Record of the Proceedings of the Fifth AAC of the Royal Audit Authority

(21^st – 23^rd July 2002, Royal Banquet Hall, Thimphu)  
Day – I

The 5^th Annual Audit Conference commenced on 21^st July 2002 at the Royal Banquet Hall, Thimphu. Lyonpo Khandu Wangchuk, the Chairman of the Council of Ministers graced the opening ceremony as the Chief Guest. It formally began by singing the National Anthem followed by the Marchang ceremony. Officers and members of the staff of the Royal Audit Authority (RAA) actively took part. 

Minjur Dorji, the Secretary General of the Conference welcomed the guests and expressed his immense gratitude and extended the sincere welcome to the Chief Guest and other distinguished guests and participants. He expressed his confidence of a good start to the Fifth Annual Audit Conference with the blessing and good wishes of all the well wishers. He informed and reminded the floor of the unfortunate demise of one of our senior colleagues, Kumbu Dorji, the then Deputy Chief Auditor and expressed utmost sorrow and grief of the audit family and the Conference observed a minute’s silence and prayer. He stated that the auditors had gathered in this very place a year ago to share ideas, ideology, concerns, views and experiences. He remarked such occasions are rare and it is the only time the audit family gets opportunity to share the auditing experiences and declared that we shall collectively resolve to strive towards the common goal.

He emphasized that the conference theme “A Successful Ninth Five-Year Plan: Role of the RAA” is chosen aptly and timely suiting the occasion as the Ninth Five Year Plan launches at this crucial juncture of time. It was stated that the Ninth Plan accords priority to the development of infrastructures and social services and the process of decentralization, a new thrust with the introduction of revised GYT and DYT Chathrims. He quoted the Ninth Plan document “Auditing will be strengthened to scrutinize the management of finances in the Geog and Dzongkhag administrations and to provide recommendations to the Royal Government on the cost effective ways of improving performance”.  

The In-House Training Coordinator, Tashi presented his report of the RAA’s 2^nd Annual In-House training held during July 2002. The floor was informed that the In-House training was inaugurated on 1^st July 2002 by the Ambassador of India to Bhutan, His Excellency Shri K.S. Jasrotia. He briefed that training were conducted on various subjects such as System Based Auditing, Internal Control, IT-Systems Audit, Certification Audits and Performance Auditing conducted by the resource persons from the Office of Comptroller and Auditor General of India and the RAA[1]. 

The Hon’ble Auditor General then presented Auditor General’s Report to the Fifth Annual Audit Conference covering the Financial Year 2001-2002 highlighting various achievements made during the last financial year. Among the long lists of achievements, he expressed satisfaction on the implementation of the Zero Tolerance Approach Policy in auditing adopted at the end of the Fourth Annual Audit Conference. He reported that more than 198 agencies had been audited, including audit of Country offices and few bilateral organizations, 159 Inspection Reports and 90 certifications were issued by the RAA. He also reported on the audit observations raised, amount of recoveries made, follow-ups done, Audit clearance issued for various purposes and also reported on streamlining the issue of audit clearance.   

Further, the Auditor General informed the house that the Annual Audit Report 2000 was issued as committed in the last Annual Audit Conference, which did create a tremor when it was made public. He landed the good works of the Auditors that could not be faulted by the affected people. He also informed the floor of the signing of the Memorandum of Understanding that was signed between the Office of the Comptroller & Auditor General of India and the Royal Audit Authority to promote professionalism through exchange of experiences, training and attachment courses and its ultimate results, which had immensely benefited RAA in particular and promoted Indo-Bhutan relations. 

He urged for the need to enhance the corporate accountability, entrepreneur friendly role of financial institutions; systematic and facilitating urban development; application of holistic approach to development and management; responsible and transparent technical assistance; and greater role of Private Sector to fight corruption.  

He pleaded that the audit reports and findings be made accessible and available to all interested as well as affected in their organization; and the action and decisions taken should also be made available in a widely circulated media for public to be aware of integrity and accountability systems of the managers in an organization. He also reminded the Bhutan’s Policy on anonymous complaints may be reviewed while innocents may be protected from frivolous and malicious criticism yet grant immunity to well meant whistle blowers. He reported that the theme for the 5^th Annual Audit Conference to be the “A Successful Ninth Five Year Plan: Role of the RAA” has been chosen so that the auditors are better prepared to answer the call of the Ninth Plan. 

The Hon’ble Chief Guest, Tengye Lyonpo Khandu Wangchuk, the Chairman of the Council of Ministers and the Planning Commission expressed his appreciation for the achievements made by the RAA. He remarked that the auditors have difficult job to do and recognizing the same His Majesty have generously rewarded the auditors with more benefits. It was also expressed that RAA had been given independence and reminded that auditors should be more responsible as with the independence of the responsibility and duty comes. He also recalled that the RAA’s reporting system earlier used to be one-sided, reporting only negative and urged for a balanced reporting system by acknowledging and reporting the achievements and good deeds done by the audited agencies as well. He also suggested that the RAA in addition to recruiting fresh students should consider secondment of the auditors to the auditee agencies to gain on-the-job experience so that the auditors understand the practical problems faced by the audited agencies and can weigh the pros and cons of deviations from the rules, regulations, laws and acts and its impact towards country’s development. It was expressed that the audit observations need to be categorized based on the seriousness and materiality of the observations so that important audit observations draw due importance of the competent authorities. Further, the Chief Guest stated that with the changes in the political system with the decentralization of executive authorities to the DYT levels, the auditors should work with more sense of responsibility, dedication, and utmost care without fear and favor. It was also expressed that the auditors should recommend measures to the auditee agencies and suggestions may be made to correct and amendment of policies, laws, rules and regulations of the country where it finds necessary. The Hon’ble Chief Guest assured the RAA the full support from the Royal Government. 

