The Ministry of Finance (MoF) has enforced the Guideline for Hospitality & Entertainment (H&E) Budget 2025, which came into effect on February 3, 2025. The revised guideline introduces strict parameters for the utilization of public funds allocated to hospitality and entertainment across government agencies. The primary aim is to enhance fiscal discipline, ensure transparency, and align expenditures with official mandates.
The H&E expenses are defined in the guideline as those expenses incurred in an official capacity for the entertainment of guests or events directly related to the organization’s mandates. It is made clear that the primary purpose of such expenses is to fulfill official functions, with personal benefit strictly prohibited.
Key Provisions of the Guideline
The revised guidelines mandate that only essential and documented expenses related to official duties are permissible. Public servants authorized to use the H&E budget must ensure that all expenditures are strictly official, which means no personal benefits allowed.
The expenses must be actual and documented with proper receipts, invoices, and approvals required. Additionally, it must be reasonable and value-driven, meaning, costs must not be excessive.
The framework aligns with the Pay Structure Reform Act of Bhutan 2022, which eliminated discretionary grants for Cabinet Ministers and senior officials, integrating them into their monthly variable pay. Likewise, discretionary grants for Dzongdags and representational grants for embassies, missions, and consulates are now included under the annual recurrent expenditure.
Permissible & Non-Permissible Expenses
Under the new guideline, allowable expenses include meals and beverages, including refreshments and snacks. Alcoholic beverages are permitted only if locally produced and must not exceed the cost of meals.
Other permissible expenses include business gifts and souvenirs related to official duties, expenses for national events such as Tshechus and Kurims, tips for service staff—allowed only for Cabinet Ministers and equivalent officials during official travel.
Strictly prohibited expenses include those unrelated to official duties. All expenditures must be duly documented, with receipts and approvals from the concerned organizing official and the host official to ensure transparency and accountability.
Budget Allocation & Accountability
Each agency will receive an annual H&E budget as per government-approved rates. Expenditures must not exceed the allocated budget unless an additional request is approved by the Cabinet through the MoF with proper justification. Unutilized funds will lapse at the end of the fiscal year.
The guideline mandates that all fund releases, procurement, and accounting follow the Financial Rules and Procurement Regulations. Officials responsible for managing H&E budgets will be fully accountable for ensuring compliance.
Budget Ceilings for Key Officials & Agencies
The budget ceiling for each position is clearly outlined, with the amount specified for various government offices and officials. For instance, there is no specific ceiling for the Prime Minister’s H&E budget, and it will be based on the actual expenses incurred, while the Speaker of the National Assembly, Chief Justice of the Supreme Court, Cabinet Ministers, Chairperson of the National Council, Opposition Leader, Chairman of the Privy Council have been allocated a combined total budget of Nu 1.5M, and combined total of Nu 0.16M has been allocated for heads of constitutional bodies, government secretaries, Chief Justice of the High Courts, commission secretaries, NA/NC Secretary General, Vice Chancellor of RUB, President of KGUMSB and NMS, and Dean of JSWSL.
For the Ambassadors, permanent representatives and Consul Generals-LTOs abroad, Nu 7.8M has been allocated for the Royal Bhutan Embassy (RBE) in New Delhi, followed by Nu 2.695M to RBE in Dhaka and Nu 4.870M for the RBE in Bangkok. Similarly, Nu 2.855M has been allocated for RBE in Brussels, and 2.320M has been allocated for RBE in Kuwait. For the RBE in Canberra, a total of Nu 3.640M is allocated as the H&E budget.
For the Gups, the allocated budget for H&E expenses are set at the ceiling of Nu 0.020M for the fiscal year 2025-26.
Ensuring Accountability in Public Spending
The H&E budget is strictly defined for expenses incurred in an official capacity to entertain guests or host events directly related to an organization’s mandate. The new guidelines prioritize fiscal responsibility and reinforce the government’s commitment to transparency and accountability in public spending.
The guideline also specifies that all fund releases, procurement, and accounting must follow the government’s established Financial Rules and Procurement Regulations. Public officials tasked with managing the H&E budget will be fully accountable for ensuring that all payments and expenditures align with the new guidelines.
Nidup Lhamo from Thimphu
