l Karma Yuden, Thimphu
The presentation made by the Public Accounts Committee (PAC) to the last session of the 2nd parliament, which concluded on December 8, 2017, reported that the Royal Audit Authority (RAA) issued 815 audit reports comprising of 690 financial audits, 118 compliance audit reports and seven performance audit reports.
Irregularities have been divided into four sections: fraud, corruption and embezzlement; mismanagement; violations of laws and rules and shortfalls, lapses and deficiencies.
Under fraud, corruption and embezzlement; the total unresolved irregularities is Nu.9.408 million of which Nu.2.134 million has either been resolved or settled, leaving a balance of Nu.7.274 million.
The PAC’s report says that the Ministry of Agriculture and Forestry has unresolved irregularities of Nu.0.260 million related to forged Bank guarantee in lieu of performance security and non-recovery of penalty. The case has been forwarded to Anti Corruption Commission.
In education, it is reported that serious misrepresentation of facts in the Ministry of Education’s International Assisted Project in the construction of Retaining wall (130 meter long and six meter height) along the school football field of Minjey Middle Secondary School, Lhuentse, led to irregularities amounting to Nu.6.665 million.
Though not reflected as a financial irregularity, the Royal Audit Authority has observed possible fronting case of license and submission of wrong information in key professional staff in the Asian Development Bank funded project “Rural Renewable Energy Development” under Ministry of Economic Affairs. Both the cases have been forwarded to ACC.
At the local government level, the report says that due to lack of internal control system, the Gedrung of Gewog Administration, Gangzur had misused revenue of Nu.0.035 million on rural taxes collected from the public. The Gewog Administration had reported the case to the Royal Bhutan Police, Lhuentse which was further forwarded to the Anti Corruption Commission.
Meanwhile, the College of Language and Cultural Studies (CLCS) , Taktse under the Royal University of Bhutan (RUB) initially had not deposited Nu.1.334 million into the Welfare Account from collection made on account of security deposit, development fund, self-funding fees, paper re-check fees, Distance Education fees, rental from cafeteria, printing and photocopy charges. After reconciliation, the final short deposit is confirmed as Nu.0.314 million.
Dungsam Cement Corporation Limited (DCCL) had a case of tampering documents and adding additional items. Though the management has recovered the amount and compulsorily retired the supervising official, action against the direct accountable official is awaited.
Irregularities under mismanagement are Nu.52.259 million of which Nu.15.59 has either resolved or settled leaving a balance of Nu.37.712 million.
The Ministry of Work and Human Settlement had incurred wasteful expenditure of Nu. 3.738 million in Netherlands funded ORIO Project “Poverty Alleviation through Road Development in Southern Bhutan” by continuing to pay remunerations for two Supervising Engineers and two Junior Engineers even after termination of works.
The illegal collection of fees and non-refunds amounting to Nu.7.548 million by M/S Tenzu Overseas Employment Agent has been booked as irregularities of the Ministry of Labour and Human Resources. The Ministry however, has filled criminal complaints but could not initiate court proceedings against the agent as the whereabouts of the proprietor is not known.
The Regional Revenue and Customs Office (RRCO), Phuentshoiling had short levied sales tax and green tax of Nu.8.7million during the year 2015 from imported vehicles resulting from less selling price of vehicles reflected in the bills by the dealer as compared to excise Invoice of the Manufacturer. So far Nu.4.585 million has been recovered/ adjusted leaving a balance of Nu.4.115 million. The case is subjudice.
The Ministry of Health had installed four chiller machines at a cost of Nu.21.00 million in the construction of 350 bedded Jigme Dorji Wangchuck National Referral Hospital and commissioned in August 2010 but had stopped working after four months and were found defunct and non-operational. The contractor failed to provide adequate repairs during the defect liability period due to which the chiller kept breaking down. The chillers have been lying idle for more than five years resulting into wastage of scarce resources.
The Road Safety and Transport Authority (RSTA), Regional Office, Thimphu had not released annual renewal fees amounting to Nu.0.480 million.
The RUB had not adjusted the advances of Nu.2.736 million from the contractor in the GoI funded Project “Construction of Academic, Library, MPH, 100 Bedded Hostel, Provost Quarter and Site Development Works”.
