The 2006 Oxford Analytica (OA) Fiscal Transparency report for Pakistan states that, in overall terms, Pakistan rates as "Intent Declared" for this standard. While a great deal of progress has been achieved, more work needs to be done to fully comply with the Code of Good Practices on Transparency in Fiscal Policy. This position is repeated in the International Monetary Fund's (IMF) most recent Report on Observance of Standards and Codes (ROSC), released in 2008. The IMF and OA both cited the 2005 passage of the Fiscal Responsibility and Debt Limitation Law as having been key to improving fiscal discipline and transparency. Also helpful has been the implementation of the Project for Improvement of Financial Reporting and Auditing and the adoption of a new accounting model and chart of accounts, both of which are being adopted across the different levels of government. Both OA and the IMF have pointed out that capacity building remains necessary to maximize the transparency and efficiency that should result from ongoing efforts. Dr. Masood Qazi, writing for the Open Budget Index, assigns Pakistan a rating of 51% overall, denoting "some" degree of openness in the budget process. Pakistan is not yet a subscriber of the IMF's Special Data Dissemination Standard, but has participated in the less rigorous General Data Dissemination System since 2003.

General Overview

In 2008 the International Monetary Fund (IMF) published a Report on the Observance of Standards and Codes (ROSC) dealing with fiscal policy transparency, updating earlier reports issued in 2000, 2002, and 2004. According to this latest ROSC, Pakistan "is at a relatively advanced stage in introducing a comprehensive financial management information system and strengthening the audit function at the federal, provincial, and district levels" (p. 1) and has moved forward in the introduction of the Medium Term Budget Framework. The Fiscal Responsibility and Debt Limitation Law, enacted in June 2005, has improved the legal framework and enhanced transparency. In order to maximize fiscal transparency improvements, institutional changes are required and implementation remains a challenge.

The 2006 Oxford Analytica Fiscal Transparency report on Pakistan assigns the country an overall rating of "Intent Declared" (p. 341), which is unchanged from the previous year. The year 2006 saw a slow down in transparency improvements as the country prepared for the 2007 federal parliamentary elections. Nonetheless, OA applauded the government's efforts to meet targets set by the Fiscal Responsibility and Debt Limitation Law of 2005. Debt reduction was achieved, bringing public debt below the Law's target of 60% of GDP (the debt was brought down to 56% of GDP) and further reductions were planned. The revenue deficit was also reduced, with its elimination expected by the end of the 2007-2008 fiscal year. OA did note that Pakistan revised its GDP figures in 2004 and that this mechanical change may have contributed to these favorable results, however. In 2005 Pakistan introduced a new accounting model and chart of accounts, which has since been implemented in the budget of the federal government and all provincial budgets. In addition, all but one of the 111 districts use the new chart of accounts. OA does note that the implementation of the new accounting model has encountered some problems, attributing these to inadequate infrastructure and insufficient trained staff. As a result, the quality of the data is low. Capacity building in the Office of the Auditor General and Controller General of Accounts has been undertaken as a part of Pakistan's Project for Improvement in Financial Reporting and Auditing (PIFRA). There are now 55 functional online accounting sites out of the planned total of 130 nationwide. OA notes that slow progress has been made toward making the 3-year, rolling Medium Term Budget Frameworks (MTBFs) fully operational. Of the four provinces, three have adopted the MTBF, but Baluchistan has not. Some ministries have been added to this effort, but the Ministry of Finance (MoF) recently backed out of its expected participation. OA cautions that while the MTBF was originally intended to serve the needs of strategic planning, the frameworks seem merely "to have become an accounting procedure" (p. 351). Nonetheless, OA notes that "there are plans to introduce a three-year sectoral finance ceiling and to bring the entire federal government under the system" (p. 341). OA notes that Pakistan has progressed toward compliance with the Special Data Dissemination Standard promulgated by the International Monetary Fund, even though there remain serious deficiencies in the reliability and timeliness of its fiscal data. According to OA, the areas that still need work are the national accounts and the development of quarterly wage data. OA also noted that quasi-fiscal activities are inadequately covered and there are no plans in place to assess fiscal risk.

