RAA(AG-SP)/2004/3758

                                                      24^th December, 2004

To,

(I)    Asst. Auditor Generals,
        Royal Audit Authority. 

(II)   Asst. Auditor Generals,
       OAAG(Bumthang, Tsirang & Samdrupjongkhar). 

Be informed hereby that it has been observed that changes are being made to plans, programmes and activities in the 9^th Five Year approved plans by individuals and authorities without completion of proper formalities.  This also has reference to the circular No. DoP/PCD/16/1622 dated, 16^th September 2004 of the Department of Planning, which states that many non-plan activities have been carried out in the first two years of the plan without the approval of the competent authorities. 

Therefore during the course of auditing, proper scrutiny of the implementation of plans, programmes and activities must be carried be at national, Dzongkhag or geog plans.  Any deviation that does not conform to the government policies and approved plans should be reported invariably in the Inspection Report with accountabilities properly established. 

(Kunzang Wangdi)
Auditor General of Bhutan

RAA(AG-SP)2004/3367

November 7, 2004

Office Order

The Office of the Comptroller and Auditor General of India conducted a "Peer Review" of the Royal Audit Authority to assess on the practices and management system of the auditing standard and capacity for effective auditing in Bhutan. In line with the Peer report, the Royal Audit Authority has come up with the "Plan of Action" on their comments and recommendation. The proposed plan of action is circulated for strict compliance and adherence. 

Auditor General of Bhutan

RAA(AG-SP)/2004/3097

7th October, 2004

Office-Order

In order that RAA operates its management in the most economic, efficient and effective manner, the audit of the accounts and operations of the Royal Audit Authority is being carried out by the Chartered Accountancy firms on a three year rotation basis. Further, the divisions in the RAA on a rotation basis also conduct the internal audit of the RAA, HQ and its Regional Offices.

 

Considering the important findings being reported it is felt desirable to institute the RAA's Audit Committee to oversee the implementation of its recommendations and other oversight audit functions. Therefore, the following senior officers are appointed as the RAA's Audit Committee Members.

                                                 

Sl. No.	Name	Designation & Portfolio
1.	Jigmi Rinzin	Assistant Chief Auditor, Chairman
2.	Karma Tenzin	Assistant Chief Auditor,  Member
3.	Kesang Wangdi	Assistant Chief Auditor,  Member
4.	Kelzang Namgyel	Assistant Chief Auditor,  Member
5.	Chhimi Dorji	Assistant Chief Auditor,  Member

                                              

The Terms of References for the Committee inter alias includes the following:

 

• To oversee that RAA's accounts and operations, internal controls, financial reporting process and disclosure of its financial & non-financial information are reviewed and audited by an independent statutory auditors and by internal auditor;

• Oversee propriety of any transactions as pointed out by the auditors, and to ensure that related party transactions are given due care to avoid occurrence of potential conflict of interest;

• Liaise between auditors and management concerning external and internal audit report;

• Discuss and review all the audit reports for the Royal Audit Authority and Submit independent report to the Auditor General along with appropriate recommendations on reviews made on the significant findings reported by auditors;

• In partnership with the Internal Auditors shall follow-up the implementation of the internal and external audit recommendations and other comments;

• Responsible for the appointment of statutory & internal auditors of RAA;

• Ensure that respective work programs of the external and internal auditor of the RAA complement and supplement each other;

• Approve the internal and external audit program/work plan for the audit of RAA;

• Identify lapses of serious nature, if any, causing it to be discussed in the Disciplinary Committee;

• Approve audit fees and provide minimum terms of references to external/statutory auditors;

• Responsible for ensuring the quality, including the completeness, accuracy of report and rationale behind company's existence;

• Ensure that auditors responsible for the audit of corporations, Financial Institutions and NGO's also see the consistent application of commercial accounting concepts and principles in the treatment of financial & non-financial transactions in the Annual Financial Statements;

• Independent reporting to Hon'ble Auditor General of Bhutan from time to time;

• Ensure that there is minutes drawn for all the exit conferences including those with statutory auditors; and

• Audit Committee shall meet at least four times a year on a quarterly basis.

 

Besides the Committee Members the concerned Internal Auditors, relevant officials/divisions shall attend as and when the meetings on this agenda are held.

The Committee's ultimate objective is to ensure RAA and its officials not only preach but practice to the letter. 

 

(Kunzang Wangdi)
Auditor General of Bhutan

RAA(AG-SP)2004/2929

September 21, 2004

Executive Order

In order to promote timely and prompt follow up action on issues  raised in the Inspection reports and also to compensate the Government for the implied losses, the Royal Audit Authority had adopted a system of levying Commercial Interest at the rate of 16% on any recoverable amount which is overdue: viz advances, loans excess payments, double payments and other inadmissible/irregular payments.

The Commercial Interest shall be effected immediately after the Action Taken Report (ATR) date or from the dates specially mentioned in our reports.

The responsibility for collection in full of the commercial interest after the ATR date rest with the respective follow up sections of the Royal Audit Authority.

This is issued for compliance by all concerned. 

Dasho Kunzang Wangdi
Auditor General of Bhutan

RAA(ADM-21)2004/2571

24/12/2004

INTER OFFICE MEMO

The Royal Audit Authority believes that Internet facility and access to it is to be considered as privilege rather than a right. With that privilege comes efficient and legal utilization of the material resources.

In order to enhance the efficiency & safety of all computers, it has been decided that the following action will be taken by IT Section with immediate effect.

