Audit Report (2008-2013): PPP government accused of misusing Rs 4.782 billion uplift funds

Auditor General of Pakistan (AGP) has disclosed that previous government of Pakistan Peoples Party (PPP) released Rs 4,782.837 million development funds for 1,691 schemes to former MNAs and notables who were not authorized to utilize these funds. Special Audit Report for 2008-2013 said that the allocation of development funds under the Peoples Works Programme was meant only for sitting MNAs and Senators.
The audit report states that allocation and release of funds for the schemes to Members of Provincial Assembly, former MNAs and notables were not covered under the rules and procedures governing Public Sector Development Programme (PSDP). The development schemes identified by MPAs were required to be met from provincial development grants instead of federal development grants, it said.
Audit, therefore, held that the allocation, release and expenditure of Rs 4782.837 million was irregular and unjustified and this unequal distribution of development funds occurred due to non-adherence to the prescribed rules and procedures governing the PSDP projects and due to block allocations in the budget. The report said that these block allocations were later used to select, approve and release funds on discretionary basis.
In the discussion of Departmental Accounts Committee (DAC), the department explained that the funds were released by Cabinet/Finance Division on the prime minister's directives for execution of schemes identified by MPAs and notables.
The audit report said that Pak-Public Works Department (PWD) is merely an executing/implementing agency and is unconcerned whether the sponsor is an MPA or a notable. The DAC observed that primarily Peoples Works Programme comprised schemes identified by parliamentarians (sitting MNAs and Senators) and as it was a policy/systematic issue, it may be placed before Public Accounts Committee for decision. The audit also observed that five Pak-PWD divisions accepted altered bid rates against 103 Peoples Works Programme's schemes valued at Rs 1.511 billion and awarded the schemes through post bid negotiations.
Under the Public Procurement Rules 2004, no bidder is allowed to alter or modify his bid after the bids have been opened, however, the procuring agency may seek and accept clarifications to the bid that do not change the substance of the bid. The audit report identified that bid tampering varied from altering the rates of items within the subhead to overall bid amount in percentage terms. It further found that in all the schemes where bid tampering was done, the rates were reduced and this state of affairs reflects poor estimation and rate analysis.
"Audit holds that bid tampering and manipulation of award process was a serious violation of Public Procurement Rules," the AGP said. The audit report also noted that in 36 Pak-PWD divisions works valued at Rs 1.99 billion were awarded to different contractors who were ineligible as they were not registered with the Pakistan Engineering Council.
The Peoples Works Programme was initiated by Prime Minister Yousuf Raza Gilani to provide relief to the people through the provision of basic social services and utilities at the grassroots level and the schemes for it were identified by parliamentarians.