Report: Most activities executed under the Gewog Development Grant (GDG) in the last two fiscal years (2013-14 and 2014-15) are of no economic value to the local economy, the Royal Audit Authority (RAA) has found.

About Nu 799 million (M) was spent on 2,181 small activities that are similar to normal planned activities.

The RAA’s performance audit report on GDG states that a sizable amount of public resources was spent on activities having no long-term impact. “It apparently does not yield or encourage new ideas or innovation … funds are not used for maximum economic advantage.”

The RAA has recommended the government review the existing GDG system and to align activities executed through GDG with that of long-term national goals.

The audit recommends the addition of provisions in the GDG guidelines that not only promotes decentralisation but also fosters local economic growth, generates employment and enhances income opportunities for the rural communities.

In absence of such provisions, the RAA found that gewog administration and gewog tshogde members had allocated budget for activities with no long-term impact.

For instance, Nu 48 million (M) was spent on activities like renovation or construction of lhakhangs, schools, BHUs, among others, which were under the direct control and financial responsibility of the dzongkhag administration. This deprived the people of their share of funds to be spent on chiwog development.

In the last two fiscal years, more than 915 activities involving Nu 312M from the grant were spent on religious and guest house related activities, entertainment, and awareness programmes.

The guideline stipulates equitable distribution of the grant among chiwogs irrespective of number of households, population and size. RAA found this provision restrictive to undertake larger activities with long-term economic impact.

The authority also found that the system doesn’t ensure fairness and equity. Should the GDG fund be divided up among individual households, each of the 29 households in Soe gewog, Thimphu would get Nu 68,965 a year. But in Samtse gewog with 1,918 households, the GDG budget per household works out to Nu 1,043 a year.

While the GDG guidelines 2014 states that the grant allocated is “over and above” the regular budget provided to the gewogs, the review of revised capital budget conducted by the RAA found decreasing trend in budget allocation in the last two fiscal years.

The aggregate amount of capital budget, including Nu 410M GDG has decreased from Nu 1.72 billion (B) in 2012-13 to Nu 1.26B in 2013-14. Without the GDG, it was found that the capital budget has reduced by 50 percent. In many cases, the audit noted that GDG was much higher than the normal capital budget allotted.

It was observed that GDG funds were used in funding more than 151 activities either forming a part of the annual budget of the gewog or those covered under the 11th Plan. “The need for co-funding out of GDG had arisen due to reduction in the allocation of normal capital budget in 2013-14 and 2014-15,” the report states.

Funds spent on unusable and incomplete infrastructure

Due to lack of proper planning, coordination and monitoring the audit noted that more than Nu 31.85M was spent on infrastructures that were either not usable or incomplete.

For example, an amount of Nu 1.27M was spent to construct a pump house at Rama, Chang gewog in Thimphu. But the power transformer wasn’t able to bear the load. So the Bhutan Power Corporation had to replace the transformer.

Some 33 farm roads constructed from GDG at a cost of Nu 24.56M was found not pliable due to inadequacy of funds to meet the basic requirement standards and lack of maintenance funds.

The 2km farm road from Karberater to Chukhangsum farm road in Gakiling gewog, Haa did not benefit three villages, as a bridge has to be constructed to connect the villages. By the time the bridge is constructed, the audit claims that the road will be unusable. About Nu 1.6M has been spent on its construction.

Similarly, Phuntsho, Yonten, Norbuling Namlay Tshogday, a farmers’ cooperative in Langchenphu gewog in Samdrupjongkhar incurred an expenditure of Nu 3.35M for supply of ginger seedlings, construction of a caretaker’s house and barbed wire fencing.

Upon auditing, it was found that the cooperative was not registered as per rules and regulations and was established on government land without authority. It was also found that the caretaker’s house was abandoned and fencing was destroyed. Further the plantation done was covered by bushes and not surviving.

As per the guidelines, GDG funded activities should be monitored by respective chiwogs and technical backstopping such as design, drawing, estimates and monitoring should be provided by the dzongkhag administration.

However, RAA observed that more than 63 percent of gewogs did not submit proposals for GDG implementation. It was directly endorsed by the Gewog Tshodu (GT) and in some cases no endorsement from the GT was sought.

Further, it was found that activities were being monitored by concerned tshogpas and gups and not by the dzongkhag administration. No working committees were formed contradicting the provisions of community contracting protocol and resulting in sub-standard works. More than 41 percent of gewogs did not submit reports to the concerned agencies.

More than 353 activities were implemented without appropriate monitoring and verification. Likewise, 728 activities were not monitored by the dzongkhags.

Non-standard farm roads constructed 

Most of the chiwogs prioritised farm roads and consequently 566 were either constructed or renovated from the GDG fund. About Nu 154.6M was spent on construction of farm roads alone.

However, the indicative budget required for the construction of farm roads, as per the farm road development guideline is Nu 3M per kilometre, if construction is done through contract and Nu 2M if it is done departmentally.

So, even if the entire GDG of Nu 2M is spent on construction of farm road it is insufficient. The RAA pointed out that farm roads constructed through GDG did not meet the minimum standards and technical specifications.

For instance, the technical sanction for the 1.28km farm road from Basochhu to Mephina in Wangdue was Nu 8.46M while the funding with which the road was constructed from GDG was Nu 0.87M, which is not even 11 percent of the technical sanction.

The audit team also visited 22 newly constructed farm roads and found that the roads did not have proper side drains, culverts, retaining wall and were un-pliable.

“The farm road constructed without meeting the required minimum standards will inevitably have limited useful economic life and also may not add any value or benefit to the communities,” the report states.


No. of GDG implemented  activities

(As of June 2015)

566 –  Construction & renovation of farm roads

163 –  Construction, renovation & maintenance of meeting hall/kitchen/store /toilet

364 –  Rehabilitation/protection/maintenance/renovation of RWSS & irrigation channel

133 –  Construction, renovation & maintenance of Lamai Zimchung and religious items

243 –  Construction, renovation & maintenance  of lhakhangs/chortens/cremation ground

199 –  Procurement/supply of seeds & seedling/poultry/livestock/barbed fencing

32 –  Renovation & maintenance of gewog office/staff quarter

22 –  Disaster relief fund

55 –  Construction of footpath/walls/gates/grounds/drainage

62 –  Electrification & barbed wire fencing

87  – Procurement of materials/equipment

241 –  Construction & renovation of schools/ECR/ORC/ECCD

14 –  Others


Tshering Dorji