S. reports to Controller General of Accounts and Auditor-General of
Pakistan of Pakistan, Islamabad.
p) Maintenance of Financial Rules and Regulations and their circulation among
District/Agency Account Offices in NWFP, and various section of Main office at
Peshawar.
q) Maintenance of Computer Cell at Peshawar as well as in some District/Agency
Accounts offices established for computerization of pay roll, G.P. Fund and
Accounts
r) Introduction of New Accounting Model (NAM) as well as computerization under
project for Improvement of Financial Reporting and Auditing (PIFRA).
4.3.1. AG, NWFP and Provincial Government
The Accountant General N.W.F.P., Peshawar therefore forms a vital part

in the management of Provincial Government. It not only keeps accounts of the
provincial transactions but also stands as a third party authenticating proper
utilization of financial resources at disposal of the Government of N.W.F.P.
According to the Accountant’s General Manual of General procedures

published in 1993 there were 18 branches, sections and department working the in
the main office. In addition, there are 24 District Accounts Offices established in
each direct of N.W.F.P, which report to the Accountant’s General office with
regard to above said functions. Beside, the Accounts officers working in these

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Peshawar
district there are seven 7 Agency Accounts Officers who are controlled by the Sub
Office of Accountant General Pakistan Revenue (AGPR).
The District/Agency Accounts Officers perform the same function, which

is performed by the Accountant’s General office but are controlled by the Deputy
Commissioners of the District Now DCO’s and in the Agency; the Political
Administration controls them. Thus administratively, they are controlled by the
DCOs/Political Administration and functionally by the Accountant General in the
case of DAO and Additional Accountant General (PR) in the case of Agency
Accounts Offices.
Federal Treasury Rules provide for the relationship between Accountant

General’s office and the executive. It governs the smooth working relations
between the two. The scheme of district accounts offices was implemented in
1970-71 as a result of district governance scheme under the constitution of 1962.
Later on, with changes in constitutional character of the country, full powers and
autonomy to these offices could not be provided.
4.4. History of District Accounts Offices/Agency Accounts

Offices
The DAO/AAO scheme was introduced in NWFP on experimental basis with

effect from March 01, 1970. In fact it was a step towards separation of Audit and
Accounts and to decentralize the maintenance of GP Fund Accounts, pension payment,
pre audit of claim of pay & Allowances and contingent charges and preparation of
monthly accounts (Federal as well as provincial and now district government) and to
provide doorstep service/facility at District/Agency Accounts level.
The main theme behind the creation of the offices of District/Agency Accounts
Officer, is to provide the masses facilities/services at their doorstep. It is obvious that
before creation of the positions, the provincial employees, who were working in far flung
areas come to the office of the Accountant General NWFP twice or may be many times in
a month to look into their accounts. The work of the Accountant General Office was

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manual and no latest technology was adopted. So to facilitate them, the Government of
Pakistan and the Pakistan Audit Department (PAD) agrees to decentralize the accounts of
Pension, GP Fund and others as stated above of Government of NWFP at district and
Agency Level.
There are 24 District and 7 Agency Accounts Offices in NWFP as stated earlier,
started from the date noted against each in the following table.
Each District/Agency Accounts Office consists of two wings i.e. Treasury Wing
and the Audit Wing. The treasury Wing comprises f\posts and personnel of provincial
Government and is under the Administrative Control of Government of NWFP. The posts
and personnel of Audit Wing belong to Accounts Department and are under the
Administrative Control of the Accountant General NWFP, Peshawar.
The post of District/Agency Accounts Officers belongs to Provincial Government

and is manned by the Accounts Officers of Accounts Department and Provincial
Government in the ratio of 50:50. The post of District Accounts Officers in 7-District
(Peshawar, Mardan, Kohat, Bannu, D.I. Khan, Swat and Abbottabad) have been upgraded
with effect from July 1, 2002 and have been manned by the officers in BPS-18 of Audit
and Accounts Services. Now recently in the month of September 2004, the Provincial
Government also promoted their Accounts Officers/Treasury Officers from B-17 to B-18
for the purpose.

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CHAPTER NO. 5
5. ADDL: ACCOUNTANT GENERAL (PR) PESHAWAR.
5.1. Introduction
Additional Accountant General Pakistan Revenues sub office Peshawar is a field

office of the Accountant General Pakistan Revenues Islamabad, and performing all the
function on behalf of Accountant General (PR) only related to all Federal departments
situated in NWFP.
It is purely a public sector organization aimed at maintaining, controlling,

regulating and monitoring the public accounts of the Federal government department
working/functioning in the NWFP. It implies a check of the Provincial government on the
functioning of Federal government with respect to day-to-day incurrence of expenditure
from public exchequer. It’s a service industry and offers its products in the shape of a
wide range of financial advisory service to the Federal government. The products it offers
include not only maintaining the detailed history of service of the employees, maintaining
their salaries, GPF, Pensions, Gratuity and Advances but also the authorization of all
kinds of expenditures to the Federal government reconciliation of expenditure figures.
5.2. Main Functions

Following are the main function performed by the AGPR.
1. Maintain the accounts pertaining to Federal departments in NWFP.

2. Finalization of Pension Cases.
3. Maintenance of G.P. Fund Accounts.
4. Pre audit of personal claims of all gazzetted/non gazzetted staff.
5. Maintenance of deposit register, personal ledger account and
refund of lapsed deposit of Departmentalized entities in Federal Govt:.
6. Payment of various loans and advances, Civil advances and
permanent advances of non-developed departments in NWFP on behalf of

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Federal Govt: and issue of cheques after processing claims on this account
at State Bank of Pakistan at Peshawar.
7. Compilation of monthly accounts
5.3. Organizational chart of Addl: Accountant General (PR)

Peshawar.
Office of the Additional Accountant General (PR) sub office Peshawar comprises
of Addl: Accountant General, Assistant Accountant General, Accounts Officers,
Assistant Accounts Officer, Assistant Supervisors, Senior Auditors ,Junior Auditors and
class four staff.
The AGPR is assisted by an Additional Accountant General. The Additional

Accountant Generals works, as supervisor while the Accountant General Pakistan
Revenues is the overall head of the organization. The Accountant General (PR)
Islamabad is of 21 Grade officer (22 Grade structure), while the Additional Accountant
General is a Grade 19 Gazzetted Officer.
Under the direct supervision of Additional Accountant General, following staff

are working, they are as fallows 2 Assistant Accountant General,BPS-17 (CSS cadre), 08
Accounts Officers,BPS-17 (Rankers), 28 Assistant Accounts Officers,BPS-16 (SAS
Qualified), 10 Assistant Supervisors (BPS-15), 187 Senior Auditors (BPS-11), 33 Junior
Auditors (BPS-05), and 22 class four (BPS-01). The sanctioned strength of the overall
organization is 277 including Additional Accountant General, whereas total strength that
is working is 290, the extra officers are working as deputionists in different departments
under the supervision of Federal and Provincial Govts:.
All those District Accounts Offices who comes under the audit jurisdiction of
Federal Gvot: are also dealt under the supervision of Additional Accountant General and
he is not only responsible to keep their monthly accounts but also make policies
regarding accounting matters of the concerned DAO’s as well.
The placement of all the officers/officials within the office has been made as
fallows. There are 23 sections within the office. Each section is supervised by one

