Chapter 1

Introduction to the Report

The report in your hand is a result of eight weeks internship efforts at the Office of the
Accountant General (AG Office) KhyberPukhtunkhwa. The first chapter provides a detailed
introduction of the report including topics namely: Background of the study; Purpose of the
report; sources of data collected for preparation of this report; scope and limitations of the
report and scheme of the report.

1.1. Background of the Study

It is a basic requirement for students studying in the Masters of Commerce (M.Com)
Program at Quaid-e-Azam College of Commerce, University of Peshawar to do internship in
any reputable public or private sector organization and prepare a report reflecting the learning
and experience in that organization. In order to fulfill the requirements of the degree of
M.Com, I had to find an internship for me. I submitted applications for internships at
different reputable institutions and received an unpaid internship opportunity for two months
at the AG Office, Peshawar.

1.2. Purpose of the Study

The purpose of this report is two-fold. First, it is prepared in partial fulfillment for the
requirements of the M.Com degree. Second, it provides a brief account of the eight weeks
internship at the AG Office Peshawar. So, this is a descriptive study. It describes the
fundamental aspects about AG Office Peshawar, my learning at the AG Office, basic
financial and SWOT analysis, problems and recommendations to resolve the problems.

1.3. Data Collection

The study has used both primary and secondary data sources. Primary data for the report
are collected through observations, interviews and discussions with the officials of different
sections of AG Office Peshawar. Secondary data are collected from the official website of
AG Office Peshawar, published reports and financial statements.

1.4. Scope of the Study

The report is restricted to Office of the Accountant General KhyberPukhtunkhwa
Peshawar office only and cannot be generalized to all such offices operating within Pakistan.

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Furthermore, it is not possible to cover every aspect of AG Office Peshawar in two months
duration as it is one of the major field offices of Office of the Accountant General
KhyberPukhtunkhwa. I have worked only in three sections of the said office; 3 weeks in
Pension Section, 3 weeks in Government Provident (GP) Fund Section and 2 weeks in Books
Section. Thus, the report describes the working of these three sections in detail.

1.5. Scheme of the Report

The report is prepared as per the requirements of the college available on the webpage
of the college at University of Peshawar. The report is divided into five chapters each sub-
divided into different sections and sub-sections.

The first chapter briefly discussed the background, purpose of preparing the report,
sources of data collected for preparation of the report, scope and limitations of the report and
overall scheme of the report. Brief account of the subsequent chapters is presented below:

Chapter 2 presents overview of the Office of the Accountant General

KhyberPukhtunkhwa and AG Office Peshawar.

Chapter 3 presents a summary of the overall learning experience at the AG Office

Peshawar; three sections namely Pension Section, GP Fund Section; and Books Section.

Chapter 4 presents financial and SWOT analysis of AG Office and

Chapter 5 summarizes the overall report by highlighting the problems of AG Office

and my recommendations to resolve these problems.

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 Chapter 2

Overview of the Organization

This chapter provides a brief history of AG Office KPK, Separation of the functions
of audit and accounts, an introduction of the AG Office KPK, its objectives and
responsibilities, the role that it is playing in the province, its organizational chart, divisions /
sections and field offices.

2.1 History of AG Office (KPK)

The AG Office (KPK) was founded on April 1, 1929 for audit and accounts of both
federation and NWFP (now known as KPK). Initially, it was a small pay and accounts office.
Later it became Comptroller NWFP on November 1, 1931. In 1973, it was redesigned and its
status was raised to AG Office.

Apart from NWFP, it was responsible for audit and accounts of adjacent Tribal Areas
and Northern Areas (Gilgit and Baltistan). Audit of the later was assigned to AGPR,
Islamabad in 1974.

In 1970, the “District Accounts Office (DAO) scheme was introduced in NWFP as an
experiment on District Mardan. By now there are 24 DAOs and 7AOs) in KPK and FATA
respectively.

In July 1979, the audit and accounts of the federal transactions was transferred to Sub-
Office of AGPR.

2.2. Separation of Audit and Accounts

In July 1989, the function of local audit of accounts was withdrawn from AG Office
and assigned to another newly established office of the Director General, Audit (DG, Audit).
The function of audit and accounts were separated through Auditor’s General’s Ordinance,
2001 and Controller General’s Ordinance, 2001. Since then, the Accounts Departments have
been under the office of the Controller General of Accounts (CGA).

2.3. AG Office KPK

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 AG Office KPK is a provincial office of the CGA. Accountant General (AG) is the
head of this office. He is subordinate to Comptroller and Auditor General of Pakistan. This
office has been performing its functions through the provisions of article 168 to 171 of the
Constitution of the Islamic Republic of Pakistan, 1973 and the Presidential Order, 2001.

2.3.1. Objectives and Responsibilities of AG Office KPK

AG Office KPK is charged with the responsibility of keeping proper books of

accounts of the province. It is to authorize the drawings and disbursements from the
consolidated fund and public accounts of the provincial government. It renders advice on
accounting procedures for new schemes, projects or program activities. In addition, the AG
Office KPK is required to develop and maintain an efficient system of pension, GP Funds and
retirement benefits in consultation with the concerned government.

2.3.2. AG Office KPK and Provincial Government

AG Office KPK has been performing a very important role in the management of
provincial government. It maintains accounts of provincial transactions and serves as a third
party in authenticating proper utilization of resources available to the province.

