… in the first two fiscal years of the 11th Plan
Assembly: In the first two fiscal years of the 11th Plan, more than Nu 7 billion (B) of the capital budget was underutilised.
The Royal Audit Authority (RAA) in its annual report 2015 pointed out that there was a decline in the utilisation of capital budget as compared to the previous years.
The revised capital budget in the 2013-14 fiscal year was Nu 19.44B while the actual expenditure reported was Nu 16.66B, resulting in underutilisation of Nu 2.820B.
In the following fiscal year, the unused budget increased to Nu 4.193B. The actual expenditure incurred in the year was Nu 15.44B against the revised capital budget of Nu 19.637B.
The Public Accounts Committee’s (PAC) report to the joint sitting stated that underutilisation of the fund will have implications on the effective and optimal use of borrowed funds and also place a burden on the government in debt servicing.
During the first day of the deliberation on the PAC report on December 6, the finance minister Namgay Dorji said since the government has to gather funds and draw plans for the entire Planned period in the first fiscal year, underutilisation of the budget in the first fiscal year has been an issue even in the past.
By the time the current government took over, he said it was already September and that there were only nine months to gather funds and implement the activities. “This issue was there in the past, it persisted and it will remain even in the future,” he said, adding that it will not have much implications to the debt as it is grant money.
The foreign minister also added that the budget once approved by Parliament is being distributed to respective ministries, dzongkhags and gewogs. To execute the works, he said drawings, estimates and the tendering process have to be initiated. He said that everything has to be done with due diligence to the financial rules and regulations, procurement manual and contract rules among others. In doing so, he said, time was lost.
The Panbang representative Dorji Wangdi said when capital expenditure is underutilised the implication is that benefits from planned activities are not reaching the people.
He said preliminary works are not conducted before the budget approval and contractor delaying the works could be probable reasons for underutilisation, besides lack of engineers.
The works and human settlement minister Dorji Choden said the issue was extensively discussed in the Cabinet meetings.
She said the problem occurred because both the budget and expertise was kept with central agencies while works are being executed in dzongkhags and gewogs.
Starting this fiscal year, Lyonpo said all budget allocated for activities in the dzongkhags and local government are being sent to the local authorities.
The deliberation that continued yesterday saw the members endorsing the RAA’s recommendations one of which states that a shift in plan and downsizing capital outlay demonstrated call for adequate analysis and evaluation of policies. Another of RAA’s recommendation also stated that there is a need to ensure that prescribed criteria are met for booking expenditure as closed work.
The joint sitting yesterday also endorsed an additional recommendation which stated that the finance ministry and the Gross National Happiness Commission must assess the implications of underutilisation of capital budget and develop strategies to reduce the underutilisation of funds.
The PAC had also recommended for the Anti-Corruption Commission (ACC) and the Office of the Attorney General (OAG) to update the PAC on the status of cases one month prior to the parliamentary session.
Another recommendation was to fix accountability on the head of the agencies if unresolved irregularities between 2009 and 2014 are not taken seriously by March 30 next year.