by Table of Contents
- Introduction
- Background on NTC and the PFM Act
- Audit Findings
- NTC’s Response
- Legal Implications
- Broader Implications for Public Finance
- Recommendations and Next Steps
- Conclusion
Introduction
The Auditor General of Pakistan (AGP) recently reported that the National Telecommunication Corporation (NTC) failed to deposit Rs. 16.67 million in non-tax revenue into the Federal Consolidated Fund (FCF) during the fiscal year 2023–24.
These funds were collected from sources such as recoveries of liquidated damages, deductions from house requisitions, and charges for private phone calls. The AGP emphasized that such lapses reflect serious concerns regarding financial discipline and adherence to Pakistan’s public finance regulations.
Background on NTC and the PFM Act
The National Telecommunication Corporation (NTC) operates under the Ministry of Information Technology and Telecommunication (MoITT). Its primary role is to provide telecommunication services to government departments.
According to the Public Finance Management (PFM) Act, 2019, all non-tax revenue collected by government entities must be deposited into the FCF. This ensures transparency, accountability, and proper monitoring of public funds. Sections 40B and 40C of the PFM Act explicitly mandate these deposits, leaving no room for discretionary retention.
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Audit Findings
The AGP’s audit report revealed that NTC retained Rs. 16.67 million instead of transferring it to the FCF.
The retained funds were accumulated from various sources, including penalties, private communication fees, and other recoveries. The audit emphasized that such retention violates the PFM Act and represents a significant breach of financial discipline.
The AGP warned that if such practices continue unchecked, they could undermine transparency and weaken the federal government’s fiscal oversight mechanisms.
NTC’s Response
In response, NTC management argued that, under the Pakistan Telecommunication (Reorganization) Act, 1996, certain revenues are considered part of its internal income. According to them, these funds could be managed as part of the organization’s annual financial surplus or deficit.
However, the AGP clarified that the PFM Act of 2019 takes precedence over all other laws concerning public finance. Section 45 of the Act clearly mandates that all non-tax revenues must be deposited into the FCF without exception.
Legal Implications
Failing to deposit non-tax revenue into the FCF constitutes a direct violation of the PFM Act, 2019.
For more details on NTC’s financial management, visit the Ministry of Information Technology and Telecommunication official website.
This non-compliance can have several legal and administrative consequences. Officials responsible for such lapses could face disciplinary action. The AGP has recommended immediate deposit of the Rs. 16.67 million to restore compliance and maintain the integrity of federal financial management.
Broader Implications for Public Finance
This incident highlights broader systemic issues in public financial management. Weak internal controls and lapses in adherence to established financial regulations are recurrent concerns.
Other federal departments have faced similar issues, indicating the need for comprehensive reforms. Strengthening internal audits, enforcing timely fund transfers, and promoting accountability are critical to preventing future violations.
Recommendations and Next Steps
The AGP report recommended the immediate deposit of the Rs. 16.67 million into the FCF.
Additionally, the NTC is urged to improve its financial management practices, including:
- Preparing timely and accurate financial statements
- Enhancing internal control systems
- Conducting periodic internal audits
The Public Accounts Committee (PAC) has also emphasized stricter oversight to ensure that similar lapses do not recur.
Conclusion
The failure of NTC to deposit Rs. 16.67 million into the Federal Consolidated Fund represents a significant lapse in financial discipline.
Immediate corrective measures are necessary to restore compliance and ensure proper management of public funds. This incident underscores the importance of robust financial oversight and serves as a call for continuous reforms in Pakistan’s public financial management system.
