Climate aid project faces scrutiny over high consultancy spending

Planning Commission officials questioned the project’s spending priorities, citing heavy allocations for consultancy, management and travel while a relatively small share was reserved for direct assistance to climate-displaced people.

Bangladesh’s Planning Commission has declined to recommend approval of a Tk61.29 crore climate project after finding that only Tk8.10 crore, or about 13 percent of the budget, was allocated directly to beneficiaries while nearly 87 percent was earmarked for consultants, management and other administrative expenses.

The Ministry of Social Welfare project, funded by the German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), is intended to provide small business grants to 300 people displaced by climate change and improve the livelihoods of nearly 1,500 others.

According to documents from a Project Evaluation Committee meeting held on 5 June, the project was designed to run for one year and nine months in the districts of Khulna, Satkhira, Rajshahi and Sirajganj, with a total estimated cost of more than Tk61.29 crore.

The documents show that nearly Tk8.11 crore, representing 13.23 percent of the total allocation, was designated as direct grants for beneficiaries.

The remaining Tk53.18 crore, or 86.77 percent, was allocated for consultants, project management, office rent, training, travel and other administrative expenses.

The proposed consultancy costs have attracted particular attention. The project plans to hire 473 local and foreign consultants for 300 direct beneficiaries at a cost of Tk29.62 crore.

It also includes Tk3.51 crore for overseas travel and training for officials and Tk1.27 crore for domestic travel.

Another Tk10.07 crore has been allocated for project management charges while Tk3.19 crore has been earmarked for office rent.

The Planning Commission also questioned comparatively high expenditure under several other budget headings, including the purchase of information technology and telecommunications equipment.

Shah Md Helal Uddin, chief of the Socio-Economic Infrastructure Division at the Bangladesh Planning Commission and an additional secretary, said the commission had refused to recommend the project because of what it viewed as a disproportionate allocation between beneficiary support and administrative spending.

“We did not recommend its approval because a very small amount has been allocated for the beneficiaries,” he told the Times of Bangladesh.

“In contrast, significantly higher expenditure has been proposed for consultants and other sectors.”

The issue has been further complicated by information indicating that work under the project had already begun before the proposal was reviewed by the Planning Commission.

Helal Uddin said the proposal did not disclose that project activities had already started.

He added that because the initiative is financed by a foreign donor, the Planning Commission’s refusal to recommend it might not necessarily stop activities funded directly by GIZ.

The Department of Social Services, which is implementing the project, said it was not responsible for the spending structure, arguing that the proposal had been prepared in accordance with conditions set by the donor.

Md Sajjadul Islam, director of the department’s Planning and Development Wing, said the initiative was being implemented under an agreement reached through Bangladesh’s Economic Relations Division.

“This is a GIZ-funded grant project,” he said.

“The project proposal was prepared in accordance with the donor agency’s conditions under an agreement reached through the Economic Relations Division. In many cases, there is no scope to go beyond the structure determined by the donor agency.”

Sajjadul said the department had also objected to the proposed expenditure structure.

Asked why the proposal had nevertheless been submitted for approval, he said the matter should be addressed by the Ministry of Social Welfare.

Mohammad Selim Hossain, senior assistant secretary at the ministry’s Planning and Development-1 Branch, said foreign-funded projects operated under different rules from those financed by the government.

“Under project rules, a government-funded project cannot begin without a recommendation from the Planning Commission,” he said.

“However, foreign donor agencies spend their grant funds according to their own procedures or begin their activities independently.”

Selim said he could not officially confirm whether GIZ had already started implementing the project.

“However, like you, I have also learnt that they are carrying out their part of the work,” he said.

Asked why the donor would seek government approval after project activities had already begun, he said GIZ might have sought to formalise the initiative through the government’s approval process.

“As a donor agency, it may have wanted to legalise the project,” he said.

“Perhaps it wants approval through a specific process to remain protected on its side.”

Mohammad Nazmul Ahsan, joint secretary of the Ministry of Social Welfare’s Planning and Development Wing, declined to comment and referred questions to GIZ.

“You should speak to GIZ about this,” he said.

An official from Bangladesh’s Economic Relations Division, speaking on condition of anonymity, said GIZ generally spent its funds according to its own procedures.

“In some cases, there may be instructions to prepare and implement a project proposal through the relevant ministry, but this is not mandatory,” the official said.

The official added that development project proposals are prepared by the ministries concerned.

This post is republished from the Daily Times of Bangladesh.