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Assistant Accounts Officer and he is responsible of the overall supervision of the his
section. According to the nature of the section work number of senior auditors are posted
in different sections. Than the charge of these sections are further given to an Accounts
Officer. According to the nature of different works, in some cases Accounts Officer are
the final authority, whereas in some other cases final decisions are taken by Additional
Accountant General. All those problems or cases which are beyond the power are then
sent to Accountant General Pakistan Revenues, Islamabad, and after his consultation the
cases are decided. One junior auditor is also placed under the direct supervision of
Assistant Accounts Officer, who is basically responsible for the following main function.
i. Issuing and receiving token on the claims

ii. Issuing cheques
iii. Issuing of schedule of cheque
Maintaining different diaries i.e General and Internal Control Cheak .
Receiving letters from the dispatch sections, their sorting and their distribution as well.
Making different weekly, and monthly reports.
Maintaining casual leave register of the section staff.
Fix seal payment on the pass bills etc etc.
For the smooth running of the office functions, twenty Naib Qasids and two
Chowkidars are also workings
5.4. Staff Of Addl: Accountant General, Peshawar.
Staff employed in the office of Additional Accountant General at Peshawar

comprised of Departmental Federal Employees. Departmental cadres comprise of all staff
and officials recruited or appointed by the Accountant General Pakistan Revenues as
Junior Auditors, Senior Auditors and Assistant Accounts Officers’ i.e. from BPS-05 to
BPS-16. Auditor-General of Pakistan and Controller General of Accounts, Islamabad
promotes accounts Officers BPS-17.
Thus, all posts in BPS-17 and above falling in management and not exactly
accounting work are Inter-Departmental Cadre (IDC). It includes posts of Assistant
Accountant General, Deputy Accountant General and Accountant General in the

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hierarchical set-up. According to the Manual of General Procedures there were a total of
1500 departmental cadre employees compared to an average 8 inter departmental Cadre
Officers in the main office i.e. Accountant Genera Pakistan Revenues Islamabad.
The Strength of the staff required in each office is fixed under proper sanction
with reference to the satisfaction of workload in each section. The Accountant General
(PR) Islamabad is not permitted to alter permanently the strength of any section or of any
class of their establishment.
As stated earlier, Additional Accountant General is a field office. The

appointments/selection of officials are made by the office of Addl: Accountant General
with the sanction of AGPR, Islamabad in the case of Federal employees. and then their
postings have been made in different sections within the office, the Additional
Accountant General is fully authorized in posting/transfers of his staff within the office.
5.5. Initial Appointment (GOP instructions)
Initial appointments to post in Basic Pay Scale (BPS) 5 to 15 shall be made on the
recommendations of the Department Selection Committee (DSC) after the vacancies have
been advertised through newspapers. The Departmental Selection Committee is consists
of following 3 members, I;e one is chairman (Additional Accountant General) and two
members they are
Deputy Accountant General and Deputy Director Audit.

i. A candidate for initial appointment to a post mush possesses the educational
qualifications and the experience required for the post.
ii. The suitability of the candidates should be tested either by examination and/or by
interview on first appointment. Subject to any general instructions issued by the
Auditor-General of Pakistan from time to time, suitable rules/procedures for the
purpose of recruitment should be laid down by the Accountant General (PR)
prescribing minimum requirements in terms of qualification and experience etc.
For different posts, with the overall framework of the rule son the subject and the
recruitment policy of the government and the Auditor-General of Pakistan.

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Subject to the provision of Section 14 of the Civil Servants Act, 197, the Auditor-
General of Pakistan has the power under Article 520 (iii), C.S.R, to sanction the
reemployment of pensioners when necessary.
5.6. Age for Recruitment and its Relaxation
A person whose age exceeds from 25 years may not be admitted to a pension able
post in Government service without the sanction of head of department. The various
heads of departments in the Pakistan Audit Department may allow relaxation of age up to
30 years.
The Addl: Accountant General may pay due regard to the Administrative
instructions contained in the Fundamental rules and supplementary rules Vol II. All other
cases should be referred to the Auditor-General of Pakistan for his orders.
The upper age limit for recruitment to the services posts under the Federal
Government should be relaxed by three years in case of Tribal candidate who are
permanent resident of such areas. For absorption of disabled persons against 1% quota. It
is very important to award ten years relaxation in addition to relaxation already given
under normal rules and regulations.
5.7. Functions of the Addl: Accountant General, Peshawar.
The Additional Accountant General is functioning on behalf of Accountant

General (PR) Islamabad. They are actually performing the delegated powers by AGPR,
Islamabad.
He perform the under noted functions/duties beside other administrative

responsibilities of the department.
5.7.1. Accounts Section

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The Additional Accountant General (PR) sub office peshawar keeps the
following accounts, as for as the District Government is concerned, the AGPR
NWFP is also authorized to keep and maintain the accounts.
i. Federal Government
ii. Provincial Government
The Federal and Provincial Governments are separate accounting and

reporting entities, each having one Consolidated Fund into which all revenues,
borrowings and repayments of loan from the Government are repaid, and out of
which all public expenditures are made. Each Government also has a Public
Account, for money received by the Government for which it has a fiduciary
responsibility but which it is not at liberty to appropriate for the general services
of the Government. Public Accounts money comprises trust accounts (normally
established under the special laws) and special deposits accounts such as for relief
funds, civil and criminal court deposits, welfare funds and development funds.
Each Government maintains separate single account with the State Bank
of Pakistan for the Consolidated Fund and the Public Account. Single accounts
are to be created for each of the new district governments. Spending entities are
permitted under certain circumstances to open separate bank accounts
(Assignment Accounts, or Personal Ledger Accounts) with the NationaBank of
Pakistan only upon the approval of the Ministry/Finance Division, and funded
from the Consolidated Fund or Public Account. The main users of Assignment
Accounts are self-accounting entities and development projects.
5.7.2. Consolidated Fund.
According to articles 78, all moneys received, all loans arised and all
moneys received in repayment of any loan by he Government, will form the
Consolidated Fund of the Government. Furthermore according to articles 83, no
expenditure may be incurred upon the Consolidated Fund unless it has been only
authen

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5.7.3. Pension Section
“PENSION” Means a periodical payment made by Government in consideration
of the service rendered by a Government servant in accordance with the rules.
Article 41 of C.S.R.
Work of Pension Branch/Section

The work entrusted to the Pension Brach mainly consists of the following
items of work:
a. The verification of service of applicants for pension and gratuity

(including of claims for counting previous military service for Civil
Pension)
b. The reports on titles to pension and gratuities of the officers serving under
the audit control of this office and the allocation of pensionery charges
between different Governments.
c. The maintenance of pensionery contribution register and broadsheet of

leave salary and pension contributions due on behalf of officers on
Foreign Service.
d. Keeping watch over regular recovery of contribution and recovery of

interest on overdue contributions.
e. The preparation and issue of the pension payment and gratuity orders.
f. The disposal of commutation applications for pension received from the

pensioners consisting of the report as to the amount of commuted value
admissible and the issuing of authorities for its payment on receipt of
sanctions.
g. Adjustment of pensionery charges between different governments.
h. Audit of pension, commutation and gratuity charges.
i. The preparation of the budget estimates for pensions.

