Irregularities reign supreme at agency established to combat poverty

  • The Poverty Alleviation Fund under probe for misappropriating Rs185 million

Mar 19, 2019-

Poverty Alleviation Fund, a government organisation formed 16 years ago to reduce poverty in the country, continues to witness massive embezzlement of funds meant for the poor.

In recent years, the PAF has come under public scrutiny after the Commission for Investigation of Abuse of Authority (CIAA) filed two corruption cases at the Special Court against 50 senior officials and staff of the PAF in March 2015 and April 2016. Last year too, in September, the Special Court convicted nine PAF officials, including immediate executive director Raj Babu Shrestha, of corruption.

Despite being soiled in such corruption cases, irregularities at the PAF continue to thrive. “A fresh investigation is ongoing for the last two [to] three months on the corruption allegations against senior officials at the Fund,” said CIAA Spokesperson Pradeep Koirala, without divulging details.

While the CIAA probe is ongoing, another investigation into the Fund, conducted by the National Vigilance Centre, a corruption watchdog under the Prime Minister’s Office, has exposed irregularities worth millions of rupees. According to a report obtained by the Post, possible irregularities of Rs185.96 million have been conducted by the PAF under its Infrastructure Sub Project and Income Generation programme. The NVC also found that office equipment valued at Rs41.47 million is also missing.

As far as the infrastructure sub-project is concerned, the PAF has spent Rs4.03 billion in 5,859 community infrastructure projects--including rural roads, community buildings, small irrigation projects, rural energy projects, drinking water, and sanitation projects, among others--until the fiscal year 2016-17.

The PAF claims that its projects benefited a total of 287,107 people. But NVC’s report states that the Rs100.44 million provided to 160 community organisations might have been misused, because most of the community organisations have failed to claim money for second and third instalments after receiving the first.

During a field inspection, the NVC team found that a number of projects funded by the PAF were incomplete, despite the latter’s claim that the concerned community organisations had received full payments.

For example, Mahabir Mode Nirman Sanjal and Rajaji Culvert Nirman Samudayik Sanjal, in Sunsari district, received full payment of Rs1.83 million and Rs1.75 million respectively, according to the PAF. However, the two community organisations’ projects were found to be incomplete.

The NVC report has recommended a thorough investigation be conducted to prevent possible misuse of the fund and to take action if anybody is found to have already misused the amount.

Similar is the situation in the use of fund provided through revolving fund for income generating activities of the targeted people. There is a total fund of Rs19 billion in revolving fund which is mobilised by community organisations as per the Programme Operation Directive of the PAF. There is a contribution of Rs15 billion from the fund and Rs4 billion from the community organisations.

According to the NVC report, community organisations are supposed to keep records of the use of the revolving fund to the PAF every four months. But such practice was not seen, the report states. “This may result in misuse of money in the revolving fund,” the report has warned.

According to the NVC, as many as 928 community organisations were supposed to receive Rs379.65 million from the revolving funds as per the agreement signed with PAF.

They received a total of Rs294.13 million in the first phase, but they didn’t receive the remaining Rs85.52 million from the revolving funds. This has raised question about the use of that fund, the report has said.

The report also identified irregularities in PAF’s hiring of an Indian company--Asian Heritage Foundation--to implement a programme called ‘Marketing Markets Work for the Conflict Affected in Nepal Project’, as the company was hired without following the Public Procurement Act. The Indian company was hired on August 13, 2014.

As per the contract, the PAF was supposed to pay Rs38.16 million to the company. While awarding the contract to the Asian Heritage, a single source selection process was adopted as per the World Bank’s consultant procurement guideline. This procedure is adopted only when the past works need to be continued, when there is emergency or natural disaster and when there are no other qualified contractors.

Given the lack of competition, the Indian company bagged the contract at an amount higher than the estimated cost of Rs37.87 million.

According to the NVC report, the executive director of the PAF is yet to clear the unaccounted expenditure of Rs259.2 million since fiscal year 2003-04.

The NVC has sent the report to the PMO. But the PMO is yet to respond. The NVC has also recommended further investigation from the CIAA.

“We usually receive the report from the government instantly where recommendation has been made for further investigation,” a said an official of the CIAA. “But, there is no trace of registration of this report at the CIAA so far.”

According to CIAA officials, they use such report as additional resources for its own investigation. The PMO also has not issued any instruction to Poverty Alleviation Ministry and the current leadership of the PAF.

Secretary at the Ministry Gopinath Mainali said he didn’t have any information regarding the report. “I have heard about the irregularities. This issue is dealt by the concerned agency responsible for investigation,” he told the Post.

Chhabi Rijal, newly appointed executive director of PAF, said that he has not received the NVC report on PAF and he could not comment on the matter

Published: 19-03-2019 08:26

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