Writing for the International Budget Initiative's 2006 Open Budget Index (OBI), Dr. Ahmed Masood Qazi assigns Pakistan a score of only 51%, denoting "some" degree of openness in the budget process. The OBI is based in large measure on tracking the production and public availability of seven key budget documents: the Pre-Budget Statement, Executive's Budget Proposal, Citizen's Budget, In-Year Reports, Mid-Year Review, Year-End Report, and Auditor's Report. Pakistan produces and makes public five of the seven reports, but does not produce a Citizen's Budget or a Pre-Budget Statement. The content of the Executive's Budget Proposal is deemed insufficiently detailed to give citizens a comprehensive understanding of the government's fiscal activities, and is assigned a score of just 59%. In-Year and Mid-Year reporting are also deemed insufficiently detailed, as is the Year-End Report. The Auditor's Report lacks any information as to whether or not recommendations contained therein have been acted upon. The OBI further notes that that although Pakistan holds public hearings on the budget, there is no opportunity for citizens to participate in those hearings or to make their opinions heard.

The 2007 Article IV Consultations between the IMF and Pakistan (published in January 2008) discloses that Pakistan's data "are broadly adequate for effective surveillance, but further improvements in the availability and timeliness of key economic statistics would help policy analysis and formulation" (p. 7). Pakistan is not yet a subscriber to the IMF's Special Data Dissemination Standard, but has participated in the less rigorous General Data Dissemination System since 2003.

The Principles

Clarity of roles and responsibilities.

EN

OA's 2006 Fiscal Transparency report assigns Pakistan a rating of "Enacted" (p. 342) for this principle. The 1973 Constitution, along with the 1973 Rules of Business set forth the roles of the federal and provincial governments. Although the Constitution was set aside in 1999 following the military takeover of the government led by General Perves Musharraf, it was fully restored in March 2003. The Constitution allocates government across three levels: federal, regional, and municipal. Regional government comprises four provinces and one territory, with the capital standing alone as a separate entity. The Constitution also allocates government functions across three distinct branches: executive, legislative, and judicial. The definition of general government and its activities comports with internationally accepted definitions. Provincial governments are legally fiscally, and financially independent. The management of public finance is carried out within a framework set forth in the Constitution, which stipulates the distribution of powers and revenues across the federal and provincial governments. The responsibilities of government agencies are set forth in the 1973 Rules of Business. In 2000, the New System of Financial Control and Budgeting was introduced that set forth "the precise allocation of responsibilities for budget management" (p. 342). In addition to these rules, the MoF issues supplementary instructions and orders. The budget management system employed by the central government is replicated in the provincial budget process. Taxes and certain other revenues are deposited into a consolidated fund for reallocation across the federal and provincial governments, which are then added to their individually raised revenues, and this pay-out from the consolidated fund is done in accordance to rules set forth in the Constitution. Some pay-outs are automatic, while others must be formally requested and authorized by parliament. A Constitutionally mandated National Finance Commission (NFC) forms periodically in order to offer the government its recommendations regarding the operation of the consolidated fund as well as to oversee the allocation of tax revenues across provinces. The revenue-sharing arrangement is currently under review.

The OA report finds that in the case of discretionary grants at the provincial level, fund disbursement suffers from a lack of transparency. OA notes that the Asian Development Bank has offered recommendations as to the handling of discretionary grants, replacing them with "mandatory revenue-sharing transfers" (p. 343) in order to improve transparency. With the 2005 passage of the Fiscal Responsibility and Debt Limitation Law, transparency practices and fiscal discipline have been enhanced. Among its provisions is the requirement that the government present three economic policy statements to the National Assembly each year. Nonetheless, the Law has been criticized for failing to specify what must be done when debt targets are not met, and some have complained that there has been manipulation of underlying GDP figures in order to achieve the appearance of having met the targets. Because the provinces have legal guarantees of independence, budgetary coordination across government levels has been difficult to achieve. This difficulty is not fully addressed by the 2005 Law, according to OA. The report further states that there is less than optimal separation of fiscal and monetary authority, given the legal requirement that the State Bank of Pakistan (SBP) must coordinate its policy with the government.

OA notes that "state-owned enterprises... play a central role in the Pakistani economy and include the water and electricity utilities, gas distribution companies, refineries, railways and an airline. The government also holds a major stake in the fertilizer industry" (p. 344). OA finds that although the MoF website offers some information regarding the state-owned enterprises, this information is limited. Overall, OA finds that "the division between the public and private sector in Pakistan has been blurred" (p. 344). Nonetheless, the report states that the government is taking steps to alleviate this situation through a privatization and deregulation program. This has resulted in the development of a "legal framework aimed at establishing a fair and transparent mechanism for privatization" (p. 344).