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j. The compilation of periodical returns
k. The classification of pension receipts and payments and the compilation of

monthly accounts relating to Provincial Payments of pension, gratuities,
and receipt-in- aid of Superannuation etc “and payments of commuted
value of pensions Provincial under the heads Commuted value of pensions
and commuted value of pensions.
l. Appropriation audit in regard to Provincial expenditure under these heads.
Classification of Pensions
o Compensation pension
o Invalid Pension
o Superannuating pension
o Retiring Pension
Compensation Pension
If a permanent Government Servant is selected for discharge owning to
the abolition of his permanent post or owing to a change in the nature of duties of
the post, he shall, unless he is appointed to another post the condition of which are
deemed to be at least equivalent to those of his own, have the option.
i. Of taking any compensation pension and/or gratuity to which he

may be entitled for the service he has already rendered; or
ii. Of accepting another post of transfer to another establishment oven

on a lower pay if officered and continuing to count his previous service for
pension. (Rule 3.2 of NWFP Pension Rules).
Invalid Pension
i. An invalid pension is awarded on his retirement from Government
Service, before reaching the age of superannuation to a Government

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Servant who by bodily or mental infirmity is permanently incapacitated
for further service on production of the prescribed Medical Certificate.
ii. A Government servant, who wishes to retire on invalid pension,

should apply to his Head of Office or Department/Attached Department
who should direct him to present himself before a Medical Board of an
invaliding committee or (Medical Superintendent District Head Quarter
Hospital/Services Hospital for obtaining a medical certificate of incapacity
for further service.
Decision:
When a medical board is convinced for invalidation of a Government
servant that medical board may also be specifically requested to report its
recommendation in the prescribed Form-8 (PEN) along with medical certificate
under Supplementary Rules 4 AA to assess his expected age in accordance with
chapter VIII of the Civil Services Pension Rules and the government Servant
retire on invalid pension may be saved the trouble of second medical examination
for the purpose of commutation. These instructions shall take immediate effect
and will also be applicable to cases of invalidation already referred to medical
board but medical certificate not recorded on the date of issue of this letter i.e. No.
S.OS-RIII (FE&TD)/4-36/76 Vol VII dated December 1, 1998.
Superannuation Pension
A superannuation pension is granted to a Government Servant on
completion of age of Superannuation, which under section-13 of the Civil
Servants Act 1973 is sixty years.
Retiring Pension
A retiring pension is granted to a Government Servant, who not being
eligible for superannuation pension opts to retire after 25 years qualifying service
or is compulsory retired form service under E&D Rules.

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Simply we cay say, subject to the provision of the Essential Services
Maintenance Act, all Government Servants shall have the right to retire on a
retiring pension after completing 25 years of service provided that a Government
servant who intends to retire before attaining the age of Superannuation, shall, at
least three months before the date on which he intends to retire, submit a written
intimation to the authority which appoints him, indicating the date on which he
intends to retire. Such intimation once submitted shall be final and shall not be
allowed be modified or withdrawn.
The right of retirement shall not, however be available to a Government

servant against whom a departmental Enquiry is pending.
A Government Servant compulsorily retired under the Government

Servants (Efficiency and Discipline) Rules, 1973, shall be entitled to pension of
gratuity as admissible under normal rules and the certificates of “thoroughly
satisfactory service” is not be required in this particular case.
RULE: ( 3.4 OF NWFP Pension Rules with Section –13 of the Civil Servants
Act, 1973)
Family Pension
Family pension is admissible at the rate of 50% of gross pension in the
event of death of a civil servant before retirement (i.e. dies during service). The
gratuity in lieu of one fourth of gross pension on the basis of age next birthday of
the deceased civil servants according to commutation table will be paid.
If the civil servant dies after retirement, the family pension would be
admissible equal to 50% of the net or reduced pension. The family pension
admissible to the widow for life or until her re-marriage. In case, the widow dies,
the pension will be admissible to the sons, if any, until they attaint the age of 21
years and the unmarried daughters, if any, until they are married or attain the age
of 21 years, which ever is earlier.

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Family for the purpose of payment of gratuity and family pension will
include the following relatives of the Civil Servants:
a. Wife or wives in the case of a male civil servants

b. Husband in the case of a female civil servant
c. Children of the civil servant
d. Widow of widows and children of a deceased son of the civil
servant.
NOTE: A child means a legitimate child or an “adopted child” if under the

personal law of the Civil servant concerned adoption is legal recognized a
conferring the status of a natural child.
If it is proved that the wife has been judicially separated from the
Government servant or has ceased under the customary law of the community to
which she belongs to be entitled to maintenance, she will not longer be deemed a
member of the family unless the Government Servant has himself intimated in
writing to the Accounts Officer/Head of the Office she will continue to be so
regarded.
In the case of a female Civil Servant, if the wife intimates in writing to the
Additional Accountant General/head of the Office that her husband should not be
included as a member of the family, then he will no longer be considered a
member of the family unless subsequently she cancels in writing here intimation
excluding him.
• Issuance of Pension Payment Order

• Arranging First Payment of Pension in cases of Federal Government
Servants (retired)
• Payment of monthly pension to those pensioners who opts to get
pension at DAO Office
• Restoration of commuted value of pension, whenever it due.