The Dungsam Cement Corporation Limited (DCCL), Nganglam had not levied penalties amounting to Nu. 5.985 million against M/S Dhenjyud Enterprise for excess content of moisture and ash in coal which did not meet preset quality control parameters during 2013 and 2015.
Langchenphug Gewog had irregularities and lapses in utilization of GDG fund amounting to Nu.0.470 million.
In this category; violations of laws and rules, total irregularities reported is Nu.159.797 million of which Nu.38.560 has either been resolved or settled leaving a balance of Nu.121.237 million.
The Ministry of Work and Human Settlement had allowed bidders to include General items of works amounting to Nu.16.596 million as separate items of works in the BoQs in the Netherlands funded ORIO Project. This was in deviation to the Procument Rules and Regulations 2009 (PRR) and the Bhutan Schedules of Rates (BSR). Further lapses were observed in the online tendering process while procuring Bitumen Emulsion worth Nu.175.953 million by the Regional Office, DoR, Phuntshoiling.
Illegal deployment of candidates in various countries, collection of fees and making advertisement of job vacancies in the social network without prior permission of the Ministry by the agent has been booked as irregularity of the Ministry. However, the Ministry had initiated action against the agent by suspending their license for 10 months.
The Regional revenue and Customs Office, Samtse had pending desk assessment of PIT for 354 candidates in contravention to chapter 2 clause 1.2 of the general provision on rules on the Income Tax Act of Bhutan 2001.
The Market access and Growth Intensification Project (MAGIP) under Dzongkhag Administration, Trashiyangtse had booked expenditure of Nu.0.878 million as closed work in the construction of Pump Irrigation Scheme without completing the works and had booked Nu. 18.233 million as final expenditure for various incomplete constructions and deposited into Refundable Deposit Account for future payments.
Chukha Dzongkhag Administration had cases of substandard works valuing to Nu.2.086 million executed in the resurfacing of road from Tsimasham to Tsimalakha, construction of foot path at Tsimalakha, construction of farm road from Kothiline to Pana and construction of BHU – II at Dungna.
Under TCB, the contractor had not rectified various defective works worth Nu.2.559 million in the Austrian funded construction project of Hotel and Tourism Management Training Institute, Motithang.
The BPCL, Phuntsholing had not levied ten percent liquidated damages amounting to Nu.38.249 million on the contractor for unwarranted grant of time extensions in the construction of ‘220KV Transmission Line from Malbase to Samtse.
In the final category, shortfalls, lapses and deficiencies, total irregularities reported was Nu.367.320 million of which Nu.146.815 has either been resolved or settled leaving a balance of Nu.220.505 million.
The Ministry of Work and Human Settlement has shortfalls, lapses and deficiencies of Nu.94.236 million, while the Ministry of Agriculture and Forest has Nu.17.821 million. The Ministry of Labour and Human Resources has irregularities of Nu.1.845 million and the Ministry of Finance Nu.1.162 million.
The report states that the Dzongkhag Administration, Chukha had made excess payment of Nu.1.743 million, Dagana had made excess payment of Nu.3.270 million and Trashigang had neither surrendered National Day Celebration materials valuing to Nu.1.919 million to the Department of National Properties (DNP).
DCCL,Nganglam had made excess payments amounting to Nu.0.661 million due to non-deduction of three percent TDS from bill payments made to M/S Sharma Hardware Stores, Phuntsholing to supply of materials and other items. Similarly, DCCL, Nganglam had made over payments amounting to Nu.0.796 million due to inflated claim of quantities for ceiling works executed in the construction of ten units temporary accommodations for employees.
The Natural Resources Development Corporation Limited (NRDCL), Bumthang had made excess payments amounting to Nu.1.163 million in the construction of three Kilo meters. Others include the Royal Insurance Corporation of Bhutan, Regional Office, Phuntsholing, which had overdue outstanding claims amounting to Nu.19.388 million payable to clients on account of motors. The Bhutan Development Bank Limited, Head Office, Thimphu had a case of seriously defaulted Housing Loan amounting to Nu.24.548 million.