The Constitution contains specific lists of both federal government spending responsibilities and those responsibilities shared with other government entities or levels, and local government responsibilities are stipulated in the Local Government Ordinances. Everything not so specified falls under the responsibility of the provinces. The Constitution also enumerates the MoF's responsibilities within the budget process, including a schedule of dates by which elements of the budget process must be completed. OA adds that "the existing budget procedures "are described in a 1998 Finance Division manual entitled 'Revised System of Financial Control and Budgeting' (p. 345). The MoF website provides public access to the laws and ordinances governing the budget process. The Pakistani tax regime is also covered by law. Almost all federal taxes are laid out in the Constitution. Local taxes are governed by the Local Government Ordinances. The Central Board of Revenue (CBR), a part of the MoF, has responsibility for the administration of the federal tax regime. OA notes that the complexity of Pakistan's tax legislation and weak supervision makes it challenging for the country to address transparency and efficiency issues. A new system was introduced in 2002 that has achieved some improvements in this regard. OA noted that "in 2002, the government launched initial reforms of the CBR to improve the quality of its human resources by adopting a recruitment policy of merit-based remuneration" (p. 346). In addition, a tax ombudsman's office was created, and 2004 saw the formation of Taxpayer Units (two for "large taxpayers" and six for "medium taxpayers"). Tax regime simplification efforts are also underway with a move toward self-assessment in the area of income and corporate taxes, excise taxes, and customs duties. There are complaints that corruption remains a problem however. The CBR is working with the World Bank to improve tax-regime transparency.

OA reports that ethical standards in the public sector are rooted in the 1965 Government Servants (Conduct) Rules. Issues covered in these rules include conflicts of interest, asset declarations filed by staff, and the mechanisms by which civil servants may be discharged from office. According to OA: "low pay and a lack of effective supervision have entrenched corruption, especially at the sub-national level" (p. 346). This was addressed in party by the 2003 National Anti-Corruption Strategy.

The IMF's 2008 ROSC reports that "traditional planning and budgeting responsibilities have not been fully redefined or coordinated for medium-term budgeting" (p. 2). It adds that support for transparency and accountability is clearly provided in the rules-based policies of the Fiscal Responsibility and Debt Limitation Law. The ROSC notes that full implementation will make it easier to comprehend Pakistan's fiscal management and policy intentions, but is contingent upon the adoption of international accounting and fiscal reporting standards and their rigorous application. The ROSC notes that Pakistan's monetary and fiscal policy is inadequately separated, citing "the practice of automatic financing of the short-term liquidity needs of the government" (p. 2). The need for greater clarity regarding the financial relationships obtaining between the state-owned enterprise sector and the financial sector is being addressed through privatization efforts. The Ministry of Finance maintains a registry of the government's holdings and collects government investment data on both wholly owned enterprises and joint ventures, but the ROSC finds that these data are not up to date.

Open budget processes

EN

The 2006 OA Fiscal Transparency report on Pakistan assigns a rating of "Enacted" (p. 351) for this principle. The report notes that the budget documents and the MoF's budget presentation clearly state fiscal policy objectives. A 3-year macroeconomic framework is employed in the development of the budget and all key budget variables are addressed. A Medium-Term Budgetary Statement, as well as the Annual Fiscal Policy Statement set forth medium-term fiscal objectives. A publication called the Economic Survey is published by the Ministry of Finance that addresses the country's current macroeconomic situation and offers a perspective on future prospects as well. This forms a part of the annual budget documentation. OA notes, however, that the MoF does not make its macroeconomic model publicly available and does not have a formal consultative mechanism enabling it to solicit the input of independent experts. Some government ministries have begun utilizing the three-year rolling medium-term Budgeting Framework, including the Ministry of Health and the Ministry of Population Welfare (for the 2005-2008 period) and, later, with the Ministries of Education, Women's Development, and Food and Agriculture. The MoF does not yet participate in this framework, despite initial plans to do so. At the provincial level, all but Baluchistan participate in such a framework. OA warns that none of the participating agencies have adequate capacity to fully exploit the strategic potential of the medium-term budget framework, however, resulting in its devolution to a mere accounting procedure. Plans are afoot to address this shortcoming, according to OA. These involve conversion to computerized financial management, among other improvements. OA reports that "the MoF does not publish any systematic analyses of sensitivity of its budget estimates to changes in economic conditions" (p. 351), although it does include a discussion of the macroeconomic factors that may have bearing on the budget in its Economic Survey publication. Nonetheless, OA states that there have been some improvements in transparency in this regard, particularly in the area of contingent liability reporting and reporting on tax expenditures, both of which are covered in the MoF's Economic Survey. However, this information is not yet included in the budget documents. Budget documentation also does not adequately address the question of budget deficit sustainability. It is discussed in the Economic Survey, however.

