Procurement officer at the center of RAA Report

The then Ministry of Information and Communication (MoIC) has been hit by a major scandal involving widespread fraud and corruption, as revealed in the annual audit report released by the Royal Audit Authority (RAA).

The first case concerning MoIC involves the irregular awarding of operation and maintenance works for electric vehicle (EV) charging machines and the supply of spare parts, amounting to Nu 13.970M. The report says that the ministry’s procurement officer, Sonam Dorji, has falsely portrayed the open procurement process through falsified tender IDs and the use of canceled tender IDs from other agencies, resulting in the awarding of the work to M/s S.P.D Enterprise, based in Thimphu.

A subsequent investigation by the RAA revealed a web of corruption and irregularities, including fictitious payments for maintenance and spare parts. The RAA found that Nu 0.785M was fraudulently paid to M/s S.P.D Enterprise for maintenance of EV charging machines without proper verification of the maintenance works. Crucial records, such as a history book, log book, or register, were also found to be missing.

The report also reveals that the MoIC had made a payment amounting to Nu 0.6M for a fictitious claim submitted by M/s S.P.D Enterprise for the replacement of spare parts of the EV charging machine at Chunzom carried out by M/s Thunder Motors. “Such unethical practices and manipulation of the documents had occurred due to collusion among the procurement officer, deputy chief finance officer, and the enterprise. The case has been forwarded to the ACC for investigation,” the report states.

Furthermore, the ministry made a double payment of Nu 1.682M to M/s S.P.D Enterprise for the maintenance of EV charging stations. Although the bills were submitted to the Cabinet Secretariat for payment, the ministry also approved and made the payment, resulting in double payments. The lapses in the payment process were allegedly due to collusion between ministry officials and the supplier, leading to the loss of public funds.

The RAA also uncovered cases of double payment for operational charges of EV charging machines made to M/s S.P.D Enterprise, resulting in a loss of Nu 0.825M. Although the amount was later recovered and deposited, legal action against the individuals involved is yet to be taken.

Additionally, the RAA also discovered a multitude of discrepancies and irregularities in various other procurement processes, such as double payments, forged documents, and tampering with records.

For instance, the MoIC had made a double payment of Nu 0.608M to M/s S.P.D Enterprise on account of the supply of office equipment vis-à-vis missing equipment. The double payment had occurred as the payment was made by DoS, MoIC, and DoIM, MoIC, though the office equipment was supplied to DoIM, MoIC only. The supplied MacBook Pros differed from the specified i7 model. Further, Sonam Dorji did not return Nu 0.02M worth printers upon his resignation.

The MoIC had a case of forgery and tampering with documents in the contract for the construction of electric car charging stations and related works. The RAA noted discrepancies in the records maintained in hard copy and e-GP and inconsistencies in evaluation, leading to the rejection of the lowest bidder. The case too has been forwarded to the ACC for investigation.

“The cases of fraud and corruption uncovered in the report demonstrate a deliberate intent to derive undue benefits, both monetary and otherwise, through deceitful practices,” the report stated. The offenses range from manipulation and tampering with records to the misappropriation of cash and public resources.

Meanwhile, the report exposes a total of Nu 39.604 Million (M) in irregularities, accounting for 1.39% of the total issues identified during the fiscal year 2022-23.In the same year, the RAA issued 456 audit reports, of which 17 were issued with qualified opinions and 439 were issued with unqualified opinions. Of the total audit reports issued, the Annual Audit Report 2022-23 was compiled from 379 audit reports that contained audit findings.

The financial implications of the audit findings observed during the period amounted to Nu 2,840.092M, of which Nu 39.604M was categorized under ‘Fraud and Corruption’, Nu 2,244.804M under ‘Non-compliances to Laws, and Rules and Regulations’, and Nu 555.683M under ‘Shortfalls, Lapses, and Deficiencies’, representing 1.39%, 79.04%, and 19.56%, respectively.

Nidup Lhamo from Thimphu