The Opening Ceremony formally closed with a vote of thanks proposed by Khampa Tshering who emphasized that the advices and remarks made by the Chief Guest and assured to uphold these as the guiding principles in our endeavor to enhance the three pillars of Good Governance; Accountability, Transparency and Efficiency.  

Session-I

The Fifth Annual Audit Conference commenced with a brief presentation of the programmes by Minjur Dorji, the Conference Secretary General. He thanked all officials of the RAA for making the opening ceremony of the conference a success. 

Choida Jamtsho, Deputy Chief Auditor, chaired the first session. He began the session by stating that we have been looking forward to this historic moment in order to debate on issues and topic of concern to our Supreme Audit Institution and us with the expectation of changing our present for a fully hopeful future.

The Hon’ble Auditor General of Bhutan in his opening address to the Conference informed the participants that it is with a great sense of happiness that auditors are attending the 5^th Annual Audit Conference on the theme “ A successful 9^th five-year Plan: Role of RAA”. He emphasized on the greater role that the RAA is expected to play in the 9^th FY plan when the people at the grass root level will be further empowered to shoulder the governance and developmental responsibilities by themselves. He reminded all the Auditors that since this is the only forum where all audit family could sit together and discuss and resolve the problems of mutual concerns. He drew the attention to the urgency of the need for auditors to the full use of Audit Information Management System (AIMS) and briefed on the Annual Audit Report 2000 and aftermath. He emphasized the importance and the urgency of the use of Audit Report Template. He proposed for a documentation centre to archive all important audit records. He stressed on the need for integrity of RAA’s AFD and better preparedness of every auditor for auditing in the 9^th Plan. He wished the 5^th Annual Audit Conference to be of greater success than the previous ones, owing to benefit of the experience gained from the past.

In the latter session Tshering Pem, Under Secretary of the Planning Commission Secretariat made a comprehensive presentation on the 9^th Plan. She emphasized that one of the development goals of the 9^th FY Plan is good governance. She stressed upon the significant role that the Royal Audit Authority has to play in promoting the good governance and the country’s overall development process. She touched upon the development goals, strategies, plan priorities, plan outlay etc. The Hon’ble Auditor General of Bhutan complimented the Planning Commission and its Secretariat for the formulation of the Ninth Plan. Audit shall further translate the expectation of His Majesty the King for full and effective participation of Bhutanese people in governance and management of development. He committed that RAA shall try in its modest way to ensure the successful implementation of the Plan.

Session-II

In session II the resource persons from the Department of Budget & Accounts, MOF thanked the RAA for giving such an opportunity. The Resource Speaker, Choiten Wangchuk presented the 9^th FY Plan budget allocation followed by briefly indicating as to how these activities are expected to be financed. He also highlighted on the new initiatives undertaken by MOF on the accounting system of the geog based 9^th FY Plan. He informed the house that 50% of the contents of the draft GYT and DYT Chathrim presented to the National Assembly involves financial aspects, which requires the constant supervision of the RAA. He acknowledged the RAA’s support and the cooperation in the preparation of Financial Rules & Regulations 2001 and reorganisation of the Procurement Manual 1998.

Minjur Dorji, Secretary General of the Conference raised the issues on operation of LC Accounts for those geogs, which are far away from the geog headquarter where the banking facilities exist. The Resource Speaker responded that they are exploring the possibilities of availing the services through postal services.

After the presentation on financing the 9^th Plan, the house was divided into three groups of three divisions each to discuss on the 9^th Plan and the audit strategies. The respective group leaders presented their strategies to the house followed by discussion. However, the Hon’ble Auditor General of Bhutan commented that the issue deserves further discussion to come up with a concrete and implementable strategy and he proposed to the Chairman to form a committee. Accordingly, a seven-member committee representing the divisions was formed with an unanimous election of B.B. Chhetri, Asstt. Auditor General as the Chairman.

Since there was some more time available before the close of the session, the Chairman informed the house to discuss any other issues.  

Gyeltshen, Dy. Chief Auditor raised the issue on organizing the Annual Audit Rimdo on a grander scale. He felt given the nature of the works that auditors are engaged kind of RIMDO RAA should perform be more relevant one. He emphasized in this context the need for all to contribute, if RAA were to conduct a grand rimdo that would be of some substance. 

The Hon’ble Auditor General of Bhutan expressed his opinion that while he appreciated the idea to organize a grand RIMDO, the house should first understand the implication of the funding requirement. He urged the past experience be their guide in making their decision, which the AFD is fully aware of. Some were in favor of making a flat rate deduction from the monthly salary to mitigate the financial problems while some advocated contribution voluntary basis. 

The house agreed that this year’s annual RIMDO will be performed as was already planned, and in the subsequent years it will be performed in an elaborate manner with contribution both from 1% deduction and voluntary contributions. 

Day - II   

SESSION III

Tshering Kezang, Chief Auditor chaired the first session of day two on Divisional Reporting to the 5^th Annual Audit Conference. The chairman started the day’s session on a humorous note and handed over the floor to Division I to begin the presentation.