According to OA, budget data reporting at the federal and district levels is timely, even though computerization at the sub-national level is lacking. The government's audited final accounts are available within about seven months of the end of the reference year. As of 2004, Pakistan began publishing annual federal budget execution reports using its new accounting model and chart of accounts system. These, however, are not available to the public as of yet. Greater detail is provided in the budget documentation than was available prior to 2004, and the organization of the data has improved. A summary of the classification system employed in the documentation is also provided. OA reports that "mechanisms for internal control" of budget execution "remain weak in some areas" (p. 353). Noncompliance of expenditure approvals requirements, classification requirements, and requirements for the documentation of expenditures appears to be a problem across the government. Efforts to improve both legislative oversight and transparency are underway. Both the national and provincial assemblies and public accounts committees are involved in this effort through the review of audit report findings and the conduct of oversight hearings. However, the public accounts committees exhibit uneven performance track records and reviews are hindered by a significant backlog of audit reports. OA notes that "the hope is that the backlog will be cleared by November 2007" (p. 353).

Pakistan's fiscal accounting is done on a cash-based system, but OA reports that a gradual move to accrual-based accounting is in the works. In broad terms, Pakistan's fiscal data is classified in conformity with the Government Finance Statistics Manual 2001. Although the federal, provincial, and all but one local districts use the new chart of accounts and accounting model, there are some difficulties associated with getting fully up to speed, particularly in the province of Baluchistan where the data are not yet adequate. OA suggests that capacity building, particularly in the area of staff development, is needed. Transparency in the procurement process aimed at reducing corruption is also in the works through the creation of the National Accountability Bureau, which works with individual Regional Accountability Bureaus. Nonetheless, OA suggests that additional transparency measures will be needed. A Public Procurement Regulatory Authority was created in 2002 but has not yet set forth nationally applicable procurement rules. Reform in this area remains slow.

OA notes that "Pakistan has an overall framework of accounting and financial reporting overseen by the Accountant General of Pakistan for federal accounts and Accountants General for the provincial accounts" (p. 354), all of whom report to the federal Controller General of Accounts. Fiscal data at the federal level include the federal budgetary operations as well as the data from public sector development. However, the extra-budgetary Zakat fund, social security, and the provincial and municipal government operations that are financed locally are excluded from the federal fiscal data. The data are produced quarterly in a timely fashion, and in accordance with the GFSM2001. The executive must submit a Medium-Term Budget Statement to the parliament, as well as an annual Fiscal Policy Statement that specifies the way in which budget targets conform to the debt reduction strategy. In addition, the government is mandated to produce an annual Debt Policy Statement, but OA reports that this has not yet been done. In the future, budget performance against established targets will be assessed in an annual State of the Economy. OA states that federal level efforts at data reconciliation has seen improvement, but the same cannot be said for provincial and district level data. Standards at the subnational level are described as "poor" (p. 354). There is a need for greater training and resources at the subnational level in order to alleviate this problem, and OA adds that legislative changes are also needed.

Writing for the Open Budget Index, Dr. Ahmed Masood Qazi assigns Pakistan a score of only 51%, denoting "some" degree of openness in the budget process. The OBI is based in large measure on tracking the production and public availability of seven key budget documents: the Pre-Budget Statement, Executive's Budget Proposal, Citizen's Budget, In-Year Reports, Mid-Year Review, Year-End Report, and Auditor's Report. Pakistan produces and makes public five of the seven reports, but does not produce a Citizen's Budget or a Pre-Budget Statement. The content of the Executive's Budget Proposal is deemed insufficiently detailed to give citizens a comprehensive understanding of the government's fiscal activities, and is assigned a score of just 59%. In-Year and Mid-Year reporting are also deemed insufficiently detailed, as is the Year-End Report. The Auditor's Report lacks any information as to whether or not recommendations contained therein have been acted upon. The OBI further notes that that although Pakistan holds public hearings on the budget, there is no opportunity for citizens to participate in those hearings or to make their opinions heard.