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• Maintenance/compilation of pension payments made by all branches
of State Bank /National Bank of Pakistan of the District as well as
those made by the DAO himself.
Payment of Pensions at a Branch of the National Bank of Pakistan

As from September 01, 1977, the pensioners at their option can choose
either to continue to draw their pension from the Treasury Office of District
Accounts Officers, (Now days DAO acts as Treasury Officer also) as the case
may be, as either or to draws it from a branch of National Bank of Pakistan (NBP)
of their choice at which the requisite authority for payment of pension may be
issued by the Accountant General (PR)/District Accounts Officer.
Commutation
It should not be necessary to submit a medical examination if
commutation is asked for within one year of the date of retirement. The pensioner
should apply to the Accounts Officer who would authorize payment and a copy of
authority issued to the treasury officer/branch of NBP.
Un-Drawn Pension Arrears

There should be no restriction for the drawl of pension if it falls in arrears.
The disbursing officers may pay the arrears without any reference to the Audit
office of the pension sanctioning authority.
Reckonable Emoluments
The following shall be treated as emoluments reckoning for pension under
Article 486 CSR.
a. Pay as defined in FR-9 (21) (a) (b)

b. Senior post allowance
c. Special pay of all types and nature
d. Personal pay
e. Technical pay

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f. Dearness Allowance
g. Increments accrued during LPR
h. Any other emoluments, which may be specially classed as pay.
Verification of Service
On receipt of application for pension and on Gratuity in the prescribed
forms, verification of service qualifying for pension/gratuity will be made in the
following manner.
a. In case of Gazzetted Officer, service verification will be made from the

printed History of Service of Gazzetted Government Servants. And/or
from the service statement to be requisitioned from and furnished by the
GAD Section concerned.
b. In case of Non-Gazzetted Government Servants verification will be made

from the service book, of the employees and the certificates of
certification of service recorded therein by the heads of offices and
counter checked/verified b y the Audit and Inspection Parties of the
Accountant General Office.
c. Service Verification will include inter-alia that
 Interruption in service, if any, has been regularizes.

 Suspension, if any, is followed by reinstatement and the period of
suspension has been treated as duly leave, etc as admissible
 Continuity of service from date of appointment to date of
retirement has been maintained.
 In the case of a government servant who has been on foreign
Service, the period of service claimed for such employment, should be
verified from the pension contributions register and the Broad Sheet of
pension contribution should be examined to see whether the
contributions for that period have been recovered in full.

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 Pay of a non-gazzetted employee revised from time to time has
been checked by Audit and audit enforcement of the check exists in
the service book.
 Pay of extra ordinary Leave (with out Pay) are identified and
excluded from the gross qualifying service according to the rules.
Simplification of procedure for the verification of service on Non-

Gazzetted government servants
With a view to simplify procedures for expeditious settlement of

pensioned gratuity claim of retired government servants, the Federal Government,
Department have issued orders that verification of particulars of service shall be
made thrice during employment of a Non-Gazzetted government servants as
under:
- Once when a Government Servants complete 10 years of service;

- Next, when he completes 24 years of service i.e. in respect of 14
intervening years since last verification; and
- Finally in respect of the period after 24 years when he is actually due to
retire.
The heads of offices in which the government servants are working shall
ensure that the service books of non-gazzetted employees are properly maintained
and service verification is done and the requisite services verification certificates
are recorded in the service book annually indicating therein the period of service
actually verified with reference to pay bills and acquaintance rolls.
The Federal Government may sanction a pension, which is certified by the

responsible Accounts Officer to be clearly and strictly admissible under the rules,
in the case of a Gazzetted Government Servant unless powers in this respect are
delegated to Heads of Department and other sub ordinate officers who are
authorized to fill the appointment vacated by the retiring officer.

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In case of Non-Gazzetted employees of the provincial government, the
authority competent to fill the appointment vacated by the retiring official may
sanction a pension certified by the responsible Audit Officer/Accounts Officer to
be clearly and strictly admissible under the rules.
Sanction to Pension in case of non-gazzetted employees in the Police

Department, all sanctions to the grant of pensions to non-gazzetted government
servants working in the Police Department will be accorded by the Inspector
General of Police Department will be communicated by the Deputy Inspector
General of Police (DIG) for the Inspector General of Police (IGP).
5.7.4. General Provident Fund Section (G. P Fund Section)

The Addl: Accountant general (PR), keep the following accounts of the
subscriber.
• Allotment of G. P Fund Accounts number to the subscribers;

• Maintenance of G. P Fund Accounts of Federal government’s servants/employees;
• Monthly posting of deductions in the Ledgers/Broad Sheets, its compilation as well
as closing of monthly/yearly basis;
• Issuance of Balance Sheets, Annual Account Statement of G.P Fund;
• Dealing with the refundable/non refundable advances from the GP Fund as well as
that of Final Payment cases of government employees; and
• Transfer of G. P Fund accounts/balances to other DAOs in whose jurisdiction the
subscriber transferred.
It is the responsibility of Controller General of Accounts to maintain the

employees record. On behalf of Accounts General (PR) the Additional Accountant
General (PR) maintains the G. P Fund Accounts of the employees working under the
audit jurisdiction of NWFP.
Monthly deduction is made of a certain portion of the employees’ salaries as a

compulsory contribution in order to encourage saving habits. The government on these
saving accounts also pays interest with a higher rate as compared to banks and other

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financial institutions; for example, the Go Pakistan decided to pay interest on G. P Fund
for the current year at the rate of 13.5%, which is much higher than commercial Bank.
The commercial Banks paying on the PLS @ 2-3% a year.
For the purpose, the subscribers have to open an account with the AGPR
concerned like an account with the commercial bank. In AGPR it is known as opening a
G. P Fund Account for the subscriber. The Auditors concerned open a page for the
subscriber and then record and maintain the monthly deductions on the page. It is all
manual.
The G. P Fund wing of this office also deals with the refundable/ non –refundable
advances and as well as the Final payment in case of retiring.
All such matters are operated in GP Fund Wing. Monthly contributions are
recorded in the respective ledgers along with calculation of annual interest. In this way
balances of the subscribers are kept updated. The updating of GP Fund balances provide
an opportunity to the subscribers that they can easily draw money from their GP Fund
accounts according to their needs. However, the government has laid down some rules on
the GP Fund. It is the property of the subscriber but they cannot withdraw all the moneys
from their accounts. They can only be allowed to withdraw 80% of the total money in
their account. The GP Fund Wing of the office is providing the service to the provincial
government employees/ subscribers like a bank. But operations in this wing are carried
out manually which are unable to cope with the needs of increasing number of
subscribers. The auditors all the time remain busy to locate the old worn out record of the
subscribers and sometimes fail to find it.
In routine, the government employees are transferred from one district/agency to

another in pure public interest. On transfer, from one place to another, the subscribers
have to shift all the money from the Account (G. P Fund Account) to the place where
he/she is moving. The transfers of balances are done through Credit Memos and Sealed
Authorities. Credit memos are just a letter, which shows the balances of the subscriber.
Transfer of balances to other DAOs/Governments through credit memos or sealed
authorities sometimes cause nuisance to the subscribers as most of the times the
documents go missing in the transit and the subscribers are pushed from pillar to post and

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face greater hardships. To overcome this problem a complete computerized record of
database of GP Fund is required to be maintained and all the DAOs /Govt:are to be
interconnected with one another through computer so that a quick transfer of balances
and other information can be ensured. By way of these alterations the GP Fund wing can
add more to the value of the organization.
Grant of Temporary Advances from the GP Fund