Division I 

Bhanu Bhakta Chhetri, Chief of Division-I commenced the presentation of Division-I with the introduction of the division’s staff. He informed the house that the presentation of Division I was divided into two parts in which Karma Tenzin, Sr. Auditor, will present half of the report. Bhanu B. Chhetri, Asstt. Auditor General presented the house on Empanelment and Kolkata visit. He stated that the objectives of visiting Kolkata were to update the profiles of the Chartered Accountant Firms, interview new CA Firms for empanelment and to derive feedback from the CA Firms auditing in Bhutan. He also briefly highlighted the activities carried out during the visit. He reported the corporate financial highlights based on the comparative analysis of the audited financial statements.

Karma Tenzin, Sr. Auditor presented to the house the divisional report by bringing the divisional jurisdiction, the number of agencies audited, the reports issued and under progress, the review of the past audit reports vis-à-vis the annual audit plan to lime light.  It was noted that Division I had achieved more than what was planned.

Division II

Gyeltshen, Dy. Chief Auditor started his presentation with the photographic introduction of the division’s staff and stating the roles and responsibilities of Division II as coordinating the prosecution with the RCSC and Office of the legal Affairs. He highlighted on the observations and achievements made by Division II during the financial year 2001-2002. He informed the floor of charge sheets made against various defaulting civil servants.

Division III

Lopon Chador, Dy. Chief Auditor presented the divisional report of the Division III by reporting upon the staff strength and the audit jurisdiction of the division. He reported upon the achievements made by the division and reported the floor of division’s proposal to perform yearly rimdo and also rimdo for late Kumbu Dorji. He also expressed the need for Choesham and his proposal for having the Choesham and type of statues to be installed and reasons for having those particular statues in RAA’s new Office building at Kawajangsa, Thimphu. He pointed out that lack of a dedicated transport for his division had hindered efficiency in deputing his team. 

Division IV

P.M. Pradhan, Chief of Division IV presented the divisional report specifying the staff strength, audit jurisdiction, agencies planned for normal and certification audits and audit recoveries of Nu. 7,533,377.66 effected during the financial year 2001-2002 and the achievements made in terms of audit. He then gave the house to Tshering Tashi, Sr. Auditor to present on the Audit Information Management System (AIMS) of the RAA. The presentation on the AIMS by Tshering Tashi was divided into three broad categories namely; past performance, present status and future of AIMS. He expressed the time and cost involved and difficulties to make AIMS user-friendly. He stressed upon the need to make audit observations against the individuals and not against organisation whereby the responsibilities cannot be fixed.  He urged that unless the Division and auditors accept the use of AIMS as their tool, AIMS will not cover to fully developed and useful.

Division V

The presentation of the Division-V was started with the brief introduction by the Division Chief, Sherap Dorji, Asstt. Auditor General who handed over the floor to Ugyen Dorji, Asstt. Auditor to present the divisional report of division-V. Ugyen reported the jurisdiction of Division five, agencies to be audited as per plan, agencies audited as per plan and beyond plan, follow-ups done and reports issued and reports under progress. He expressed the difficulties faced by the auditors of Division-V on the following grounds; 

• Audit of 16 agencies not included in Annual Audit Plan;

• Existance of limited teams vic-a-versa agencies to be covered under audit;

• Officials left for training during the interim period;

• Division-V involved in editing and issuing the Reports of the Branch office, Samdrup Jongkhar.

Further, he expressed that the audit Recoveries for the financial year 2001-2002 were Nu. 5,740,477.10 compared to Nu. 5,036,238.87 recovered in 2000-2001, with an increase of 12%, an indication of consistent approach of Division-V.

However, despite limitations and shortfalls in a field audit teams and diversed activities to be covered in the nook and corner of the country, Divivsion-V is further poised to work harder with renewed vigour and zeal.

Division VI

Division Six’s report was presented by Khampa Tshering, Sr. Auditor with the elaboration of Division Six’s history since its establishment in Gelephu in1988. He reported upon the team building and Annual Audit Plan of Division. Significant observations of the division in the audit of Royal Bhutan Army, in stores, procurement and revenue were also presented in detail. He also reported upon the feedback received from the auditees agencies like need for surprise auditing, audit reports be based on in-depth analysis and audit inspection reports to be publicized. Finally, he said that Division Six had made recoveries of Nu. 3,665,975.57 over last year’s recovery of Nu. 3,571,055.78 only. 

Division VII

Tempa Gyeltshen, Chief of Division-VII, the only branch office and division located outside Thimphu started his presentation of report by expressing his sincere appreciation and gratitude for serious and dedicated effort of the Auditor General to keep the auditors abreast with the state-of-the-art in auditing through In-house training/work-shops and Annual Audit Conference.

 He reported on the activities of division with the mandate and jurisdiction namely; six eastern Dzongkhags, regional offices such as Regional Revenue and Customs Office, Regional Trade and Industry, Road Safety and Transport Authority and Dzongkhag Forest Office and schools, institutions, hospitals, etc. He also reported on the staff strength of the division and said that the division is currently having seventeen officials of which seven are support staff and only ten are field auditors, which is divided into two teams. He then reported the division’s achievements mentioning the number of audits done (19), total number of draft reports submitted (13) and total number of reports to be submitted (6) and assured that all the pending reports would be cleared by the end of August 2002. He also mentioned that the division in last financial made the audit recoveries of Nu. 914,923.60. The division’s audit plan wherein the division had planned 23 agencies to be audited in the coming financial year 2001-2002. The proposed activities of the division such as renovation of staff quarter, top floor with the re-roofing of office building and the need for strengthening operations and other resources required by the branch office were also expressed in the conference. Reporting concluded with the video show of the branch office building.

