Lavish perks, unapproved investments, stalled IT projects, and misuse of funds stain Pakistan’s apex IT export body
ISLAMABAD: The Pakistan Software Export Board (PSEB), the government’s flagship organization tasked with promoting Pakistan’s IT and software exports, is facing serious credibility questions after an official audit exposed financial irregularities exceeding Rs1 billion, including unauthorized payments, rule violations, and poor project management.
The Auditor General of Pakistan (AGP) report for fiscal years 2022–24 presents a damning indictment of the PSEB’s governance, accusing its management of bypassing financial controls, misusing authority, and spending millions in violation of government rules, while failing to deliver on key national IT promotion initiatives.
The report highlights that despite being one of the most important organizations under the Ministry of Information Technology and Telecommunication (MoITT), the PSEB operated without proper financial discipline, submitted no audited accounts for FY 2023–24, and repeatedly ignored directives of the Public Accounts Committee (PAC).
Failure to submit audited accounts and non-compliance with PAC:
The audit notes that PSEB management failed to submit annual audited accounts for 2023–24 by the statutory deadline of December 31, 2024, violating financial management laws.
It also reveals a long history of non-compliance with PAC directives, out of 71 audit paras since 2004, 52 remain pending, showing “very poor compliance requiring immediate attention.”
Loss of Rs13.9 million on unused Karachi office:
According to the audit, PSEB signed a three-year lease for office space at the NICL Building, Karachi, in 2022, paying Rs13.9 million in rent, even though the office remained vacant for two years. The audit found that the delay was caused by bureaucratic negligence in furnishing and interior work, resulting in rent being paid for a space “never occupied.”
Illegal monetization allowance and communication perks, Rs27.8 million:
The AGP uncovered that the PSEB management unlawfully paid Rs23.51 million in monetization allowances and Rs4.35 million in communication allowances to senior officers and staff, including the CFO, company secretary, and managers, between 2022–24.
These payments were made despite clear government orders restricting such perks to civil servants only, not to employees of autonomous bodies.
Auditors termed the payments “unauthorized, irregular, and recoverable.”
Irregular hiring through private firm — Rs23.87 million:
The report revealed that PSEB hired staff through M/s ECS Pvt Ltd, paying Rs23.87 million in two years, without prior approval from the Finance Division or creating sanctioned posts.
Auditors said this violated service regulations, noting that “appointments through a private contractor for core functions are impermissible and resulted in misuse of public funds.”
Unapproved investment of Rs200 million in TDRs:
In a major violation of the Public Finance Management Act (PFMA) 2019, PSEB invested Rs200 million of public money in a fixed-term deposit at the National Bank of Pakistan without the approval of the Finance Division.
Auditors said this was a direct breach of Section 23(2) of the PFMA, which forbids any public entity from investing or transferring government funds without prior authorization.
The management’s defense that PSEB’s charter allows fund investment — was rejected as “not convincing.”
Non-achievement of IT export project deliverables — Rs220.5 million:
One of the most striking failures was the Technology Marketing Export Program, launched in 2021 with a total cost of Rs200 million to enhance Pakistan’s IT exports through global promotion and brand-building.
Despite hiring M/s ABS Associates (SMC Pvt) Ltd for Rs217 million, only one of the nine deliverables was completed.
The project, initially planned for six months, dragged on for over three years with negligible progress.
The audit blamed weak supervision and administrative delays for “non-achievement of deliverables and wastage of Rs220.5 million.”
Unjustified retention of Evacuee Trust Complex Building — Rs31.36 million:
Despite moving into larger premises in NICL Tower, Islamabad, PSEB continued to pay Rs31.36 million in rent for its old offices in the Evacuee Trust Complex (ETC) between 2022–24. The audit said the retention was “unjustified and wasteful,” adding that the decision lacked a needs assessment and placed an unnecessary burden on the exchequer.
Unrecovered advances from ex-employees — Rs7.39 million
The auditors also flagged Rs7.39 million in staff advances that were never recovered from former employees, despite clear rules requiring lump-sum settlement before release of final dues.
“No recovery efforts were recorded,” the report noted, terming it negligence by management.
Misappropriation of APICTA sponsorship funds — Rs110 million:
Perhaps the most controversial revelation relates to the Asia Pacific ICT Alliance Awards (APICTA) 2022, hosted in Pakistan.
The PSEB released Rs70 million to P@SHA (Pakistan Software Houses Association) and Rs40 million to M/s Tech Spring, allegedly without documentation, utilization reports, or measurable outcomes.
The audit said these payments constituted “favor to a private body with conflict of interest,” as the Chairman of P@SHA was also a member of PSEB’s Board and Finance Committee that approved the funding.
No expenditure records or event results were provided to justify the payments.
Irregular creation of ‘C-Level’ posts and payments — Rs46 million:
In 2021, PSEB’s Board created four senior “C-Level” posts, Chief Financial & Admin Officer, Chief Industry Development Officer, Chief Commercial Officer, and Chief Marketing Officer — and paid Rs46 million in salaries without Finance Division’s concurrence.
The audit termed the move “unjustified duplication of roles,” as similar director-level positions already existed.
Extravagant spending on events without KPIs — Rs413 million:
Between 2022–24, PSEB spent a whopping Rs413 million on exhibitions, foreign delegations, and conferences — without any performance indicators, impact assessment, or board-approved policy.
The Board had instructed that Key Performance Indicators (KPIs) must be developed for every event, but none were implemented.
Auditors said the expenditure “lacked transparency and measurable outcomes.”
Advance payment to Women Software Technology Park, Bagh — Rs22.7 million:
In another case, PSEB made an advance payment of Rs22.7 million to the Women University of AJK, Bagh, for a Software Technology Park project even before signing the agreement and without obtaining a bank guarantee.
Auditors noted that the payment violated accounting procedures and failed to secure the government’s financial interests.
Violation of PPRA Rules in hiring vehicles — Rs10.34 million:
The audit revealed that PSEB awarded a vehicle rental contract worth Rs10.34 million to a private company without open bidding in violation of PPRA procurement laws.
The management’s justification “urgency of work” was rejected as insufficient.
Irregular payments without board approval — Rs23 million:
Payments of Rs23 million were made to vendors despite the Special Committee of the Board disallowing or reducing such claims.
This, auditors said, reflected a “clear disregard for governance mechanisms and board oversight.”
Besides, despite the Finance Division’s strict ban on purchasing new furniture, laptops, and office equipment, PSEB spent Rs13.12 million on these items from its regular budget during FY 2022–23 and 2023–24.
The audit deemed the expenditure “irregular and unauthorized.”
Audit calls for full investigation and accountability:
The AGP has called for a comprehensive investigation into all financial irregularities, recovery of losses, and disciplinary action against those responsible.
It also recommended that Finance Division’s concurrence be sought for all pay structures and investments, and that governance lapses be addressed to restore credibility to the PSEB.
The report also noted that no reply was received from PSEB management, and no Departmental Accounts Committee (DAC) meeting could be convened till finalization of the audit — indicating continued administrative inaction.
Experts say the revelations have severely dented the reputation of an organization that was supposed to lead Pakistan’s IT export revolution but instead stands accused of financial excess, poor oversight, and institutional decay.
