The government recently suspended the Constituency Development Grant (CDG) in face of opposition from the National Council, Election Commission and the Opposition Party.
However, in what could be called a case of an expected breach in its use, a draft Royal Audit Authority report, has found several instances of lapses in the use of CDG by members of the National Assembly (NA).
The report points out use of CDG in contravention to CDG rules, financial irregularities, in-effective use of CDG, poor diversification, and poor utilization among others.
Since the disbursement of the grant in 2008, a total fund of Nu 282 mn was earmarked for CDG till 2011. Of this Nu 176.14 mn worth of activities were proposed and approved of which Nu 152.51 mn has been utilized so far.
The RAA report is a draft report awaiting comments and clarifications from Gewogs, Dzongkhags and MPs till April 15, 2012 after which the report will be finalized and distributed with changes if necessary.
Use of CDG in contravention to rules
The draft RAA report revealed that around 61 projects worth Nu 29.10 mn were implemented in contravention to CDG rules out of the total Nu 152.51 mn utilized so far.
The 2009 CDG rules formulated by the Ministry of Finance forbids the use of CDG money for current expenditure (salaries), purchase of vehicles, construction and renovation of Gewog offices, acquisition of land and buildings, donations and tenth plan activities funded by the government.
Of this, the bulk of activities in contravention to CDG rules came under the works already funded by the government under the tenth plan. Coming to a total of Nu 25 mn, these activities include construction of farm roads, construction and maintenance of lhakhangs, construction of irrigation channels, fencing and so on.
The MPs included in the list are Lyonpo Zangley Drukpa, Deputy Speaker Yangku Tshering Sherpa, Public Accounts Committee Chairman MP Kesang Wangdi, MP Prahlad Gurung, MP Choida Jamtsho, MP Kinely Dorji, MP Sonam Jamtsho, MP Sonam Penjor, MP Dupthob, MP Bahadhur Gurung, MP Hemant Gurung, and MP Chencho Dorji.
Not to be left out are also the two vocal opponents of CDG the Opposition leader Tshering Tobgay for construction of irrigation canals and Damcho Dorji for renovation of a lhakhang.
Others include donation for a cultural competition by MP Tshering Penjore and purchase of a school bus by MP Tsencho Dorji.
Lyonpo Dorji Wangdi, Lyonpo Ugyen Tshering, MP Damcho Dorji and MP Kinley Dorji have been found using CDG for the construction of Gewog office buildings.
Under the current expenditure head, MP Prem Kumar of the Mao Khola fame paid Nu 32,000 in salaries to a boatman for boat services. MP Sonam Jamtsho and MP Sonam Penjor distributed seeds.
The report says that this also shows that Dzongkhag and Gewog Authorities had not verified the eligibility of the activities before endorsing the proposals.
Financial Irregularities
The draft report also points out irregularities to the tune of Nu 3.186 million in the use of CDG. After approval by the MP, the money is spent by the Dzongkhag or Gewog administration that also has to maintain the accounts.
Of this, Nu 2 mn was used in payments for goods and services that have not yet been received or executed; Nu 329,000 for execution of works without drawings and approval; and Nu 452,000 for payment without supporting documents. Nu 253,000 was listed as excess payment to contractors, Nu 129,000 as outstanding advances and Nu 15,000 as non-deduction of TDS.
The MPs whose CDG was used here are Lyonpo Pema Gyamtsho, Lyonpo Nandalal Rai, Opposition MP Damcho Dorji, MP Sonam Jamtsho, MP Kinely Dorji, MP Prahlad Gurung, MP Lila Pradhan, MP Kesang Wangdi, MP Sonam Penjor, MP Ugyen Wangdi and MP Karma Lhamo.
CDG benefitting individual households and less than 10 households
It was found that in 25 activities worth Nu 10.53 mn, CDG was distributed either in cash or kind directly to households.
The report in another instance found that 11 activities coming to around Nu 3 mn plus had not fulfilled the minimum requirement of having to benefit at least 10 households.
The draft report says that RAA is of the view both the above instances are not in keeping with the provisions of the CDG rules though there is no specific mention of it.
In the case of CDG being given in cash or kind directly to households the report names the constituencies of MPs like Lyonchhen Jigmi Y. Thinley, Lyonpo Yeshey Zimba, Lyonpo Wangdi Norbu, Lyonpo Minjur Dorji, Lyonpo Dorji Wangdi, Speaker Jigme Tshultim, Opposition MP Damcho Dorji, MP Lila Pradhan, MP Karma Lhamo, MP Sonam Penjor, MP Ugyen Wangdi, MP Lila Pradhan, MP Passang Thrinlee and MP Tshering Dorji.