Division – VIII

Chandra Gurung, Sr. Auditor took over the floor for presentation of divisional report of Division VIII by mentioning the division’s auditing jurisdiction as Ministry of Health & Education, Ministry of Trade & Industry, Planning Commission, THPA, KPA & DCP, HRD & International Relations and administration of pool vehicle reports. The division’s achievements were reported as 88% in terms of audit completion wherein 29 out of 33 agencies were audited and 66% of reports were issued. He also mentioned that Division VIII had made the highest audit recoveries of Nu. 9,973,355.04 during the financial year 2001-2002. With regard to HRD and International Relations, 23 officials attended the training, workshops and seminars outside the country in various capacities to update and strengthen the skills, experience, exposure, gain knowledge, and attain the educational qualification.

Division – IX

Division nine’s report was presented by Madam Lhaden Zom, Assistant Auditor General mentioning that the division is staffed with 23 officials looking after the Finance, administration and management of assets and properties, day to day house keeping, administration of pool vehicles, issuance of Audit Clearance and other daily administration activities. She reported that the RAA had 152 staff with the joining of new and fresh enterprising auditors and informed the house that three officials of RAA deputed to various Ministries, as the internal auditors would be back in RAA soon. She also mentioned of officials transferred and deputed from the authority. She informed the house that a total of 6181 Audit Clearances had been issued with regard to promotion, training and retirement during the financial year 2001-2002.  She also mentioned that the system of issuing audit clearance manually had now been replaced by digitally Computerised system. The house was also informed of Manual on House keeping, attendance register, leave, and financial matters. She informed that the Bhutan Trust Fund regretted its inability to fund the purchase of laptops and digital testing equipment. However, there are now fund available to purchase a few number of computers and equipments. She then handed over the floor to Puran Dural, Sr. Auditor to give brief presentation on budget and recoveries made. 

Puran informed the floor that the total approved budget of Royal Audit Authority was Nu. 54.586 millions during the year 2001-2002, against which the expenditure of Nu.38.675 million (approx.) was incurred. The approved budget for the financial year 2002-2003 was Nu.44.680 million. He then reported on the audit recoveries of Nu.  30,269,941.68 had been affected by the RAA during the financial year 2001-2002 and this was further reported by division wise recoveries. 

Problems:

The common problems raised by most of the divisions that affected their achievements in a year were attributed to the need to audit of agencies beyond the audit plan, ad-hoc audits, In-house training on Public Work and Technical Auditing conducted by C & AG’s Office, Transfer and non-attendance by the agency’s staff, absentees, training of officials and staff. It was also attributed to logistic problems, such as, lack of adequate number of vehicles, computers, working personnel, etc.

The Hon’ble Auditor General of Bhutan assured that the administration will explore the possibilities to purchase more computers preferably laptops with modems. He urged the administration to follow-up consistently with the Department of Budget and Accounts with regard to budget release. He remind the AFD to release the RAA’s priorities and must pursue its responsibilities with due consideration. 

The Auditor General expressed his satisfaction with the achievements of the Divisions though some had fared far better than others. He made the following specific views for the respective divisions for the future improvement.

1.  The plan should where possible make field trips coincide so that there can be greater access to sharing of facilities.

2. He shared his experience of RIM Chosham.  Based on which RAA if decides to have a Chosham the cost and operation issues must be made very clear.

3. He urged that the AIMS should be made user friendly and the working relationship should be firmed up avoiding discrepancies within the Divisions for one and all.

4. The manuals should be printed and also produced in CD and floppy for distribution.

5. The Audit Clearance Certificate must be issued in Dzongkha and these be considered to be generated by AIMS. 

6. The audits should be made in manageable form so as to also facilitate comprehensive and timely reporting.

7. The auditors must also seize the auditing and exit conferences an opportunity for education of procurement concepts of the auditees. 

8. The reports, as pointed out in the feedback, must be supported with analysis and research findings. 

9. The Samdrup Jongkhar office be named as Office of the Assistant Auditor General and all maintenance be made appropriate and in conformity with Bhutanese culture and befitting the status of RAA. 

In the latter session P.M.  Pradhan, the Project Director made presentation on the DANIDA assistance. He reported that the RAA had received DANIDA assistance of Nu.36.293 million under the Project Development Support to the Royal Audit Authority and highlighted the main activities viz; i) Construction of new Office Building; ii) Development of Audit Manuals and Guides; iii) Installation of Local Area Network; and iv) Development of Computerised Audit Information Management System. He also reported that a project proposal seeking further Danish assistance of Nu.20.500 million has been submitted to the Department of Aid & Debt Management (DADM) in May 2002 for consideration. He further reported that a Formulation Mission Team to review project proposals under the Good Governance/Public Administrative Reforms Programme (Phase II) in Bhutan was scheduled for 1^st to 13^th September 2002.

Dechen Pelden, Sr. Auditor from PPD presented the ‘Review and Evaluation of Annual Audit Plan 2001-2002. She highlighted the analysis of achievements of respective Divisions. She informed the house that most of the audits were not executed as per the plan and the reports were not issued as per plan. It was noted that the overall achievement was 95 percent in completing the audit and 76 percent only with regard to issue of audit reports.

