An analysis of financial oversight concerning the Public Accounts Committee (PAC) in Bangladesh
Parliament has got the “power of the purse” and it has been entrusted with ensuring regularity and propriety in public spending as well as value for money. De jure public budget-making process in Bangladesh involves a concatenation of both the executive and legislative branches of the government in various stages.
De facto scenario is deceptive and the roles of the executive and legislature are not as clearly defined and tend to overlap more often. Like many other Westminster countries, in Bangladesh, an executive mandate to prepare the budget is generally accepted given its access to comprehensive data on the state’s expenditure and revenue pattern, and hence, the legislature’s role is commonly underemphasized. Consequently, the role of the legislature has been reduced to merely ex-post oversight and the authorization of the executive to conduct its budgetary actions. (Inter-Parliamentary Union 1986: 1049-53).
At the heart of the parliament’s ex-post oversight is financial accountability. Revenue collection as directed by the budget remains stalled without the approval of the parliament. Similarly, without proper verification of authorized allocation, budget implementation cannot proceed. There are a number of financial committees, including the public accounts committee, public estimate committee, and the public undertakings committee. Out of the three, the public accounts committee plays the most influential role in ensuring ex-post financial accountability of the executive.
The Public Accounts Committee (PAC)
The Public Accounts Committee (PAC) is the supreme authority with the mandate to examine/evaluate public accounts, financial statements, and audit reports by the Comptroller and Auditor General (C&AG). The scope of activity of the PAC was augmented in 1974, after which it was empowered to undertake some new functions, which included the examination of the financial statement showing the income and expenditure of autonomous and semi-autonomous government bodies.
In Westminster tradition, PAC is the principal audience of C&AG. PAC does not concern itself with policy. Rather it is concerned with carrying out policy efficiently, effectively, and economically. The primary duty of the C&AG is to oversee the adoption of all canons of financial property by the executive in the process of spending public funds.
Every year the C&AG submits an annual report to the President who in turn presents it to the parliament. The report explains the extent of expenditures proposed by the budget and authorized by the parliament that has been incurred as per rules, regulations, and laws. The C&AG on the other hand provides expert advice and support to the PAC.
PAC is a standing committee which consists of 15 members. Committee meetings are held regularly and is a closed-door affair. The number of reports produced by PAC is few (10th parliament which suffers from image crisis is an exception) and the contents are based on the old reports submitted by the C&AG.
The parliament is supposed to hold discussion upon the placement of committee reports by the PAC. In reality, PAC reports are not tabled in the parliament, let alone having discussions on them. This is how common people in general and the key stakeholders remain in the dark about activities of PAC. Thus the efforts made by the PAC to ensure financial propriety of the executive and hold them accountable remains a far cry.
Table 1: PAC Activism
Number of Meeting held
Number of Subcommittee formed
Number of Sub-committee Meeting Held
Number of Reports prepared
Source: Bangladesh Parliament Secretariat (PAC Reports)
The PAC of the 7th parliament was able to recover Tk227 crore (about $41m) and adjust Tk 929cr (about $169m). Due to committee pressure, the PAC of the 8th parliament was also able to recover Tk 63.77cr and adjusted Tk61.66cr in its first 25 committee meetings and till the end of the term, the committee recovered Tk1.69cr and adjusted Tk 9.2cr. The PAC of the 10th parliament recovered Tk172cr and adjusted Tk346cr.
No record, however, had been found as to the amount of recovery and adjustment by the previous PACs. Thus, the real impact made by the PAC is too vague to reckon. However, in one of its reports, the PAC had observed that two secretaries of the government, who, according to the rules, are principal accounting officers of their ministries, apologized in writing for their inability to attend meetings of the committee.
Committee recommendations are advisory in nature and no institutional mechanism is in place that can follow up and monitor the status of implementation of the recommendations. In the 5th parliament, an action-taken sub-committee was constituted to do this important task of monitoring. Now-a-days, progress of implementation is reviewed in the regular PAC meeting along with discussion of other agenda, and thus lose focus.
One of the basic weaknesses of the PAC is that unlike most other Westminster parliaments (UK, Australia, Canada, India, Sri Lanka) in the world, the PAC in Bangladesh had been headed by a treasury bench MP. However, a departure from the past is that Rustum Ali Farazi, who is a veteran MP from the opposition Jatiya Party, heads the PAC in the 11th parliament.
Structural and logistical inadequacies
Although entrusted with great responsibilities, the Public Accounts Committee allegedly lacks the trained human resource and the logistical, as well as infrastructural support needed, which have led to successive backlogs in reporting. A similar picture is seen in many developing countries where public accounts committees depend on the expertise provided by the CAG’s office. The PAC suffers from a lack of adequate staff and research capacity, due to an absence of professionals and specialists.
Lack of autonomy
Another severe issue is the lack of constitutional autonomy granted to the C&AG, which is constrained by putting it under the authority of the Ministry of Finance. Because of this, the C&AG is dependent on the ministry for budget allocation and staff recruitment. In most countries, the C&AG enjoy autonomy from the executive which is in stark contrast to Bangladesh, where executives enjoy unchecked superiority over the supreme audit office. It is worth mentioning that in most of the democracies in the world, the office of CAG has been placed under the parliament.
The Office of the Controller and Auditor General (OCAG) lags in placing updated audit reports. Former Finance Minister AMA Muhith, informed the 10th parliament in June 2016 that 876,013 audit objections involving Tk778,739.85 crore were pending decisions and 80% of them were not serious financial irregularities in nature and are technical or general observations.
Lack of benchmarking of audit objection and mandatory timeframe to submit audit reports are the main reasons behind audit report backlogs. Absence of any binding for the principal accounts officer or secretaries to timely reply is another reason.
It is worth mentioning that the OCAG submitted 1,080 audit reports to the parliament since the independence of Bangladesh. Among those, 978 audit reports were discussed up to the 108th meeting of PAC of 10th parliament. The number of un-discussed reports is 102 (CAG Annual Report, 2018).
Conclusion: The need for institutional reform
The PAC cannot force government ministries/departments to implement its recommendations. Nonetheless, the PAC has a publishing effect. The PAC, as a watchdog of parliament in contemporary Bangladesh, can bark but it cannot bite. However, it can expose the executive of its malfeasance and irregularities, press the government to improve its financial accountability, penalize the errant officials, and thus, contribute to promoting good governance in the country.
A strengthening of auditory oversight, along with the enhanced capacity and autonomy of the supreme audit institution (specifically C&AG) to produce timely, transparent, and easily understandable financial statements, as well as implementable recommendations to improve fiscal management are all achievable outcomes in the long run if institutional reforms are welcomed by the existing framework.
Political will of the incumbent government is a major factor in bringing parliamentary reforms and making the same work. A political culture of showing respect to the opposition and working together is at the heart of making any reform sustainable. On top, it is the macro-political environment that has determined the way the parliament and the PAC in Bangladesh have performed.
Strong opposition members play the most important role in making the PAC assertive and vibrant. Parliament originating through a free and fair election can pave the way for a better performing parliament and a better performing PAC as well.
Dr Taiabur Rahman is a Professor at the Department of Development Studies, University of Dhaka. He can be contacted at [email protected]. Lamia Mohsin is a post-graduate student at the Department of Development Studies, University of Dhaka. She can be contacted at [email protected]. This article is an excerpt of a working paper (authored by Taiabur Rahman and Lamia Mohsin) titled “Parliamentary Power of the Purse: Stocktaking the Role of Jatiya Sangsad (JS) in the Budgetary Process of Bangladesh” published by the Center on Budget and Policy, University of Dhaka, June 2020.