Pakistan’s Universal Service Fund failed to conduct its legally required financial audit by a chartered accountant for fiscal year 2024-25, prompting audit authorities to recommend a high level investigation into the matter. According to an audit report, the Pakistan Telecommunication Reorganization Act requires the fund’s annual accounts to be audited by both a chartered accountant and the Auditor General of Pakistan, but the mandatory audit by a chartered accounting firm was not carried out despite repeated observations by audit authorities in previous years.
The auditors directed Universal Service Fund management to immediately complete the pending statutory audit through a chartered accounting firm and recommended identifying the officials responsible for failing to comply with the legal requirement. The dual audit requirement exists because the fund manages public money collected from the telecom industry and disbursed to operators for connectivity projects, and an independent chartered accountancy audit provides a level of financial verification distinct from the Auditor General’s compliance focused review. Its absence means the fund’s financial statements for the year were not subjected to the full scrutiny the law requires.
Beyond the missing audit, the Auditor General’s broader report on the Universal Service Fund flagged a total of Rs9.43 billion in irregularities for fiscal year 2024-25, naming Jazz, Pakistan Telecommunication Company Limited, and Ufone among the operators at the centre of the findings. The most significant finding concerned the award of seven contracts under the Next Generation Broadband for Sustainable Development and Optical Fiber Cable programmes, collectively valued at more than Rs7 billion, alongside questions raised over post facto board approval for relocated base transceiver station sites and unused PTCL fibre projects that auditors said warranted further inquiry.
The audit also found that the fund failed to recover Rs116.1 million in mandatory contributions from telecom operators, with Pakistan Telecommunication Company Limited accounting for more than Rs115 million of that outstanding amount. Fund management noted that part of the sum had since been recovered and that the remaining dues from Pakistan Telecommunication Company Limited remain sub judice, currently subject to legal proceedings. Auditors acknowledged this context but maintained that delayed recoveries, regardless of cause, weaken the financial health of a fund that depends on timely contributions from telecom operators to remain operationally effective.
The report also highlighted a sharp decline in the fund’s spending during the year, with total expenditures falling 30 percent to Rs11.66 billion, down from Rs16.64 billion in the previous fiscal year. Despite the lower spending, the fund recorded stronger revenue collections, with receipts rising 17 percent to Rs11.05 billion compared to Rs9.45 billion a year earlier, driven largely by higher levy collections from telecom operators. Auditors stressed that completing the pending statutory audit remains essential to ensuring transparency, accountability, and legal compliance in the management of public funds intended to extend connectivity to Pakistan’s underserved and unserved populations.
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