The Hon’ble Auditor General of Bhutan urged the Divisions and the PPD to sort out the discrepancies if there are any before it is published as official report.

Yeshi Jamtsho, PPD Head informed the house that for the Financial Year 2002 –2003, the number of units to be audited by seven divisions are 214 and 201 reports to be issued during the period.  He also made comprehensive presentation on Annual Audit Plans of various divisions viz; i) Dzongkhag wise Annual Audit Plan; and ii) Agency wise Annual Audit Plan. The house was also briefed on the Month wise Annual Audit Plan for the divisions and the Month wise Reports to be tabled before the Hon’ble Auditor General for review.

The Hon’ble Auditor General remarked on the wide differences in the number of audits planned by respective Divisions. He commented that either some of the divisions are overworked or some were not working.

Minjur Dorji, Chief Auditor responded that such differences could be due to size of the agency to be audited. B.B. Chhetri, Asstt. Auditor General further clarified that the Certification audits, which are required to be conducted on annual basis, add up the number.

As resolved in Day I of session II, a 7-member committee was formed to develop and work out on the 9^th Plan Auditing strategies. Tashi, Assistant Chief Auditor presented the outcome to the house, the following strategies: 

1. Audit planning and programming

Good proportion of time shall be devoted in planning and programming each audit, Planning & budget documents will be used to determine priorities & allocate resources by each division, all audit shall be prioritized and carried out in such a way that no audit shall be over due, all audits required to be carried out annually shall be included in the Annual Audit Plan.

2. Audit approach

In addition to normal audits, thematic audits shall be carried out more frequently; possibility of conducting comprehensive VFM audit on selective basis shall be explored; audit shall be supplemented by physical verification; Audit shall be also be extended to Human resources Auditing, Environmental Auditing and Geog based activities; use of system based audit and CAATS shall be promoted; Greater cooperation & coordination shall be promoted with the internal audits; certification audit of the Consolidated National Accounts shall be conducted; resource mobilization & debt servicing shall be reviewed.

3. Audit reporting

Balanced reporting shall be encouraged; to achieve uniformity Audit Master Report Template shall be improved and used; Audit report shall be issued timely; concept of materiality shall guide reporting; RAA shall continue to commit towards transparency of reports; audit reports and details of work carried out shall be supported by audit evidence & adequate working papers.

4. Strengthening the RAA’s capacity

Restructuring the RAA; increased use of AIMS for planning & Reporting; opening of two regional offices; strengthen RAA’s Human Resources by training & further studies and recruiting additional officials;

The House unanimously agreed to adopt these strategies as one of the 5^th Annual Audit Conference Resolutions.

Session – IV

Bhanu Bhakti Chhettri, Assistant Auditor General chaired the fourth session. In his address to the house, the Chairman cited the significance and the need to review the Annual Audit Report as the report is going to be publicized like last year. In view of feedbacks received in the past he stated that it is the right forum to discuss on the validity and reliability of the information contained in the audit report. He further highlighted that room for all those negative feedbacks should be reduced to the minimum by including valid, non-controversial and correct information.

Dechen Pelden, Sr. Auditor from PPD presented the Annual Audit Report Review 2000 by thanking all the Divisions for the kind cooperation extended to the PPD in providing valuable information to prepare Annual Audit Report 2000. She emphatically stressed that amount recovered, adjusted and paras settled were based on the further comments of RAA and based on the justification furnished by the auditee and also with regard to the write off by the competent authority in the respective ministries. She also reported the house on the over all observations and status of ministries, corporations, and other organizations. The findings were mainly of irregular payment, excess payment, outstanding advance, revenue losses, tendering losses, misappropriation, non-accountal of stock and wasteful expenditure.

Yeshey Jamtsho made the presentation on the Draft Annual Audit Report 2001. In his address to the house he highlighted the categories of observations uncovered during the audit of line ministries and many other organizations. Some of the Division Chiefs also raised the issues on the discrepancies noticed in the audit report.

The Honourable Auditor General of Bhutan notified the house to discuss the issues between Policy & Planning Division and respective Division Chiefs to reconcile the discrepancies.

The Secretary General of the Conference appreciated the presenters for their tremendous input in coming up with the Annual Audit Report almost at par with the International standard.

The Hon’ble Auditor General of Bhutan questioned as to why the Ministry of Foreign Affairs was not audited and urged on the need to review the audit plan in order to dispel the misconception of bias for not having audited some organizations. He also suggested a section be devoted for the review of the Annual Audit Report 2000.  Jamtsho raised the concern on the need to thrash out technical jargon and languages used in the audit report before it is being distributed for the general public. Accordingly, the house resolved to form a committee to review the draft Annual Audit Report before it is being transmitted and provided to users and media.

Minjur Dorji, the Head of HRD and International Relations deliberated the presentations on RAA’s Ninth Plan including the Human Resource Development Master Plan. The presentation was divided in two parts, Part I – RAA’s Ninth Plan Objectives and Strategies, and Part II – Human Resource Development in the 9^th Plan. Besides a brief highlight on the goals and strategies of the Ninth Plan of the Kingdom, he explained the role of RAA in the 9^th Plan.

