2 Oct 2015
Internal controls over programmatic activities were assessed as being generally effective

An audit by the Office of the Inspector General of grants to Pakistan concluded that while internal controls over programmatic activities are generally effective, there is considerable room for improvement in implementation arrangements, financial management, and procurement and supply chain management.

The audit was conducted in 2015. A report on the audit was released on 21 September.

With respect to implementation arrangements, Pakistan faces challenges because while programs are implemented at the national level, health care delivery is the sole responsibility of the provinces.

According to the OIG, inadequate financial management controls, weak oversight by the internal audit function, delays in recruiting key positions, and unreconciled cash advances resulted in unsupported expenditures totaling $2.4 million.

The OIG noted instances of non-compliance with procurement policies. Suppliers were not always competitively selected, the contracts signed had no clear implementation plans and the implementation of the activities under the contracts was not monitored. The OIG said that “non-compliance with the policies on procurement may result in the program not getting value for money for transactions amounting to about $3 million.”

The OIG said that stock management and storage conditions at the storage facilities it visited had varying levels of standards for good storage practices, and that controls over the distribution of commodities were inadequate. The OIG warned that this could lead to drug resistance and loss of confidence in the commodities, thus impacting program effectiveness.

The Secretariat has agreed to implement several actions in response to the OIG’s findings. For example, the Secretariat will develop a financial control plan for the portfolio, with milestones and timelines. The plan will include measures to strengthen internal financial controls; analysis of the unsupported expenditures; and suggestions for a way forward to deal with the instances of non-compliance identified.

In addition, the Secretariat agreed to review the instances of non-compliance with procurement policies and provide the OIG with an analysis of value-for-money obtained. “Based on the findings of this report and the Secretariat’s analysis,” the OIG said, “the Secretariat will finalize and pursue, from all entities responsible, an appropriate recoverable amount.”

The OIG told GFO that its investigation unit is looking more deeply into the audit findings, in particular the non-compliant expenditures.

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