A recent audit by the Auditor General of Pakistan (AGP) has uncovered financial, procurement and governance irregularities exceeding Rs9 billion within the Special Communications Organization (SCO), raising serious concerns over transparency, financial management and compliance with procurement regulations at the military-run telecom operator. According to the audit report for the financial year 2024-25, the total value of observations stands at Rs9.009 billion, including Rs241.87 million related to procurement issues and Rs8.77 billion linked to broader financial and governance concerns. The findings highlight multiple instances where established financial procedures and procurement rules were allegedly not followed.
One of the most significant observations involves Rs6.883 billion released by the Ministry of Defence to SCO between 2021-22 and 2024-25 for sensitive development projects. Auditors stated that SCO did not provide key financial documents, including expenditure records, paid vouchers, bank statements and contract files, despite repeated requests. The organization maintained that the funds had already undergone pre-audit by the Controller of Military Accounts, but the AGP asserted that post-audit of public expenditure remains within its constitutional authority. The report also questioned SCO’s procurement practices, alleging that the organization awarded franchise agreements to 13 operators across Azad Jammu and Kashmir and Gilgit-Baltistan without conducting open competitive bidding as required under the Public Procurement Regulatory Authority (PPRA) Rules. Auditors said the absence of competitive bidding reduced transparency and may have affected value for public money.
Another major concern relates to the purchase of 25 KVA diesel generators, where auditors found a significant price difference between procurements made by different branches of the same organization. While one branch purchased generators for approximately Rs3.18 million per unit, another acquired similar units at around Rs7.09 million each, resulting in an estimated additional cost of Rs109.44 million. The audit questioned the pricing disparity and recommended fixing responsibility for the uneconomical procurement. The report further highlighted Rs103.92 million spent on machinery and equipment during a period when the federal government had imposed austerity measures restricting such purchases. According to the auditors, SCO neither obtained the required exemption nor presented sufficient justification for the expenditures. Additional observations included procurement from an SCO subsidiary that potentially created a conflict of interest, as well as commission payments and financial transactions carried out without an approved accounting framework.
Financial management practices also came under scrutiny after auditors found that hundreds of millions of rupees collected through telecom operations were directly utilized for operational expenses instead of first being deposited into the Federal Consolidated Fund, as required under the Public Finance Management Act. The report also questioned two telecom infrastructure projects worth Rs1.495 billion, citing deficiencies in project approvals, feasibility studies, regulatory compliance and technical documentation. While several audit observations were referred to the Departmental Accounts Committee for further review, many supporting documents had not been provided by the time the report was finalized. The Auditor General has recommended detailed investigations into the identified irregularities, recovery of losses where applicable, accountability for responsible officials and stricter compliance with procurement laws and financial regulations going forward.
Follow the SPIN IDG WhatsApp Channel for updates across the Smart Pakistan Insights Network covering all of Pakistan’s technology ecosystem.
