Huge account flaws in donor-funded projects

CAG raises 160 audit objections involving Tk 1,745cr in 4 years, Tk 819cr in power sector alone

Shakhawat Liton and Rashidul Hasan

The office of Comptroller and Auditor General has raised around 160 objections involving over Tk 1,745 crore in foreign-funded projects with around half the amount against anomalies in the power and energy sector.
It raised the objections while auditing the accounts of four fiscal years from 2002-03 to 2005-06 when the BNP-Jamaat-led alliance government was in power.
The audit reports placed in parliament Tuesday show 29 objections against over Tk 819 crore only in the power, energy and mineral resources ministry. The ministry was mired in allegations of corruption and irregularities in implementing power projects.
According to the audit reports, around 95 foreign-funded projects were taken under 14 ministries in the previous years.
The 13 other ministries are primary and mass education, environment and forest, agriculture, education, fisheries and livestock, women and children affairs, LGRD and cooperatives, communications, water resources, planning, post and telecommunications, health and family welfare, and commerce.
The office of Comptroller and Auditor General (CAG) has blamed the irregularities and financial loss on lack of effective plans, violation of government financial rules and expenditures beyond project proposals.
The CAG is empowered by the constitution to audit and report on public accounts of the republic and all courts of law, and all authorities and officers of the government.
Detecting irregularities like payment without approval and imaginary purchase, the CAG recommended complying with rules in purchasing, appointing consultants and keeping all expenditures within the project proposals. It also recommended determining the irregularities and take necessary steps.
"Government auditing standards, audit code, audit manual and existing rules and regulations were properly followed while conducting the audit on the accounts of the foreign funded projects," Mohammad Zakir Hossain, director general of Foreign Funded Project Audit Directorate, said in the preface of the audit report of FY2005-06.
The parliamentary standing committee on public accounts will examine and dispose the objections.
PAYMENT WITHOUT APPROVAL
During the auditing, the CAG found that a company named Arab Construction was paid additional Tk 13.15 crore against the original work order of Tk 9.83 crore for the work in the 210MW Siddhirganj power project funded by Russia.
In response to the audit objections, the project office claimed that the additional payment was made for extra work.
The audit findings say the extra work was assigned to Arab Construction without floating any tender. But the project office claimed that it did not comply with the formalities to expedite the project work and save the government money.
The audit report says the cabinet purchase committee approved the payment of the additional amount.
LOSS OF TK 676 CRORE
Auditing the accounts of fiscal years 2003-04 and 2004-05 in the Siddhirganj project, the CAG found that the Tk 548.17 crore power station was scheduled to go for production by 1999 but the timeframe for its construction was extended up to June 2003, which increased the expenditure to Tk 1,080.72 crore. The time was further extended up to June 2005, which resulted in an increased expenditure of Tk 1,273.91 crore.
According to the report, the government incurred a loss of Tk 676.35 crore because of this delay.
IMAGINARY PURCHASE
Auditing the accounts of fiscal years 2002-03 and 2003-04, the CAG revealed an instance of imaginary purchase of computers, computer hardware, five vehicles and iodine tasting kits spending Tk 7.50 crore from a foreign funded project under the health ministry.
The project office, however, claimed that it had published the tender notice for the purchase in a newspaper.
The audit team found newspaper clippings of the tender notice at the project office. But, interestingly, it did not find any tender notice published in the said newspaper on that day.
The audit report says the audit team even examined the list and addresses of the suppliers but did not find any authenticity of those. The report recommended taking stern actions against those involved in the purchase.