• Modified Cash Basis of Accounting.
  • Double Entry Book Keeping.
  • Commitment Accounting.
  • Fixed Assets Accounting.
  • Assets Register.
  • New Chart of Accounts.
  • Timely, Accurate, Relevant and Reliable Financial Reports.
  • Consolidated monthly and quarterly accounts.
  • Monthly and Fortnightly Cash Forecasting Reports.
  • Trend Analysis Reports.
  • Appropriation Accounts.
  • Annual Finance Account.
  • Combined Finance and Rev. Account.
  • Investment Reports.
  • Public Debt Profile.
  • Report on Public Account.
  • Report on Net Proceeds of Divisible  Pool.
Budget Monitoring:
  • Development Expenditure.
  • Capital/Revenue Receipt.
  • Tax/Non Tax Receipts.
  • External/Domestic Borrowings.
  • Program/Project Monitoring.
Manuals and Codes:
  • In December 2000, the New Accounting Model (NAM), which includes the New Chart of Accounts (CoA) was prescribed by the Auditor General of Pakistan, with the approval of the President of Pakistan, under Article 170 of the Constitution of the Islamic Republic of Pakistan. This had become necessary because the previous Chart of Classification (CoC) notified in 1981 had become inadequate.
  • The new CoA provides ready information about entities, programs, projects and geographical distribution of resources etc. With the introduction of a uniform new CoA, it is expected that timely, accurate, comprehensive and reliable information will be available to the decision makers and for enforcing effective accountability and better financial governance. Increased financial reporting requirements of the NAM will also be met through timely and reliable information for better:
    • Budgetary Management
    • Financial Control
    • Cash Forecasting and Trend Analysis
    • Fiscal Administration and Debt Management
  • The new CoA is expected to also provide a uniform basis for classification of Receipts, Expenditure, Assets, Liabilities and Equity (Residual Value) through elements such as:
    • Entity
    • Function
    • Object
    • Fund
    • Project
  • By providing accurate and timely information to the finance managers at the Federal, Provincial and District levels the CoA will facilitate and accelerate the complete computerization of the entire accounting system.
  • The undersigned will greatly appreciate if any error or omission that may come to notice, or suggestions for further improvement are sent to Deputy Auditor General (amp;)
  • Chart of Accounts



All financial activities starting with planning, preparation and execution of budget, accounting of all resultant transactions, evaluation and audit of accounts and ultimately financial reporting to serve as the basis for future planning and budgeting. The financial management system is embodiment of macro economic management which effects all internal and external stakeholders. In turn the macro economic indicators such as rate of inflation, changes in current and capital account, rate of growth, GNP etc. are all based on this financial management system.

Authorities Responsible:

Sponsoring Agency: World Bank, Government of Pakistan.
Implementing Agency:

Pakistan Audit Department (Comprising AGP & CGA),  Planning Division, Ministry of Finance.

Credit:     2921-PAK

Component I:

Government Accounting and Financial Reporting:

Development of accounting standards, reporting systems and financial procedures conforming to international accepted principles and computer based financial system based on complacent to internationally recognized standards.

System would enable the uniform application of prescribed controls for these transactions and support information retrieval needs for government finance managers at the centre and in the provinces.

a. Core Accounting and Reporting System:

To provide integrated government-wide accounting, encompassing the functional requirements for budget preparation and budget execution, covering appropriation, commitment, funds allocation and payment processes.

System would be comprehensive in terms of coverage and would provide acredible source of reliable and timely data.

Core Accounting System would be fully automated, interfacing with external data sources, i.e. SBP/NBP on periodic basis.

Would enable expenditures and revenues to be recorded at a detailed level and to relate these to specific programs and projects.

System Usage by:

CGA (including its AG and DAOs) to perform the basic accounting functions.

The Federal Ministry of Finance and Provincial Finance Departments to perform the process associated with budget compilation, monitoring and control and implement cash limits as may be required.

The Federal Planning Division and Provincial Planning Departments to obtain the status of actual expenditures on ongoing programs and projects.

b. Payroll and Pension System

Need for an automated payroll and pension system was evident in view of the increasing volume of transactions.

System to perform the full range of the payroll functions and the expenditures processed would automatically update the core accounting and reporting system.

GP Fund:

Automated GP fund ledgers, balance sheets, interest calculations, adjustments of loans and advances etc…

Cash Flow Forecasting and Financial Analysis System:

To establish a system for forecasting likely flows of payments and receipts, and the consequent impact on cash balances and issue of debt instruments with the help of cash flow and financial analysis system.

This would provide a powerful facility for retrieving current and historical data from the accounting system…allowing end-users to manipulate the data for forecasting and analysis purposes.

