ECB says DPT and PDP had cleared all liabilities in 2012 but RAA says it is yet to get updates from both parties

However, both ECB and RAA agree that the final financial status of all parties will emerge after an upcoming political parties Audit slated to start next week

The Chief Election Commissioner Dasho Kunzang Wangdi in a telephonic interview said that both DPT and PDP had cleared all pending financial liabilities in 2012 only after which they had been held to be eligible for contesting the 2013 polls.

“The ECB gave the clearance to the two parties only after all their accounts and their supporting documents were to the satisfaction of the ECB,” said Dasho Kunzang Wangdi.

The CEC also said that some confusion had arisen as the Royal Audit Authority (RAA) report which was discussed in Parliament covered the period prior to the two parties resolving all issues with the ECB.

“The RAA report up to the time period audited by them is true but after that time period a lot of things happened which were not audited,” said Dasho Kunzang Wangdi.

The RAA Audit for DPT was for the financial year 2010-2011 and for PDP it was 2008-2009 and 2010-2011. The RAA Annual report in which the findings are reflected is up to the financial year June 30th 2012.

The RAA Annual report showed Nu 25.6 mn in violation of laws and rules by PDP with Nu 21.7 mn in irregularities in outstanding loans and Nu 3.9 mn in accumulated current liabilities. There were also four other audit issues like membership application form used as money receipts, missing receipt booklets, un-reconciled recoveries and irregularities in financial statements.

DPT had only Nu 628,000 under shortfall, lapses and deficiencies.

“Subsequent to the RAA report the ECB had made some decisions which were shared via notifications. The RAA report would not have covered this subsequent period when the parties resolved all their financial liabilities,” said the CEC.

After both parties had cleared all financial dues the ECB had given both parties a deadline till October 15th to resolve all remaining issues. The PDP was granted an extension till October 30th after which it submitted its final report.

The CEC said that the period missed out by the RAA report including this election period would be covered in an Audit of the Accounts of the political party.

“The RAA audit was scheduled for August 2013 but due to some issues on their side they rescheduled it to October 2013. In this audit all the things will be known,” said the CEC.

A senior Auditor with the RAA confirmed to this paper that the Audit of all the parties’ accounts covering the period before, during and after the election period would be done. He said the report would be issued around December 2013.

The RAA Auditor General Dasho Ugen Chewang in a letter addressed to the Speaker on 26th September 2013 had given a status of the Annual Audit Report pertaining to the political parties. This was after the Opposition Leader Pema Gyamtsho wrote to the RAA asking for clarification.

The letter is chronological sequence of events of the Audit of the two political parties up to the period the final report was published by the RAA.

The letter indirectly questions why both parties and especially PDP did not use the time available until March 2013 to clarify with the RAA.

The letter makes some important clarifications. It says that the Audit for PDP started from 30th April 2012 and for DPT it started from 9th July 2012. The Audit memos were issued on 16th July 2012 and there were given time to respond to the memos.

The letter says that the Audit report for DPT was issued on 27th July 2012 and for PDP three days later on 30th July 2012. Both were given the procedural three month period till the end of October 2012 to submit an Action Taken Report and also resolve any findings.

RAA says that since it did not receive any response from both the parties the RAA on 14th December 2012 wrote to the Secretary General of both the parties to submit the ATR which is not submitted till date.

It goes on to say that the draft version of the Annual Audit report was shared with both the parties on 6th February 2013 asking for comments and validations and saying that it will be reported to the Parliament. The response to the draft report which was expected by 8th March 2013 did not come.

The AG’s letter says, “The RAA did not receive any responses or updates to either of the reminder letter sent on 14th December 2012 and to the draft AAR 2012 sent on 6th February 2012 and as a result we have reported accordingly in the AAR 2012. The status of the AAR 2012 in respect of both the political parties even at this point of time remains unchanged.”

The letter also clearly states that the responsibility to initiate follow up action of audit reports issued rests with the agencies concerned which in this case is the political parties.

So far in the Parliament session MPs had questioned why the ECB and RAA could not share information and coordinate. The senior RAA official said, “Since the onus is on the political parties to clear the Audit memos as the audited agency there is no role of the ECB to clarify for them.”

The Agriculture Minister Yeshey Dorji who was formerly the Secretary General of PDP said, “PDP’s Nu 25 mn liabilities which included a Nu 21 mn loan from the former PDP President taken through a bank loan were paid back as per the Public Election Fund Act by August 2012. The money had been collected through legitimate sources like party contribution with a maximum limit of five lakh, annual membership fees and new membership fees. The ECB also verified and accepted this.”

He said the RAA in its report is right to the extent of their audit which was done till June-July 2012 but the fact was that it did not reflect PDP clearing its financial obligations by end of August 2012.

When asked why PDP had not officially also reported to the RAA the Agriculture Minister said, “We could not clarify with the RAA as it was the election season and people were in the field.”

He however said that even then PDP spent some time with the RAA and cleared most of the 20 memos bringing it down to five.

The Minister said that some minor observations which come under lapses like missing receipt booklets and others would be discussed and resolved with the RAA.

PDP MP Ritu Raj Chhetri from Taschichoeling constituency under Samtse Dzongkhag also said that since the party was campaigning the full information shared with ECB could not be shared with RAA especially since it happened after the RAA report had been issued.

He said, “We cleared our financial obligations well after June 30th and so RAA has not reflected it in their records which is why the deliberations in the Parliament were redundant.”

He said, “When we contest elections we require individual audit clearances from the RAA which we got and ECB which authorizes parties to contest the elections as long as they clear their dues also gave us the clearance and the certificate.”

He also said that all dues had been cleared as per the rules with money collected as donations and membership fees over the last five years.

In addition to the Audit Report on political parties that will be out by December 2013 and should clear a lot of the issues, the Public Accounts Committee of the Parliament will also be doing their own study and presenting a detailed report on the issue in the Winter session of the Parliament.

Former Minister and now DPT MP Dorji Wangdi said, “With regard to DPT’s 628,000 it falls under lapses and is not a violation of law. The amount is basically impress funds given to the Dzongkhag offices and is part of the revolving budget. These lapses need to necessarily be solved as they are not violation of any law and the budget keeps rolling.”

A senior DPT official said that irrespective of PDP saying that its dues had been cleared after the Audit was done the Annual Audit report had said that it reflected issues which had not been resolved as of 31st March 2013.

The official said that in the deliberations in parliament some DPT MPs had recommended an ACC investigation too but the majority ultimately decided to go for a detailed PAC report in the winter session. The DPT official said that the issue was that no single member is allowed to give more than Nu 500,000 but the former President’s contribution was Nu 21 mn and also that parties cannot take loans from individuals but only financial institutions. He said this was violation of the Public Election Fund Act. He also said why was it that the ECB and RAA had different views on the same matter.

The DPT official said that in the future the Parliament should come up with a system whereby any party should have all issue resolved before taking part in elections.

All eyes will be on the RAA report on political parties including the detailed PAC report on the issue in the winter session before any final all clear is given or not.