He emphasized for a stronger Auditing System in the country to cope up with the changes as a result of change in development strategy. Among many others, the function of RAA as explained would go in depth to scrutinize the management of finances in the Geogs and Dzongkhag administrations and provide recommendations to the government on cost effective ways of improving performances.

The activities to be undertaken in RAA in Ninth Plan as informed were:

• Shifting to the New Building;

• Professionalise the Annual Audit Reports;

• Restructuring;

• Opening of the New Regional Offices; and

• Change in the Audit Strategies.  

• He elaborated on the changes in audit strategies and informed the house of many new strategies developed, such as,

• Reaching the grassroots level to ensure that the scarce resources of the government are properly utilized;

• Recommending measures to improve the effectiveness of the development activities in the Geogs and Dzongkhags;

• Providing feedback to the government on the utilization of the funds and development patterns;

• Stressing more on the recently evolved techniques like VFM audits, Environmental audits and other thematic audits; and

• Strengthening the institutional capacity of RAA, emphasizing more on the Human Resources Development to build a multi-disciplinary task force in audit, finance, management and technology.

In Part II of the presentation, he discussed on the immediate and long-term objectives of the RAA’s HRD Master Plan. He also reported the approved HRD Master Plan of RAA by the RCSC for the 9^th Plan, in which, 29 personnel would avail the Ex-country training and 224 In-country training for which Nu.18.000 million has been committed by the RCSC. Besides, every year, 2 officers would undergo training on IA & AS in Shimla, and 4 auditors in International Training Center, New Delhi. He further discussed the identified In-house training during the 9^th Plan targeting different areas of training for each year.

Finally, he informed the house of the intended key results in the HRD activities, such as, making economy, efficiency and effective use of national resources, improving the standard and quality of Audit Inspection Reports and Annual Audit Reports, providing information to the decision makers and create awareness of Value for Money in Government expenditures, making auditors capable of instituting and strengthening internal audit system, building institutional capacity to conduct the in-house training as well as to audit all the corporations, financial institutions, and NGOs, etc.

The Chairman, Bhanu B. Chhetri supplemented and remarked that the budget allocations discussed does not include the bilateral assistance we hope to receive, especially from Comptroller and Auditor General Offices, INTOSAI and ASOSAI. On the concern raised by one of the participants on the training for auditors, it was informed that the training identified were basically for the field auditors.

Report on the activities carried out and the Action Plan on RAA shifting into new Office complex was presented by Aum Lhaden Zom, Asstt. Auditor General. She informed the house that the RAA would possibly shift to the new Office Complex by the end of this year. She also informed that each division had been allocated sitting arrangement based on the existing organization chart. The house was assured that the problems we currently face as regard to shortage of space and furniture would hopefully be solved as we move to new Office building. The concerns on Choesham, canteen, etc were also discussed at length, and it was informed specially regarding the Choesham, decision would be made by the Royal Audit Authority keeping in background, the concerns and experiences of the Royal Institute of Management highlighted by the Hon’ble Auditor General of Bhutan.

Day - III

Session V

The session on Report on reorganisation of RAA towards effective auditing in the 9^th Plan was chaired by Tempa Gyeltshen, Division Chief of Division VII. In his opening remarks he informed the floor of the necessity and need to reorganise RAA especially so when we are on the threshold of 9^th Five Year Plan. He stated that 9^th Five Year Plan with Geog based planning and development approach will demand improvement of auditing strategies.

Dilliram Das, Senior Auditor presented the reorganisation of RAA. Amongst others, the important issues covered were the proposed new Organogram of the RAA including the functions and responsibilities of different divisions in the new structure, proposal of opening two new offices in the central and western regions in Bumthang and Tsirang respectively. The house was informed that the Office of the Asstt. Auditor General and Central, Bumthang shall be opened in July 2002 coinciding with the beginning of the Ninth Plan and the Office of the Asstt. Auditor General West Tsirang shall be opened in the third year of the Ninth Plan.

The house was also presented with the proposed staff strength of 244 members in the new Organogram. With the present staff strength of 152 members we were short of 92 members.

The Auditor General remarked that the issue was very important and pertinent and advised the Committee on Restructuring to prepare also the organsational structure of the Office of the Assistant Auditor Generals taking advantage of the experience of the Samdrupjongkahar office.

The Director of the Department of Geology and Mines, Dorji Wangda started his presentation on Glacier Lake Outburst Flood Mitigation (GLOF) with the brief description of the organisational structure of Dept. of Geology and Mines, the physical features, climate, river system, natural resources with flora and fauna, minerals and hydropower resources of our country, Bhutan. He stated that Bhutan fell in the earthquake prone zone with seismicity of 4-5 on the Richter scale. He highlighted on the seismicity system to record the magnitude or damage caused in the country and stated that the system was introduced last year on the trial basis and if proven appropriate and practical, it would be developed but he stated that it was expensive, costing over a million dollar.

He highlighted upon the criteria for identifying potentially dangerous glacial lakes and said that twenty-four Glacier lakes had been identified currently as potentially dangerous. The history of GLOF in Bhutan and effects of 1994 GLOF and its effects on the life of human, animals and damages to the properties including damages of Punakha Dzong was presented to the floor. The Mitigation and Research activities carried out in 1967, 1974 & 1981, 1986, 1995, 1996-98 and 1999 were briefly presented to the floor. The presentation was concluded by stating the methods of monitoring GLOF in the country.