A temporary advance under Rule 15 of the GP Fund (NWFP) Rule may be made
to the subscriber from the amount standing at his credit in his General Provident Fund
Account subject to the following conditions:
a. Advances will be granted only if the sanctioning authority is satisfied that he

pecuniary circumstances of the applicant justify it and that it will be expended on
the following objects or otherwise:
1. To pay expenses incurred in connection with the prolonged illness of the

applicant himself or any person actually dependent on him.
2. To pay for the overseas passage for reasons of health or education of the
applicant or any person actually dependent on him.
3. To pay obligatory expenses on a scale appropriate to the applicants status in

connection with marriages, funerals or ceremonies, which by his religion it is
incumbent on him to perform.
4. To meet other expenditure which is considered by the sanctioning authority to

be essential and unavoidable.
b. The sanctioning authority shall recorded writing the reasons for the advance.
c. The amount should not be exceeded three months pay or half of the amount at the
credit of the subscriber in the fund, which ever is less.
d. A second advance cannot granted unless the amount already advance does not
exceed two-third of the amount admissible under (c) above or until at least 12

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month after the final repayment of all previous advances together with interest
thereon.
Advances for Construction/Purchase of House

An advance for construction or purchase of a house for occupation by the
subscriber himself or his family or for making addition to or alteration in an existing
house, owned by the subscriber, whether or not constructed or purchased with a house
building advance, may be granted to him from the amount standing to his credit the
Account at the discretion of the appropriate authority subject to the following conditions.
a. The advance shall in no case exceed thirty-six months pay of the subscriber or (80)
eighty percent of the amount at he credit of the subscriber in the account or
whichever is less.
b. Advance granted for construction of a house shall be paid in two equal installments.
c. If the first installment is not utilized for the purpose of construction of the house
within eight months of its withdrawals, it shall be refunded unless the sanctioning
authority extends this period.
d. For the purpose of withdrawal of the second installment the subscriber shall be
required to give under his hand a certificate to the effect that he has actually utilized
the first installment on the construction of the house.
Authority for Final Payment

For final payment the refund order is passed by the AGPR/branch officer of GP
Fund Section, prepared in duplicate and a note stating the amount to be withdrawn the
officer authorized to draw and the inward number of the letter of application for refund is
kept in the remarks column of the ledger folio of the subscriber concerned under the
initial of the Gazzetted Officer. The authority for payment should hold for three months.
Any delay in payment after the issuance of the necessary authority should be
investigated.

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Check of Account Closed During the Year

The accounts closed during the year are checked in detail by the poster or the
auditor together with the respective accounts of the last preceding year in the same detail
so long as the closing balances of the yea of the year are not proved and agreed. If the
closing balances of the year are agreed only the currents year’s account is checked in
detail. The AAO/Superintendent should see that this has been done.
Discovery of an Omission
When it is noticed that a credit has not been taken into account at the time of
closing either for refund of final withdrawal r for transferring the account to another
Accounts Office, action would be taken immediately to authorize a supplementary refund
or transfer the amount to the Accounts Officers, to whom the original account was
transferred. No interest should be allowed in respect of the credit unless it is due under
the G. P Fund Rules.
Payment to Retired Officers

In the case of retirement the General Provident Fund deposits will be paid to the
officer on his personal receipt and proper identification if he is a Gazzetted officer and if
he is a non-gazzetted officer residing in the district where he was last employed on a bill
drawn by the head of office who should be acquaintance. If, however, the Non Gazzetted
officers resides outside the limits of the district where he was employed, the officer
named by the Head of his office, or the Treasury Officer of the District on which
payment is desired, being nearest to the place where is residing may be authorized to
draw and disburse the amount and to furnish the usual disbursement certificate in his next
bill. In the event of the subscriber’s death before retirement the money will be paid to the
person or person entitled to receive the payment on bills duly receipted by the them after
due identification. The procedure observed in the case of payment of gratuities should be
followed in such case.
Final Payment Six Months Before Retirement

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A subscriber to the GP Fund Account may on application made to the competent
authority be permitted to withdraw finally the amount standing to his credit in the funds
six months before is retirement. Thus when a subscriber was preceded on leave
preparatory to retirement and while or such leave has been permitted to retire or been
declared by a competent medical authority to be unfit for further service or he desired
payment within six months before his retirement, the amount standing to his credit in the
account upon application made by him in that behalf of the Accounts Officer becomes
payment to the subscriber.
Payment in another Province

When final payment of GP Fund deposits of subscriber is desired from treasury in
another province/circle of account the following particulars should be furnished to the
Account Office with a view to facilitate the identification of the payee:
a. Personal mark of identifications
b. Thumb and finer impression of the left hand
c. Specimen signatures.
Payment to Pardanahsin Ladies

In regard to payment to Pardanahsin ladies the following special procedure for
identification of payees prescribed by the government with the concurrence of the
Auditor-General/Controller General of Accounts should be followed.
 If the Pardanahsin lady does appear in person at he place of payment her left hand
thumb marks should be taken o the receipt in the Accounts officer presence and
compared with that obtained by the head of the office who must be assumed to have
satisfied himself previously that she is the proper payee.
 If she does not appear in person at the place of payment she must first be identified
by the responsible neighbors before an authority competent to give life certificate
and affix her right hand thumb mark on the document in his presence.

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Mode of Payment in Case of Death of the Subscriber
On the death of the subscriber before the amount standing to has credit has
become payable or where the amount has become payable before payment has been
made.
1. When the subscriber leaves a family.
a. If a valid nomination made by the subscriber in accordance with the provision of

Rules submits, the amount standing to his credit in the fund, the whole amount or
the part thereof to which the nomination related would be payment to his nominee
or nominees in the proportion specified in the nomination.
b. If no such nomination in favor of member or members of the family of the

subscriber subsist or if such nomination relates only to a part of the amount
standing to his credit in the account, the whole amount or the part thereof to which
the nomination does not relate, as the case may be, shall not withstanding any
nomination purporting to be in favour of any persons other than the members of his
family, become payment to the member of his family in equal shares.
Provided that no share shall be payable to:
a. Sons who have attained legal majority.
b. Sons a deceased son who have attained legal majority.
c. Married daughters who husbands are alive.
d. Married daughters of a deceased son whose husband is alive.
Provided further that the widow or widows and the child or children of a deceased
son shall receive between them in equal parts only the share which that son would have
received if he had survived the subscriber and had been exempted from the provision of
(1) above.
When the subscriber leaves no family, if a nomination made by him in accordance

with the rules in force in favor of any person or persons subsists, the amount standing to
his credit in the account or the part thereof to which the nomination relates shall become
payable to his nominee or nominees in the proportion specified in the nomination.
5.7.5. Pre Audit Section (GAD)

