About the Author
A.H.M Shamsur Rahman
Director General, Directorate of Education, Culture and Religious Affairs Audit Bangladesh
He worked as DG, Post Telecommunication Science and Technology Audit Directorate and has vast experience in Government Accounting and in all three types of audit i.e. Compliance audit, Financial audit and Performance audit.
Qualification-Post Graduate Diploma in Information & Communication Technology (ICT) from the University of Rajshahi, Bangladesh, Master of Government Financial Management from the University of Ulster, Northern Ireland, UK, Bachelor degree in Science with Honors and Master of Science in Statistics from the University of Dhaka, Bangladesh
He has authored a book titled “Fundamental and Applied Concept of Government Accounting”.
Introduction:
Poverty alleviation is still one of the important challenges in the world with diversified dimensions. Poverty reduction, poverty relief, or alleviation, is a set of measures, both economic and humanitarian, that are intended to permanently lift people out of poverty. Measures are those that raise, or are intended to raise, ways of enabling the poor to create wealth for themselves as a conduit of ending poverty forever. Poverty occurs in both developing countries and developed countries. While poverty is much more widespread in developing countries, both types of countries undertake poverty reduction measures. Numerous social safety net programs and public spending on social protection, including social insurance schemes and social assistance payments, continue to act as tools of poverty alleviation in many of the developing countries across the world.
Global Poverty Trends:
Reducing global poverty was a key aim of the Millennium Development Goals (MDGs). The target for the MDGs was to reduce the number of people living in extreme poverty by half between 1990 and 2015. Ending poverty now stands at the core of the Sustainable Development Goals(SDGs), launched in 2015; the first of its seventeen goals is ‘no poverty by 2030’. Tracking global progress on international poverty tells us how close the world is to achieving this aim. The global share of people in extreme poverty (those living on less than $1.90 a day) has been decreasing consistently since 1990, when it included over 35% of the world population, to less than 10% in 2015. The number of people living in poverty as measured by the higher international poverty lines of $3.20 and $5.50 increased between 1990 and 1999, but has fallen since then. In 2015, over one-fifth of the global population lived below $3.20 and almost a half lived below $5.50 a day(Bangladesh Economic Review, 2019).
Poverty Situation in Bangladesh
Poverty alleviation is one of the major indications of the socio-economic development of a state and society. As a result of collective efforts of the government and non-government sectors, Bangladesh has achieved tremendous development in poverty alleviation during the last few years. According to ‘SDGs: Bangladesh Progress Report- 2018’ the poverty rate is 21.8 percent in 2018 whereas it was 56.7 percent in 1991. The government has set up a target to reduce the poverty to 18.6 percent at the end of the 7th Five Year Plan (2016-2020). Though, Bangladesh is ahead of many developing countries in poverty alleviation, still approximately one-fifth of total population of the country lives below the poverty line and hence poverty reduction is a major concern on the policy and development issues of the country. As a result of poverty reduction, a progress is evident in Bangladesh’s position in World Human development Index which has reached from 139 in 2016 Index to 136 in 2018 Index.
Measurement of Poverty Incidence in Bangladesh:
The first Household Expenditure Survey (HES) in Bangladesh was conducted in FY1973-1992. HES’ were accomplished by Food Energy Intake (FEI) and Direct Calorie Intake (DCI) method. According to this method, a man having calorie intake of less than 2,122 kilo-calories per day is considered as absolute poor. Conversely, a man having an intake of below1805 kilo-calories is measured as hardcore poor. Bangladesh Bureau of Statistics (BBS) has adopted ‘Cost of Basic Needs (CBN)’ for HES for the first time in 1995-96 and renamed the title of the survey as Household Income and Expenditure Survey (HIES). The same method applied in the HIES’ in 2000-2016. This method also considered non-food consumption items for compiling poverty index.
