FCBL fails to resolve all irregularities

Audit: The Public Accounts Committee (PAC) of Parliament yesterday held a public hearing on numerous unresolved audit irregularities of the Food Corporation of Bhutan Ltd (FCBL) in Phuentsholing.

The hearing was held to understand the corporation’s irregularities that occurred between 2009 and 2014.

Officials from the Royal Audit Authority  (RAA) was also part of the hearing yesterday.

There were two observations on the irregularities; those that occurred from 2009 to 2013 and in 2014.

Most of the cases have been resolved partially, while some will be resolved at a later date. Granting of credit facilities without liquidating earlier dues is regarded as “100 percent unresolved.”

The FCBL depot in Paro had sold goods worth Nu 0.351 million (M) on credit to a business entity known as Planters Commercial. The facility was provided without the previous dues liquidated and this contravened guidelines of the credit policy on the sale of food grains and agency items.

As the owner of the Planters Commercial is serving a prison sentence currently, necessary actions could not be taken.

Irregularities were also identified on outstanding rent on two occasions. However, both cases have been partially resolved. FCBL representatives said that the current management could not trace about 10 tenants.

“The agreement drawn in the past had no details of these tenants,” an FCBL official said, explaining that only names and signatures were available. Some cases under outstanding rents date back to 2006, it was pointed out.

FCBL also allowed bidders at the auction yard to delay payment to several hundred farmers. Payments amounting to Nu 37.29M were delayed. In one case, a farmer’s payment was delayed for 770 days. However, dues observed by the RAA have been recovered and there is no balance.

Corporation representatives attributed the delay in payment to credit facilities rendered to the bidders to create better auction prices, which enhances purchasing capacity and largely helps farmers across the country.

Non-deposit of service charges and overdue sundry debtors, were two other irregularities discussed at the hearing.

After a series of questions and submissions, the committee recommended a number of  ways forward through continued communication with RAA in resolving the issues. The committee appreciated efforts made by FCBL in framing a strong credit policy and on new procedures to prevent similar irregularities in future. RAA urged FCBL to effectively enforce these policies and procedure.

The hearing yesterday was conducted as a follow up to the resolutions of the Seventh Session of Parliament.

PAC deputy chairman and Wangdue MP, Tashi Dorji, said they are receiving positive responses. “Necessary documents were available,” he said, adding that the committee has so far received all necessary information.

With five such hearings conducted for five ministries in Thimphu in August this year, this is the sixth public hearing. The hydropower projects are next in line.

Irregularities from 2009 to 2013 were supposed to have been resolved by March this year, while irregularities of 2014 by the end of this month.

Rajesh Rai | Phuentsholing

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