The main areas of work for which the department is responsible are:-
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(a) Audit of pay and allowances of Gazzetted Officers including audit of sanctions.
(b) Posting of Gazzetted Notifications in the Audit Registers.
(c) Issue of pay slips, leave salary certificates and last pay certificate.
(d) Maintenance of leaves accounts including reports on applications for leave.
(e) Maintenance, compilation and issue of the History of Services.
(f) Maintenance of Board Sheets of House Building Advances, Motor Car Advances
and Advances for other conveyances.
(g) Arrangement for the payment of pay and allowances including leave salary of
Gazzetted Officers not under the audit control of this department, when so
required.
(h) “Preparation and issue of statements showing the names of Gazzetted Officers
due to retire”(Annexure-B)
Work Distribution
The GAD section is under the direct supervision of AGPR. This section
comprises of the following officer and officials
1. Accounts Officer
2. Assistant Accounts Officer
3. Assistant Supervisor
4. Senior Auditors
5. Junior Auditor
Accounts Officer’s Job

The A.O. generally supervises the work of the section related with correspondence, all
non-routine cases and is personally responsible for maintenance of the sectional Calendar
of Returns, pay slips, review of audited bills in accordance with the prescribed procedure
and the work relating to the payment of salary. He is also responsible to see that all
returns are issued on due dates and that no unnecessary delay occurs in the disposal of
cases in his section
Senior Auditor’s Job

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The work of the sections is divided, according to load of work. Each seat is under the
charge of an auditor. He is responsible for initiating all the audit work regarding payment
of a claim, recording it in the relevant register classifying the charges, recording them in
objection book, maintenance of leave accounts, preparation and issue of last pay
certificates, pay slips, leave salary certificates, correspondence etc. some of them deal
with compilation of periodical returns.
Junior Auditor’ Job

A Junior Auditor works as a diarist and is responsible for other routine duties.
Letters’ Disposal Procedure

Following procedure is outlined for the receipt and disposal of all letters either of
common interest to all the sections or not concerned to any particular section, as in the
case of advice sought for by outside authorities in respect of gazzetted audit matters:-
5.7.6. Co-Ordination Section

The GAD also deals with the cases of general nature relating to fixation of pay,
admissibility of allowances, leave interpretation of rules, procedure and other
controversial subjects are received and dealt with in these sections.
Payment Authorities
Payment authorities received from other accounts offices on behalf of gazzetted officers
not under the audit control of this office are dealt with by GA.
Preparation of History of Service

Coordination work in connection with the preparation of the History of Services done by
the GAD Section. This section is required to collect the History of Services from the
entire GAD section compile it and make necessary arrangements for its printing and
publication.
Duties

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The following are the responsibilities of the Pre-Audit/GAD Section in the office of
AGPR.
• Personal claims of Gazzetted government Servants related to pay and allowances
• Personal claims of non-gazzetted government Servants related to pay and
allowances
• Contingent bills/charges of government departments.
Explanation
As stated earlier that every employee goes through various stages during service, these
stages not only need to be recorded in the Service Books (in case of non-gazzetted) or
Personal Files (in case of Gazzetted officer) of the employees but also prompt
adjustments have to be made in their pay and allowances accordingly. For keeping record
of these stages and for timely adjustments of salaries of the subscribers the office receives
Service Books and Personal Files of a number of gazzetted & non-gazzetted employees
of federal government working in AGPR.
The public servants can claims the following from the AGPR.
 Medical Reimbursement
 Traveling Allowance/Daily Allowance
 G. P Fund Advances
 Transfer Grant
The process of scrutinizing all the bills/ claims presented by Departments is called
Preliminary Audit (Pre-Audit). It’s a huge and important function and is carried out in the
Pre Audit wing of the office. The bills are scrutinized and either passed for payment or
un-passed and sent back to the concerned quarters under some observations.
During the course of scrutiny, the auditors, if feels, that the documents are not complete
or not in order, he may send it back to the quarter concerned under some observation. We
called these bills “Un-passed”. On the other hand, if the documents are complete, the
auditor may pass him for payment. Upon which, the Accounts Officer of this department
issues cheque in the name of the employees

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Training
The basic level audit and accounts personnel are given rigorous induction training and
equipped with the expertise for their work on passing professional examinations. For
their up gradation, the department also organizes higher-level professional training and
qualifying examinations in various branches of accounts and audit. Further, Regional
Training Institutes located in various regions of the country conduct a large number of
refresher and specialization courses.
For the effective management of the manpower and other resources of the department,
and the accounting and auditing work, the department deploys officers belonging to one
of the premier civil services in the country known as the Audit and Accounts Service to
which they are initially appointed either on direct recruitment through the Federal Public
Service Commission or on promotion from within the department.
The Headquarter of the Pakistan Audit and Accounts Training Institute is in Lahore and
the four regional training institutes working at Islamabad, Karachi, Peshawar and Quetta.
These are called the Audit & Accounts Training Institutes. (AATI).
5.8. Training of SAS

Subordinate Accounts Services is a program of Pakistan Audit Department, which
is basically designed for the employees of this department. Through SAS, the employees
working in PAD as Senior Auditors’ and Junior Auditors’ can move up to the position of
Assistant Accounts Officer and then to the upper grades. The main responsibilities of the
AATI are to impart training to staff of the department regarding auditing and accounting
matters. For this purpose a comprehensive training in the shape of SAS examination has
been provided to the employees in all the five Institutes.
5.8.1. SAS Part-1

To the employees of PAD, who wish to appear in the SAS Examination,
6-month training is provided to staff of the main office and the various field
offices (DAOs/AAOs). The staff/Instructors are the permanent employees of
Pakistan Audit & Accounts Department with lot of practical experience. They are

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head by a Deputy Accountant General (CSS). Rest all the employees are
Accounts/Audit Officers BPS-17& 18 are working here as Instructor.
5.8.2. SAS Part-II

The individuals who qualify the SAS Part-I examination are again deputed
for SAS Part-II training at AATI, Lahore, Karachi, Quetta and Peshawar. After
finishing the training, the Department of Auditor General of Pakistan conducts
another examination at the proper time schedule.
5.8.3. SAS Refresher Course

Two weeks refresher course for SAS Part-I and SAS Part-II is conducted
for the trainees of previous years. The dates are announced later on, in accordance
with the schedule of their respective examinations.
5.9. Promotion of Successful Candidates

The trainees who qualify the SAS Part-II examination are promoted from non-
gazzetted to a gazzetted post of A.A.O.

