22 April, 2009 - The basic skills development programme (BSDP) under the ministry of labour and human resources (MoLHR) - funded with a loan from the Asian Development Bank of Nu 371.47m - is facing allegations ranging from siphoning of funds and payment lapses to violation of accounting norms and irregularities.

This was detected by the royal audit authority (RAA) in January 2009.

Started in November 2001 and completed in May 2008, the BSDP programme was planned to provide basic employment skills to school graduates, unemployed youth, domestic labourers, women and people living in rural areas, through the establishment of three vocational training institutes (VTI) in Trashigang, Bumthang and Punakha, one Zorig Chosum in Trashiyangtze and one institute of automobile engineering in Thimphu.

According to the audit report, the direct accountability of the project lies with the ministry’s accountant Samten Wangdi; the supervisory accountability with project manager Phuntsho Wangmo and, partly, with project director Sonam Rinchen, both of the same ministry.

About Nu 4.25m has been siphoned of, alleged the audit report.

This includes a Nu 1.4m cheque, drawn by Phuntsho Wangmo in her name, authorised in May 2008 by project director Sonam Rinchen, to be paid to Nima construction for a riverbank construction work at Rangjung VTI. However, the money never reached the company.

“Accountant Samten is saying that he never got the money, while Phuntsho Wangmo, who is studying in Australia, e-mailed us to say she gave the money to the accountant (to be paid to Nima),” said project director Sonam Rinchen to Kuensel.

About Nu 500,000 was also siphoned from the bank account of the project by manipulating transaction records. About Nu 505,458 was also drawn, which included dollar buying but was never actually bought, and other fictitious transactions. About Nu 272,000 was also siphoned through non-recording of amounts recovered from Norgay construction and MoLHR. The report also says that Nima construction was overpaid Nu 1.4m in refunds. About Nu 85,000 from tender sales was also not recorded and spirited away, say audit report.

MoLHR also found that, although about 70 percent of the Nu 37.92m claimed by Dangling construction was paid in the past, the BSDP project management was nonetheless about to pay the company again, the remaining amount of Nu 17 million (Nu 18 million was already paid). MoLHR minister Lyonpo Dorji Wangdi, who joined towards the tail-end of the project, stopped the transaction after the audit report came out.

In 2007-08, BSDP incurred about Nu 59m in expenses, of which payment vouchers and receipts for Nu 12m was not made available to the audit team. Of this, the project management showed Nu 7m in Xeroxed receipts, which audit did not accept but demanded the original receipts. They have not been submitted.

The project also did not have proper documentation on money received and refunded to clients. About Nu 6m was refunded to contractors, which was in excess of the actual amount. Payments of Nu 10.6m were made without verification of bills, either by the project manager or concerned officials, with seals and signs of approval missing in some cases.

According to the audit report, Samten Wangdi transferred about Nu 2m from the BSDP project to the rural skills development project and held around Nu 1.6m of the refund in cash, not depositing it into the government account as he was supposed to.

Construction irregularities have also been discovered with regard to the non-repair of 100 m of river protection work in the Rangjung VTI and the non-insurance of the said work. In the contract for renovation of the old government workshop in Thimphu, about Nu 834,000 of expenses incurred was not supported by relevant documents.

The project management is, however, yet to bring out its financial statements and quarterly report from 2007-2008.

The labour ministry had also invested about Nu 45m on procurement of tools and equipment for BSDP, on which the audit team had asked the ministry to verify their existence and quality.

“During the audit, the project accountant Samten Wangdi and project manager Phuntsho Wangmo were not present, as the former was in jail over a ‘personal matter’ and the latter is in Australia on study,” said project director Sonam Rinchen.

The audit has given MoLHR till June 3 this year to take action against the persons concerned, or produce any missing documents, failing which the case will be forwarded to the office of the attorney general for prosecution.