Financial Management System for R&D Orgs

Financial Management System for R&D Orgs

Public Sector Organizations are bound to make procurement of items under Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002), of the Federal Government of Pakistan.

Under Clause 21, the Public Procurement Rules, 2004, Open competitive bidding.- **Subject to the provisions of rules 22 to 37 the procuring agencies shall engage in open competitive bidding if the cost of the object to be procured is more than the prescribed financial limit which is applicable under sub-clause (i) of clause (b) of rule 42. Under Clause 30, Evaluation of bids.- (1) All bids shall be evaluated in accordance with the evaluation criteria and other terms and conditions set forth in the prescribed bidding documents. Save as provided for in sub-clause (iv) of clause (c) of rule 36 no evaluation criteria shall be used for evaluation of bids that had not been specified in the bidding documents. Under sub clause (2) For the purposes of comparison of bids quoted in different currencies, the price shall be converted into a single currency specified in the bidding documents. The rate of exchange shall be the selling rate, prevailing on the date of opening of bids specified in the bidding documents, as notified by the State Bank of Pakistan on that day.

The procurement process dictated under the Clause 30, Sub-clause (2), the rules calls for comparison of the items on the basis of cost. Here arises the issue when the suppliers offer lower prices for the items. Lower price means lower quality of items. Animal feeds, medicines or other inputs purchased at lower prices would lead to adverse effects of the items on animals’ health, reproduction and productivity and on public health through development of drug resistance and enhanced farm expenditures. The purchase committees suffer audit paras and NAB proceedings for purchasing items with better quality with somewhat higher prices.

Under Clause 5. International and inter-governmental commitments of the Federal Government. – Whenever these rules are in conflict with an obligation or commitment of the Federal Government arising out of an international treaty or an agreement with a State or States, or any international financial institution the provisions of such international treaty or agreement shall prevail to the extent of such conflict.

Under the above clause the Consultant concludes that procurement process on the basis of PPRA Rules results in purchase of low quality animal feeds, medicines and other input supplies in the extension organizations; low quality research materials at the research organizations and low quality delayed supplies at the Universities. It hiders the smooth delivery of services by the public service organizations , lowering the trust and expectations of the people. Hence, the National Consultant FAO-UN considers the PPRA Rules as a contradiction with the interests of stakeholders of livestock value chain and under Clause 5 and suggests formulation of new rules within the following guidelines:

  1. The Rules must be simple, transparent and must ensure quick delivery of goods to the indenting person.
  2. The purchase committee for a functioning Unit of an organizing (hospital of L&DD Ext/Research Division of L&DD Res/Department of a University) must comprise 2 senior officers of the functional unit and an accessible person from the industry/civil society, with delegation of powers to purchase the desired items. The senior-most officer of the unit would work as head of the committee.
  3. The purchase committee for an Organization (Directorate General L&DD Ext/Research or Dean of Faculty of a University) would comprise three senior most officer of the organization next to the head of the organization, one member of industry/civil society and one independent auditor. The senior-most officer of the unit would work as head of the committee.
  4. An Endowment Fund would be available in an authorized bank account operated jointly by the organization/unit head and representative of the industry/civil society.
  5. Three quotation may be obtained, if required, otherwise a single quotation would be acceptable if the committee recommends.
  6. The Rules must be followed while reviewing, ordering, obtaining, and paying for goods/services.
  7. Checkpoints/steps must be minimum to avoid the complexity of the purchase process. However, the paperwork and documentation involved in every stage of the procurement process flow, must be collected and stored as hard/soft copies for reference and auditing reasons.
  8. The Funds available to the organization shall be non-lapsable.
  9. The bills shall be audited within one day in case of a Unit and 3 days in case of an organization. The bill shall be passed by the chairman of the committee within 3 days in case of a Unit and within 10 days in case of an Organization.
  10. Transparency of the process shall be monitored by an Monitoring and Evaluation Committee as a constant process. Any criminal/negligence would be notified to the head of the organization immediately. Transparency of the process would be ensured through accessibility to the relevant accountability organization, however the members would be protected from any attempt of blackmailing. No member of the purchase committee/organization would be harassed by the audit parties, NAB or senior officials/elected peoples’ representatives.