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Audit report findings

$10bn SAP plagued with corruption, malpractices

Ikramul Haq

ISLAMABAD: Despite the third party validation undertaken by the Auditor-General's special cell, the procurement of goods and supplies as well as recruitment for the $10 billion Social Action Programme continues to be plagued by corruption, irregularities and malpractices.

The latest report prepared for the period September 1998 to June 1999, shows that only 62 percent of cases met the criteria and procedures for recruitment of staff, 50 percent in procurement and supplies where money was involved, and only 30 percent of offices had adequate systems of monitoring absenteeism in offices, schools and health units set up under the social action programme.

Under the third party validation (TVP), the Auditor- General's office conducts scrutiny of cases of site selection, recruitment and procurement in education, health, population welfare, rural water supply and sanitation. It also examines the system of monitoring staff absenteeism in education, health and population welfare departments.

Since 100 percent examination of the delivery system is not feasible, nor possible, the TPV exercise is based on sampling in each sector.

According to a press release of the SAP monitoring and evaluation cell of Auditor-General's office, the review cases extended to the whole country.

A sectorwise analysis of the findings reveals that the auditors reviewed 137 cases of recruitment at the national level. Of these, 85, i e 62 percent, met the critical criteria and procedures were complied with.

In procurement, the auditors reviewed 1,720 cases, which included 932 cases of supplies, 779 of civil works and nine cases of consultancy. Based on categories, 1,428 cases were of less than $25,000 category, 275 were in the $25000 to $200,000 range, nine cases ranged in the $200,000 to $300,000 category and eight were above $300,000 category.

In terms of compliance, 867 cases (about 50 percent) met the strict criteria and were found valid. However, the press release did not mention the percentage in respect of the amount involved.

In respect of site selection for schools, health units, rural water supply and sanitation scheme, 1,039 sites were selected for review. Of these, 838, ie 81 percent met the minimum criteria.

With regard to compliance of criteria for monitoring absenteeism, the auditors checked 529 offices but found that only 157 offices, ie 30 percent had adequate systems of monitoring absenteeism.

It may be mentioned that without third party validation by the Auditor General's office of SAP expenditures , the donors do not advance funds for SAP.

Under an agreement between the Government of Pakistan and the international donors, the Auditor General has to submit the financial audit report by December 31 and Third Party Validation Report by March 31 every year.

The financial audit report submitted by December 31, 1999, showed that more than 11 percent of Social Action Programme (SAP) expenditure during 1998-99 has been put under audit observations, say the report of the Third Party Validation carried out by the Auditor General's office.

It says that out of a total expenditure of Rs 42,515 million, over Rs 4,743 million has been put under audit objection. This means that the money spending was either irregular, without financial sanction or misspent or misused.

The breakdown is as follows: SAP expenditure amounting to Rs 1,420 million in the Punjab, Rs 1,689 million in Sindh, Rs 538.133 million in NWFP and Rs 338.582 million in Balochistan has been placed under audit objection. The report contains objections to expenditure in the Prime Minister's Programme for family planning and primary health care, Islamabad Capital Territory, Northern Areas, FATA and Azad Kashmir amounting to Rs 756.64 million.