The Fiscal Responsibility and Debt Limitation Law provides for a stronger macrofiscal management framework of the budget. According to the 2008 ROSC, "establishment of the economic advisor post and the Debt Policy Coordination Office (DPCO) have provided a sharper focus for formulation and implementation of a medium-term macroeconomic framework for budget policy" (p. 3). The economic advisor is responsible to formulate the medium-term framework and come up with long-term fiscal sustainability strategies looking out over 10 years. The Law requires annual fiscal and debt policy statements to be produced. These are expected to contribute to sound policy-setting, implementation, and budget review. The ROSC states that Pakistan has yet to publish the complete details of its MBTF, and the risks applicable to both the annual and medium term budget are not formally set forth anywhere.

Public availability of information.

ID

According to OA's 2006 Fiscal Transparency report for Pakistan, the country has earned a rating of "Intent Declared" (p. 347) for this principle. The Constitution requires that the Auditor General submit a report on the federal accounts to the president, who is then required to present this information to the parliament. Similarly, the Auditor General must submit reports on provincial accounts to the relevant governor, who then presents the information to his provincial assembly. The MoF publishes quarterly fiscal operations summaries on its website along with the president's budget presentation and a summary publication called Budget at a Glance. It also provides online access to a copy of the Finance Bill and the Economic Survey. This latter document covers a variety of information, including sectoral data, external debt and liabilities, tax expenditures, and other fiscally significant data. The Economic Survey comes out annually just prior to the submission of the new budget.

Provisions of the 2005 Fiscal Responsibility and Debt Limitation Law "requires the federal government to provide the National Assembly with a set of economic policy statements for each financial year (1 July - 30 June)," (p. 347) according to the OA report. The law requires that these statements include as thorough as possible a presentation of the government's decisions that impact the nation's economy. Among the elements legally required for inclusion are the following: "a Medium-term Budgetary Statement included in the Annual Budget Statement (ABS), an Annual Fiscal Policy Statement included in the ABS, an Annual Debt Policy Statement included in the ABS, a Mid-year Economic Report by the end of February, and an Annual State of the Economy Report by the end of June" (p. 347). Improvements have been made in the timeliness with which financial statements are produced. The MoF also posts quarterly fiscal reports on its website with a lag of two months. Monthly reports are also compiled but are not published. This is due, according to the OA report, to both a long production lag and poor data quality.

Pakistan is working with the World Bank to develop a new set of financial reporting requirements and a countrywide chart of accounts consistent with a computerized accounting system, according to OA. The first phase of this project was concluded in 2005, resulting in 55 computerized accounting sites now in operation. More needs to be done, but infrastructural and staffing inadequacies have slowed further progress in this regard. In addition, OA notes that some observers cite attitudinal resistance to the computerization process as contributing to lack of progress in some areas of the country. Later stages of the project will deal with capacity building at the sub-national level. OA notes that Pakistan's participation in the General Data Dissemination System (GDDS) of the International Monetary Fund (IMF), initiated in November 2003, has resulted in the publication of data as well as statistical practices on the GDDS website. As a result of its GDDS participation, Pakistan has made a commitment to improving both data quality and dissemination of data. According to OA "Pakistan's practices are consistent with most GDDS recommendations with the exception of data on GDP and wages and earnings" (p. 348). OA also notes that Pakistan does not yet meet requirements for SDDS subscription, specifically because it does not yet make quarterly GDP and wage data available. The GDP data is expected to be available by 2007. Pakistan is also working with outside help, specifically with a German NGO, to improve its national accounts data and publish them quarterly. Work in the area of quarterly wage and unemployment data reporting is underway with assistance from the IMF. However, OA notes that Pakistan's very large informal sector presents obstacles to the generation of accurate wage and employment data. The OA also cites a 2004 IMF finding that found "significant shortcomings in "the methodological soundness of other macroeconomic statistics, especially those regarding the scope of the national accounts and the classification and sectorization systems for government finance and monetary statistics" (p. 348). OA adds that the government's longstanding tendency to overestimate revenues appears to have ceased. In addition, the MoF now includes data on tax spending and actual cash flows on both implicit and explicit contingent liabilities in its Economic Survey, with an explanation of their importance to fiscal policy and planning.

Public access to some reporting is still restricted, according to the OA report. For example, access to information on provincial receipts and spending is limited to the provincial assemblies. On the other hand, the Pakistani central bank publishes an Annual Report that includes combined federal and provincial budget data and the MoF includes consolidated federal and provincial budget data in its Economic Survey. A publication called the Combined Finance and Revenue Accounts for the Federal and Provincial Government of Pakistan is produced by the Controller General of Accounts. OA cites the long time lag involved in the production of this publication, as well as problems with data accuracy, and problems that need to be addressed. OA reports that "there have been systematic efforts in recent years to improve the quality of data reconciliation and the timeliness of data dissemination" (p. 348). On the other hand, OA states that no progress has been achieved in the reporting of quasi-fiscal activities. Finally, OA reports that "there has been no progress in the production of formal advance release calendars in recent years" (p. 350), but adds that the FBS does publish an advance release calendar for price and trade data.

