PESHAWAR: A controversy has erupted over changes to the Khyber Pakhtunkhwa Public Financial Management Law to do away with the powers of the Controller General Accounts (CGA) in accounting and authorisation of the release of provincial consolidated funds.
The amendment, which was passed by the KP Assembly on March 26, was returned by Governor Faisal Karim Kundi to the assembly’s secretariat with objections. However, the assembly re-passed the bill in its session on Monday.
Through an amendment, Section 2, Clause (m) of the KP PFM Act, 2022, which defined the Controller General of Account, has been deleted.
Also, sub-section 2 of Section 13 of the PFM Act, 2022, which says the finance department shall prepare and manage the budget and CGA shall be responsible for proper accounting in the manner prescribed by the CGA Ordinance, has been deleted.
Bill was returned by governor with objections but PA re-passed it on Monday
Another amendment to the sub-section 3 about the authorisation of the CGA for money withdrawal from the provincial consolidated funds has been done away with, leaving both the release and authorisation in the domain of the finance department.
Similarly, the move also removed another amendment to Section 18 about the CAG guidelines for the finance department to issue instructions related to commitment control and multiannual control.
Also, amendment to sub-section 2 of Section 2 has also done away, with the finance department collaborating with the CAG in issuance of guidelines related to internal control.
During the sitting, lawmaker of the opposition PPP Ahmad Karim Kundi asked the treasury not to rush with the passage of laws, saying doing so may take the matter to forums other than the provincial assembly. He said that removal of the CGA’s role was a violation of the Constitution.
However, Speaker of the provincial assembly Babar Saleem Swati said that the proposed legislation had been pending with the assembly for more than a year and that the accountant general office had conveyed its reservations about the amendments. He said that the provincial government later formally responded to the AG office reservation in writing.
Mr Swati said that the AG office didn’t respond to the KP government’s view and its representatives turned up at his office on Monday.
He later asked the minister for law to table the bill for consideration and the house later re-passed the bill.
Earlier, provincial Governor Faisal Karim Kundi noted in a letter to the assembly’s secretary that the proposed amendments, in their cumulative effect, sought to exclude the role of the CGA from the existing framework governing accounting, authorisation of expenditure and financial controls, and to vest these functions exclusively in the provincial finance department.
“This constitutes a fundamental reconfiguration of the prevailing financial management structure, which, as presently constituted, is not merely statutory in character but is anchored in a broader constitutional scheme,” he said.
Mr Kundi said that the proposed amendments, by removing the CGA from the domains of accounting, authorisation, commitment control and internal control, and by vesting those functions exclusively in the finance department, seek to displace that constitutionally anchored structure.
“Such an arrangement departs from the established system of checks and balances inherent in the current framework and alters the chain of financial accountability as envisaged under the Constitution,” he noted.
He said that a material distinction must also be maintained between the withdrawal of money from the Provincial Consolidated Fund and the authorisation of such withdrawal.
“While Article 119 empowers the province to regulate matters relating to custody and withdrawal of funds, the authorisation of expenditure is a pre-withdrawal control embedded within the accounting framework prescribed under Article 170 and implemented through the CGA Ordinance.
“The proposed amendments, by conflating these functions and subsuming authorisation within the exclusive domain of the provincial executive, encroach upon a field that is constitutionally regulated and institutionally structured,” he said.
The governor said that the proposed amendments sought to alter a framework that was rooted in the Constitution and operationalised through valid federal legislation.
He also said that such alterations fell outside the permissible scope of the provincial legislative competence and gave rise to serious constitutional concerns.
“I am not inclined to accord assent to the bill in its present form. The matter is hereby referred back to the provincial assembly for reconsideration, with a view to ensuring conformity with the Constitution, 1973, and the applicable legal framework,” he said.
An official told Dawn requesting anonymity that it was the job of the treasury department to ensure the district level accounts maintenance and authorisation but that task had been given away to the CGA through a law amendment.
He claimed that the amendments were handiwork of a senior official of Pakistan Audit and Accounts Service, who was serving in the finance department on deputation at the time of their enactment.
Published in Dawn, April 16th, 2026