As per the national budget report, the reserve is an amount set aside to cover unplanned, unavoidable and unanticipated future expenditures
In a press release issued by the Royal Audit Authority (RAA) and titled ‘AAR 2020-21’ on Thursday, the RAA highlighted the issue related to the General Reserve Fund (GRF) and urged the Ministry of Finance (MoF) to come up with proper guidelines on the operation of the GRF.
According to the RAA’s press release, the main issue is the lack of policy for operating the GRF which leads to other concerns such as fund mismanagement.
On the evaluation of the budget report for the financial year 2020-21 and the transfer of reserve, it was observed that Nu 3,335.997mn was provisioned under the GR.
Of the total reserve, Nu 3,146.769mn were transferred to the relevant agencies following different activities.
RAA’s Auditor General Dasho Tashi, talking about the GRF, said, “We cannot say that the Lyonpo (Finance Minister) has gone beyond the law because right now there are no guidelines or a proper authority that can approve the fund use. So in the absence of the guidelines and authority, the cabinet can do whatever they like, which could lead to long-term implications.”
“Therefore, at the very least some proper guidelines with appropriate authority who can actually approve the fund use should be established at the cabinet level,” he added.
While the fund transfers from the reserve were mostly accounted for Covid -19 containment measures under disaster contingency, the Auditor General said some funds were, however, transferred to meet the normal capital expenditures of agencies.
In the financial year 2020-21, the RAA reported that Finance Minister Namgay Tshering transferred Nu 19mn from the GRF to fulfill the normal capital expenditure of a few gewogs in Paro Dzongkhag.
As per the national budget report, the reserve is an amount set aside to cover unplanned, unavoidable and unanticipated future expenditures.
Meanwhile, another reason for the necessity for clear guidelines, according to the Auditor General, is that there is a problem with transparency.
“Yes, as stated by the Lyonpo, the budget allocations were approved by parliament but a few members of parliament were unaware, implying that there is a lack of transparency,” he added.
“The RAA strongly recommends the MoF to come up with the guidelines on the operations of GRF at the earliest and the guidelines should be approved by the cabinet,” states the RAA’s press release.
Tshering Pelden from Thimphu