PAC recommends review of Procurement Rules and Regulations

The Public Accounts Committee (PAC) submitted its recommendations which included the need to review the Procurement Rules and Regulations (PRR) and adequate staffing of the Public Procurement Policy Division (PPD) of Ministry of Finance with qualified and experienced personnel during the joint sitting of Parliament on 4th December

In the 3rd session of the second parliament, the PAC had put forward the need to have a PAC Act, while the house agreed that some form of legislation was necessary, some members were of the view that with proliferating Acts, it would be better to have rules of procedure which would serve the same purpose.

The house directed the PAC to look at the practice prevailing in other countries as well as weigh the merits of either having an act or rules of procedure and to summit the PACs recommendations to the house in the winter session.

The PAC sought the approval of the house for preparing the rules of procedure for the PAC and also endorsement by the speaker of the NA and the chairperson of the NC

Regarding the PAC report on Accountability issues, PAC recommended that as the supervisors are held accountable for the acts of their subordinates, it would be important to enhance their awareness.

It is also recommended that being identified with supervisory accountability in an Audit Report submitted to Parliament must have some impact; otherwise it is just a waste of time and paper. The RCSC in consultation with the RAA should identify concrete measures to enforce this supervisory accountability and incorporate them in their respective rules and regulation.

The PAC recommended that Organization Development (OD) exercise covers the key elements crucial to enhancing accountability in an organization such as a strong monitoring and feedback system, provision of adequate resources and authority, predetermined specific consequences, establishment of supervisory controls and necessary skills and training for employees.

On the joint review of the past performance audit reports, the PAC and a follow up committee of the RAA had a meeting and after a lengthy discussion agreed to close 18 reports like Department of Roads-9th plan review, Report on National Park Management, Dzongkhag Local Area Network and Internet Connection, IT Audit of Electricity Billing and Collection System of BPC, Performance Audit on Operational of Tala Hydro Power Authority, Chukha Dzongkhag-9th FYP Review, Health Sector, 9th Plan Review, Environmental Compliance by Industries in Pasakha and Gomtu, Education Development project, Operation of BBSC, Farm roads in Bhutan, NPPF, Civil Service Training, , Environmental issues in Forestry, Constituency Development Grant and Information System Audit of Budget and Audit on Drinking Water Supply and Sanitation.

However, the PAC decided not to review the 2008 report on Mining operation in Bhutan as the National Council had directed the RAA to conduct a study on the socio-economic and environmental impact of mining and quarrying in the country.

The PAC reviewed and followed up and found that all the recommendations have been implemented. Hence, the PAC has decided to also close the Performance Audit Report reports like PAC report on the Audit of Medical Waste Management, PAC report on the Audit of Solid Waste Management, PAC report on the Audit of Human Resource Management, PAC report on the audit of IT Controls in Revenue Accounting System, PAC report on IT audit of Information Security and Report on the Auditor General Advisory series 2013 on Procurement of Consultancy Service in the Public Sector.

The report states that PAC has decided to report and recommend that the Ministry of Education (MoE) submit periodic status reports with regards to the recommendation on human resource projection and planning.

PAC observed that a total of Nu. 4,594.15mn was incurred for the financial years 2007-08 to 2011-12 in accruing the consultancy services indicating expenditure almost to tune of Nu.1bn annually.

According to the report on the auditor general’s advisory series 2013 on procurement of consultancy services in public sector, the government had incurred expenditures aggregating to Nu. 4,596.15mn purely on procurement of consultancy services and the Ministry of Economic Affairs (MoEA) had highest amount of expenditure on consultancy services amounting to Nu.2, 344.23mn mainly for the preparation of Detailed Project Report (DPR), pre-feasibility studies and pre-construction activities in the hydro power projects.

The PAC recommended that the Ministry of Finance (MoF) must ensure that the procurement Rules and Regulations (PRR) are review from time to time with relevant clauses inserted in order to avoid future lapses and waste of government resources.

PAC has also recommended that the public Procurement Policy Division (PPPD), MoF is the central agency that looks into public procurement and therefore, any agency that seeks to procure consultancy services beyond a threshold amount must obtain a clearance from the PPPD.

PAC states that all pending Performance Audit Report since 2007-08 have now been reviewed and cleared.

The recent Performance Audit Reports received from RAA are System Audit of Hydro Electricity Energy (2013), Environmental Audit Report on Timber Harvesting in FMUs and WSs, April, 2014 and Audit Report on Public Debt Management (2014). As many members agreed, these Reports will be review by PAC and reported to the Parliament in the forth coming session.

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