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CHAPTER NO. 6
6. PROBLEMS/FINDINGS
From a general analysis of structural and functional aspects of the office of AGPR, it is
now clear that the magnitude of services to be performed by this office incompatible with its
practical management. The system on which the organization is based has depleted with the
passage of time. It therefore demands immediate reforms. Keeping in view the basic purpose or
function of the AGPR, a comprehensive reform plan has been suggested.
6.1. Building
The existing building of the department was hired on rental basis on a very high
per month cost. The existing building has only twenty rooms, which is insufficient for the
office routine. It is obvious that in this house, it is even impossible to adjust all the
personnel of the department. In the current situation. There is no kitchen in the office
building. It is therefore, essential that being head of the department, the Accountant
General (PR), Islamabad should take personal interest to resolve this problem. It is
equally important that resources of the offices are pooled to provide the building with
necessary HVAC (Heating Ventilating and Air Conditioning) System. Dusty and
improper maintenance of building is incompatible with spirit of account keeping office.
I suggest, that building for the office be hired on rental basis or it is feasible to
construct a new office for the department in Phase 5, Hayat Abad, Peshawar. As Phase 5
has been declared for the official building. For the smooth running of the office, it is
necessary for the Government of Pakistan, to provide funds for the building. Thirty
rooms for the existing staff are required on immediate basis.
6.2. Lack of Information Technology

AGPR has been working on an age-old system of keeping manual records with a
result that surplus men are being employed to perform the job of ever growing
requirements of the organization. The situation is further aggravated by the fact that
Government has imposed ban on further recruitment. Nevertheless, such measures can be
compensated by the adoption of Information Technology. One of the causes of lack of

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public trust is the slow functional processes, delayed procedure, in-exact irreconcilable
accounting records that stem from the non-adoption of Information Technology.
All organizations today rely on computer and information technology to conduct

business and operate more efficiently. Often, however, these institutions do not have the
resources to effectively implement new technologies or satisfy their changing needs.
When this happens, they turn to the computer and data processing services industry to
meet their specialized needs on a contract or customer basis.
The information technology demands skilled staff both at field service and central
accounting units. With the help of skilled staff, the required data is collected and punched
in the computers where from it is transferred to the central accounting units. However, no
serious attempt was made at computerization of AGPR. The adoption of Information
Technology can usher in a new era of development and quality service to the clients. It is
therefore, a top priority issue. The information technology will therefore, bring radical
change in the nature of monitoring and control mechanism of field units beside redressing
their problems arising out in day to day transaction.
6.3. Problems in G.P. Fund Section

AGPR is using manual system for all the above functions. In this record there is
no maintenance of (In real sense) G.P. Fund record of the subscriber. The subscriber,
when needed to withdraw some money from his G.P. Fund (which is admissible under
the rules), for personal use, when he/she visited to the office, he finds no record of his/her
accounts. For which he has to take their monthly deduction schedule from their parent
department. This is also a source of corruption for the employees of AGPR. In addition to
the above fact, I would like to mention here that the new honorable Additional
Accountant General (PR) Mrs. Hashmat Iqbal has taken serious view of the matter and
after taking over as AGPR she started with the routine matters but later on when she feels
that there is no record of G.P. Fund section she started struggle with his subordinate to
update the G. P Fund record and in the ever history of this office she updated the G.P
Fund record and issued the Balance Sheets to all the subscriber in July 2004.

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In the current year, 2004-05, there were no employees in the G. P Fund Section
(All the employees were transferred to other sections). As per rules, the AGPR has to
submit June Final Account with the total balance of G. P Fund and interest there on. The
government for forecasting purpose only does it. As stated above, there was no employee
in the section, on emergency basis, every one in the office except class IV was asked to
complete (posting of deductions in the ledger, working out their interest and then
transferring to Broad Sheet) the G. P Fund. Every employee received eight- ten ledgers. It
was really a difficult job, but have to be done in a short period of time. But successfully
every one done it before the time.
6.4. Pension Section

The word connected with the pension has following three aspects:
1. Determining amount of Pensions/family Pension to Government

servants retiring or who die during service and its authorization.
2. Determining amount of family pension to the families of

pensioners who die after retirement and its authorization.
3. Audit of pensioner authorized for payment or in course of

payment.
The pension section is also using manual system, which created very difficulties
to the Pensioners as well as the employees of the Pension section. In the Section, there
are six senior auditors working for the whole section, the sanctioned strength for the
section is 10 but there are only 06 persons functioning the whole section. Due to the work
Load they cannot entertain all the cases in a day because they receive 10-20 cases daily.
So every pensioner has to wait for his/her turn. Every pensioner has more than 60 years
of age and it is not feasible for him/her to visit the office daily or regularly, which is
much expensive and difficult. Under the rules, every pensioner when he intends to
complete the documentation of his pension case, he has to meet the A.O. personally for
authentication. I think, every pension case needs 10-15 days for finalization manually.

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6.5. Pay Roll Section

In term of size, the Payroll sections constitute the biggest wing of the Office.
Broadly the payroll section is responsible for all claims of civil as well as defense
departments. Unfortunately the payroll section is also enjoying with their manual record
keeping. In such case, there is no proper record can be maintained in the registers,
ledgers, which can leads to fraud or other, related activities.
The AGPR office is enjoying in the 21st Century with the old age system of
Manual Book Keeping rather to adopt the latest technology of Information. Our
organization has very limited computers which are unsufficient for the smooth running of
the office works, and which are only used for word processing, the problem is, there is no
proper skilled worker, who can operate the PC for effective and efficient work of the
organization.
6.6. Cheque Section

The main responsibilities of Cheque Section are:
1. Receiving the bills/claims of government servants and from

government departments
2. Maintaining Token Register
3. Correspondence with State Bank of Pakistan in cheque-related

activities
The cheque section is also enjoying problem in their field. The lack of funds
creates problems for the personnel working in Cheque Section. The competent authority
should keep soft eye on the section because they play a very confidential and important
role in the office.
6.7. Lack of Financial resources

Any organization, for its day-to-day transaction, needs money; this office faces
the lack of financial resources. One cannot expect it to execute its job efficiently and
effectively. This office faces the shortage of budget, which has suffered its activities a lot.

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The officers of the Finance Division severally contacted for the purpose, but no proper
response were given with regard to budget allocation. For instance, this office is
functioning in a rented building, as stated earlier; the monthly rent of the building is Rs.
20,000/-pm, which comes Rs. 240,000/- a year but the Competent Authority allocated
only Rs. 180,000/- a year under the building head. This is not only one case. In each and
every head, this office faces a lot of problem.
Means of communication facilities play an important role in the effective

performance of any organization. Scarness of transportation facilities and Tele
Communication means has adversely affected the activities of this office.
The working condition of the office plays a vital role in its overall performance.
Further more there is no separate conference hall for the office use , normally AG’s
conference hall is taken for official purpose .The office building is situated far away from
the main road and often employees comes to office late.

