A framework built in layers
Compliance in Bangladesh's public sector rarely rests on a single rule book. Ministries and divisions follow the government's financial rules and delegations of financial power. Statutory corporations and autonomous bodies also follow their own enabling laws. State-owned companies are incorporated under the Companies Act 1994 and file with RJSC, and those that are listed must meet BSEC requirements as well. Projects funded by development partners add the conditions of their financing agreements on top. Finance officers often need to satisfy several of these at once. A compliance calendar that lists each requirement, its source and its owner is a simple tool that helps keep them all in view.
Procurement requirements
Public procurement is governed by the Public Procurement Act 2006 and the rules made under it, with most tendering now carried out through the national electronic government procurement system. Procuring entities need to keep track of revisions to the rules, approval thresholds, procurement methods and complaint procedures, and to make sure that evaluation committees document their decisions fully. Contract management after award, including variations, extensions and payment certification, is where many audit observations arise, and it deserves the same discipline as the tender itself.
For projects financed by development partners, the partner's own procurement guidelines may apply alongside or instead of national rules. Confirming which rules govern each contract at the planning stage prevents disputes and ineligible expenditure later.
Financial reporting and audit
The Comptroller and Auditor General is the constitutional auditor of government accounts, and audit observations raised through that process need timely responses and settlement. Many donor-funded projects must also submit audited project financial statements within deadlines set in their financing agreements, and late or qualified reports can delay further disbursements.
State-owned enterprises are expected to prepare financial statements under IFRS and report to their parent ministry and the Finance Division. Where accounts have fallen behind, a structured catch-up plan is usually needed before other improvements can take hold.
Tax and VAT obligations
Public bodies are withholding entities under the Income Tax Act 2023 and the VAT and SD Act 2012, deducting income tax and VAT at source from payments to suppliers and contractors. Errors in rates, in deposit timing or in the certificates issued to suppliers can create liabilities for the paying office and disputes with contractors. A monthly reconciliation of withholding deposits to payment records prevents most of these problems.
RRH's Internal Control & Compliance Review work assesses compliance with procurement, financial and project rules. Our VAT and Customs Services team reviews withholding and VAT processes, and our Risk Consulting team helps public bodies set up internal audit that keeps pace with changing requirements.
Related RRH services: Internal Control & Compliance Review, VAT and Customs Services and Risk Consulting.