MoC refuses to allow third party audit of EDF

Ministry of Commerce (MoC) has refused to allow third party audit of Export Development Fund (EDF), fearing massive irregularities in utilisation of precious national resources, despite pressure from the Ministry of Finance (MoF), well-informed sources told Business Recorder here on Thursday.
The issue has recently been discussed by the EDB Board presided over by the Senior Minister for Commerce, Makhdoom Amin Fahim wherein a number of projects worth millions of rupees were cleared for implementation .
"Regarding ''third party evaluation of EDF utilisation'' as desired by the Finance Division, the Board observed that the accounts of EDF are regularly audited by the Auditor General of Pakistan as provided in the EDF Act. Furthermore, TDAP is responsible for monitoring of expenditure incurred from the fund pool as per financial rules of EDF. Thus, third party evaluation of EDF utilisation'' which is neither covered by the EDF Act nor EDF financial rules, is not required," the sources added.
The Export Development Fund (EDF), established in 1991 to support export-oriented industries, has allegedly been massively abused and distributed to some blue-eyed organisations and individuals using the head ''''miscellaneous expenditures'''', sources told Business Recorder.
The Federal Cabinet, in its meeting on May 30, 1991, had decided that an ''''Export Development Surcharge (EDS), equivalent to 0.254 percent of the exports value will be levied with effect from July 1, 1991 and that the proceeds of the surcharge should be transferred by the government to EDF for distribution among various export associations for development of export-oriented projects.
However, there is a general complaint from different associations that EDF is being given to those associations which have ''cordial relations'' with the Ministry of Commerce.
According to sources, a detailed discussion was held in the EDF Board meeting on suspending release of funds by the Finance Ministry. The Board members argued that Export Development Surcharge (EDS) collected by the federal government is in fact exporters'' money and the entire receipts of EDS collected in the preceding year must be transferred to EDF in the following year as provided in the EDF amendment Act, 2005.
For implementation of the Act, the Board took the following decision: (i) Commerce Ministry should expedite its efforts to make such arrangements that all EDS receipts are transferred directly to EDF without crediting to the consolidated fund of the federal government and ;(ii) Commerce Minister who is also Chairman of the Board, should take up the matter with the Minister for Finance, Dr Abdul Hafeez Sheikh for release of the remaining amount pending with the Finance Division according to EDF( amendment) Act, 2005.
The sources said, Board members were also of the view that Secretary Finance should be invited in person in the next meeting, so that he should be briefed about the problems being faced due to non release of funds.
It is pertinent to mention here that Finance Ministry had approved an amount of Rs 15 billion for the three years'' Strategic Trade Policy Framework (STPF) in 2009, but according to the Commerce Ministry, Finance Division has released only one billion rupees so far which was source of embarrassment for the top brass of the ministry, the sources concluded.