OAG report finds financial rules widely violated in mobilizing Covid-19 funds in provinces, local bodies

BP Aryal

  • Read Time 4 min.

Kathmandu: The Office of the Auditor General (OAG) Report 2021 has clearly stated that the provincial and local governments violated the financial rules and regulations, promoting misuse of Covid-19 funds.

The 835-page report was published on last Friday, indicating that irregularities of Covid-19 funds were rampant in federal, provincial and local governments.

Among several cases, the Office of Chief Minister in Province 1 spent Rs 20 million to purchase necessary equipment for establishing 50-bed Koshi Covid Hospital including minimum of 10 ICU beds. Additionally, the Public Health Office, Morang this year sent purchased materials worth Rs 3.5 million and lab equipment worth Rs1.2 million, and the Health Ministry sent equipment worth Rs 7 million. “There are no records kept of these amounts worth Rs 11.8 million,” mentions the report on page number 596.

Similarly, Karnali Province Hospital purchased a PCR machine from Tribhuvan University Teaching Hospital Kathmandu at a price of Rs 3.2 million without a bill and specifications against Public Procurement Regulation 2064BS (111). “Teaching hospital is not a seller and an old machine could be exchanged,” the report said. “This matter should be probed into.”

Province 1 released a budget of Rs 45 million to establish a clinical laboratory in the fiscal year 2076/77BS but it is yet to come into operation due to a delay in equipment purchase. Likewise, Gandaki Province released Rs13.3 million to a hospital to buy medical equipment including ventilators but they are yet to be purchased, according to the OAG report.

Manang District Hospital spent Rs 4.9 million to set up an oxygen plant and Rs 9.7 million for operating ICU with ventilators while Parbat district hospital spent Rs 16.9 million to establish ICU with ventilators and other required equipment. However, they have not operated yet due to claimed crunch of manpower.

In grants promised to farmers, they would be given 12 percent relief grants to the loans up to Rs 500,000 but there is no record of grants deposited in the farmers’ bank account nor aimed objectives furnished yet as evidence, says the report.

Likewise, Agriculture Knowledge Center, Jhapa in Province 1 deposited Rs 9.5 million in a deposit account to distribute relief to the farmers while the Social Development Ministry of Province 1 has the remaining Rs 12.5 million received from the provincial public security fund. However, they are yet to return the unused amount.

Sudurpaschim Province is yet to update the status of Rs 213 million given to 88 local bodies for establishing isolation centers and relief distribution, Rs14 million given to 44 bodies under the province and Rs 204 million given to the Social Development Ministry. Similarly, Rs 98.5 million deposited but unused in 31 local bodies given for quarantine and isolation centers are yet to be returned, the report explains.

Seven provincial governments allocated Rs 2.38 billion for prevention, control and treatment of Covid-19. Of it, they have shown expenses of Rs 1.5 billion on relief materials, quarantine and isolation, risk allowance, health equipment and exemption of interest in agriculture loans. They have shown Rs 878.6 million unused, according to the report.

They attempted to manage quarantine and isolation centers and hospitals after an outbreak of the pandemic instead of taking care of pre-preparedness. Quarantine centers were haphazardly operated. They were released from dispersed channels but they should have disbursed the budget through one door policy as per the rules.

However, the transparency was not maintained in releasing the budget, spending it, keeping detailed records and preparing reports as per the Public Procurement Act 2063BS, according to the OAG report. “There is an urgent need for formulating new and clear procedures and guidelines for utilizing such funds,” the report suggests.

Under the Ministry of Federal Affairs and General Administration, Gokarneshwar Municipality spent Rs 16.2 million, Suryabinayak Municipality Rs 14.7 million, and Godavari Municipality Rs 10.09 million for emergency service after March 2020. Gokarneshwar spent 9.59 million for relief materials, SuryabinayakRs 5.7 million, and Godavari Rs 10.06 million. Among them, Gokarneshwar disbursed all these amount for relief to ward chairmen but it is yet to clear out while Suryabinayak directly purchased materials worth Rs 8 million for relief, and Godavari purchased materials of Rs 10.06 million as per market rates but the quality of materials was substandard as well as lacking transparency in distribution. These municipalities dis not maintain updated records of beneficiaries.

The OAG could not carry out the audit of 59 local bodies due to the pandemic effects. The situation of other provinces and many local bodies are similar to the aforementioned cases.

The OAG finds a lack of coordination between federal, provincial and local governments while using Covid-19 funds and working in the prevention, control and treatment of the pandemic. “It needs to bring a separate purchase rule to manage the procurement procedures,” the report said.

The OAG Report 2021 indicates that a massive misuse of COVID-19 funds took place in the budget disbursed since March 2020 against exiting rules and regulations.

The Ministry of Finance allocated Rs 5.92 billion for the federal government previous fiscal year for prevention, control and treatment of Covid-19 in which the government spent Rs 4.81 billion. Additionally, the government established the Covid-19 fund in which it collected Rs 2.39 billion and it released and spent Rs 1.03 billion. In the last fiscal year, the government mobilized 512.9 million US dollars from development partners and 5.5 million from INGOs as ODA for Covid-19 management.

According to the OAG report published last week, a total of Rs 418.85 billion is an unaudited budget of the country. The arrear budget is increasing every year and it increased by 0.13 percent last year.

BP Aryal is a freelance journalist. This news is based on a fellowship program.

ncell_ad