PESHAWAR (Dunya News) - The Khyber Pakhtunkhwa Health Department's Human Capital Investment Project (HCIP) faces failure due to financial irregularities, unnecessary expenses, recruitment of ghost employees and administrative incompetence, according to an audit report.
The project launched with the assistance of World Bank in March 2021 has collapsed as financial irregularities worth Rs16 billion have emerged in Rs24 billion project.
The contract of the officer, who highlighted the corruption and irregularities, has been cancelled.
The project was initiated in March 2021, following approval by the World Bank Board, under the former government’s slogan of “investing in people instead of roads.”
The initiative covered four districts, Peshawar, Nowshera, Swabi and Haripur, with the objective of improving primary healthcare delivery.
However, complaints of financial mismanagement, unnecessary expenditures, ghost appointments and weak oversight soon surfaced, prompting a formal audit of the project.
According to the audit and monitoring reports, large-scale violations of procurement rules and financial regulations were detected.
Contracts for the reconstruction of 158 buildings damaged in the 2022 floods were allegedly awarded to two favoured companies, in violation of rules that prohibit multiple contracts to a single firm.
Overpricing in construction and repair works caused an estimated Rs7.8 billion loss to the national exchequer.
Despite being outside the project’s mandate, Rs1 billion was spent on family planning medicines and supplies without competitive bidding.
Hospital furniture, medical equipment and solar energy systems were procured from the open market at prices up to ten times higher than approved rates, resulting in an estimated Rs2 billion loss.
The audit further revealed that around 700 ghost employees were recruited on wages below government-approved standards, with no verifiable records available. Payments exceeding Rs510 million were allegedly made under ghost employment.
In another major irregularity, a preferred firm was hired through a manipulated process and paid Rs200 million, the report states.
Records for Rs7.8 million worth of OPD receipts could not be produced.
Medicines worth over Rs570 million were purchased for hospitals without any formal demand, with no evidence of their utilization.
Despite large-scale procurement, no proper storage facilities were arranged; medicines were reportedly stored in girls’ hostels and even parking areas.
Additionally, more than Rs30 million was allegedly misappropriated under fuel and miscellaneous expense heads, while certain officers received extra allowances amounting to crores of rupees.
The report also highlighted losses caused by non-deduction of sales tax from consultant firms and individuals, as well as irregular recruitments.
In a controversial move, instead of implementing the audit recommendations, authorities reportedly removed the Monitoring and Evaluation Expert who highlighted the irregularities.
His contract was terminated without prior notice, while no action has so far been taken against officers identified as responsible in the audit findings.
The revelations have raised serious questions about transparency, governance and accountability within the provincial health sector, particularly in donor-funded projects meant to improve public welfare.
Despite the gravity of the findings, officials named in the audit report have yet to face disciplinary or legal action, further intensifying concerns over institutional oversight and misuse of public funds.