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CHAPTER NO. 7
7. RECOMMENDATIONS
7.1. Adoption of Information Technology

Survival of the fittest, this is a fact that everyone must face here in a world full of
competitions. Where the strongest and the bravest are to survive as the triumphant
victors, while the weak and coward are to become corps left eaten by the scavengers after
the victors have satisfied themselves to the extent. Considering the situation has now
turned into an irony. Nowadays, even the pale, powerless and a coward boy can beat and
topple down the strongest creature that ever lived. This may come true through the
computer technology that only needs a press then you are done.
While today nearly every organization uses a substantial number of computers

and communication tools (like telephone or fax), they are often still isolated. While
managers today are able to use applications like word Processors or spreadsheets, not
very many of them use computer-based tools to communicate with other departments or
information retrieval programs.
Businesses today rely on computer technology to assist them in almost every area
of corporate life. Computers have invaded grocery stores, fast food restaurants, big
businesses and small offices. They process data, store information, work out complex
mathematical problems, track inventory, and even control temperature and lighting in
office buildings. Reliance on the high-speed digital computer is so complete that the
world of commerce would break up to a sudden stop if computers were removed.
So at the end I would suggest that our organization should adopt the information
technology because it is the need of today’s world.
The adoption of information technology in the department can usher in a new era
of development and quality service to the clients. It is therefore, a top priority issue. The
information technology will therefore, bring radial change in the nature of monitoring

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and control mechanism of field units beside redressing their problems arising out in day
to day transaction.
Procedure
Purchase of hardware, software development, installation and training are four essential
elements of the adoption of information technology. However, the process of
transformation from manual office to fully automated office management can take place
within six months subject to the availability of funds. For this purpose demand for a
comprehensive plan of office automation and computerization may be sent to the Auditor
General for allocation from Project for Improvement of Financial Reporting and Auditing
(PIFRA).
Training Programs
There is an intense need to provide to the new entrants, as the same is not available.
Different training programs for new comers will boost their efficiency right from the
beginning, which will be followed by value addition of the organization
The employees of AGPR Peshawar are ill trained especially at Time Management related
to quality service and timely disposals. The overriding importance of good training can
never be overlooked. The Additional Accountant General (PR) Peshawar should
therefore, organize professional short and long term courses for the office in the
following areas for creating a sustainable Human Resource Development Pool.
 Quality Service Orientation (Client Vendor relations)
 Computer Literacy
 Accounting
The Pakistan Audit and Accounts Department has Training Institutes named as “Audit &
Accounts Training Institute” working in each and every head quarter of the province.
They can arrange such training for the employees of the organization.

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Peshawar
On the job training:

Though some training programs are available in the organization yet there is a need to
diversify them so as to cover all aspects of the job. Programs like training for financial
and supplementary rules, leave and pre audit rules, government accounting and DA
manual are required to be introduced to fill the gap of existing and required knowledge of
the auditors, which will lead to a better efficiency on their part. It is very pertinent to
mention here that improvement of organizational value very much depends upon
improvement of efficiency of the staff.
Development
For career development, there are two different training programs available in the
organization. The training of “subordinate accounts service” provides a good opportunity
to develop in the future as a professional accountant. For this purpose a separate training
institute has been established which provides six months SAS training to the auditors.
The training for “Divisional Accounts Officer” is also playing a vital role in producing
professionally sound accountants.
Some general recommendations

There should be an updated website having all the rules and regulations. Even a novice
just putting his problem regarding pay fixation, GP. Fund or leave may get guidance
under the rules with clear support and depiction of rule thereon.
 Loopholes like drawing cheques on 30th June, which usually remain valid for three
months be given special attention. Amending the relevant rules should eliminate
such practices. This can be only done, if the expenditure be allowed in the whole
year.
 Financial reports should be prepared in a manner that will communicate

comprehensive, relevant, reliable, understandable and comparable information in a
timely manner, about a reporting entity, to meet the needs of the users of those
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Peshawar
financial reports. Financial statements are a means of communicating relevant and
reliable information about a reporting entity to users. Financial statements are a
means of communicating relevant and reliable information about a reporting entity
to users, financial reports serve two broad purposes. The first is to assist users in the
allocation of resources. The second purpose is to provide a mechanism to enable
and entity and the Government, as the owner of that entity, to discharge their joint
accountabilities.
 To promote transparency and accountability, the Accounts of the Government be

released on monthly basis for circulation to the stakeholders, including the Public at
large, on the Finance Ministry’s Website.

64

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Additional Accountant General Pakistan Revenue,

1.1. INTRODUCTION TO THE REPORT

The educational values of Institute of Management Studies (IMS) are quite

I was appointed as Junior Auditor in above named office in 02/2000. The

1.2. Purpose of Study

Quaid-e-Azam College of Commerce,

1.3. Scope of the Study

1.4. Primary Data

The foremost sources of primary data were my personal observations, experience

i. Office of the Auditor General of Pakistan, Islamabad

Quaid-e-Azam College of Commerce,

1.5. Secondary Data

It includes the Manuals Codes, Books, Journals (Performit), Technical Reports,

Quaid-e-Azam College of Commerce,

2. HISTORY OF AUDIT AND ACCOUNTS IN PAKISTAN

2.1. Brief History of Audit & Accounts Department

Quaid-e-Azam College of Commerce,

2.2. Functions of Auditor General of Pakistan

Following are the main functions of AGP:

i. The Auditor General still certify the accounts compiled and

2.3. Powers of Auditor General of Pakistan

Following powers are lies with the Auditor General of Pakistan.

1 To inspect the accounts of federation, Province or District including

Quaid-e-Azam College of Commerce,

2.4. Rights of Auditor General

Preliminary Auditing (Pre-Auditing)

These two functions were controlled/headed by the Auditor General of Pakistan

Now days, Controller General of Accounts is mainly responsible for maintaining

Quaid-e-Azam College of Commerce,

2.5. Accounting Against the Historical Background

Accounting is a general sense, may be considered as a process in which

Another definition in some-what different words is also there. Accounting

Government accounting may be said to comprise these same activities for

2.5.2. Origin of Accounting

Quaid-e-Azam College of Commerce,

2.5.3. Accounting and the Righteous Caliphs

Quaid-e-Azam College of Commerce,

3. NEED FOR GOVERNMENT ACCOUNTING

Accounting is the “language” employed to communicate the financial

Quaid-e-Azam College of Commerce,

Government accounting satisfies the needs of accountability and administrative

3.1.1. Legislative Requirement

Overall control and release of funds is exercised by the legislature. All

3.1.2. Accountability Requirement

The government servants, entrusted with the performance of financial acts,

Quaid-e-Azam College of Commerce,

3.1.3. Control of Funds Requirements

The preparations of complete and accurate accounts are also needed as

3.1.4. International Requirement

3.1.5. Competition requirement

Again in order to provide a sense of healthy competition in the efficient

3.1.6. Economic and social requirement

3.1.7. Commercial Accounting Vs Government Accounting

The principles of commercial and government accounting differ in certain

Quaid-e-Azam College of Commerce,

As far as the principles are concerned, a non government commercial

The classification in the accounts of the transactions of the Federal and

Quaid-e-Azam College of Commerce,

The mass of the Government Accounts is kept by single entry. Single

Non-Government commercial accounts are designed to show how much

Quaid-e-Azam College of Commerce,

A third general area of similarity between accounting for Governments

3.2. General Outlines of the Govt: Accounting System