The Royal Audit Authority (RAA) Annual report says the compared to Nu 261.46 mn in 2013 the irregularities in 2014 has increased by 142 percent at Nu 634 mn.
In a comparative analysis for the last five years since 2010 this is the third highest figure. In 2010 there was Nu 681.59 mn in irregularities, in 2011 it was Nu 770.14 which is the highest so far and in 2012 it dropped to Nu 391 mn.
The largest component this year is violation of rules and laws at Nu 263.88 percent followed by lapses and deficiencies at Nu 136.45 bn, mismanagement at Nu 135.04 mn and finally fraud and corruption at Nu 98.18 mn.
The highest irregularities is under autonomous bodies like Royal University of Bhutan, Education City, Thromdes etc at Nu 239.49 mn followed by ministries at Nu 131.6 mn.
Among the ministries the biggest irregularities is in the Ministry of Information and Communication at Nu 85.66 mn mainly over unresolved issues around the construction of the Gelephu domestic airport between 2010 and 2012.
This is followed by Nu 27.58 mn in irregularities in Dzongkhags with the main focus being on Sarpang Dzongkhag with Nu 16.52 mn in irregularities mainly due to fraud and corruption around the Losel Cinema Hall. Gewogs have Nu 2.32 mn in irregularities.
Under non budgetary agencies like corporations and financial institution there is Nu 233.14 mn in irregularities. The biggest issue here relates to the construction of the Dungsam Cement Corporation Limited with Nu 179.72 mn in irregularities.
Among political parties there is a Nu 0.221 mn observation against the Druk Phuensum Tshogpa for outstanding advances against office staff, party members and workers.
Fraud, Corruption and Embezzlement
Of the Nu 98.18 mn under this heading the biggest chunk has to do with irregular claims and overpayment of Nu 75.53 mn between 2010-2012 for the construction of the Gelephu domestic airport. The RAA over the years had observations against all three domestic airports constructed between 2010-2012 but many of these issues were resolved or the money recovered.
Another major amount of Nu 14.02 mn under Sarpang Dzongkhag pertains’ to operations of the Losel Cinema hall in Gelephu where numerous cases of corrupt practices were found including one where Nu 10.63 mn in advances were not found adjusted and there was manipulation of records.
The Thimphu Thromde here has Nu 7.11 mn in observations on this count mainly due to issues around revenue management. One major instance was that revenues amounting to Nu 5 mn were not deposited on a daily basis as required by the Revenue and Accounting Manual 2004 resulting in possible misuse of cash. Penalties amounting to Nu 0.711 mn were not imposed for non deposit of revenues on time. It was found that the dealing official had retained cash collections for almost two financial years.
Of the Nu 135.04 mn under this section around 90.10 percent is represented by Autonomous Bodies of Education City Secretariat at Nu 110.18 mn and DHI-Infra at 11.34 mn (see separate story on page 3). The rest are small amounts of Dzongkhags, Gewogs, Thromde, Ministries and corporations.
Of the total irregularities Nu 122.23 mn representing 90.51 percent pertained to revenue and construction, followed by Nu 11.932 mn representing 8.84 percent falling under revenue management.
Violation of laws and rules
Of the total of Nu 263.88 mn around Nu 261.81 mn representing around Nu 99.41 percent occurred in construction and procurement, followed by revenue management with Nu 1.25 mn.
The biggest irregularities here was for Dungsam Cement with Nu 179.09 mn (see separate story on page 4).
The College of Natural Resources, Gaeddu College of Business Studies, Royal Institute of Health Sciences, Paro and Samtse Colleges of Education, and Institute of Language and Cultural Studies (Taktse) all under the Royal University of Bhutan had irregularities of Nu 61.23 mn pertaining to construction activities in these institutes.
Ministry of Health had Nu 9.34 mn in irregularities pertaining to procurement of medicines between 2010 and 2012.
The MoIC had Nu 8.16 mn in irregularities pertaining again mainly to the Gelephu airport construction.
Dzongkhag administrations of Sarpang, Trashiyangtze, Chhukha, Dagana and Samtse had irregularities of Nu 3.267 mn.
Phuentsholing Thromde had irregularity of Nu 1.25 mn pertaining to overdue taxes and revenue.
Gewog administration in Lunana has Nu 200,000 in irregularities for irregular adjustment of advance.
Shortfall, lapses and deficiencies
The irregularities under this description came to Nu 136.45 mn. Of the total Nu 73.84 came under financial management.
The National Land Commission has irregularities of Nu 35.82 mn pertaining to non reconciliation of revenue from sales and outstanding advances.
Bhutan National Bank has irregularity of Nu 29.92 mn on account of bad and non-performing loans of 11 clients payable to the government.
Ministry of Finance has Nu 18.4 mn in irregularities pertaining to construction, revenue, advances and non realization of taxes.
Ministry of Foreign Affairs has Nu 12.85 mn in irregularities on account of inadmissible payment of children’s education allowance, non deduction of TDS and advances.
Agriculture Ministry’s Nu 4.6 mn irregularities pertain to excess payments, porter charges, advances and non reconciliation of accounts.
State Trading Corporation has to account for Nu 5.51 mn of shortage and excess in balance of stock. Food Corporation of Bhutan had Nu 4.04 mn in irregularities pertaining to operation of auction yard, shortages of food grains and overdue sundry debtors.
Dzongkhag administration of Sarpang, Chhukha and Trashigang had irregularities of around Nu 4 mn on account of advances and excess payment.
The RAA Annual Audit Report 2014 will be presented to the winter session of this Parliament later this year.