The Bhutanese Leading the way.
MoF to draw up guidelines to put a cap and control this expenditure
A ‘Financial Thrift’ report compiled during the interim government period found that the lack of a cap or rules on actual ‘hospitality and entertainment’ expenditure has led to huge expenses by 15 ministerial ranks from 2008 to 2018 covering the time period of two governments.
The 30 individuals who held the 15 posts over two governments are the two former Prime Ministers, 20 former Cabinet Ministers, two former National Assembly Speakers, two former National Council Chairmen, two Opposition leaders and two Chief Justices of the Supreme Court.
All of the above fall under the ministerial rank and are hence are entitled to this facility.
The ‘Financial Thrift’ report is a much larger one that focuses on reducing overall government expenses, but one segment has shed light on this little known aspect of government expenditure with no ceiling, rules, limit and even accountability.
In the 10th plan period from 2008-2013 the 15 ministerial individuals spent Nu 157 mn in total going at the average rate of Nu 31.4 mn a year. This means that each person here was spending around nu 2 mn a year in ‘hospitality and entertainment.’
In the 11th plan period from 2013-18 this increased to Nu 213 mn which is an average of Nu 42 mn a year or an individual average of Nu 2.84 mn a year.
It is not that all the individuals spent the same amount under actual expenses some spent more than others but despite requests by The Bhutanese to the government, both information and a break up of the figures was not given.
The lack of any ceiling and rules has led to a very broad definition of what constitutes actual expenses on ‘hospitality and entertainment.’ It could be anything from entertaining high profile guests, to giving large mass dinners or lunches in Dzongkhags, to hotel and food expenses of accompanying staff, to giving semso and even soleras in cash or gifts.
Given, that of the 15 ranks, only the Supreme Court Chief Justice is a non political one, this entire expenditure head raises questions on if it is appropriate in a political context and if it can be misused for meeting political ends.
The question becomes even more important when it is the tax-payer’s money that is being used by mainly elected leaders, with no ceiling and rules around it.
The August 2008 First Pay Commission Report first referred to this, recommending a cap of Nu 1 mn a year for ministries (read minister) with an exception for the Foreign Ministry (read minister). The 2008 pay commission report says, “The practice of keeping a pool budget for Ministers to draw from should be stopped.” However, this recommendation was not taken up.
Though the allocation is given in the names of the agencies, it is very much at the personal discretion of the concerned minister or ministerial ranked individual with no committee and consultative process involved.
The above ‘hospitality and entertainment,’ amounts do not include the annual discretionary grant that such ministerial ranks already receive. For example, the Prime Minister gets Nu 300,000 a year while the rest of the 14 ministerial ranks get Nu 200,000 a year. The annual implication is Nu 3.1 mn. With actual expenses already taken care of, these discretionary grants are more like an income.
In fact, the March 2014 Second Pay Commission report says as much, recommending that the discretionary grants be treated as income and be taxed accordingly.
The Ministry of Finance is coming up with guidelines on cost cutting and uniformity of government expenditure.
The Finance Minister, Lyonpo Namgay Tshering said that the first part of the report will focus on these 15 ministerial ranks and it will aim to come up with a ceiling and also attempt to define for what the ‘hospitality and entertainment’ expenditure can be used or not.
“Even if a cap is not possible in some special cases then there will still be strict guidelines,” said the minister.
Lyonpo explained that since the government is planning to carry out austerity measures from the coming financial year, it should start with the head which is the ministers themselves.
He said that this would set an example down the line to other civil servants.
While the ministers have no limits, there are limits for other posts. Government secretaries, Head of Constitutional Bodies, Drangpons of the Supreme Court and the Chief Justice of the High Court have an annual ‘hospitality and entertainment’ expenditure cap of Nu 160,000.
Then Dzongdas, Thrompons, Drangpons, Directors and Constitutional post members get an an annual cap of Nu 80,000. Gups have a cap of Nu 10,000 a year.
