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The Royal Audit Authority (RAA) reported a case of misuse of public funds amounting to Nu 4.553 million (mn) at the Regional Office of Industry, Commerce and Employment (ROICE), Samdrup Jongkhar. The irregularity involved the accountant of the office, who adjusted personal advances released to officials as expenditure without supporting documents.
The RAA stated that an advance amount of Nu 4.553 mn released to various officials was adjusted as expenditure without bills or documents to support their utilization. The audit found that such fraudulent practices occurred due to the absence of appropriate controls in the sanctioning and recovery of personal advances. While the full amount was later recovered and deposited into the Audit Recoveries Account, the case was referred to the Anti-Corruption Commission (ACC) for further investigation.
According to the audit, financial rules and regulations require that personal advances provided to government employees must either be adjusted from their pay and allowances or supported by bills demonstrating their use for government purposes. The RAA cited Section 8.1.6 of the Finance and Accounting Manual, which mandates that any payment of personal advance must be processed based on a sanction order issued by a competent authority. The sanction order must specify the purpose of the advance, the time and manner of recovery or adjustment, and a copy of the order must be attached with the disbursement voucher.
The audit further explained that personal advances such as travel allowance and leave salary, when paid in accordance with service rules, are booked under ‘Personal Advances’ with Broad Head Code 7. Temporary and permanent advances issued for government works must be treated under appropriate suspense heads and not under personal advances.
Such personal advances are required to be liquidated through deductions from pay and allowances or refunded through transfer into the Non-Revenue Accounts of the Ministry of Finance. After this, accountants adjust the advance by creating an Other Voucher in the system, followed by an equivalent release sanctioned by the Department of Treasury Accounts.
A review of the Memorandum Register for Personal Advances from 1st January 2022 to 28th March 2025 revealed that out of the total sanctioned personal advances of Nu 6.5 mn to various officials, only Nu 1.9 mn was properly adjusted through payroll deductions or settled with supporting utilization documents. The remaining Nu 4.553 mn was adjusted through Journal Vouchers without actual liquidation into the government account. These advances were directly recorded as expenditure without proper documentation, indicating potential misuse of funds.
Upon inquiry, six officials informed the auditors that they had refunded the advances in cash to the accounts section, with the accountant acknowledging receipt. However, instead of depositing the refunded amounts into the Non-Revenue Account, the accountant adjusted the advances as expenditure under the names of the six officials. The accountant also admitted that the advances were used for private purposes. ROICE, Samdrup Jongkhar was requested by the RAA to furnish justifications.
In response, Mani Raj Gurung, Accounts Assistant, acknowledged the audit observation and stated that seven individuals, including himself, had availed personal advances that were adjusted through Journal Vouchers. He clarified that the total amount of Nu 4.553 mn was adjusted without adequate supporting documents. He stated that all other individuals who availed advances had fully repaid Nu 620,000 while the remaining amount was associated with his own advances.
He admitted that he failed to deposit the refunded cash into the Non-Revenue Accounts in a timely manner and instead created vouchers reflecting deposits within the accounts section. He further stated that the amount of Nu 3.9 mn availed in his name was also not deposited on time into the Non-Revenue Account and was adjusted through Journal Vouchers. He accepted full accountability for the missing amount, expressed regret over the lapse, and committed to making the necessary payments or recovering the outstanding amount within the stipulated period.
The RAA observed that the ROICE, Samdrup Jongkhar did not exercise due diligence while disbursing personal advances and failed to consider the repayment capacity of recipients.
The audit attributed the lapses to the absence of a proper maker-checker mechanism within the system. It noted that the accountant was solely responsible for preparing and approving vouchers, creating a conflict of interest and increasing the risk of financial mismanagement. The RAA recommended strengthening internal controls through segregation of duties, enhanced supervision and monitoring, regular internal audits, reconciliation procedures, and strict adherence to financial regulations to prevent future misuse of funds.
The audit identified direct accountability with Mani Raj Gurung, Accounts Assistant I of ROICE, Samdrup Jongkhar, and supervisory accountability with Aiman Mahat, Regional Director of the same office.
