Audit Report Questions USF Governance, Names Jazz, PTCL and Ufone
The Auditor-General of Pakistan (AGP) has identified Rs9.43 billion in irregularities in the Universal Service Fund (USF) for the fiscal year 2024-25, raising concerns over procurement practices, project management, and financial oversight. The audit names Jazz, Pakistan Telecommunication Company Limited (PTCL), and Ufone in various findings, while emphasizing that the issues stem primarily from governance and compliance shortcomings within the USF.
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The largest observation involves Rs7.46 billion worth of broadband and optical fiber contracts awarded through restricted bidding. According to the audit, limiting participation to telecom operators contributing to the USF violated public procurement principles of openness and transparency. USF management defended the process, saying it followed the USF Rules 2006, but auditors recommended seeking legal clarification from the Public Procurement Regulatory Authority (PPRA) and the Law Division. The report also flagged Rs1.007 billion in unauthorized relocation of 33 mobile tower sites under Jazz and Ufone projects without prior approval from the USF Board.
Rs9.43 Billion in USF Irregularities Highlight Procurement and Project Management Concerns
Another major finding relates to Rs845.17 million spent on PTCL optical fiber projects in Sindh. Although the fiber network was completed and technically verified, auditors found that telecom operators were not using the infrastructure, raising questions about project planning and value for money. The report also noted that the USF failed to recover Rs116.1 million in mandatory contributions from operators, with PTCL accounting for more than Rs115 million of the outstanding amount. In addition, the fund did not conduct the legally required independent chartered accountant audit and failed to account for potential liabilities arising from ongoing litigation.
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The AGP has recommended legal review of the procurement process, a high-level inquiry into the unused fiber projects, recovery of outstanding contributions, compliance with statutory audit requirements, and stronger financial oversight. The report concludes that addressing these governance weaknesses will be essential to ensuring the Universal Service Fund fulfills its mandate of expanding telecom connectivity to underserved areas across Pakistan.
