Performance Audit: A Tool for Improvement

Results and Analysis

The selection of our three different organizations is balanced because they cover public and private sectors, social and infrastructure oriented, and then profit and non-profit organizations. NHA is a public sector organization but it has a wide network and it is interacting with international organizations and the present Sukkar Bypass Project was also funded by international donors but still many deficiencies were pointed out by the performance auditors. There were delays, cost overruns, improper measures to call tenders, dissatisfaction and displacement of people, and hiring of foreign consultants at much higher prices than a person with similar expertise can be hired from the local market at a much economical cost.

BISP is again a very good example of missed opportunities. It has the high ideals of bringing out the poor sections of the society from the poverty trap but it has fallen into a trap of poor management as is pointed out by the Performance Audit Report. In the first year, it has not been able to utilize all of its funds. It has serious issues in its HR management and procurement side. The distribution of its cash transfers lacks transparency and also reports of illegal gratification by the post office personnel have shaken its repute very badly. Performance audit has provided a comprehensive list of recommendations for its improvement.

Our third Performance Audit report is unique in the sense that it was conducted by the international organization under the supervision of USAID. It has again pointed out various factors that are contributing towards IESCO’s financial woes and contributing towards its less than optimal performance for consumer satisfaction. It has again given many useful suggestions for the improvement of the working of the IESCO.

Now if we analyze all the three examples on the touchstone of the improvement as it is stated in our statement of the problem, we have hypothesized that a Performance audit contributes towards the improvement of the organizations that arrange this activity on regular occasions. The second assumption was whether it is similarly applicable in the context of Pakistan? It can be stated with some confidence that Performance Audit is equally beneficial in our context and it can produce very good results in all the organizations it has been applied to. The performance audit has the potential to improve quality of service, improve planning control and management, and also can improve accountability by enhancing the visibility of procedures and outputs in addition to its objectives of economy, efficiency, and effectiveness. (Khan, Performance Audit Manual April 2012) So it can be safely said that a Performance Audit is a tool for improvement.


Performance Audit is a mechanism that has been contributing positively towards the different organizations in the advanced world. Results are not encouraging in developing countries. There are many reasons for this and one of the salient features is the political and socio-economic environment of organizations. “It is possible that the various socio-economic and political factors within different countries will continue to impact upon the practice of performance auditing. Future development and practices may continue to be influenced by the socio-economic and political environment in the public sector.” (Nath, Peursem and Lowe May 2006)

Pakistan has also its share of a similar response to the Performance Audit where it has not been able to establish its foothold despite a quarter of a century has passed when it was first introduced in the public sector in 1978. We have more reliance on the traditional concept of financial auditing and not very comfortable with performance auditing. The audit is always considered an encroachment on the jurisdiction of a certain organization. Different organizations respond differently to the audit instructions and observation. Some of them throw these reports into the trash can while others try to use them as a guide to improve upon their practices. There is no denying the fact that the importance of audit in general and Performance Audit, in particular, cannot be overemphasized. The value for money is the only criteria that can ensure efficiency, economy, and effectiveness. This is now getting some foothold in Pakistan because legislators have been demanding efficiency from the public sector.

This study is a starting point in the context of Pakistan to analyze the working of Performance Audits and inter-organizational relationships. It will provide a guide to future researchers. Moreover, the research paper is mostly descriptive and lacks data analysis.

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