Foreword

Bhutan has embarked upon parliamentary democracy with the adoption of the Constitution of the Kingdom of Bhutan in 2008. With the first Parliamentary election, Bhutan witnessed a historic transition and a paradigm shift in governance system from absolute monarchy to Constitutional Democratic Monarchy. Hence, not only resources are demanded and made available at the grassroots level but the implementation responsibilities are shifted to the lowest level as well. Thus, a steward relationship between the government and the governed provide basic premise for accountability framework in the public sector essentially to account for public resources that are at the disposal of implementers.

Never before was there a greater demand for public scrutiny and accountability for fiscal and social responsibilities. As an oversight body, the RAA in the spirit of the mandate enshrined in the Constitution and the Audit Act has been earnestly investing resources in the promotion of accountability and transparency in the utilisation of public resources. In furtherance of its purpose and rendering greater effectiveness in the delivery of the mandates, the RAA has embarked upon focused and risk-based audit approach and high profile performance and thematic audits from a conventional transaction auditing approach.

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Transparency and Accountability are generally and globally perceived to be the most important pillars of good governance. The RAA as part of its modest attempt to further promote and strengthen good governance has developed model for Financial Resources Management Accountability Index (FRMAI) concept to be promoted in the public sector accountability process to ignite passion for excellence in the public service and in pursuit of its goals and objectives.

The FRMAI model is thus intended to provide objective and holistic assessment of agencies entrusted with stewardship of public resources. It is a multi-faceted review and assessment tool basically designed to mirror agencies’ performances and their practices and procedures instituted to provide essential safeguards for attaining economy, efficiency and effectiveness in the use of public resources with appropriate delineation of responsibility and accountability of those charged with governance. It encompasses dimensions of management, organizational structure, reporting, human resources and results. This assessment model uses both financial and non-financial aspects consisting of nine main elements, and several indicators and sub-indicators. These elements may not be applicable to all the agencies all the time. Therefore, assessors involved in the assessment will have to exercise fair degree of professional judgement to use relevant elements applicable to the concerned audited agencies. Assessment of financial aspects will follow appropriate sampling techniques and methodologies. Each element, indicator and criterion will be allocated a weight on which scores will be assigned. Aggregation of scores in each element will give the accountability index of the agencies assessed.

The result of assessment will either be reported annually alongside the Annual Audit Report or separately as Accountability Index (AI) report. This accountability information is expected to provide important insights for public organizations, policy makers and the RAA. This report will be archived to study the trend on how the usefulness of the rating system can be further enhanced or for appropriate recommendations and government interventions.

Through this assessment and reporting mechanism, it is intended to instil a sense of competitiveness amongst the agencies in discharging their duties and responsibilities as the trustees of public resources and promote a work culture that embraces best practices and upholds principle of good governance, assess the trend and provide appropriate basis of benchmarking. This will facilitate comparison between units within the similar organization, between agencies providing different services and between different sectors. While potential external donors will be able to obtain confidence in the utilization of its assistance both cash and in-kind through the FRMAI reports, agencies assessed and reported will have fair idea of its positions and rankings and areas of concerns where they need to improve upon.

An expert from National Audit Department of Malaysia was engaged to review this Concept Document and the Scoring Methodology. The Malaysian Audit Office also uses a similar assessment tool, and is the first Supreme Audit Institution in the world that mooted the concept of providing scores in assessing the financial management of ministries/departments/agencies. The comments and recommendations provided by an expert were very useful in finalising this document and the scoring methodology.

The UNDP has been supporting the RAA in various capacity building initiatives, and the funding support to develop this model is yet another important milestone. The RAA is very grateful to the UNDP for supporting this initiative, which is being considered as an alternative route to fulfil the Constitutional responsibility of reporting on economy, efficiency and effectiveness in the use of public resources.

This accountability index model is dedicated to the 60th Birth Anniversary of His Majesty the fourth Druk Gyalpo Jigme Singye Wangchuck. The RAA hopes that all agencies would aspire and put equivalent resources to obtain the highest of scores and index ratings and resonate with excellence in pursuit of their goals and objectives.