The Chairman declared the floor open for discussion. In the discussion one of the auditors raised the question if the DGM have any inventory of lakes beyond the political boundary north of Bhutan if there are potentially dangerous lakes? The Director of DGM said that all the big rivers of Bhutan originates from within Bhutan only and there is no danger of lakes outburst from outside the country but some of the rivers originating in Bhutan flows to Tibet. Further, it was also raised if the DGM have any co-ordination and other mechanisms with our Hydro Power Projects with regard to early warning system and other aspects? The Director, DGM said that they do have links with Hydropower Projects especially when they design any dams.

The Hon’ble Auditor General suggested that the DGM should make a similar presentation of glacier lakes of our country to the Council of Cabinet Ministers through the line Ministry because given the current scenario, there are likely more facilities are built downstream and the possibilities of these being affected by the glacial outburst is apparent. He emphasized that DGM should apprise the CCM technically, but politically it is up to them to decide. He felt we put everything in the valleys because it is expensive to build elsewhere.  Should something happen we will have all our eggs in one basket. One of the participants also suggested that the presentations on Glacier lakes should be broadcasted in the BBS and Kuensel for awareness of the public and caution against constructing buildings in risk prone areas.

The presentation on Audit Staff Welfare Scheme (ASWS) was made by Sherub Dorji, the Chairman, and Gyeltshen, the Executive Secretary of the ASWS. They informed the house on the recently conducted internal audit report, status of the fund position as on the date and on the enhancement of membership contribution from Nu 100 to Nu. 200.00 per month w.e.f. July 2002 for one year. Further highlights were also made on the change of management committee and the two lottery draws coinciding with His Majesty’s Birthday and on the losar. However, proposal was failed on the ground that most auditors will be out of station on these dates and as such it will not be practicable.

Cheki Dorji, Senior Auditor suggested the inclusion of child benefit clause and revision of age ranging from one day to 8 years instead of one year to 8 years. The issue was deliberated at length. The Chairman adjourned the floor stating that such cases needed to be reviewed jointly by the present management committee and the in-coming committee.

Then Chairman opened the floor for the Open discussion for any problem and grievances that entail and curb the smooth functioning of the organization, and for the discussion of any remedial course of action. In which one of the participants raised his concern with regard to frequent breakdown of the AIMS. He also pointed out the problems of fixing the Heads of the auditee for the lapses of their subordinates in absence of requisite details of the sub-ordinates which invited unnecessary problems to the RAA. Some members of the house felt that AIMS is an unfriendly system and foresee that AIMS becoming aimless, yet some were of the opinion that it is a user-friendly and it just needed bit of improvement. The Secretary General of the Conference urged the field auditors to be diligent and to bring the full details information from the field for any particular observation raised. He also urged the house that the AIMS is a system that we already had invested huge amount and we definitely had to look forward for its betterment. Some field auditors have raised their inability to fit certain observation into the categories identified in the AIMS. However, B.B. Chhetri informed that there is still a provision for such observation to fit in the system, especially in the category listed as OTHERS.

Besides, the house also discussed at length in identifying the theme for the 6^th Annual Audit Conference. Whereas long list of themes were proposed, only three were short-listed and adopted for further review – “Auditing beyond the Books of Accounts”, “RAA meeting all the challenges” and “RAA’s support to Good Governance”.

Finally, the house concluded with the presentation of Conference Report for adoption by P.M.Pradhan, Chief Auditor.

The Honourable Auditor General of Bhutan addressed the closing ceremony by extending a warmest welcome to the Chief Guest and other distinguished guests. He informed the house that Lyonpo was instrumental in spearheading the reforms in the Government towards enhancing accountability and preventing corruption in the Bhutanese Society. He further added that Lyonpo’s presence in this auspicious occasion would inject a sense of encouragement and inspiration to the auditors.

The heralding of three days conference would help chart the course of direction for the 9^th Plan, which stipulate several roles for the RAA and poses many challenges, said the Honourable Auditor General of Bhutan. He emphasized that auditors shall rise up to inject the sense of accountability and integrity to sow a healthy seed for the good governance.

The Honourable Auditor General also expressed his strong conviction that auditors will give highest consideration on the national priorities and sensitivities by without compromising their integrity. He reiterated his plan made during the inauguration that audit findings be made accessible and available to all interested as well as affected in the audited organizations. He also emphasized that audit documents should no longer be regarded as a secret or sacred document to be guarded zealously by the finance officer.

He concluded by stating that as auditors are also citizens and SOBs and they are not above laws, rules and regulations. They could be held accountable for willful lapses and breach of the code of conduct and ethics of auditors.

Minjur Dorji, the Secretary General of the Conference presented the report on the proceedings of the Fifth Annual Audit Conference. He reported that the Hon’ble Auditor General of Bhutan had presented the Auditor General’s Report to the Conference for the financial year 2001-2002, specifying clearly the achievements of audit. It was reported that RAA had made a cash recovery of around Nu. 37.00 million during the period.

The day-wise proceedings were reported to the august gathering as:

Day – I

• The Hon’ble Auditor General of Bhutan had explained the objectives for conducting the Fifth Annual Audit Conference. He also expressed importance of adopting the auditing strategies to suit the policies of Ninth Five Year Plan.

• The two Resource persons from Planning Commission Secretariat had presented the Ninth Plan Goals and strategies, and the budget allocation.

• The two officers from the Department of National Budget and Accounts had presented to the house the budget allocation in the Ninth Plan.

