RAA identifies thrust areas for audit scrutiny

The Royal Audit Authority (RAA) has identified nine audit thrust areas for the year 2012-2013.
The categorized areas are construction, procurement, farm roads construction in dzongkhags and gewogs, consultancy services, corporate governance, management of government properties, computerization in the agencies, quality control system, and townships and urban planning in Thromdes.
The nine thrust areas were determined based on the discussions held with the department heads and division chiefs taking into account the pressing cross sector issues that needed to be reviewed and streamlined based on the audit’s past years experiences.
“Every year we prepare an Annual Audit Plan for the year beginning July to be accomplished June next year (i.e. Fiscal Year) and this plan is prepared based on the five year strategic plan, which was prepared in the year 2010,” said Assistant Auditor General of RAA Karma Tenzin.
The Audit Annual Plan 2012-13 is time bound and has been prepared in align to the RAA’s Strategic Plan 2010-15.
“We identify the audit thrust areas based on the level of risk, i.e. in areas where there is more risk of things going wrong, and this assessment is based on the past experience and our professional judgment,” said the Assistant Auditor General.
In the construction area, the RAA stated that it will continue its activities in the ministries and departments as huge amount of expenditure had been incurred in these sectors during the financial year 2011-12.
With the construction sector more prone to fraudulent practices and mismanagement the RAA will also ascertain the financial probity and prudence in the management of construction activities.
For this the adequacy of monitoring and evaluation will be assessed to the systems existing in the agencies to ensure effective and efficient implementation of the construction activities.
The RAA will be giving more focus on big construction projects such as school and hospital constructions. On the other hand, auditors will also see that payments to the contractors are made timely in accordance to the prevailing rules.
In order to ensure better application of audit methodologies, the RAA will be sensitizing its auditors on a continual basis on Construction Audit Manual, which was launched in 2011.
On the procurement front, the RAA will not only continue to focus on procurement of goods and services by the agencies but it will continue to devote adequate resources in the form of time and manpower to ensure that procurements are done in accordance to the prevailing Procurement Rules and Regulations and accordingly report on economy, efficiency and effectiveness in the delivery and use of goods and services.
The RAA auditors will also see that claims of suppliers are cleared within specified timeframes.
In the farm roads construction at dzongkhags and gewogs, during the Financial Year 2011-12 in regard to geog centre connectivity, a total of 166 gewogs centers had been planned to be connected by the end of the financial year.
A budget of Nu 2,018.018 million had been provisioned in 2011-12, which included 237 new roads, 111 spillovers, 130 roads improvement and one maintenance work.
This had been provisioned so that the review of the issues of road constructions are at the right frequency, and it would create a system to report performance gaps on a timely basis. This would facilitate appropriate intervention by the implementing agencies to resolve issues mid-way rather than at the end of the plan period.
In the consultancy services, the government had spent millions in the consultancy contract especially in specialized services such as ICT and constructions.
RAA pointed out many flaws in the procurement of consultancy services in the recent past primarily due to lack of understanding of the actual requirements by the agencies and the inability to properly evaluate the professional competency of the consultants.
In the past works executed and services provided were found to be deficient and did not render real value of money.
The report showed that problems existed from the preparation of contract documents itself which stretches to the rendering of goods and services and payment made for it.
The loopholes in the contract which favored consultants and instances of unjustified payments not commensurate with the value of work done were some of the major issues noted in the past.
To this end the RAA will ensure that complete and thorough review of procurement of consultancy services are done in all sectors involved in procurement of consultancy services from outside.
RAA will also ensure and determine whether the agencies had obtained value for money in consultancy services and provide appropriate recommendations to the agencies.
The analysis shall be carried out in the light of available capacity of the agencies, type of services outsourced, and the assessments done in support of outsourcing of services.
The corporate governance comes in the fifth area, the RAA’s mandates also extends beyond the government agencies and conducts proprietary audits of corporations where the government has ownership in addition to the external audit by chartered accountant firms empanelled by the RAA.
The Company Act provides a foundation of corporate governance. However, the improved corporate governance must be seen essential to ensure development of corporate growth according to the RAA.
The RAA will focus on compliances to good management practices in the corporations concerning appointment, conduct, powers and duties of boards, independence of directors, performance incentives, accounting policies, and human resource management.
This will be alongside the transparency and disclosures, and shareholders rights amongst others.
Apart from reporting on propriety aspects, the RAA will focus on broader aspects that would entail review of corporate governance in the corporations.
RAA will also take under its scanner the management of government properties, computerization in the agencies, quality control system, townships and urban planning in Thromdes.

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2 comments

  1. Wrong interpretation rules, regulations, circulars etc etc also need to be audited strictly. These are the ways that the officials bully the people. 

    Another one is to say they don’t know and don’t take any decisions leaving citizens hanging in the balance for years and years.

    RAA, please audit FOR THE PEOPLE, not just for the govt! Govt exists for the people and so do you!

  2. samden drup matsug

    Same recommendations year after year and report after report has fallen into the deaf ears of decision makers and proven nothing so far. Procurement and other rules do not amend any changes to deter such lapses as recommended by RAA. RAA do not follow up in the next auditing whether these agencies have adhered to their earlier recommendations. RAA detect same lapses and issue same recommendation. So it is a potter’s wheel which turns round and round.

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