Financial irregularities increases by about Nu 3.5bn 

Financial irregularities increases by about Nu 3.5bn 

Fraud, corruption and non-compliance to laws, rules and regulation irregularities decreased

According to the annual audit report (AAR 2021-22) published by the Royal Audit Authority (RAA) released recently, financial irregularities have increased by about Nu 3.5bn compared to the previous year.

From the summary and analysis of audit findings from the 327 reports, the total financial irregularities are about Nu 7.5bn. The financial irregularities according to the AAR 2020-21 was about Nu 4bin.

In different significant cases by category, from the total irregularities of Nu 7,525.498mn, shortfalls, lapses and deficiencies amounted to Nu 5460.71mn. Fraud and corruption irregularities amounted to Nu 26.442mn while non-compliances to laws, rules and regulations irregularities amounted to Nu 2,038.575mn.

The financial irregularities from the shortfalls, lapses and deficiencies in the previous fiscal year was Nu 1,544.106mn. The irregularities increased by 33.98 %. 

However, fraud and corruption irregularities decreased by 2.97 % and non-compliances to laws, rules and regulations irregularities decreased by 31.01 %.

Deputy Auditor General, Minjur Dorji said that the RAA’s findings of increased irregularities is a good implication which signify that accountability and responsibility are fixed.

He said, “the irregularities may increase for one-two years but it will reduce significantly after that with the transformation of system fixing the accountability.”

As per the AAR 2021-22, irregularities from the manipulation and tampering of documents amounted to Nu 0.404mn and Nu 0.245mn in other forgery and tampering documents from the fraud and corruption category.

The highest irregularities are in mis appropriation of cash and revenue which amounted to more than Nu 11mn followed by tax evasion amounted to more than six million. Irregularities from the malpractices and abuses amounted Nu 4.536mn.

The least irregularities were from the fictitious payment and misappropriation of public resources which amounted to Nu 0.188mn and Nu 0.047mn while there are no irregularities from deception and coercion in this category.

RAA observed that under fraud and corruption category, Jigme Dorji Wangchuck National Referral Hospital (JDWNRH) accounted for Nu 8.441mn and the Regional Revenue and Customs Office (RRCO), Phuentsholing with Nu 3.354mn.

The highest irregularities as per the previous report was in cases under malpractices and abuses which accounted for Nu 122.149mn, representing 91.84% while the least was in fictitious payment, which accounted to Nu 0.297mn.

In non-compliances to laws, rules and regulations, irregularities from non-compliances to financial norms accounted to Nu 903.270mn and non-compliances to procurement of works, goods and services norms accounted to Nu 659.352mn.

Financial irregularities from non-compliances of human resource management amounted to Nu 8.287mn and Nu 467.677mn from non-compliances to laws, rules and regulations.

Under this category, RRCO, Phuentsholing accounted for 17.93% and the Department of Road’s Regional Office in Sarpang with 11.20%.

Irregularities from non-compliance to financial norms increased by about Nu 5.3bn. Non-compliance to procurement norms decreased by about Nu 1.2bn comparing to AAR 2020-21.  The cases under non-compliance to procurement norms category accounted for Nu 1.9bn representing 82.58% as per the AAR 2020-21.

In the category of shortfalls, lapses and deficiencies includes those irregularities arising from improper property management, uneconomical operations and non-cooperation.

The issues of shortfalls, lapses and deficiencies are reported based on the materiality with potential to undermine the economic and efficient functioning of agencies.

In this category irregularities from RRCO, Phuentsholing amounted to about Nu 2.8bn which accounted for 52.45 % and from Punatsangchhu-I Hydroelectric Project Authority amounted to about Nu 6.9bn with 12.76 %.

Irregularities from shortfalls and uneconomical operation according to AAR 2020-21 was 88.84%. Deficiencies on property management and non-cooperation amounted to Nu 216.795mn and Nu 0.062mn respectively.

The budgetary fraud and corruption irregularities as per the AAR 2021-22 is Nu 21.804mn with non-budgetary amounted to Nu 4.337mn.

The non-compliances to laws, rules and regulations budgetary irregularities amounted to Nu 1818.46mn million while non-budgetary amounted to Nu 220.159 million.  The shortfalls, lapses and deficiencies budgetary irregularities are Nu 3528.931mn while non-budgetary irregularities are Nu 1,911.850mn.

Meanwhile, the AAR 2020-21 found irregularities from the budgetary bodies was about Nu 6.4bn while the non-budgetary bodies was about Nu 3.3bn.

Sangay Rabten from Thimphu