Pays and allowances incur highest expenditure as per RAA

Last FY sees highest audit recoveries

During the last Fiscal Year (FY), a total of Nu 202.458 million (M) was recovered as audit recoveries from both the budgetary (Nu 190.264M) and non-budgetary (Nu 12.194M) agencies by the Royal Audit Authority (RAA). An additional amount of Nu 3.211M was recovered and deposited directly with the Department of Public Accounts (DPA).

According to the annual audit report 2023 released by the RAA, while irregularities in general have significantly reduced during the year despite increase in the number of audits conducted, the total audit recoveries for the year amounting to Nu 205.699M remains the highest so far. The type of irregularities observed during the period showed that there were instances of Fraud and Corruption amounting to Nu 39.605M of which Ministry of Information and Communication (MoIC) accounted for Nu 12.718M (32.11%) and Dagana Dzongkhag Administration accounted for Nu 9.213M (23.25%). Irregularities under Non-compliance to Laws, Rules and Regulations amounted to Nu 2,244.804M of which Punatsangchhu Hydroelectric Project -II accounted for 39.47% and Phuentsholing Township Development Project accounted for 21.35%. Irregularities under Shortfall, Lapses and Deficiencies amounted to Nu 555.683M of which Druk Holding and Investments (DHI) accounted for 26.25% and Punatsangchhu Hydroelectric Project-II accounted for 24.11%.

The RAA stated that the efficiency and effectiveness of control mechanisms are dependent on the monitoring and supervision of the activities that take place within the agencies. Most irregularities point towards lack of accountability and ownership of implementing agencies and officials towards the activities resulting in financial implications to the government. Additionally, implementing agencies do not take actions, as recommended in individual audit reports, to ensure that irregularities pointed out by the RAA are properly treated, officials responsible are sanctioned, and a proper system is put in place to curb the repetition of such irregularities in the future.

The RAA also noted that despite issues getting settled in court and verdicts passed, the responsible agencies fail or delay in their actions to enforce the court verdict resulting in piling up of pending issues. The RAA has provided seven recommendations to improve accountability, governance and public finance management in the country. “The RAA believes that, if all agencies collectively prioritize to resolve audit issues, act on the recommendations provided, and hold officials accountable for their actions, His Majesty’s vision of Bhutan being a ‘corruption-free’ and ‘zero-incidences of noncompliance’ can be realized,” the report highlighted.

The Annual Audit Report 2022-23 contains audited Annual Financial Statements (AFS) of the Royal Government of Bhutan (RGoB) and analysis of audit findings issued during the period. It also contains the performance of RAA for the FY 2022-23. The summary of audit findings reported are from 456 financial and compliance audit reports and one performance audit report issued between July 1, 2022 and June 30, 2023.

The approved budget of the RGoB of the FY 2022-2023 was Nu 74,807.887M which was revised to Nu 79,360.850M. The sources of revised government budget comprised of 41.84% from domestic revenue, 26.32% from grants, 24.49% from borrowings, and 0.02% from other receipts. The RGoB borrowed Nu 66,367.393M through T-bills and Nu 3,603.620M through bonds besides redeeming of Nu 75,363.898M during the year. The debt stock was reduced by Nu 6,496.505M in the liability of T-bills leaving a balance of Nu 9,050M as on June 30, 2023. The RGoB also raised Nu 8,727.508M from external borrowings including Nu 7,965.412M in cash and Nu 726.096M in kind.

Total grants received during the year amounted to Nu 14,363.319M comprising of Nu 14,093.105M in cash and Nu 270.215M in kind. The total irregularities for the period amounted to Nu 2,840.093M of which 56.12% pertained to non-budgetary agencies and 43.88% pertained to budgetary agencies. Non-budgetary agencies include Corporations and Financial Institutions, State Owned Enterprises, Non-Governmental Organizations, Civil Society Organizations, and Hydropower projects. Budgetary agencies are government organizations including Ministries and Agencies for which annual budgets are included in the appropriation bill and appropriations are made by the National Assembly.

Meanwhile, the RAA expressed satisfaction to note that the number of irregularities has started declining despite increase in number of audits conducted; a positive step towards achieving His Majesty’s Vision.

Tashi Namgyal from Thimphu