WB axe hangs over funding of health project as massive fraud unearthed

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A Z M Anas
A state audit watchdog has uncovered massive fraud by government agencies involving Tk 12 billion in what is touted as the world's biggest health and population programme.
The Foreign Aided Project Audit Directorate (FAPAD), an agency responsible for auditing donor-funded projects, said it has found anomalies in more than 80 cases since the 2006 financial year in the Health, Nutrition and Population Sector Programme (HNPSP), funded by scores of donors led by the World Bank.
The US$ 4.0 billion project, undertaken in 2005, was designed to help improve the health and nutrition status of Bangladeshi people, while ensuring the sustained supply of modern contraceptives including oral pills and condoms.
Faced with implementation lag, health officials acknowledged that the government extended the timeline of the programme by one year, originally scheduled for completion in 2010.
Nearly two dozens of donors including the World Bank, the UK's Department for International Development (DFID) and the European Commission partnered with the government to co-finance the programme.
Officials said the World Bank, which is managing the programme, threatened to cut funding unless the government responds to the audit objections by July this year.
A source involved in the programme said no government agency was able to come up with responses to the audit objections, although two months have already elapsed.
They noted that even the Washington-based lender itself identified irregularities in 21 cases involving more than Tk 400 million over the last three fiscal years.
The biggest fraud was detected in the 2007 fiscal, with the Institute of Public Health (IPH), the Directorate of Family Planning, the Central Medical Store, and the Directorate General of Health being suspected to have committed financial irregularities in a string of components involving Tk 11 billion.
A senior health ministry official resented the audit report, saying most of the audit objections are based on what he called flimsy grounds. "But some may be genuine-I don't know," he added.
The official said the Health Ministry would take necessary steps to resolve the audit objections.
An official of the Directorate of Family Planning said the FAPAD detected irregularities in procurement of clinical contraceptives from a European nation, which was imported by the UN Population Fund.
"The items were imported by the UNFPA. That's why, we could not show the money receipt," the official said. "The FAPAD was not ready to listen to us."
"We had nothing to do with the procurement," he said.
In the fiscal 2008, the FAPAD found irregularities in programmes such as health education, nutrition improvement, research, essential service delivery, maternal and child health, and TB and leprosy control.
Together, the government agencies are suspected to have wasted an unknown amount out of Tk 500 million allocated in 2007-08, more than half of which was detected by the Washington-based bank.
Out of US$ 4.0 billion costs, officials said development partners agreed to fund about US$ 1.37 billion for the programme over five years and some donors are also ready to fund extension of the programme.
The World Bank remains the biggest financier of the programme, followed by the UK's Department for International Development (DFID) and the European Commission (EC).
The Washington-based lender committed US$ 320 million in loan for the programme over five years, already extended up to 2011.
As of June 2008, according to government figures, the government was able to spend nearly US$ 1.0 billion, facing a challenge for spending the rest of the amount over the next two years.
Officials with donor agencies say the Health and Population Sector Programme (HPSP), the predecessor of HNPSP, also failed to utilise the amount earmarked for the programme.
"This has become a regular phenomenon. This is an example of the government's lack of capacity to utilise money," a donor representative said.