1. All games software shall be removed from all RAA computers;

2. Internet connection will be given to one computer per division to be conveniently located for browsing & email services.

If RAA user violates any of the rules in use, the user may face disciplinary action such as account termination, denial of future access, etc.

The undersigned sincerely requests all concerned to extend their kind cooperation and support to enable the IT Section to work smoothly and effectively. 

Dawa Tenzin
Chief Auditor
AFD

RAA(AG-SP)2004/2432

Dated:  12^th August, 2004.

Office Order

Whereas the Auditors and Officers of the Royal Audit Authority having gathered in Thimphu from 22^nd to 24^th July, 2004 to attend the 7^th Annual Audit Conference 2004 on the theme “Barriers to Effective Auditing: Finding Solutions” and having deliberated on various subjects; and a plan of action adopted; the following directives are issued for immediate implementation:

1.                 Preparatory work for post enactment of Audit Act.

As the Draft Audit Act would be tabled in the ensuing National Assembly in 2005 for enactment a standard Service Rules and Regulations, Administration & Financial Manual must be set in place.

Accordingly, Administration & Finance Division and Personnel Section shall develop Administration & Financial Manual and Service Rules and Regulations, etc.

The draft when ready should be presented for review at least in three consecutive meetings of senior officers prior to the commencement of the Annual Audit Conference. The final draft shall be presented during the 8^th Annual Audit Conference, 2005 for approval.

2.                 Establishment of Accountability in the Inspection Report.

Accountability for lapses against each audit para needs to be undisputedly established during the audit exit conference. Accordingly an accountability statement must be duly signed and authenticated by the head of the agency and the official concerned.

The accountability of individual person responsible for commission or omission should be reflected in the ‘further comments’ column detailing the name of defaulting official along with his/her employee ID. Words such as “Until such time the issue is satisfactorily resolved/amount as worked out is deposited in ARA/action as recommended is instituted, etc” should be prominently mentioned.

Further, for legality in transfer of accountability from one official to another without proper concurrence and verification will be restricted.

3.                 Follow-ups.

The present system of reviewing and following-ups of previous audit reports both by review team back in the office and audit team in the field would be continued subject to the following modifications:

Where audit observations and issues are complex, ambiguous and subjective, audit teams in the field must be consulted for eventual settlements. Where audit observations are simple, explicit and objective follow-ups shall be carried out without having to consult the respective audit teams in the field.

4.                 Execution & Implementation of Annual Audit Plan.

All Division Chiefs and Team Leaders are instructed to strictly adhere to the Annual Audit Plan with exceptions only to situations where additional audits could be taken up without disrupting the planned audits.

5.                 Assessment of additional requirement of auditors for effective auditing.

HRD, Professional Development and International Relations Division is instructed to assess the requirement of additional auditors in consultation with Department Heads, AFD & PPD for effective auditing. Matters such as number of man-days required for audit of each agency must accompany the assessment report. The draft assessment report must be presented during the Mid Year Review, i.e. January 2005.

6.                 Mobilization of funding for Audit Awareness Programme.

HRD, Professional Development and International Relations Division is instructed to explore assistance for fund required on Audit Awareness Programme. Administration and Finance Division will incorporate this fund requirement in the annual budget proposal to make it a regular feature of the RAA.

7.                 Categorization of audit observations.

A committee must complete and finalize the categorization by mid September 2004. All issues and concerns raised during the Conference must be given due recognition and incorporated accordingly.

8.                 Reward Schemes.

The committee identified in the Plan of Action must submit the Draft Proposal during the Mid-Year Review meeting for views and further comments.

9.                 Direct dealing with contractors and suppliers.

All Auditors shall refrain from dealing directly with the contractors and suppliers on matters relating to observations raised. In the event of a violation, the defaulter will be dealt with in accordance with the RAA’s 16 Principles Oath of Good Conduct, Ethics and Secrecy.

10.     Other issues.

Actions to all other commitments and responsibilities given in the Plan of Action for implementation of the resolutions must be taken as deemed appropriate.

(Kunzang Wangdi)

Auditor General of Bhutan

RAA(AG-SP)/2004/2092

9th July 2004

Inter Office Memo

To: All the Auditors. 

It has been noticed from the Audit Recoveries Statement that the amount recoverable as Commercial Interest had not been recovered at all. All concerned responsible to see that collections due are effected will be personally held accountable for any such amount not collected.

Henceforth, in event of such instances, the amount will be directly deducted from the pay and allowance of the auditor(s) responsible for the collection.

AIMS should also monthly submit reports of all its activities generated by it to the Auditor General, including a statement on commercial interest collected for a month. 

Auditor General of Bhutan

RAA(AG-SP)2004/721

2nd March, 2004

Inter Office Memo

1.   Deputy Auditor General
      Royal Audit Authority
      Thimphu, Bhutan.

2.   Asst. Auditor General,
      Department of Sectoral Audits,
      Royal Audit Authority
      Thimphu, Bhutan.

3.   Asst. Auditor General,
      Department of Performance & Thematic Audits,
      Royal Audit Authority
      Thimphu, Bhutan.

By now all clarifications regarding the discrepancies in the information contained by the AIMS are all sorted out. As such hereafter you all should ensure that the contents of the AIMS is correct as well as up-to-date at all times.

I would like to notify that henceforth you all would be held responsible, answerable and accountable for any obvious errors that may emerge out of the system.

I hope the point made is clearly understood. Should any one of you require any clarifications please do not hesitate to ask me.

Auditor General of Bhutan