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Gups and Mangmis in danger with LG polls in January
In the past, the only way an audit clearance could be denied to a senior official was if the memo was directly issued to them with either Direct Accountability or Supervisory Accountability.
However, the Royal Audit Authority (RAA) is enforcing its Audit Act and Rules more strictly from April 1, 2026, whereby RAA announced that Audit Clearance Certificates (ACC) will be withheld from heads of agencies with unresolved audit issues. So, even if the memo is not against the head of an agency, their inability to get it resolved or take action, like putting it to court, will mean their ACC will not be given.
ACC being withheld for Heads of Agencies
So far, a Government Secretary, Dzongda, two College Presidents and the former Phuenthsoling Thrompon have had their ACC suspended for around a month, and it remains suspended.
It has also been learnt that 3 CEOs of Financial Institutions also had their ACC suspended for a week or more due to agency-level issues, but it was reinstated after submitting their Action Taken Reports.
The former Phuentsholing Thrompon could not get an ACC for elections due to two supervisory audit memos and 3 agency-level audit memos for which he did not get the agency-level ACC either.
With the Local Government elections for 205 Gewogs and Samdrupjongkhar Thromde scheduled for January 2027, the RAA has already written to the elected heads and members to resolve audit issues in these organizations to get their ACC for the elections.
Around 24 Gewogs have 72 pending audit issues, and Samdrupjongkhar Thromde also has a pending issue to resolve until June 30, 2024. Here, Gups, Mangmis and Tshogpas are in danger, along with Samdrupjongkhar Thromde elected figures, if they cannot clear the agency-level memos or even their own memos.
The 2024-25 Financial Year audit report is out, but the pending issues are being resolved, and the final pending list will increase once this data is added too.
Apart from elected leaders, senior bureaucrats are also in danger if they cannot resolve ministry-level memos like 53 memos against 9 ministries, and Dzongdas are particularly vulnerable with 352 memos in 20 Dzongkhags, 31 memos in Dungkhags, 6 in Thromdes, 12 in Autonomous bodies and 7 in the Judiciary, all till June 30, 2024, with numbers likely to go up as the 2024-25 audit numbers are added.
Bureaucrats who can be affected at the agency head level can go up from the Chief level to the Secretary level or other arrangements where the head of agency is defined differently.
Ministers can ordinarily avoid memos as they are not involved in procurement, Human Resources, etc., but if ministers take certain decisions that lead to memos, then even ministers can face memos.
The more active application of the rules also coincides with the Special Audit Report on the Bhutan Integrated Taxation System (BITS) that issued memos against the former Prime Minister Dasho Dr Lotay Tshering, former Finance Minister Namgay Tshering, and the current Cabinet Secretary Dasho Kesang Deki. If the memos are not resolved, the former PM and FM’s participation in the 2029 elections is at risk.
There are 31 memos against corporations, 2 for Financial Institutions, 1 for Armed Forces and 33 for CSOs until June 30, 2024, meaning their heads like CEOs, Directors, General Managers, Chiefs, etc., will also be impacted.
A RAA official said that ACC is fundamental to decisions relating to promotion, training, transfer and post-retirement benefits, etc., and so without it, those with memos and the agency heads cannot process them.
The RAA official said their aim is to have no pending issues by 2030 and that this is their contribution to the diamond strategy with a high-integrity Bhutan.
As part of its strategy to fix accountability better at the higher levels, the RAA is coming up with the Accountability Fixation Framework, which will define what kind of accountability is to be fixed at various levels like Chief, Director, Director General, Dzongda, Secretary and more.
The RAA official said that in the past, decisions may have been taken at the higher level and even verbal orders issued, but the memo would land at the junior and middle levels implementing the order, and so this needs to change.
This is apart from the issue of ACC for heads of agencies at various levels, even if the memo is not on them.
Reducing Audit Memos
Over the years, unresolved audit issues going back as far as 2007 accumulated to around Nu 17.921 bn, coming to around 2,580 observations by 30th June 2026.
The figures were adding up and going up year by year, and there were deliberations in the Parliament too on this almost every year, with the need to address the issue and implement Section 123 of the Audit Act 2018, whereby pending serious audit issues are sent to court one year after deliberation in the Parliament.
An important development that happened was the appointment of former Anti-Corruption Commissioner Jamtsho as the new Auditor General (AG) on October 28, 2025.
A senior RAA official said that the new AG decided to strongly pursue and resolve the unresolved cases of the past.
The problem that was happening was that the responsibility for resolving pending audit issues in organizations was being passed from one head to the next.
One target was to aim to resolve pending audit issues between 2007 and 30th June 2024, which came to 1,756 pending audit issues worth Nu 6.342 bn. This is because the above cases had been discussed in Parliament already and were past the one-year mark of being discussed in Parliament, after which they are meant to be put in court under the Audit Act.