Trends of Poverty in Bangladesh
The latest HIES was conducted in 2016. According to the result of this survey, poverty trends in Bangladesh are stated below:
| 2016 | 2010 | Annual Change (%) (2010 to 2016) | 2005 | Annual Change (%) (2005 to 2010) | |
|---|---|---|---|---|---|
| Head Count Index | |||||
| National | 24.3 | 31.5 | -4.23 | 40.0 | -4.67 |
| Urban | 18.9 | 21.3 | -4.68 | 28.4 | -5.59 |
| Rural | 26.4 | 35.2 | -1.97 | 43.8 | -4.28 |
| Poverty Gap | |||||
| National | 5.0 | 6.5 | -4.28 | 12.8 | -6.3 |
| Urban | 3.9 | 4.3 | -1.61 | 9.1 | -7.93 |
| Rural | 5.4 | 7.4 | -5.12 | 13.7 | -5.46 |
Source: BBS HEIS 2016
Initiatives taken for poverty alleviation in rural areas in Bangladesh
Bangladesh has experienced an outstanding achievement in poverty alleviation during the last decade with dynamic and courageous activities of government. The 7th Five Year Plan has been targeted to reduce poverty rate at 18.6 percent by 2020. In order to attain the desired target of poverty alleviation, the government provides special priority in social safety net programs. For this purpose, Bangladesh has already formulated ‘National Social Security Strategy (NSSS)’. Currently, the government is working for acquiring poverty and hunger related targets to the Sustainable Development Goals (SDGs). Like other developing countries Bangladesh has also undertaken various projects /programs/ activities for poverty alleviation in rural areas.
Audit of program/project/scheme for poverty alleviation in rural areas:
The programs, projects, schemes and activities are undertaken by different organs of the government involving large amount of public money. But in most of the developing countries and under developed countries these allocated funds are misused, misappropriated and to some extent embezzled. Lots of political and social interventions are evidenced in implementing these sorts of programs. Moreover, these programs mostly being cash/kind distribution focusedthe likelihood of fraud and embezzlement is very high. Therefore, auditors must be very keen about transparency, accountability, efficiency and effectiveness of these sorts of programs. Internal control system and risk in the business process of these types of programs are very crucial and significant areas for auditors. So, auditors have immense scope to contribute by assessing and evaluating the system. The management takes measure to improve of the system based on the audit report which describes and identifies the loopholes of the system. For instances, “cash distribution in hand” to different poor people have been replaced by new system such as “Cash distribution to bank account “of incumbent. Media, citizen including auditors have raised the issue of cash embezzlement. Consequently, the government has responded to these risk areas and replaced the “hand cash payment system” by “payment to incumbent through bank account”.
In many cases, the amount of cash and food staffs allocated for poor widow, distressed old, pregnant women are not distributed in order. The intermediary group takes away some portion of it for their own or for their relatives. Many food staffs have been found in the house of rural based political leaders which were supposed to be distributed to poor people. In this context, the audit evidence can be obtained by using Survey and Focus Group Discussion (FGD) methodology. Thus auditors plan varies based on the diversified context of the programs/schemes for poverty alleviation in rural areas. Apart from compliance audit, auditors have broader scope to conduct performance audit, which ultimately improve the overall system and minimize the risks of fraud.
Objectives of the Audit:
The basic objective of audit of poverty alleviation is to ensure the accountability and transparency in spending different funds for eradicating poverty in rural areas. However, ‘audit of poverty alleviation’ can also be understood in a broader sense, as a continuous process of public vigilance and aid to management for improving their system. The major objectives of the audit of the programs for poverty alleviation are:
- To analyse whether the poverty reduction projects, programs, activities and schemes are in line with the government long term and mid-term economic policy or not.
- To analyse whether the budget allocation are sufficient in line with the government policy of poverty reduction.
- To evaluate whether subject matter of these programs (activities, financial transactions and information) are in compliance with applicable authorities.
- To evaluate the effectiveness and efficiency of these programs.
- To evaluate the internal control system of these programs and identifying the risky areas.
- To evaluate whether funds are really helping in eradicating poverty in rural areas
- To assess the physical and financial gaps between the needs and resources
- To create awareness among beneficiaries and providers
- To increase efficiency and effectiveness and ensure transparency
- To sensitize citizens and legislatives to demand accountability.