The Annual Audit Report (AAR) 2018 was released on 21 June. As required under the Constitution of the Kingdom of Bhutan and the Audit Act of Bhutan 2018, the Royal Audit Authority has tabled AAR 2018 to the Parliament on 21 June.
The report is a compilation of un-resolved significant issues from 597 audit reports issued during the year 2018. The report includes the certification of the Annual Financial Statements of the Royal Government for the fiscal year ended 30 June 2018, audit of accounts and operations of the RAA, accomplishments made by RAA during the year and summary on significant issues from the joint audits of hydropower projects.
The approved budget of the Royal Government of Bhutan (RGoB) for the fiscal year 2017-2018 was Nu 55.850 bn against estimated resources of Nu 51.403 bn with a fiscal deficit of Nu 4.447 bn. The RAA report states that it was noted that as against the revised capital budget of Nu 34.094 bn, the actual expenditure was Nu 28,830 mn with resultant underutilization of capital budget by Nu 5,255 bn, which represented 15.42 percent of the revised capital budget.
As per the report, the total unresolved significant irregularities reflected in the AAR 2018 amounted to Nu 604 mn as on 31 March 2019. As compared to the irregularities of Nu 407 mn reported in AAR 2017, the irregularities reported have increased by 48.46 percent.
Auditor General, Tshering Kezang, said that RAA has made audit recoveries of Nu 106 mn in 2018 of which Nu 101 mn was credited into the Audit Recoveries Accounts (ARA) maintained by RAA and Nu 5.37 mn from corporations and Financial Institutions were retained in their respective ARA.
He said that as compared to underutilization of 20.89 percent reported in the fiscal year 2016-2017, there was a decrease in the underutilization of capital budget by 5.47 percent during the fiscal year 2017-2018.
He said, “As per the report, the irregularities comprised of non-compliance to laws and rules; mismanagement; fraud, corruption & embezzlement and shortfalls, lapses and deficiencies. The irregularities with element of fraud, corruption & embezzlement aggregated to Nu 29. 61 mn, of which ministries represented Nu 19.03 mn followed by gewog administration with Nu 3.86 mn.
Similarly, under mismanagement, lapses of Nu 127.38 mn was reported with Nu 74.52 mn under ministries followed by Nu 25.74 mn under corporations. The report contains unresolved significant issues pertaining to nine ministries, 19 dzongkhags administration, 69gewogs administration under 15 dzongkhags, 12 autonomous agencies, 17 corporations, three financial institutions and six NGOs.
The report also states that the total lapses reported under non-compliance to laws and rules amounted to Nu 185 mn of which corporations represented Nu 105 mn followed by dzongkhags with Nu 33 mn.
“Shortfalls, Lapses and Deficiencies amounted to Nu 262 mn where Dzongkhags had Nu 94 mn followed by Ministries with Nu 73 mn”, states the AAR report 2018.
Meanwhile, from three hydropower projects audited jointly during the year, the total unresolved significant irregularities reported in the AAR 2018 amounted to Nu 1.772 bn as on 31 March 2019 in which PHPA I had irregularities involving Nu 1.007 bn followed by PHPA II with Nu 657 mn and MHPA with Nu 108 mn.
Based on the overall findings, RAA have submitted various recommendations, whereby under construction management domain, the office recommended to ensure proper planning and scheduling of construction works to avoid delays in completion of works, agencies must ensure that drawings, designs and estimates are complete in respect of deliverable sought and process for taking over of completed works must be clearly delineated.
Under service delivery domain, they recommended for the need to improve delivery of land services and need to improve census service delivery. In addition, RAA also recommended the need to review un-reconciled financial statement under financial management domain.
RAA has submitted five performance report to the Parliament, which includes IT audit of core banking system in BDBL, IT audit on the efficiency and effectiveness in public service delivery through G2C service, performance audit on government vehicles and foreign vehicle quota system, performance audit on housing development- adequacy and affordable and performance audit on food self-sufficiency and security.