Included in the list for carrying out activities not fulfilling the criterion of covering at least 10 households were MPs Lyonpo Pema Gyamtsho, Opposition leader Tshering Tobgay, MP Karma Rangdol, MP Ugyen Wangdi, MP Sonam Penjor, MP Kinley Dorji, MP Tshering Tenzin and MP Lhatu.
Positives
However, there are some positives for CDG in the report. It says that in a poll conducted in 16 constituencies with 154 respondents around 79 percent had indicated that CDG was highly beneficial to the community. The report says that though a bigger survey is needed, discussion with beneficiaries and implementers showed that CDG was generally considered as being beneficial to rural people.
The report says that promulgation of CDG 2009 rules facilitated proper utilization of CDG fund.
It also goes on to say that of the 578 activities proposed and approved around 526 activities representing around 91% of the total activities proposed were implemented.
Non-utilization of CDG effectively
The report says that given the Nu 282 mn budget, underutilization was a problem showing that funds worth Nu 130 mn were blocked which could have been used for other purposes.
RAA found that in several instances CDG money had been used for farm road construction but due to the low budget available most new CDG farm roads did not meet the required standards.
RAA also came across specific instances of how CDG money had failed to achieve the intended targets.
In Shawa village under Gangzur Gewog, Nu 407,000 of river protection work had still not stopped 1.5 acres of farmland being washed away and a Nu 120,000 weaving center in Samtse was not used. In Chukha Nu 1.6 mn worth of equipment and material remained unutilized with similar cases of Nu 96,322 worth of equipment in Samdrup Jongkhar and Nu 207,000 worth of equipment in Trashiyangtse remaining grossly underutilized.
It also says that many implemented activities lacked a realistic work plan and there was non submission of progress and completion reports.
Thirty two percent of CDG spent on lhakhangs and culture
The report also says that majority of CDG money had been spent on just a few themes not heeding to diversification of spending as envisioned by the CDG rules 2007.
The most resources allocated were for agriculture with 33% of spending followed by 32% spending on lhakhangs and other cultural symbols. In short 52% of the money was spent for poverty alleviation, 32% for cultural promotion, 8% for advancement of women and children, 4% for community vitalization and 3% for environmental preservation.
From the Dzongkhags
Apart from the common findings the RAA also found specific findings specific to some Dzongkhags.
In Trashiyangtse a Nu 2.07 mn back hoe bought by CDG money was registered in the name of ex-Gup Neten Dorji and the Gewog had failed to collect Nu 385,000 in rental charges for it from him.
In Gasa the issues are poor progress in renovation of Tashi Lhakhang, poor utilization of barb wires worth Nu 2 mn, renovation of staff quarter for Nu 380,000 and no accounts of dismantled materials from Chorten Goenpa.
In Bumthang the issue was use of the Nu 1.1 mn Drashak Naglhakhang as a non-formal classroom and award of farm road construction to second highest bidder.
In Samtse there were instances of proper receipts not being maintained and several projects not being implemented properly. In Wangdue Phodrang, Athang Nu 300,000 had been paid in cash to 65 household in violation of rules.
In Trashigang, Radhi, Merak and Sakteng Nu 1,48,000 was used as scholarship to benefit many students. However, an advance of Nu 2,20,000 made to the Merak Gewog GAO and Lobzang Tashi to buy Yaks benefitted only two individuals.
In Dagana there was a direct purchase of Choe Cha from a goldsmith not following procurement rules.
Other issues
The RAA report also points out other lapses in CDG. It says that the Nu 10 mn per constituency for five years is not a fair distribution as it overlooks poverty and population.
The report says that CDG rules procedures were not followed on process of selecting and approving CDG projects. Local people also complained that the Gewog office did not consult them properly before carrying out CDG activities.
It also says that CDG assets are not being kept in proper assets inventory and maintenance of CDG assets is an issue. The lack of engineers at the local level is also problem for CDG.
The so-called ‘positives’ are a piece of crap. You cannot ask someone’s opinion in place of following a rule. If I steal your money and give it to a third person, does it make the crime any less just because the third person is very happy with the money he got??
The RAA report should not even waste its time on that chapter.
the DPT govt announced that due to public objections they are withdrawing the CDG for now. In hindsight, it has become clear that they had no choice but to cancel the CDG because they’ve already blown up whatever money they had. well done! They’ve also created a rupee crisis by not watching the wallet and opening too many banks and not monitoring them.
Our first elected government has turned out to be a real disaster!