Pays and allowances incur highest expenditure as per RAA

About 36.85% of expenditure is incurred towards pay and allowances this year

The total expenditure recorded for this year amounted to Nu 71bn of which the major share of expenditure is incurred towards pay and allowances with an overall 36.85%, according to the Annual Report of the Royal Audit Authority (RAA).

 Additionally, current grants and travel in-country represented 12.82% and 5.48% respectively during the last five years. The average share of five major current expenditures to total current expenditure for the last five FY stands at 63.13%.

 The RAA in its annual report highlighted an analysis of the financial performance of the government for five years to assess the trends from FY 2016-17 to FY 2020-21.

 There was under-absorption of the capital budget by 32.56%, following interest payment-external with 4.71%, and other personnel emoluments with 3.27%.

 The report states that a significant increase is observed in pay and allowances possibly due to the revision of the pay for civil service in FY 2018-19.

 However, a decreasing trend was observed in the expenditure on travel in-country from FY 2019-20 possibly due to the impact of the COVID-19 pandemic.

 โ€œGovernment needs to meet the cost of current expenditures from internal resources following the constitution. So, the proportion of the current expenditure to the internal revenue, the proportion of recurrent expenditure to internal revenue for the FY 2020-21was accounted for 88.94%,โ€ RAA reported.

 The RAA in its Annual Report highlighted that the major capital expenditures comprised expenditure on structure-roads, expenditure on structure-buildings, and capital grants, representing 23.62%, 22.69%, and 8.26% respectively over the five financial years.

 The average share of five major capital expenditures to the total capital expenditure for five FYs stands at 67.33%.

 Meanwhile, the government was able to meet the current expenditures from internal sources, which in turn fulfill the constitutional mandates. The current expenditure accounted for 88.94% of the internal revenue in FY 2020-21.

 The report states that over the past five financial years, there is consistent under-absorption of the allocated budget with major underutilization observed in the capital budget. The capital budget was underutilized by 32.56% in FY 2020-21 and by 30.03% in FY 2019-20.

 According to Auditor General Dasho Tashi, the RAA acknowledges the support in the cooperation from the Ministry of Finance of early submission of the Annual Financial Statement of the Royal Government of Bhutan which enabled the AAR 2020-21 to be submitted six months ahead of the existing practice.

ย Meanwhile, Article 14 (6) of the Constitution of the Kingdom of Bhutan requires the government to meet the cost of current expenditures from internal resources of the country.

Kuenzang Choden from Thimphu