Alright.

Here I'm prepending $HOME/dir to PATH, and executing a program named "program name", which happens to be in /home/anneli/dir (i.e. the path I prepended):

$ pwd
/home/anneli
$ ls -F ./dir/
program name*
$ cat dir/program\ name
#!/usr/bin/env perl

print "It works!\n";
$ cat eg.pl
system('env', "PATH=$ENV{HOME}/dir:$ENV{PATH}", 'program name');
$ perl eg.pl
It works!
$
[download]

I hope this helps. We do the necessary expansion of HOME and PATH on our side, before sending them through to the (non-expanding) multi-argument system call.

Anne