AG Office KPK has 31 field offices; 24 DAOs and 7 Agency Accounts Offices
(AOs). Moreover, there are 14 sections of AG Office KPK performing delegated functions
(KhyberPukhtunkhwa, 2018).

The AOs perform same functions, but they are administratively controlled by the
Deputy Commissioner (DCO) of the district and the political administration. Functionally
they are controlled by AG Office in the case of DAOs and by the AGPR in the case of
Agency accounts.

2.3.3. Organogram of AG Office KPK

AG Office KPK is centralized organization. Little authority is given to the lower

divisions of the office. It is headed by Accountant General, currently Mr. Abdul Hameed
Pasha is the AG of this office. He is supported by an Additional AG, a private secretary, a
personal staff officer and four Deputy AGs. Detailed organo-gram of this office is provided
in the next page please.

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Deputy Account General Deputy Account General Deputy Account General Deputy Account General
(payrolls/Account) (Admin & CC) (Inspection (G.P Fund & Pension)
&Wads,CM& I &
Had)

Figure 01: Organization Chart of AG Office Peshawar

2.3.4. Sections of AG Office KPK

AG Office has 14 sections each designated with specific functions. Each section has
sub-sections. Below are the names of these sections:

1. Administrative Section 9. DA Section

2. HAD Section 10. WAD Section
3. Coordination and Monitoring Section 11. Deposit and Loan Section
4. GP Fund 12. Payroll Section
5. Pension Section 13. Cheque Section
6. Compilation Section 14. Computer Coordination Section
7. Book Section

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 8. DA Section
All these sections are briefly explained below:

1. Administration Sections

It looks into personnel matters of employees, logistic support and office security

2. HAD Section

It performs Interpretation of rules, rendering advice to different field offices and

departments on implication of government rules

3. Coordination and Monitoring Section

It is responsible for coordination and monitoring of 31 field offices, inspection and

pay fixation of these field offices.

4. GP Fund Section
It is responsible for maintenance of GP fund accounts of the subscribers. This sections
further divided into four sub-sections. These sections are explained in detail in chapter
3.
5. Pension Section

This section is responsible for dealing of pension cases of retired and deceased
employees of the province. It also looks after revision and restoration cases of the
pensioners, payment of pension and post audit.

This section is explained in detailed in chapter 3 of this report.

6. Compilation section

This section is responsible for recording of recoveries an account of advances like GP

fund, House Building, Motor car and Motor cycle advance, sorting of manual bills
and preparation of payment of expenditure and receipts of the province.

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 7. Book Sections

Book section is responsible for preparation of monthly civil accounts, compilation of

accounts prepared by DAOs / ROs, Coordination of suspense / exchange accounts,
maintenance of SBD accounts and reconciliation of accounts with SBP, Karachi.

8. DA Section (Account)

This section is responsible for making releases from Development demand in the form
of authorities or bills. It reconciles the expenditures, passes transfer entry due to
wrong booking and difference in reconciliation. Reconciliation with provincial
departments at controlling level. Preparation of classified abstract received from
various duos. Preparation of FMC reports. Preparation of MIS reports. Providing
expenditure figures for Appropriation Accounts.

9. Works and Audit Sections (WAD)

It deals with accounting and post audit of works accounts

10. Deposit and Loan Section

It deals with advances for example HBA, Motor Cycle advance and cycle advance to
non-gazette employees and watch their recoveries thereof. It also maintains PLA /
SDAs, assignment accounts, reconciliation of these accounts etc.

11. Payroll Section

It deals with the payroll of different departments of the province e.g., Excise and
taxation, city district government, DCO, C&H Highways etc This section further
divided into ten sections.

12. Cheque Section

It implements the Cheque Module of the SAP System and prints cheques and sends
scrolls to the SBP.

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 13. Court Cases Cell /Legal Cell

This department is responsible for preparing the legal replies on behalf of the
A/G/A.G.P. R and presenting them in Supreme Court, High Courts, F.S.T etc. If
initiated by any aggrieved employee or any third party in relation to governmental
rules and procedures especially in service matters.

14. Computer Coordination Section

It coordinates computerization activities of AG Office and field offices. It

trouble shoots problems therein and resolve these issues.

2.3.5. Field Offices of AG Office KPK

AG Office KPK has 31 field offices; 24 DAOs and 7 Agency AOs. Each district has
one DAO such as Abbottabad, Mardan, Swat, Bannu, D.I Khan, Kohat, Chitral, Dir Lower,
Mansehra, Kohistan, Karak, Nowshehra, Buner, Haripur, Lakki Marwat, Tank, Batagram, Dir
Upper, Swabi, Charsadda, Shangla, Hangu, Malakand, Tor Ghar.

Similarly, each agency has an AAO such as Bajaur, Miranshah, Khyber, Tank,
Mohmand Ghallani, Orakzai, and Kurram.

This chapter discussed about history of AG Office KPK, Separation of the functions
of audit and accounts, an introduction of the AG Office KPK, its objectives and
responsibilities, the role that it is playing in the province, its organizational chart, divisions /
sections and field offices. The next chapter (chapter 3) presents detailed discussion of my
learning experience at the AG Office Peshawar. I have worked in three sections of this office
namely Pension Section, GP Fund Section and Book Section. Chapter 3 presents a detailed
discussion on working of these sections.