Understanding the KPK Finance Department Internal Audit Policy 2018

Transparency and fiscal discipline are the cornerstones of effective governance. To reinforce these values, the Finance Department of Khyber Pakhtunkhwa introduced the Internal Audit Policy 2018. This document is the primary authority for internal controls across all provincial government departments and autonomous bodies.

Whether you are a government official, an auditor, or a student of public policy, understanding this framework is essential for navigating the administrative landscape of KPK.

What is the Purpose of the 2018 Audit Policy?

The policy was designed to move away from traditional “post-mortem” auditing and toward a risk-based, proactive internal control system. It establishes the Provincial Internal Audit Cell (PIAC) as the central body responsible for overseeing internal audits across the province.

Core Objectives:

Efficiency & Transparency: Ensuring that public resources and assets are used judiciously.
Risk Management: Identifying financial risks and operational loopholes before they lead to misappropriation.
Compliance: Ensuring all departments follow the KPPRA rules and the Delegation of Financial Powers Rules 2018.
System Improvement: Providing the Principal Accounting Officer (PAO) with objective recommendations to improve departmental performance.

Key Features of the Framework

1. The Role of the PIAC

The Provincial Internal Audit Cell (PIAC) acts as the technical wing of the Finance Department. Its duties include:

Formulating audit policies and procedures.
Conducting Quality Control Reviews (QCRs) of departmental audits.
Consolidating the Annual Audit Plan for the Chief Secretary.

2. Departmental Internal Audit Cells (IACs)

Every major department in KPK is required to have its own Internal Audit Cell. These cells have “unrestricted access” to all books of accounts, records, and facilities to ensure nothing is hidden from the audit process.

3. Reporting and Accountability

The policy mandates a strict reporting cycle. Auditors must submit quarterly progress reports to their respective Secretaries (PAOs). If serious irregularities are found, they are escalated to the Departmental Accounts Committee (DAC) or the Public Accounts Committee (PAC).

Why is this Policy Important for Public Sector Entities?

For autonomous bodies and public sector companies in KPK, this policy serves as a roadmap for:

Financial Audits: Assessing the reliability of financial reporting.
Operational Audits: Checking the quality of administrative procedures.
IT Audits: Evaluating the security and integrity of digital data systems.

Download the Internal Audit Policy 2018 (PDF)

You can download the full, updated version of the policy directly from our link below. This document includes the complete Internal Audit Charter and the guidelines for audit execution.

📥 Download KPK Finance Department Internal Audit Policy 2018 (PDF)

Frequently Asked Questions (FAQs)

Q1: Does this policy cover the Merged Districts (NMDs)? Yes, the Finance Department’s policies extend to the entire province, including the newly merged districts, to ensure uniform financial management.

Q2: Who is the “Principal Accounting Officer” mentioned in the policy? In most cases, the Secretary of the respective government department serves as the Principal Accounting Officer (PAO).

Q3: How is this different from an External Audit? While the Auditor General of Pakistan (AGP) conducts external audits for the legislature, this Internal Audit is a management tool used by the department itself to monitor its own performance and compliance.