Financial discrepancy: Audit of Universal Service Fund demanded
Telecom operators allege that fund is being used illegally for political gains.
KARACHI:
It seems that no one can beat our bureaucrats when it comes to spending someone else’s money to appease the sitting government. Telecom operators’ apprehension about the misuse of their hard-earned money by Ministry of Information Technology (MoIT) is the latest attack on one of the highly taxed sectors of the economy.
Telecom companies contributed Rs117 billion, almost one-third of its revenues, to the national exchequer last year; it may have fallen short of the government’s expectations though as the latter, allegedly, spent Rs120 million out of a telecom fund for political gains.
MoIT has spent a huge amount out of the Universal Service Fund (USF) on projecting the achievements of the government in electronic media during last two months, stakeholders said in a written complaint to IT and Telecom Minister Raja Pervaiz Ashraf.
They also asked Ashraf to conduct an inquiry about the illegal use of USF and take action against those responsible for the same; a source familiar with the matter told The Express Tribune.
Telecom operators – each of whom contributes 1.5% of their gross income to USF – are the sole sponsor of the company. USF is meant for the expansion of telecom network to the remote areas – which do not make a business case for telecos.
The aforesaid amount, according to the source, was spent without any budget allocation and approval of the USF’s board of directors. Competitive bidding procedure and Public Procurement Rules were not followed either while awarding the contract to a single ad agency, the source added. This act is contrary to the Public Procurement Regulatory Authority Ordinance, 2002; the source said.
The money spent on media campaign, the source said, was in violation of section 33 (B) (2) of Pakistan Telecommunication (Re-organization) (Amendment) Act, 2005, which states:
“The USF shall be utilised exclusively for providing access to telecommunication services to people in the un-served, under-served, rural and remote areas and other expenditure to be made and incurred by the Federal Government in managing USF.”
The USF’s last year’s advertising budget was about Rs5 to 6 million, the source said, but this year they spent Rs120 million and that, too, on political campaign – causing uneasiness among telecos whose money was wasted in media campaign for political purposes.
USF currently has about Rs30 billion in its account; the telecos annual contribution to the fund is about Rs3 to 4 billion, the source said. This money – which would be needed for the expansion of telecom network to remote locations following the 3G auction – is likely to be used for political campaigns as general elections are nearing, the source said.
Another telecom source, who wished not to be named, also confirmed that the money spent on the media campaign was not approved by the board. He, however, said USF has about Rs40 to Rs45 billion its account while the money used in the ad campaign was higher than Rs120 million.
Despite several attempts – via phone and email – to contact the minister; secretary and other MoIT officials, no contact could be established to find out if any inquiry has been launched in this regard.
However, a government official – when contacted on his cell phone – said the media campaign was approved by the Prime Minister, then chairman of USF board.
The chairman can’t approve this without the approval of the board, the official said, requesting he should not be quoted. Representatives of the telecom sector are also on board, he said, they were part of the decision.
The use of funds depends upon the board that owns the fund, the official said, adding if the board desires to use it for advertising, it can. However, it is done in accord with the rules and regulations governing USF; he added.
The official refused to talk about the amount used for the media campaign, saying it was not in his knowledge.
Published in The Express Tribune, May 17th, 2012.
It seems that no one can beat our bureaucrats when it comes to spending someone else’s money to appease the sitting government. Telecom operators’ apprehension about the misuse of their hard-earned money by Ministry of Information Technology (MoIT) is the latest attack on one of the highly taxed sectors of the economy.
Telecom companies contributed Rs117 billion, almost one-third of its revenues, to the national exchequer last year; it may have fallen short of the government’s expectations though as the latter, allegedly, spent Rs120 million out of a telecom fund for political gains.
MoIT has spent a huge amount out of the Universal Service Fund (USF) on projecting the achievements of the government in electronic media during last two months, stakeholders said in a written complaint to IT and Telecom Minister Raja Pervaiz Ashraf.
They also asked Ashraf to conduct an inquiry about the illegal use of USF and take action against those responsible for the same; a source familiar with the matter told The Express Tribune.
Telecom operators – each of whom contributes 1.5% of their gross income to USF – are the sole sponsor of the company. USF is meant for the expansion of telecom network to the remote areas – which do not make a business case for telecos.
The aforesaid amount, according to the source, was spent without any budget allocation and approval of the USF’s board of directors. Competitive bidding procedure and Public Procurement Rules were not followed either while awarding the contract to a single ad agency, the source added. This act is contrary to the Public Procurement Regulatory Authority Ordinance, 2002; the source said.
The money spent on media campaign, the source said, was in violation of section 33 (B) (2) of Pakistan Telecommunication (Re-organization) (Amendment) Act, 2005, which states:
“The USF shall be utilised exclusively for providing access to telecommunication services to people in the un-served, under-served, rural and remote areas and other expenditure to be made and incurred by the Federal Government in managing USF.”
The USF’s last year’s advertising budget was about Rs5 to 6 million, the source said, but this year they spent Rs120 million and that, too, on political campaign – causing uneasiness among telecos whose money was wasted in media campaign for political purposes.
USF currently has about Rs30 billion in its account; the telecos annual contribution to the fund is about Rs3 to 4 billion, the source said. This money – which would be needed for the expansion of telecom network to remote locations following the 3G auction – is likely to be used for political campaigns as general elections are nearing, the source said.
Another telecom source, who wished not to be named, also confirmed that the money spent on the media campaign was not approved by the board. He, however, said USF has about Rs40 to Rs45 billion its account while the money used in the ad campaign was higher than Rs120 million.
Despite several attempts – via phone and email – to contact the minister; secretary and other MoIT officials, no contact could be established to find out if any inquiry has been launched in this regard.
However, a government official – when contacted on his cell phone – said the media campaign was approved by the Prime Minister, then chairman of USF board.
The chairman can’t approve this without the approval of the board, the official said, requesting he should not be quoted. Representatives of the telecom sector are also on board, he said, they were part of the decision.
The use of funds depends upon the board that owns the fund, the official said, adding if the board desires to use it for advertising, it can. However, it is done in accord with the rules and regulations governing USF; he added.
The official refused to talk about the amount used for the media campaign, saying it was not in his knowledge.
Published in The Express Tribune, May 17th, 2012.