10 January, 2010 - A penal interest of 24 percent per year will be imposed on all uncleared audit dues, according to a 7 January 2010 circular from the ministry of finance and the royal audit authority. The penalty will be applicable from 1 March 2010, including all past and future audit cases.
The circular applies not only to civil servants but even government corporations and financial institutions, which have to implement the penal interest as per their own respective financial regulations.
The circular is based on a resolution of the third session of the National Assembly that calls for imposing such a penalty on all audit irregularities pertaining to expenditure and advances.
For audit reports that are issued after or on 1 January 2010, a three-month time will be given for the amount to be recovered after which the interest calculation will start.
“In case the amount isn’t paid back with penalty 12 months after the date of issue of the audit report, then the agencies concerned should take legal action by taking the defaulter to court,” said the auditor general Ugen Chewang.
For example, if a person does an audit violation in March 2009, then when the agency wise audit report comes out in December 2009 showing his violation, he would have a three month’s grace period to pay back without interest after which the interest is calculated. So, by the end of 12 months from the date of issue of the audit report, if the amount is still unpaid, then the person would be taken to court.
Advances however will attract the penalty immediately after the due date for paying back the advance is over, irrespective of when the audit memo is issued.
“Advances are of different types like the salary advance, training advance, ta/da advance and contractors advance,” said Sonam Wangdi, the chief administrative officer of MoF.
“All advances will have to be paid back within a month from taking the salary advance, returning from training and a tour, otherwise the 24 percent will start applying from the next month, even if the audit report comes out much later,” said Ugen Chewang.
He said that, in case of contractors advance, it would depend on the contract agreement between the two parties.
For example, if a person going for training and his or her agency pays for the air ticket as advance, which is reimbursed by the sponsoring agency to the person in the foreign country. The person even if he/she spends the reimbursed money for shopping would have to come back and pay it within a month or face the penalty calculation.
“Earlier the person would either defer payment for months or ask the agency to cut a certain percent from his or her pay on a monthly basis which is no longer allowed,” said Sonam Wangdi.
RAA has some Nu 94 mn in uncleared audit dues going back from 1987 till 2006, while those for 2007 and 2008 are also under process.
By Tenzing Lamsang
