As of September this year, a total of Nu 796.2M remain unresolved, finds PAC
To minimise the misuse of funds, the local governments or gewogs have to deposit the revenue collected from the public in the official account, the joint sitting of the Parliament decided on December 5.
This was one of the recommendations of the Royal Audit Authority (RAA) report 2016 from Public Accounts Committee (PAC) that the joint sitting of the Parliament adopted after a lengthy deliberation.
The committee recommended that finance ministry immediately complete pending desk review of personal income tax and institute measures to complete the assessment on time.
The Parliament recommended Bhutan Development Bank to expedite and resolve defaulted loan litigation cases from 1991-2015 by June 2018. The RAA forwarded the recommendations to the PAC.
The most recurrent issues were the mounting irregularities and unused budget.
PAC chairperson and Wangdue National Council member, Tashi Dorji reported that as of June this year, unresolved irregularities reported were about Nu 159 million (M) in nine ministries; Nu 50M in 13 dzongkhags; Nu 8M in 15 gewogs; Nu 64M in nine autonomous agencies; Nu 70M in 10 corporations; Nu 21M in two financial institutions and Nu 13M in one non-government organisation.
The highest unresolved irregularities among the ministries were reported in the Ministry of Works and Human Settlement (MoWHS) with about Nu 115M followed by the Ministry of Agriculture and Forests with Nu 21M as of September 30.
Trashiyangtse had the highest unresolved irregularities of about Nu 20M. Among the autonomous agencies, Royal University of Bhutan accounted for 14 percent of the total irregularities followed by Tourism Corporation of Bhutan with about one percent.
MoWHS minister Dorji Choden said that the irregularities were not big issues as the ministry dealt mostly with procurement projects worth billions involving more than 100 contractors. “The ministry recovered Nu 59M of the Nu 169M initial irregularities,” she said.
She said Nu 94M was mostly giving as advance payment for road blacktopping. “The work is ongoing and there’s not a big problem,” she said. “The irregularities were not for fraud or personal gains but for the benefits of the work progress. There was no corruption and embezzlement.”
The approved budget for the 2015-16 fiscal was Nu 45.505 Billion (B) against an estimated budget of Nu 41.018B with a fiscal deficit of Nu 4.487B.
During the year, the outlay was revised to Nu 48.776B and the budget to Nu 44.677B. At the end of the fiscal year, the actual outlay reported was Nu 43.603B against the realised budget of Nu 42.039B resulting in a fiscal deficit of Nu 2.779B.
As against the revised capital budget of Nu 26.578B, the actual expenditure was Nu 21.808B with resultant underutilisation of capital budget of Nu 4.770B which was 17.95 percent of the revised capital budget.
The government debt as of June 30 was Nu 160.562B, of which Nu 4.656B accounts for domestic debt and Nu 155.906B for external debt.
Trongsa National Council member Tharchen asked why most of the ministries had unused budget when they are better equipped both in terms of materials and expertise. “The situation in the gewogs is the opposite,” he said.
Despite the trend of high-unused budget in the central agencies and the gewogs not being able to handle large budgets, the government plans to give more to the local governments in the next Plan.
Finance minister Namgay Dorji said this has happened with every Plan but there was huge decrease in the unused budget over the years.
The minister said agencies make higher budget estimates for works but the actual contract bid was lower by 20-30 percent, which is why the money is returned to the government. “There are delays in bidding processes which leads to time overrun,” he said.
Lyonpo Namgay Dorji said such trend is expected to reduce hereon. “The annual performance agreements that the agencies signed with the government have five percent marking on incomplete capital works,” he said.
The finance ministry’s budget utilisation plan is implemented to disburse budget properly. There is a quarterly meeting held between Gross National Happiness Commission, National Budget and Public Accounts to check on budget and the status of implementation.
The minister also said that in the 11th Plan, 22 percent of the budget was given to the local governments and 76 percent implemented by central agencies.
However, he said, the local governments were given more than 35 percent in 2015-16 fiscal year which further increased in 2016-17.
“Moreover, they have the annual gewog development grant of Nu 2M, and from 2016-17, the annual dzongkhag development grant of Nu 7M,” he said.
The PAC committee examined and evaluated the financial audit reports, reviewed performance audit reports, conducted several meetings and completed synthesised report for the presentation to the Parliament.
The PAC presented the annual audit report 2016, review report of annual audit report 2015, implementation status of 8th session resolution from 2009-2014, and its observations and recommendations.