The 2008 ROSC found that "budget and accounts documents cover most general government transactions and are accessible to the public, but analytical information requires further strengthening" (pp. 6-7). The newly adopted chart of accounts mentioned in the OA report has now been fully incorporated into the budget and accounts documentation. Comparisons between original budget and actual data are hindered by the lack of a summary analytical table, but there is enough data available in other forms to permit such a comparison to be made. The Central Board of Revenue Year Book and the CBR Quarterly Review offers a detailed presentation of actual versus target revenue collection figures. The State Bank of Pakistan (SBP) also includes government fiscal data in annexes to its Annual Report. Other data on borrowing and grants are covered in the Economic Affairs Department's Year Book. The Debt Policy Coordination Office publishes a Debt Policy Statement that should help to resolve some of the current data reliability issues. The ROSC notes that there is room for improvement in the reporting of tax expenditures, which appears in an annex of the Economic Survey. One area that the ROSC finds fault with is the way in which exemptions are handled. As the ROSC notes: "exemptions designed to encourage foreign investment are not included in the tax expenditure report and absence of this data limits the possibilities for a comprehensive review of tax policy" (p. 7).

Independent assurances of integrity.

ID

OA's 2006 Fiscal Transparency report for Pakistan assigns a rating of "Intent Declared" (p. 355) for this principle. According to OA, fiscal data for Pakistan has improved. Pakistan has a federal-level Fiscal Monitoring Committee which not only provides oversight of fiscal flows but also works to improve data quality. Provincial versions of this committee are in the works. The MoF and the Accountant General work together to prepare quarterly published fiscal reports in which the issue of data quality is addressed. Data quality is diminished by continued reliance on "obsolete computing resources" and "outdated benchmarks" (p. 355), and insufficient efforts are made to encourage fiscal reporting. The MoF has stated its intent to invest in capacity building, particularly in regard to the reporting of national accounts data. The Auditor General, who reports to the Pakistani president, is Constitutionally granted independence. Once responsible for both auditing and accounting, the Auditor General is now focused solely on the audit function. Reforms in methodology are underway to move from a compliance to a performance focus for the national audit function. Improvements in timeliness have been achieved, and audit reports are now produced within the year following the reference year. The Auditor General has embarked on a major capacity building effort, with the goal of adding 800 qualified auditors to enable the effective auditing of local governments. The Auditor General conducts audits of the districts' decentralized accounts. Internal auditors conduct audits of the line ministries. However, OA notes [Page 356] that lag times in producing the audited accounts remain long and that it will take time to reduce them. The Statistical Act of 1974 established the mandate for the Federal Bureau of Statistics (FBS), the independence of which is covered by specific legislation. Statistical work by the FBS is published in the Statistical Yearbook and the Pakistan Statistics Handbook, among other publications. Among the data recorded by the FBS are the government's public finance statistics. It enjoys a reputation for professionalism. According to OA, the operations and credibility of the FBS "would benefit if it enjoyed greater autonomy from the government" (p. 356).

The 2008 ROSC reports that fiscal data quality still needs improvement, but adds that "significant improvements in scope, timeliness, and quality of external audit are under way" (p. 8). The Auditor General has begun the implementation of a more modern audit methodology throughout Pakistan, one that replaces the old transaction-based techniques with a risk- and systems-based approach. This is expected to enhance not only audit quality but also audit efficiency and effectiveness. Audit findings are now being presented in a timelier manner, according to the ROSC. In addition, there is greater public access to these findings, as well as greater follow-up than was the case in the past. There is a backlog of audit reports before Parliament's Public Accounts Committees for review, however. This is in part due to the fact that the Committees did not meet during the first two years of this century. However, steps are being taken to reduce and ultimately eliminate the backlog, prioritizing the review of more recent reports over the older ones. Finally, the ROSC warns of problems that may arise from the current legal situation vis-à-vis the Auditor General. The Auditor General's Ordinance restricts the Auditor General from auditing certain government entities. However, the ROSC notes that the Auditor General is aware of these issues and is "examining measures that can be taken to remedy the situation" (p. 9).