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The Interior Ministry has found “systematic collusion” and “misuse of commune funds’ development projects” in “a lot of provinces” which had similar irregularities in the controversial solar street lights case in Kampong Chhnang province.
“As we all know, in recent months there was the case regarding the eight million riel [$2,000] solar light poles which went viral on social media. The General Department of Administration did not only [conduct inspections] in Kampong Chhnang but also [other] provinces and found that the situation is no different from Kampong Chhanng,” said Suos Prathna, director-general of the General Department of Administration.
Last month, three senior officials were demoted from their ranks for their alleged involvement in the solar street-light procurement scandal.
During the Conference Work Achievement of the 5th Commune/Sangkat Councils on September 7, he described irregularities in the implementation of local projects as “systematic collusion” related to bidding documents, fraud documents, false data, misuse financial procedure and public procurement. It included “excessively inflated prices ” from previous bidding, and unauthorized budget additions concentrated on items with high unit costs, which drove project prices “significantly above market rates”.
Prathna requested sub-national leaderships as well as provincial governors to pay attention to the improvement of development project funds, and warned to take legal action if necessary.
“If this situation remains [unchanged], the Interior Ministry under the leadership of His Excellency Sar Sokha will take legal action against officers involved in the collusion,” Prathna said.
Minister Sokha said challenges in the delays in budget resource transfers have forced some commune or sangkat administrations to wait until the third quarter budget allocation to secure sufficient resources to proceed with project development.
“I think 24 years is long enough, it is time to strike at the root of the problem. There is involvement of both national and sub-national levels when we talk about timely budget transfers, especially ensuring the proper implementation of bidding on road construction, and local development within their commune,” Sokha said.
In 2002, each commune was allocated $5,000 but it has since dramatically increased and now stands at $200,000 for each commune.
About 2,200 projects are completed annually at the local level, such as road repairs, constructing small bridges, schools, health centers, small-scale irrigation, as well as providing service and promoting infrastructure, enhancing livelihoods and reducing poverty.
Mar Sophal, policy and law program and CSOs’ working budget group manager of NGO Forum, said there are four core factors that could have contributed to collusion and document falsification. They comprise the lack of local capacity and independent oversight, delayed post-audit controls, budget growth and development demands, and the absence of whistleblower protection.
“Rapid budget increases paired with lagging capacity and integrity among officials created lucrative opportunities for exploitation,” he said.
“The fact that certain communes were able to add funds to contracts that had already been awarded without undergoing new procurement procedures, and inflated contract price above market value show loopholes in local checks and balances,” Sophal said.
The government should tackle issues, such as enforcing open contract standards, strengthening social accountability, and establishing legal measures and penalties.
San Chey, executive director of the Affiliated Network for Social Accountability (ANSA), stated that public financial management reforms must be carried out openly, with relevant stakeholders monitoring public budgets.
He called on authorities to take strict action against irregularities, particularly fraud and corruption.
“We have observed that some companies win bids in some locations despite having limited capacity, and create many companies to manipulate the bidding process to gain profit and use the funds to bribe project owners,” Chey said.
Some scandals involve contractors who have damaged their credit while carrying out commune projects, but instead of being blacklisted, they simply set up new companies or register under different names, while remaining the actual operators.
