KPK Health Project Hits Major Funding Shortfalls

The Khyber Pakhtunkhwa Health Department’s Human Capital Investment Project (HCIP), launched with the help of World Bank assistance in March 2021, has faced failure due to financial irregularities, unnecessary expenses, recruitment of ghost employees, and administrative incompetence. According to an audit report, the project’s Rs24 billion budget has seen financial irregularities amounting to Rs16 billion.

The HCIP covered four districts—Peshawar, Nowshera, Swabi, and Haripur—and aimed at improving primary healthcare delivery. However, complaints about mismanagement, overexpenditure, ghost appointments, and weak oversight emerged soon after the project’s initiation in March 2021, following approval by the World Bank Board.

The audit found numerous violations of procurement rules and financial regulations. Contracts for the reconstruction of 158 buildings damaged during the 2022 floods were awarded to two favored companies, despite a prohibition against such multiple contracts to a single firm. The report also revealed overpricing in construction and repair works, causing an estimated Rs7.8 billion loss to the national exchequer.

Rs1 billion was spent on family planning medicines and supplies without competitive bidding, while hospital furniture, medical equipment, and solar energy systems were procured from open markets at prices up to ten times higher than approved rates, resulting in an estimated Rs2 billion loss. The audit also revealed that around 700 ghost employees were recruited with 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, as detailed in the report.

Records for Rs7.8 million worth of outpatient department (OPD) receipts could not be produced; over Rs570 million worth of medicines were purchased without any formal demand, with no evidence of their utilization. Despite large-scale procurement, no proper storage facilities were arranged; medicines reportedly stored in girls’ hostels and even parking areas.

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, authorities reportedly removed the Monitoring and Evaluation Expert who highlighted the irregularities without prior notice. His contract was terminated, with no action taken against officers identified 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.