Another national organization goes down the drain


Following the path of many national organizations and state owned setups, the Trust for Voluntary Organizations (TVO), an indigenous grant-making facility created in 1990 following an agreement between the governments of Pakistan and the United States of America to establish a Special Development Fund (SDF), is slowly but surely dying an unnatural death due to bureaucratic neglect, misappropriation of funds and cronyism.
A source at TVO told Pakistan Today that after the allegations of massive corruption surfaced, a delegation of prominent citizens from Sargodha recently met Chairman Public Accounts Committee (PAC) Nadeem Afzal Gondal and requested him to order an immediate inquiry into corruption and financial mismanagement of TVO’s grant funds. Nadeem also has been elected from Bhalwal, Sargodha. The ministry had also ordered an inquiry into the scam but the report has not yet been made public by TVO board chairman. The board chairman is an owner of a fried chicken outlet, while 80 percent of the TVO funds are being spent on overhead and only 20 percent go to projects, it has been learnt reliably.
When it was created, the US government agreed to provide USD 30 million in balance of payments support in lieu of the GoP providing at least Rs 520 million for a private sector company to carry out the purposes of the Special Development Fund (SDF) agreement.
Begum Nusrat Bhutto graced the founding board as its chairperson. She was succeeded by Begum Zari Sarfraz, Barrister Shahzad Jahangir and Azam Khan. Board members, during the early years included highly accomplished people like Abdul Sattar Edhi, Asma Jilani, Akhtar Hameed Khan, Shoaib Sultan Khan, Syed Babar Ali and Shahzada Alam Munnoo. However, these days, it seems cronyism has replaced professionalism.
Detailed interaction with some of the TVO officials and relevant documents have revealed that TVO’s performance is marred by corrupt practices committed by the TVO officials while every board member is being paid Rs 10,000 honorarium against each meeting held in violation of TVO rules despite the fact that the organization is a charity body and runs mostly on foreign grants.
TVO is governed by a board comprising of 10 private sector members and two ex-officio members representing ministry of finance and economic affairs division. The prime minister appoints the private members who have distinguished themselves in their areas of professional expertise.
“However, due to diminished interest of successive governments in strategic role of the TVO, members with less experience and professional expertise were inducted in the TVO board. Though Begum Nusrat Bhutto was the founding chairperson of the TVO, the incumbent chairman of the TVO board, Sajjad Hussain, brings with him an experience of running a fried chicken outlet in a rural town of Sargodha to lead this prime institution,” said an official requesting anonymity.
When contacted, Sajjad Hussain admitted corruption in the TVO affairs and said that a newly-appointed chief executive officer (CEO) of TVO had committed irregularities of Rs 3.5 million within two months of his appointment and his contract had been terminated due to the same on recommendation of economic affairs division.
He conceded that two years back when he had taken over the TVO board, 80 percent funds were being spent on overhead and only 20 percent were spent on projects. However, he claimed, he was successful in bringing the 80:20 ratio down to 68:32 in year 2011 and the same had been brought to 51:49. However, he said he could not support his claim with a documentary proof as the evaluation report of the TVO would be compiled in a month. He further admitted that each board member was being paid Rs 10,000 for each meeting, stating that if money was not paid, no one would like to remain a member.
“You see all boards have such provisions and TVO is not a distinction. Moreover, other than ten members appointed by PM, we also pay to two ex-officio members who are nominated by EAD, finance ministry,” he said. This is pertinent to mention here that the ministry officials get their salary as well but are also being paid the money for attending each meeting. TVO’s mission speaks of women development. However, TVO did not make a comprehensive and coherent strategy to achieve that. In fact, TVO with just three women staff members out of a total of 118 illustrates lack of focus. Most TVO partner NGOs do not have any regular source of income, they have dry periods between projects. There are no financial sustainability plans of most such NGOs. Most of these NGOs are one man shows, with little institutional capacity.
Some of the stitching centers don’t even exist. One such stitching center was set up in Khanewal by a board member. There are schools funded by TVO where teachers have not received salary for the last eight months since the TVO funding ended. Hundreds of hand pumps installed by TVO have been reported missing in the field. None of the employees charged for pocketing money with fraudulent means has been fired. A TVO official said the institution had decided in early years in the interest of policy continuity that one third of the board members should retire every year. This staggered retirement arrangement does not exist anymore. “However, nine out of the ten members of the current board have been appointed on the same date and all would retire at the end of August 2013 at the same time. This will leave TVO with a leadership vacuum and turn it into a chicken without a head,” he said. The source said that during the course of its expansion, TVO’s overhead-to-program cost ratio was reversed from 20:80 to 80:20, meaning that 80 percent of the funds would be spent on overhead while only 20 percent would go for projects. “TVO’s annual income is Rs 90 million out of which its overhead expenses amount to Rs 70 million and it is left with Rs 20 million for development assistance. Currently, TVO operations are entirely dependent upon income from its endowment investment (now Rs 755m),” the source added. TVO’s success in resource mobilization critically depends on reducing its overhead expenses. TVO established an Endowment Fund of Rs 520 million under Special Development Fund. Subsequently, Rs 662.5 million were received from European Union. However, at present, TVO’s Endowment size is Rs 821.77 million.
“In 2010, that annual income was Rs 102m; however, TVO operating costs consumed Rs 82 million of that income. In TVO, the operating cost is about 77 percent of the budget, leaving just 23 percent for the program costs. That means that on average, there would be funds available for just 1 to 2 NGO project grants at each of the 20 regional offices. TVO’s concern for women empowerment is discerned by the fact that it has just three women staff members, out of a total of 118.” Another official told that during 2006-11, TVO funded 220 NGO projects which equals to 40 projects per year and two projects per year per TVO regional office. “Genuine community participation is very weak in all TVO funded projects. During the past five years some of the 20 TVO regions were not visited even once by any staff from the head office.”
The official said no review, coordination and planning meetings were held between the head office and regional staff and no staff training was held either. “Regional staff, even in distant places e.g., in Turbat or D I Khan, requires head office permission each time to make field visits. At the regions, after accounting for vehicle maintenance and staff pick and drop costs, there is little vehicle running allowance left for field visits.” With two projects per year and no transport budget, one can imagine how effectively TVO’s humongous work force is being used. While Pakistan Poverty Alleviation Fund with a grant fund of 46 million dollar maintains one office, TVO with annual grant size of 0.3 million dollars maintains 20 offices. Officials say that the TVO funded project feasibility and planning is weak and infrastructure project sustainability is compromised by usually no formal system of O&M (operation and maintenance). “Other projects, like stitching centers, health centers, schools, often suffer from not having sufficient income to cover costs once the TVO project has ended (six months to a year); their operations and quality suffer. Serious allegations of fraud against TVO board members and employees have been reported by former employees who dared raise their voices against rampant corruption in TVO.”