Misuse of public funds-II: Marauding through 12 projects with billions misspent

Huge funds from 12 development projects under Local Government Engineering Department (LGED) have been stashed aside through bending rules governing the country's financial discipline, insiders say.

The department, which is entrusted with implementing great many development works under local government, has misspent Tk 4.59 billion from the projects by not depositing a substantial amount of the project funds with government treasury in disregard of a binding provision, they add.

Sources have said the LGED has not deposited acquired funds as management-support expenditure or services charge or professional fee from the 12 projects. Rather, the money was "misused" for LGED Bhaban (building) expansion vertically, constructing residential building, purchasing cars and by transferring funds from one project to another with impunity.

The state's supreme auditing institution -- Office of the Comptroller and Auditor General (CAG) -- has found such financial irregularities under these LGED projects, official sources say.

As stated in the audit findings, the LGED authorities did not deposit acquired funds worth Tk 4.45 billion as its service charge and professional fees between the year 2004 and 2020 from the 12 projects with the public exchequer.

Another amount of Tk 10.08 million was allegedly misused procuring two luxury jeeps beyond provisions in the development project proposal (DPP).

The auditors have found that the LGED spent 51.91 per cent of funds instead of the 22-percent limit from the service charges of the projects. "It is a clear violation of the finance ministry's circular, ECNEC instructions," says the audit report.

The 12 impugned projects are: PEDP-3, setting up of 1500 primary schools, 12 PTI institute installation, Primary Education Development project, Government Primary school re-construction and rehabilitation, Demand-based government primary education development, demand-based newly nationalised schools, PEDP-4, Reaching-out of school children, Proxy means testing administration, Bangladesh applied nutrition research and training institute and Construction of upazila, and regional server station for electoral database projects.

The demand-based govt. primary school development project and demand-based govt. newly nationalised primary school development project authority lent Tk 130.65 million to PEDP-4 project "violating" the DPP and public financial management rules, the audit report also reads.

The LGED was the implementing agency on behalf of different ministries for the 12 projects.

The CAG auditors said the LGED had spent the management-support expenditure or service charge without appropriations approval from parliament.

According to government rules and regulations, public funds are not allowed to be deposited into an account of a commercial bank.

However, it was learnt that the project authority had not only spent the money indiscriminately, a portion of the funds was deposited into the LGED Chief Engineer's own bank account.

The LGED authorities bought two cars from Navana Limited by diverting money from the service charges, which is supposed to be deposited with the public exchequer.

"Misappropriating Tk 17.72 million worth of funds, the department built residential quarters for the officers and staffs of the LGED."

The LGED had also spent Tk 490.20 million from the funds to pay wages and salary to the manpower recruited without approval from the authorities concerned.

And the LGED had not deposited unutilised Tk 17.32 million from two projects rather spent those for different purposes like fuel purchase, car maintenance, stationery, and VAT payments.

The auditors have also found that the LGED paid bills to the contractors and consultants for different goods and service procurements without deducting VAT and taxes.

"The government has been deprived of millions of takas for the above-mentioned reasons," the CAG report says.

Chief Engineer of the LGED Sheikh Mohammd Mohsin told the FE that they had been working for education ministry's projects for long. "It's true that there were some audit objections for those projects. But after long discussions, many of those are settled."

The chief engineer adds: "We have deposited the unspent funds to the government exchequer. But those funds which had already been utilised for procuring logistical goods and some other purposes within the framework were shown as public expenditures.

"Actually I am not aware of details at this moment about those audit objections," Mr Mohsin told the FE.

When contacted, Chairman of the Parliamentary Standing Committee on Public Accounts Dr Rustam Ali Farazi told the FE that they were scrutinising all the CAG reports. "Gradually we will discuss the findings of the CAG office. If it is possible to resolve from our end, we will do it.

"And if we find big corruption and anomalies, we will recommend the line ministry to take action. For big graft we will forward the report to the Anti-Corruption Commission for taking action," says Dr Farazi.

Former Planning Secretary Pradip Ranjan Chakrobarty told the FE that violation of procurement law and public financial management should be handled strictly.

The Planning Commission and Implementation Monitor-ing and Evaluation Division (IMED) should also check and monitor the audit reports in every financial year of the project cycles to check the misappropriation of public tax money," says Mr Chakrobarty, who was also former IMED secretary.

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