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Thinley Namgay 

In the past five years, the unresolved financial irregularities have kept increasing as per the annual audit report (AAR) 2020.

According to the report, unresolved irregularities in 2020 stands at Nu 2,051.23 million (M), an increase of 44.95 percent compared to the irregularities of 2019.

Shortfalls, lapses and deficiencies account to Nu 1,574.24M, followed by non-compliance to laws and rules with Nu 408.86M. Mismanagement accounts to Nu 42.76M, fraud and corruption misused Nu 18.33M, and embezzlement involve Nu 7.83M.

In 2020, the Royal Audit Authority (RAA) carried out 510 audits and issued 507 reports comprising of 455 financial audit reports, 49 compliance audit reports, two performance audit reports, and the joint-audit report on Mangdechhu Hydroelectric Project Authority (MHPA).

The report contains significant unresolved issues of ten ministries, nine dzongkhag administrations, four drungkhag administrations, 49 gewogs, 10 autonomous agencies, 15 corporations, three financial institutions and nine non-government organisations (NGOs).

Agencies with significant fraud, corruption and embezzlement cases are in four gewogs of Trashigang (Radhi, Phongmey, Shongphu, and Bidung) with Nu 11.35M, Thimphu Thromde with Nu 4.41M, and Pemagatshel dzongkhag with Nu 2.05M.

Irregularities in MHPA amounts to Nu 6.37M, comprising Nu 4.29M under non-compliance to laws and rules and Nu 2.08M of shortfalls, lapses and deficiencies.

AAR 2020 report stated: “The increasing trend in irregularities could be indicative of the laxity on the part of the management of the government agencies, corporations and NGOs in undertaking corrective actions, injudicious use of government resources and lack of due diligence.”

Under shortfalls, lapses and deficiencies, the highest irregularities were found to be with financial institutions with Nu 651.26M, followed by ministries with Nu 540.83M.

For ‘non-compliance to laws and rules’, autonomous agencies had Nu 249.46M, followed by ministries with Nu. 91.22M.

Under the budgetary agencies, the highest amount of irregularities was reported under the  Ministry of Works and Human Settlement at Nu 345.81M, followed by autonomous agencies at Nu 288.78M and Ministry of Economic Affairs with Nu 261.34M.

Under the non-budgetary agencies, Bhutan Development Bank Ltd. had irregularities amounting to Nu 311.02M, followed by Royal Insurance Corporation of Bhutan Ltd and Bank of Bhutan with irregularities of Nu 183.44M, and Nu 160.44M, respectively.

The report cited that the significant increase of lapses for the non-budgetary agencies was due to a huge portion of non-performing loans.

Irregularities relating to mismanagement cases were highest in drungkhag administrations with Nu 13.66M, followed by dzongkhag administrations at Nu 9.91M and corporations at Nu 8.36M.

“While financial Institutions recorded no mismanagement cases, ministries had cases amounting to Nu 3.23M, NGOs had Nu 2.38M, and autonomous agencies had irregularities amounting to Nu. 3.63M,” the report stated.

Under the non-compliance to the laws and rules, autonomous agencies had the highest irregularities amounting to Nu 249.46M, followed by ministries with Nu 91.22M and gewog administrations with Nu 37.54M.

RAA officials said that auditing was a continuous process and it would be difficult to tell when to subside irregularities.

The lack of timely response to the audit report aggravated the irregularities, as per the officials.

Officials claimed that RAA had been informing various agencies on the lapses after the report and provided a three-month duration to justify their stand.

After the three-month dateline, RAA would impose a 24-percent penalty daily, officials said.

Edited by Jigme Wangchuk

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