Bangladesh Bank (BB) has found Investment Corporation of Bangladesh (ICB), which is entrusted with operating the Equity and Entrepreneurship Fund (EEF), misappropriating travel and entertainment allowances, a BB report says.
Besides, a four-member investigation committee of Bangladesh Bank prepared the report which also revealed that cases have been filed against six out of eight ICB firms who have not repaid the EEF loan and there are misappropriation in the client service and additional service allowances. A four-member BB investigation committee, headed by Deputy General Manager of BB and EEF unit head Nirod Kumar Sarkar, launched the investigation into EEF authority after a report was published in Bangla daily 'Samakal' on March 4, titled 'Not a single penny loan disbursed but 22 crore taka spent as office expenditure".
Investment Corporation of Bangladesh (ICB) has been involved with the operation of the BB funds since 2009.
ICB authority has spent 22 crore taka for travel and entertainment expenses of the staff and officials of ICB and EEF, according to the investigation report.
The report says that the entertainment allowance amounted to 13,03,959 taka during October 2019 to December 2019 period while the authority spent 1,80,960 taka for General Manager and Assistant General Manager (AGM) of the BB. It also spent 1,11,23,099 taka for arranging meetings.
Where EEF unit is permitted to spend only 580 taka per person, it cost 700 taka for the training of entrepreneurs, lunch package and other purposes. ICB invoiced an abnormal catering bill for arranging training and conference of EEF units. Furthermore, total allocation for foreign trip was 28,51,200 taka for the October and December 2019 quarter but ICB spent 98,82,562 taka for foreign trips but there is no valid documentation shown by EEF authority in support of such trips.
Besides, ICB did not maintain assets and inventory register despite EEF unit and BB warning in this regard.
Report finds misappropriation of funds in the purchase of stationery and printing materials by ICB. In January 2019, ICB spent 18.81 lakh taka from budget allocation of 46.65 lakh taka in that fiscal year.
Spokesperson, also Executive Director of BB, Md. Serajul Islam said the authorities concerned will take necessary steps against illegal practice. According to investigation committees’ 14-point recommendation, the EEF unit and ICB will strictly comply with rules and regulation of contract between Bangladesh Bank, EEF unit and ICB for smooth operation of the fund. The policy level decision will be taken with prior approval from the BB EEF Unit.
ICB needs to abstain from spending money beyond the allocated budget and must obtain prior approval of BB on the contrary.
In addition, ICB has to maintain asset and inventory registers for the non-moveable assets of EEF. EEF authorities will adhere to financial reporting standards and submit three months’ financial statement to Bangladesh Bank.
The central bank itself was the implementing authority of the fund till 2009. Later, the operational function of the EEF was transferred to the ICB.
The central bank, since then, has been involved with formulating fund management policies and monitoring investment of the fund.
The BB introduced EEF fund with 100 crore taka to support new ventures with potentials in the fiscal year 2000-2001 and the EEF authorities disbursed a total of 1606.56 crore taka in 1026 projects of 2063 entrepreneurs since then.
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