Focus on audit systems improvement and systems development including.

1. Audit Standards and Techniques: Consultant services to

Prepare guidelines for the introduction of international auditing standards.
Introduce modern auditing techniques and concepts.
Review PAD’s audit policies, processes and procedures, output, workload, efficiency and quality assurance for the audit functions.
Advise on methodology to enhance PAD’s communication with stakeholders, for internal audit of PAD’s systems under development.
To assist in the use of automated audit tools and standard audit programs wherever appropriate.
Improve communication of audit results and to develop quality assurance programs.

2. Administrative tool: Provision of hardware and audit software for audit planning, sampling and documentation as well as for audit of automated accounting systems.

3. Capicity Development : consultancy to support revised human resource management procedures through international training in a modern financial system environment and through arranging attachments with other Supreme Audit Institutions.

4. Use of Private Sector Firms: Assistance with developing modality for utilizing private sector firms and finance for private audit firm’s fees.

Involves organization and systems development.
To reflects needs for increased professionalism and specialization.

PAD would implement revised HRM policies relating to the career paths of accountants and auditors, defining standard job descriptions, enhancing the effectiveness of training developing a transparent and quantifiable system of evaluation and manpower planning.

Consultant Assistance.
Managing the process for change..
Preparation of job descriptions and performance standards.
Installing an MIS system for HRM planning and monitoring.


Moving towards professional-level training.
Providing retraining associated with the change introduced by the project.

Strengthening the quality of training and training facilities.

Expanding the circle of beneficiaries.


Component V:


1. MIS Wing: to provide;

  • Software development centre.
  • Selected posts to be staffed by contract professional.
  • Local training for PAD staff in systems development.
  • Recurrent cost for system maintenance.

Project management: strengthening the Project Directorate through;

  • Provision of staff.
  • Facilities.
  • Hardware and software.
  • Trainers.
  • Consultants.

Output by Components:

Component II: Government Auditing


i) Completion of the Financial Audit Manual, Supervision Instruments, Working Paper Kits and Specific Guidelines

  • First development of general financial audit manual……later supervision instruments and working paper kits with audit guidelines for 16 were finalised.
  • These instruments give tailored audit guidelines for specific audit areas on how to use the Supervision Instrument and Working Paper in their scenario.
  • Guidelines used for the audit of:
    1. Federal Government
    2. Provincial Governments
    3. District Governments
    4. Procurement
    5. Foreign-aided projects
    6. Customs and Sales Tax
    7. Income Tax
    8. Civil Works
    9. Railways
    10. Water and Power Development Authority (WAPDA)
    11. Commercial Enterprises
    12. Defense Services
    13. Zakat Collection
    14. Privatization
    15. Environment
    16. Foreign Mission

ii) Procurement of Hardware and Software: used for the test implementation field audit were

  • ADM Plus for Audit Management purpose.
  • ACL for CAATs.

iii) Test Implementation of the Audit Manual: DAGP identified seven audit teams and assigned audit objectives….

  • Deral Audit Team – audit a portion of Repayment of Domestic Debt (a significant component of the federal appropriation account).
  • Provincial Audit Team – audit a portion of Interdepartmental and Judicial Deposits ( a significant portion of the Financial Statement of Public Accounts).
  • District Audit – audit a portion of payroll data from the SAP/R3 accounting system pertaining to the District of Abbottabad (to enable use of CAATs software tool against payroll which is a significant component of District expenditures).
  • Railways Audit Team – audit consumption of fuel (a significant element of Railways expense).
  • WAPDA Audit Team – audit of Civil works (a major activity of WAPDA).
  • Work Audit – audit of Pak PWD (a major activity).
  • Revenue Audit – audit of customs receipts pertaining to Vehicle Imports (an important Revenue activity).

iv) Training of Core Group of Auditors:

  • Completion of audit training material using new audit manual.
  • On-job-training provided through pilot testing activity.
  • Strong source of expertise via DAGP master trainer counterparts and local consultants.

Internal Audit deliverables include:

  • Internal audit plan.
  • Internal audit manual.
  • Draft internal audit legislation.
ACL Guidelines for Auditors Auditor General's Manual of Standing Orders DAGP HR Strategy 2016 Strategic Plan 2015-19 DAGP Annual Report Performance Audit Manual:

Audit Manual For Foreign Aided Projects:


News Bulletin: Ordinance: SAP User Manual for Ministries/Departments (Finance Managers): Sectoral Audit Guidelines: Sales Tax Deduction in SAP System: Rules & Regulations: Residential Accommodation: Check List For Pension Papers:
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