Page 49 - CMA Journal (May-Jun 2026)

F oc us S ec t ion

For AI-driven nancial management, this means the
From Reactive Oversight to Predictive Governance: foundational data is still fragm ented, and a
processes would need to operate in a weak oversight
Real-Time Fiscal Intelligence in Pakistan environment.
Regional comparison also shows divergent trends,
with countries like Pakistan and Sri Lanka havi
By: ICMA Research and Publications Department successfully enhanced budget transparency (OBI)
while simultaneously experiencing signi cant declin
in institutional and audit oversight mechanisms. Wh
For decades Public Financial Management operated record data but do not generate insight. The next nations like Bangladesh and China exhibit rel
with a reactive logic. Auditors reviewed spreadsheets frontier is intelligence. Systems must move beyond stagnation across all governance metrics, others ar
months after transactions, inspectors agged issues recording to anticipating risks, agging anomalies in grappling with the trade-o s between increased
long after funds were spent, and fraud detection real time, and transforming oversight from reactive public information and weakening internal
became a post-mortem exercise that assigned blame review to proactive scal governance. accountability structures.
but did not prevent leakage. In 2024, global public Fiscal Transparency
debt reached 102 trillion dollars, with developing
countries carrying 31 trillion. These nations paid a Fiscal transparency means openly publishing
record 921 billion dollars in interest, draining scal complete, reliable, and timely information on
space and threatening essential public services. When government revenues, expenditures, and nancial
every misplaced dollar adds to borrowing costs, obligations to strengthen accountability and support
waiting for an annual audit is no longer an option. informed decisions. It is a cornerstone of sound public
The International Monetary Fund has pointed to weak nancial management, emphasizing clarity, timeliness,
systems marked by poor data quality, outdated reliability, and accessibility of scal data. Transparency
structures, and lack of real-time monitoring. Digital extends beyond nancial reporting to include
transformation is reshaping GovTech into core public budgeting, scal risk management, and citizen access
infrastructure that in uences resource allocation, to information. In developing economies such as
contract oversight, and audit targeting. Yet Pakistan, implementation remains uneven due to
digitalization alone does not ensure transparency. The institutional limitations, technical capacity gaps, and On the other hand, Pakistan ranks 81st out of 195
2025 GTMI report shows that while 193 countries have weak enforcement. countries in the 2025 Government AI Readiness Index
adopted Financial Management Information Systems, Current Fiscal Transparency Measures placing it in the lower tier globally. Pakistan is
only 30 percent publish reliable data on system use, It creates a critical disconnect where increased data FRMF have been established to monitor PPP liabilities, nations making progress, but it lacks the dedicated
Treasury Single Account operations, or budget and Status disclosure is not yet translating into improved reliance on periodic, manual risk analyses limits the It is therefore unsurprising that cases of nancial Pakistan's Performance in AI Readiness funding, compute infrastructure, and cross-sector
outcomes. Pakistan’s GovTech Maturity Index (GTMI) Pakistan's public nancial management (PFM) institutional accountability or real-time scal government's predictive capacity and necessitates the irregularities, embezzlement, and corruption, running and Fiscal Transparency coordination seen in top-ranked countries. Without
score of 0.679 is above the global average of 0.589, landscape is currently characterized by a fundamental oversight. urgent integration of AI-based early-warning systems. into trillions of rupees, continue to surface year after parallel improvements in data quality and instituti
showing progress but also exposing gaps in tension between growing digital adoption and The current status of the Fiscal Transparency landscape Pakistan has made notable progress in scal year. Pakistan’s Open Budget Index (OBI) score rose from 30 oversight, AI will remain a technical add-on rather
governance intelligence, as shown in Table 1. persistent systemic fragmentation. Several initiatives shows transparency, publishing the Governance and Pakistan’s public nancial management failures are to 45 between 2023 and 2025, marking meaningful a transformative tool for nancial accountability.

The challenge lies in integration. Many systems remain demonstrate a commitment to modernization, but the 1. Transparency vs. Accountability: While there is a Corruption Diagnostic and UNCAC review reports, systemic rather than isolated. The Rs. 376 trillion “typo” progress in scal transparency. However, this score Furthermore, in terms of government readiness de

remains low in absolute terms, meaning most budget
towards AI, South Asian peers India and China score
fragmented, paper-based, or dependent on manual underlying governance architecture remains largely measurable strength in the increased publication of mandating digital asset declarations, and expanding e scandal exposed the absence of a uni ed scal data information is still not fully public or higher, indicating stronger scal governance system

workarounds, creating islands of digitalization that reactive and retrospective. procurement systems. In 2026, the Ministry of Finance en
scal reports and asset disclosures, the landscape architecture, while massive procurement irregularities machine-readable. whereas Pakistan, Bangladesh, and Sri Lanka cluster
su ers from a weakness in prioritizing disclosure over introduced a Fiscal Risk Monitoring Framework for PPP and healthcare audit fraud revealed weak cost-control the bottom with scores between 45–48.

Table 1: GovTech Maturity Comparison: Pakistan vs. Global Average actual accountability, further hampered by limited projects, disclosing Rs. 472.3 billion in liabilities and systems. Audit enforcement remains ine ective, with Th

Index Pakistan Global Avg Pakistan Global Avg citizen-friendly reporting. guarantees, with plans for a national dashboard to 75 percent of recommendations unimplemented due Pakistan’s Performance Gap Indenti ed 20
ex
strengthen oversight. However, gaps remain: no

2022 2022 2025 2025 2. Digital Fragmentation: Although digital updated PEFA assessment since 2012, an Open Budget to the lack of real-time oversight. This gap contributes • Without synchronized improvements in legislative
GovTech Maturity Index (GTMI) 0.535 0.552 0.679 0.589 governance systems like e-PADS have expanded, the Index score stuck at 45/100 with missing citizen. to mounting losses in state-owned enterprises and the and audit oversight vu
unchecked growth of circular debt, now at Rs. 5.2

re
Core Government Systems Index 0.431 0.575 0.688 0.619 data remains trapped in "islands of digitalization" that Focused documents and audit reports published with trillion. Development spending is also chronically • Gains in transparency alone may be insu cient to
lack integration, creating a signi cant gap for a
(CGSI) centralized, AI-enabled, real-time scal data platform. long delays, limited accessibility, and weak follow up, underutilized, re ecting manual and fragmented foster long-term institutional accountability. e

Public Service Delivery Index (PSDI) 0.823 0.649 0.832 0.657 3. Audit Inertia: Despite broad institutional coverage, with only about 25 percent of recommendations monitoring. Collectively, these cases show that • Wide gap in Governance Readiness Index between
implemented.
Pakistan and leading Asian countries

Digital Citizen Engagement Index 0.361 0.449 0.51 0.474 the audit function remains stuck in a cycle of delayed, In the IMF's November 2025 Governance and Pakistan’s core scal challenge is the absence of in

on
integrated, real-time intelligence, underscoring the
(DCEI) retrospective reporting and poor implementation of Corruption Diagnostic Report, several issues were need to shift from retrospective auditing toward • De ciencies in transparency, audit mechanisms, o

governance frameworks

Government Technology Enablers 0.524 0.536 0.686 0.607 recommendations, highlighting the absence of identi ed, including that weak audit and oversight AI-driven continuous scal governance. al
continuous auditing and AI-based anomaly detection.
Index (GTEI) structures place approximately Rs 40 trillion in federal • Need for structural reforms. re

4. Predictive De ciency: While frameworks like the public funds at signi cant duciary risk. an
ICMA’s Chartered Management Accountant, May-Jun 2026 47