In Bangladesh, public works and projects are undertaken to create tangible assets which result in the creation of drainage, irrigation and dams, railroads, roads, highways and bridges and ports and buildings. The goal is to achieve the necessary infrastructural development to promote economic growth and the alleviation of poverty.
Various types of public works and projects are undertaken by the government. These include irrigation, water supply, power development, construction and road maintenance.
The government from time to time spells out the priorities and policies to be implemented. Criteria are then fixed as a guide to subsequent investment.
Feasibility studies are carried out which contain some minimum information of general nature i regarding the projects, preliminary analysis of alternatives, market analysis, estimation of capital and operating costs and finally financial analysis of the project.
The project approval process is a very lengthy one. It is initiated by the administrative ministry with the preparation of a Project Proforma (PP) which goes through various ministries and divisions, viz. the Ministry of Finance - Planning, Implementation, Monitoring and Evaluation Division (IMED), Executive Committee of the National Economic Council (ECNEC) and finally the National Economic Council (NEC) headed by the Prime Minister.
Smaller projects are usually funded by the government from its own resources, but projects which involve major investment are generally undertaken with foreign assistance or grants. Projects of the first type are based on local budget provisions and for the second type, donor agencies are contacted by the Economic Relations Division of the Ministry of Finance. In the case of foreign-aided projects, the implementing authority is given sufficient financial scope for the smooth and effective implementation of the project.
The Project Director, appointed by the government, heads the organisation of a particular project. A number of officers including some technical personnel are engaged in the organisation of the project.
5.2.1. Technical personnel prepare the detailed design and bills of quantities for the project.
5.2.2. Tender documents with conditions clearly stating the terms of tender are prepared by the project implementing authority, with assistance from tender document specialists.
5.2.3. On the basis of tender documents, tender is invited. Sometimes with foreign-aided projects, some sort of prequalification of contractors is done to select technically and financially qualified contractors. Having receipt of tenders, tender are subsequently evaluated on the basis of the terms and conditions of contract.
5.2.4. The contract is awarded to the lowest evaluated bidder among those technically and financially qualified.
5.2.5. Supervision of the project is carried out by full-time personnel of the project concerned.
5.3. With the progress of the project, running bills are paid to the contractors for the work done. Suitable accounting records are maintained by the accounts section of the project. The progress of the project and the amount disbursed are reported to the ministry or division concerned. For internal control, internal audit is conducted by the accounts section of the project which carries out the preliminary audit in the approval of accounts for payment.
5.4. The quality control aspects are strictly monitored by the foreign-aided project consultants entrusted with the particular job. Without their certification, no bills of the contractor are paid.
5.5. Projects are monitored by the relevant administrative ministries or divisions at regular intervals. Necessary adjustments or modifications are approved by the monitoring agencies.
5.6. In large scale projects, construction machinery and equipment are procured either internally or imported by the government or the contractors concerned.
5.7. Construction materials are generally procured by the contractors concerned. The government is discouraging projects in which materials are supplied by the proj ect authority.
A number of government agencies are involved in the public works implementation process. These are the following:
With these organisations, public works and projects are managed and controlled by the government.
In the operation, maintenance and utilisation of public works, the responsible directorate is directly involved. With the completion of the project, the project authority is abolished, with the responsible directorate looking after the next stage of maintaining and operating the particular project. Revenue collected from the project is deposited in the Treasury and the process of cost-recovery commences.
In Bangladesh, there is no competition by the public sector with private contractors for public works and projects. Thus, the government does not own companies which compete for such work.
Large-scale projects involving foreign funding are subject to the approval of the donor countries or institutions involved. In some cases, the project is approved by the government by arrangement with the donor concerned. However, all foreign-aided projects are ultimately audited so that accountability to the donor is ensured.
Audit has full mandate in exercising its functions. Its independence is protected by the Constitution of the country. Having constitutional backing, audit has access to all records, documents, cash, stores, vouchers, stamps or any government property in the possession of any person in the service of the Republic.
The objective of audit is to see whether existing financial rules and regulations are properly followed in any financial transaction. Financial irregularities are brought to the notice of the authority concerned thereby reducing the possibility of future irregularities. Though conventional audit can only ensure the financial propriety, not the effectiveness of the programme appraising the value for money invested, audit aims to achieve economy, efficiency and effectiveness in public financial administration.
There are two directorates involved in the audit of public works and projects, viz. Directorate of Audit (Works) and Directorate of Audit (Foreign-aided Projects). In exercising their auditing functions, each directorate formulates its own annual Audit Plan and arranges its execution by segmented programmes over the whole plan period. The programmes are assigned to the audit teams who conduct test audits on the accounts of the auditee organisation and report their findings to audit headquarters which supervises the various field units through internal reporting systems nd frequent visits of the senior audit officers. The auditing system now in use in Bangladesh is mostly voucher-based. Audit teams scrutinise vouchers, documents and books of accounts and form an opinion as to their adequacy and compliance with rules and procedures. Any deviations are brought to the notice of the auditee organisation. If the comments made or actions taken by the local audit office appears satisfactory, the objection is settled on the spot. However, in the event of an unsatisfactory reply, the observation is included in the draft report of the audited entity. This draft report is examined at the audit head office and then sent to the auditee organisation for comments or corrective action. On receipt of a satisfactory reply, the various paragraphs are subsequently settled. But audit observations of more serious financial irregularities are subject to further scrutiny for confirmation of the issues raised with a view to including them in the annual report of the Auditor-General, The Public Accounts Committee of Parliament makes final recommendations as to the action to be taken in connection with the irregularities and lapses pointed out in the annual report.
Audit staff of the Comptroller and Auditor-General have unrestricted access to all records, documents, cash, stores, vouchers, stamps or other government property in the possession of any person in the service of the Republic. Regularity and propriety audits are conducted but there are no audits of construction design, cost estimates or value for money. Extension of audit to these other areas has been constrained by the shortage of technically qualified personnel. Local contracts and associated contract payments are subject to audit by the Comptroller and Auditor-General. However, with international contracts, the relevant documents are examined by the Ministry of Law and National Board of Revenue - not by the audit office.
Public works and projects are subject to audit by the staff of the Comptroller and Auditor-General. General public works are audited by Directorate of Audit (Works) and foreign-aided projects are subject to audit by the Directorate of Audit (Foreign-aided Projects). Financial audits are mainly carried out manually, but there is some use of computers.
15.1. Normally, audit tests are conducted in the audit of public works and projects. Such tests involve the physical examination and verification of the books of accounts, vouchers and ledgers. However, there is no actual physical verification of the tangible assets produced by the various projects.
15.2. Because audits are conducted after the close of the financial year, there is insufficient time for the full coverage of the relevant books of accounts, vouchers and ledgers. Such audits are therefore more in the nature of partial or segmented audits.
15.3. The shortage of trained manpower is a problem in the conduct of audits. Since public works and projects are dependent on engineering and technically skills, associated audits require special staff trained in auditing knowledge and methods. In addition to trained auditors, the audit department is not equipped with technical experts such as engineers and architects. Dependence on the technical expertise of the auditee organisation tends to be a major problem in some audits, coupled with the general shortage of computers for auditing work.