ISLAMABAD, Nov 21: The federal government has decided to put in place special audit arrangements and procurement guidelines for the Earthquake Reconstruction and Rehabilitation Authority (ERRA) to meet a demand of donors seeking transparency and accountability in the utilization of funds.

Informed sources told Dawn on Monday that procurement guidelines would ensure that all contracts and purchase of required construction materials go through a stringent system.

The donors had demanded that all activities relating to procurement and award of contracts should be subjected to a third-party verification and parliamentary debate on a quarterly or biannual basis.

Similarly, special arrangements would be made for auditing the money to be used by the ERRA in the execution of contracts and reconstruction works.

The sources said the government had decided to use personal ledger account (PLA) for transfer of money to the ERRA to sidestep a usually cumbersome pre-audit and post-audit requirement of normal budgetary expenditures to avoid long delays in the implementation of reconstruction activities.

Legally, the PLA is not required to be pre-audited. This means that ERRA would not need to seek approval of the Auditor-General of Pakistan before release of funds from the finance ministry.

Moreover, utilization of funds could not be audited until completion of the financial year and so it was difficult to track down how the amount was being used once it was transferred to the PLA.

The donors have, however, demanded and the government has agreed as a special case to direct the ERRA for quarterly financial reporting to the AGPR to figure out how much money has been used and in what fashion. And this audit by the AGPR would be subjected to third-party verification.

This would ensure that the amount lent by the international community was being utilized in a transparent manner. And this would also ensure, for example, that the amount drawn in the name of food aid is not spent on construction of roads.

For this purpose, the UN agencies and multilateral agencies like the World Bank and Asian Development Bank would provide to the government of Pakistan a specially-designed reporting and auditing module that would be uploaded on the website for information to all and sundry.

These donors would also provide assistance out of their pledges for capacity building.

The government and the donors have agreed that these measures should be fully implemented by the time the ERRA and National Engineering Services of Pakistan (Nespak) complete their survey and feasibility studies of various reconstruction projects, the sources said.