The Supreme Court has declared all secret funds subject to audit, and has struck down the sub-section of the financial rules that had hitherto allowed the placing of some funds beyond the scope of independent audit by the auditor general. The Supreme Court announced its order on Tuesday on a petition which had asked for the abolition of the secret service funds, which had been purportedly used by the government to buy the loyalty of journalists and other opinion makers. In 2012-3, secret funds of over Rs 2.57 billion had been budgeted in 27 ministries. The order also allowed the auditor general four months to establish procedures to allow for secrecy in the process of audit. The order also noted that the method prescribed by the rules was sketchy and relied on the good faith of the users of these funds. As noted, this is subject to abuse. Indeed, the secret funds are not used just to buy support from journalists, but they are spent by officials on themselves. Again, as was noted, this is also taxpayer’s money, and as such, must be audited.

There is indeed a need for certain official expenditures not to be made public, which must not be made available to the enemies of the country. However, those funds must still be subject to audit, though now the Court has specified the period in which the manner of auditing is to be carried out while preserving secrecy is maintained, is to be determined by the Auditor General of Pakistan. As the Court observed, accountability of those who held high office presented the foundation for the levy and legitimacy of taxes. Having such money subject to audit is thus essential to the integrity of the entire system. The Court’s remarks about the need for legislation to provide exemptions must be seen in this context.

The Court has shown once again that it will intervene in the financial affairs of the government, such as the recent striking down of the law that permitted the collection of taxes from the announcement of the Budget without waiting for the passage by the National Assembly. The Supreme Court has been remarkably consistent in ensuring that all official actions have a basis in law, and that law is consistent with the Constitution. Rather than taking the passive course of allowing the Court to decide on petitions that go before it, the government must ensure that all its functions are in accordance with law. If necessary, it should use the mechanism of the presidential reference to find out the opinion of the court.