Day – II

 ·        The Division Chief of each division of RAA had elaborately presented their divisional reports – the Divisions responsibilities, jurisdiction, number of audit conducted during the period, reports issued, etc.

• Briefing on DANIDA assistance and Second Phase DANIDA Assistance had been presented by the Project Manager, P.M. Pradhan, Chief Auditor.

• Review and Evaluation of Annual Audit Plan, 2001-2002 had been reported by Dechen Pelden, Sr. Auditor, Policy and Planning Division (PPD).

• Presentation of Draft Annual Audit Plan, 2002-2003 had been done by Yeshi Jamtsho, Dy. Chief Auditor, PPD.

• The Auditing Strategies to be adopted in the Ninth Plan as identified by the seven-member committee elected in the first day had been presented to the house.

• Annual Audit Report Review, 2000 was presented to the house by Dechen Pelden.

• Draft Annual Audit Report, 2001 was presented by Yeshi Jamtsho.

• Minjur Dorji, Chief Auditor presented the RAA’s Ninth Plan including HRD.

• Report on the activities carried out and the Action Plan on RAA shifting into new office complex was presented by Aum Lhaden Zom, Asstt. Auditor General, Administration and Finance.

Day – III

• Report on re-organisation of RAA towards effective auditing in the Ninth Plan was presented by Diliram Das, Sr. Auditor.

• Glacier Lake Outburst Flood Mitigation was presented by the Director, Department of Geology and Mines.

• Report on Audit Staff Welfare Scheme and election of new executive members was presented by Sherab Dorji, Asstt. Auditor General and Gyeltshen, Dy. Chief Auditor.

Resolutions of the 5^th Annual Audit Conference:

Khampa Tshering presented the 5^th Annual Audit Conference resolutions to the august gathering. Among plethora of resolutions, noteworthy are that in 9^th plan auditing will not only be confined to financial regularity audit but more thematic audits shall be taken up. He also informed the house on the policy of sending auditors on secondment to other organizations so as to gain experience of the field works of the auditee better.

The other issues brought to the notice of the floor was that henceforth when certifying of Annual Accounts (statutory audit reports) of Trust Fund, Association and Entities undertaken by RAA, it will be subject to payment of fees.

The Royal Audit Authority conducted series of In-house trainings in various fields viz., System Based Auditing, IT Audit, Audit of Loans, Grants & Aid and Certification Audit. The certificates of participation for the above trainings were awarded by the Guest of Honour, His Excellency Lyonpo Sangay Nidup, the Minister for Health and Education.

An Oath of Good Conduct, Ethics and Secrecy for the new employees of the RAA and for those who missed last year were administered by His Excellency Lyonpo Sangay Nidup with Nachu from Venerable Yangbi Lopon of Zhung Dratshang.

The Rolling Trophy of the RAA Inter-Divisional Khuru Tournament for the year 2002 was awarded to Division VIII by the Guest of Honour. The award for Significant Observation for the 2000-2001 report and also the AG’s Compliance Assurance Award (ACAA) 2002 were awarded to Division VIII.

The Hon’ble Chief Guest, Lyonpo Sangay Nidup, Minister, Ministry of Health and Education thanked the Auditor General and officials of the Royal Audit Authority for inviting him as the chief guest for the Closing Ceremony of 5^th Annual Audit Conference. He expressed his deep appreciation with the dedication, auditors’ participation and taking the oath of good conduct, ethics and secrecy. He stated that after reading the contents of the code he felt the RgoB can repose the full confidence and the trust on the auditors. The chief guest said that ours is a small country with the small management but is distinct from rest of the countries in the world. The reason why it is distinct is because of our fortune to have a farsighted leader our beloved King His Majesty Jigme Singye Wangchuck.

The Hon’ble Lyonpo recollected and urged the Royal Audit Authority and the auditors to give due consideration of his concerns expressed during the Salhang Ceremony of the RAA office building when he was the chairman of the Council of the Ministers, i.e. “how we can salvage and protect the civil servants”. He stressed on the importance of retaining the civil servants by quoting an example on the age of the civil servant and the investment made by the Royal Government on that particular civil servant and loss to the Government when he/she may be dismissed from the service because audit may detect him/her to have defalcated a few lakhs of public money. Lyonpo further stressed on the importance of the human resource by stating that the human resource is the most important commodity and said that auditors should stress on through preventive and proactive methods to retain the trained and experienced manpower.

He also remarked that the auditors should not stress only on the compliance of rules, regulations and laws but through interactive and proactive means should be educative and anticipate problems. He drew the analogy of the medical service, which gives utmost importance for prevention rather than cure. He reemphasized the importance in auditors upholding the three pillars of Good Governance, i.e. accountability, transparency and efficiency.

The chief guest complemented the Royal Audit Authority for its contribution to the Government that had brought remarkable results but he reiterated that the auditors to be consistent yet reasonable in discharging their duties. He declared the 5^th Annual Audit Conference closed with striking the Gable.

The ceremony concluded in a dramatic manner with the vote of thanks proposed by Rinzin Lhamo, Senior auditor who stated that in essence to herald a conference was to exchange ideas and update knowledge for the benefit of all, followed by offering of Tashi Moenlam led by the Lopons from Zhung Dratshang.  

Training on Personal Income Tax by the Department of Revenue & Customs and Refresher Course in Driiving were cancelled due to the sudden demise of Kumbu Dorji, the then Dy. Chief Auditor.