Three-month deadline
To reduce the growing audit pile, the RAA issued its first notification on December 9, 2025, giving three months to resolve memos and submit Action Taken Reports.
The notification reminded the Heads of Agencies to refer to Section 123 of the Audit Act, which states that, “Any serious cases remaining unresolved for 12 months after deliberation in the Parliament shall be referred to the Court of Law by the agencies concerned. Failure to refer such cases to the Court of Law shall result in denial of Audit Clearance Certificate to the Head of agencies concerned”.
RAA asked that all Heads of Agencies and officials concerned personally ensure strict compliance with this directive.
After the first notification, 695 audit observations worth Nu 11.41 bn were resolved. This includes 480 old audit issues (2007-24) worth Nu 2.63 bn.
Hard Action
After the end of the three-month deadline of the RAA, the Auditor General, on April 1, 2026, issued a much tougher directive that targeted the heads of agencies for not resolving old audit issues or taking unresolved ones to court.
The directive suspended Audit Clearance Certificates issued through undertaking; there was a suspension of transfer of accountability, and most importantly of all, it was announced that Audit Clearance Certificates (ACC) will be withheld from heads of agencies with unresolved audit issues.
It said the RAA, as an exceptional and temporary facilitative measure, allowed issuance of ACC based on undertakings to resolve audit observations at a later date, and transfer of accountability.
RAA said these measures, introduced in good faith, were intended to ease administrative bottlenecks. But in practice, they have been misapplied, contributed to the deferral and dilution of accountability, resulted in prolonged pendency and continued accumulation of unresolved audit observations, and weakened the integrity of the ACC system.
RAA said public servants obtain ACC without resolving audit irregularities; heads of agencies are not sufficiently compelled to ensure timely closure of audit observations; public confidence in oversight mechanisms may be undermined; and the practices deviated from the intent and spirit of the Audit Act of Bhutan, 2018.
The RAA also said that, notwithstanding the RAA’s directive issued in December 2025 requiring submission of Action Taken Reports (ATR) within three months, several heads of agencies either failed to comply or submitted incomplete or unsatisfactory ATRs, as a result of which a substantial number of issues remained unresolved.
RAA said such failure constitutes a violation of statutory obligations under Chapter 9, Section 146 of the Audit Act of Bhutan, 2018.
The RAA once again called upon all heads of agencies and public servants to ensure resolution of all outstanding audit concerns on or before 30th June, 2026.
It said failure to comply with this notification shall constitute dereliction of duty and shall attract additional actions or sanctions, in addition to the withholding of ACC for the unresolved audit accountability as provided for under the Audit Act of Bhutan 2018.
After this second notification, 193 old audit issues worth Nu 1.94 bn were resolved.
This meant a total of 888 observations were resolved, worth Nu 13.35 bn, leaving a balance of 1,692 observations worth Nu 4.571 bn as of June 30, 2026.
Of the 1,692 balance observations, 1,083 are old pending issues from 2007 to 2024, worth Nu 1.774 bn.
The total balance of 1,692 observations worth Nu 4.571 bn includes 524 cases in various stages of investigation or court action worth Nu 1.042 bn.
These include 223 cases referred to the Anti-Corruption Commission (ACC) worth Nu 176.23 million (mn), 52 cases in the Office of the Attorney General (OAG) worth Nu 174.20 mn, 211 court cases worth Nu 641.11 mn, 19 cases of missing people worth Nu 13.92 mn, 15 cases in arbitration worth Nu 25.93 mn and 4 cases of no party showing up worth Nu 10.80 mn.
Strong follow-up
A RAA official said that RAA is now holding bilateral follow-up meetings with agencies to clear remaining issues and other stakeholders too. RAA is also asking agencies to take certain issues either to the court or the OAG.
The RAA is also having meetings with the ACC and OAG in a ‘carrot and stick’ approach with very aggressive and very robust follow-ups until all issues are resolved.
Despite the above, some of the problems with the old cases are that no accountable person can be identified; no responsible person was originally recorded; the accountable person has moved to a different agency; responsibility has been officially transferred to another person; the accountable person is no longer available due to resignation, separation, relocation abroad, or death; the accountable person has already secured the required clearance; and incomplete, inaccurate, or improperly processed supporting documents.
There were also certain cases where accountability was assigned to the wrong person, or the responsible person was not informed of a memo and found out only later while processing for promotions or benefits.
RAA will be improving the system to ensure that accountability is fixed on the right people, including senior people and not just junior or mid-level people.
In the case of missing people, the agencies have to prove it by taking the case to court and getting the police to issue an arrest warrant. The RAA, ACC and OAG are working on an SOP for missing people.
Many of the unresolved audit observations have to do with the construction sector, as an official said that for other smaller observations, civil servants pay or resolve them early to get audit clearance.
