Inquiry finds Rs106 million embezzlement in World Bank-funded KP project, action initiated

An inquiry into the embezzlement of over Rs106 million in a World Bank-funded project in Khyber Pakhtunkhwa has held three officials responsible, including the project director, and recommended disciplinary action along with a wider investigation by anti-corruption agencies, The News reported. 

Following approval from the chief secretary, the project director has been removed, with proceedings initiated under the E&D Rules and a charge sheet issued, according to the Planning and Development Department.

The inquiry was launched after media reports on September 13, 2025, highlighted alleged financial irregularities in the Khyber Pakhtunkhwa Human Capital Investment Project.

The report found serious lapses in financial controls, including failure to conduct monthly reconciliations, weak oversight of transactions, and lack of coordination with the bank despite large fund movements. Procedures related to cheque issuance and verification were also not followed.

Investigators found that two cheque books were issued and handed over to an unauthorised individual without proper verification, enabling unauthorised withdrawals. There was no record of identity checks during these transactions.

The project director was held responsible for failing to safeguard cheque books and enforce internal controls. The finance management specialist was cited for not conducting reconciliations and failing to detect irregular transactions, while the accounts officer was found negligent in cheque verification and monitoring of financial records.

The inquiry committee has called for referral of the case to NAB, FIA and other relevant agencies for investigation into fraud, forgery and misuse of public funds.