The Bhutanese Leading the way.
The Milk Processing Unit (MPU) operated by Zambala Farmers’ Group in Norbugang Gewog in Pemagatshel is under the Royal Audit Authority (RAA)’s scanner, as a case of misuse of sales proceeds amounting to Nu 4.738 million (mn).
It was found that the sales proceeds received by various office bearers were not deposited into the designated account.
Further, the RAA noted that the loan amounting to Nu 0.238 million was remaining outstanding against M/s Lhendrup Construction, Dewathang as of 5th November 2023.
RAA cross checked the monthly sales record against the fund balances of group accounts, the funds deposited into those accounts, and the records of fund balances maintained by treasurers.
Current expenses were also verified against sales deposits via bank statements.
It was then observed that a total of Nu 4.7 mn sales proceeds were not deposited into the group account as on the review date of 11th November 2023.
Furthermore, a loan was approved to Tashi Tobgyal, proprietor of M/s Lhendrup Construction, Dewathang Samdrup Jongkhar, on 14th July 2020. The outstanding loan balance of Nu 237,500 remained unliquidated.
Based on the discrepancies identifies during the audit, RAA recommended that it is important to implement robust controls and oversight mechanisms to ensure the accurate and timely deposit of sales proceeds into group accounts.
RAA also recommended that the enhancement of monitoring mechanisms to track the misuse of funds to disburse loan should be put in place.
During exit meeting held on 24th November 2023, RAA informed the house to produce additional records and justifications, if any, to refute RAA’s claim of misuse of funds.
However, no additional records or justifications were furnished during the exit meeting.
The Dasho Dzongdag also instructed the relevant focal persons and Drungkhag Administration, Nganglam to revisit the verified records and accordingly intimate the RAA. The outcome of re-verification by the Drungkhag was not submitted to RAA as on 13th March 2024.
RAA states, “The use of personal bank account for depositing sales proceeds, coupled with the non-deposit of sales proceeds amounting to Nu 4.7 million into the official accounts, implies a potential misuse of group funds for personal gain. This provides an inferential indication of financial impropriety, where funds intended for the public benefit may have been diverted for personal use.”
The sales proceeds of Nu 4.7 mn and outstanding loan balance of Nu 237,500 should be recovered with liable interest or penalty and deposited into MPU’s Joint Account within one month from the date of issue of the report beyond which penalty of 24% per annum shall be levied as per Section 55(21) of the Audit Act of Bhutan 2018.
