Finance Minister refutes PDP’s allegation

Nu 19mn from the GRF has not been diverted to be used for my gain, says the minister

After the People’s Democratic Party (PDP) issued a press release on Thursday highlighting the misuse of the General Reserve Fund (GRF) by the Finance Minister, Lyonpo Namgay Tshering, in a press briefing yesterday afternoon, refuted the allegation made by the PDP.

“PDP is accusing me; this only proves the narrow-mindedness of the party,” said the Finance Minister, adding that it is not expected from a seasoned political party to use such blatant accusations. 

The minister said that the entire issue surfaced from the GRF and the Royal Audit Authority (RAA) in their annual audited financial statement observing that from the GRF, the Ministry of Finance (MoF) had used the fund for five gewogs under Paro dzongkhag for the construction of farm road and maintenance of irrigation channels.

“For that purpose, the audit has recommended that the MoF should have a guideline for the management of the GRF,” Lyonpo Namgay Tshering said.

According to the PDP, the GRF is a fund created for specialised needs such as during natural disasters, emergencies and for national interest works. The governments in the past have traditionally exercised great prudence in the use of the GRF. The country has therefore been served very well by the GRF during disasters, emergencies and specialised national interest projects.

“PDP is alarmed that the Finance Minister has recklessly misused Nu 19mn from the GRF to finance non critical works such as improving farm roads and irrigation channels and the construction of a lam’s residence,” states the PDP’s press release.

“In a brazen disregard to prudent financial governance, the Finance Minister has actually used the Nu 19mn to finance projects in his constituency (Dogar Shaba) in Paro. We are surprised that the Nu 19mn from the GRF is in addition to the normal Gewog budget received by the Gewogs in his constituency,” states the press release.

Contrarily to PDP’s allegation, Lyonpo Namgay Tshering asked why former Prime Minister Dasho Tshering Tobgay had used the GRF by diverting the transfer benefits for his in-country travels (PM has used around Nu 485,000 in his visits to Samtse Dzongkhag in FY 2016-17) if the governments in the past have traditionally adopted the prudence in the management of the GRF.

“Is it legal and where is prudence,” Lyonpo questioned.

“They have used Nu 30mn for monsoon restoration works from the GRF to construct a 20 bedded hospital in Haa,” Lyonpo said, adding that for this, he doesn’t have complaints because the hospital is a public infrastructure. “But I will question about the money that has been diverted from the GRF for personal travel; is it legitimate?”

According to Lyonpo, the allegations are surfacing only because of funding infrastructure under Paro dzongkhag.

Additionally, Lyonpo shared that the PDP had used Nu 5.7mn budgeted for the construction of new farm roads by diverting that fund for the procurement of vehicles. The vehicles are not public infrastructure.

“I am shocked to learn that the PDP is not considering construction of farm roads and maintenance of the irrigation channels as non-critical works. They have purchased the gift from the GRF; where is prudence,” Lyonpo said.

The minister further said that Dotey and Dopshari are not under Dogar-Shaba constituency or under his constituency.

“I want to make it clear that whatever is given as an addition will be adjusted from the overall outlay of 12th FYP of that five particular gewogs. So at any cost no gewogs will get surplus the outlay provided in the 12th FYP,” he added.

According to the PDP’s press release, the reckless action of the finance minister has breached the guidelines of the GRF usage and has now deprived the nation of a proportionate amount during the times of disaster and emergencies.

“As the Nu 19mn from the GRF has been siphoned to the minister’s constituency, it tantamount to political corruption where public finance has been abused for political gratification,” states the PDP’s press release.

However, Lyonpo Namgay Tshering said he wants to ask the PDP where the guidelines are.

“As far as I am concerned, for three years I haven’t seen the guidelines. I thought that it would be useful in practice. In the presence of the Financial Rules and Regulations (FRR), I don’t see there is a requirement of the guideline. If we have to prepare guidelines, we need to supersede the FRR or amend it,” he added.

“However, with due respect to the observation made by the RAA, in the AFS 2020-21, they have recommended the MoF to come up with the guidelines to rationalize the expenses under the GRF,” the minister said, adding that they are ready with the guidelines. 

The PDP, in view of the gross violation of budgetary guidelines, misuse of authority and political corruption, had called on the concerned agencies to correct the wrong doing of the Finance Minister and hold him accountable.

 “We urge the PMO, the opposition party, the National Council, the Anti Corruption Commission and the media to take up the matter with due seriousness it warrants and set a good precedent for future political governments and politicians for good conduct,” states the PDP’s press release.

In a similar style, the Finance Minister also urged all to see how prudently the PDP had used the GRF during their tenure.

Lyonpo explained that the reserve is a part of the budget and every year the government keeps some reserve to meet expenses for enforcing activities. 

Additionally, Lyonpo said the Public Finance Act 2016 (chapter 3, section 15-19) spells out the authority of the Minister of the Finance and the Ministry. Now based on the Act, the guidance document for the management of public resources is the FRR 2016.

Further, as per the Public Finance Act (chapter four, section 4.2 and subsequent appendix 1), the minister said that the MoF has full financial authority to re-appropriate capital expenditure from the general reserve.

“This is a power bestowed upon the MoF by the Public Finance Act and the FRR 2016,” the minister said.

Aligning and based on the consolidated request from the Dzongkhag Tshogdu, Lyonpo Namgay Tshering said that he had requested the Department of National Budget to identify a saving (if there are capital activities that cannot be taken off because of the Covid-19).

“Identify the savings and give them to respective gewogs because at the end of the day irrigation channels and farm roads are critical activities. This is a public infrastructure that is going to remain whether I re-contest in an election or not,” he said.

“I didn’t divert the money to be used for my gain; I have made this based on the request and transferred this money for infrastructure which happens to be under Paro Dzongkhag. It is not only my constituency; it also involves a few gewogs in upper Paro which are not under my constituency,” the minister added. 

Kinley Yonten from Thimphu