The Integrated Financial Management Information System, currently under development, is expected to address issues related to the misuse of closed work accounts. The finance minister said this during the joint sitting today following questions on addressing issues related to closed work accounts. The Public Accounts Committee has recommended the government to undertake a comprehensive review of existing provisions on closed work account and adopt global best practices for better control and accountability.
Closed Work Accounts are intended for projects that have been completed and formally closed.
However, the Royal Audit Authority, RAA, in its Annual Audit Report 2024-2025, identified a systemic issue.
The audit report highlighted that agencies book funds for projects that have not started or remain incomplete under these accounts.
Agencies use this practice to prevent returning the funds to the government at the end of the fiscal year if a project remains incomplete.
“When the work remains incomplete at the end of a fiscal year, there is no provision by the Ministry of Finance to disburse funds in the next fiscal year to continue the project. Although the ministry should consider keeping it as spill over, the ministry does not disburse funds in the following fiscal year. Digitalisation is under progress, but these issues will continue. What are the ministry’s plans and strategies to prevent or minimise this?,” questioned Kinzang Wangchuk, Dramedtse_Ngatshang MP from Monggar.
“When working, funds are not disbursed on time. Secondly, work does not start on time. The challenge is also due to a shortage of human resources. For instance, for the 205 gewogs, there is only one engineer for two or three gewogs combined. If each gewog had an engineer, it would benefit greatly. Shortage of manpower causes deposit work. For eight to nine months, funds are kept with the central ministries and agencies, resulting in delayed project implementation in the gewogs. This results in the misuse of Closed Work Accounts,” said Kelzang Lhundup, National Council’s Member of Parliament from Lhuentse.
“The finance minister said that the Integrated Financial Management Information System is under progress, but when will it be completed? If it takes two years or so, such challenges will continue,” added Phutsho Rapten, a member of the Public Accounts Committee.
The House has directed the finance ministry to present an action taken report on regulating closed work accounts in the winter session of the parliament.
“I agree it is an issue. Earlier, there was the Electronic Public Expenditure Management System and the rolling budget system, which were outdated and had issues. To strengthen public financial management, we are developing the Integrated Financial Management Information System. Issues related to Closed Work Accounts will be addressed. It is under progress. We are also introducing a unified chart of accounts,” responsed Finance Minister Lekey Dorji.
Furthermore, the joint sitting deliberated three other recommendations from the Public Accounts Committee’s Review Report of the Annual Audit Report. The recommendations include enforcing contract penalties. According to the review report, when a contract is cancelled the ministry should collect both delay damages and the 20 per cent recovery for incomplete work.
The report also recommended the ministry to fully activate the government inventory system to ensure public assets are properly recorded and managed.
The finance ministry is also recommended to digitise all financial records.
The RAA proposed 10 general recommendations in its Annual Audit Report, which were reviewed by the PAC.
However, the Committee resolved to submit only four to the Parliament for deliberation and consideration, as the others were already implemented or sufficiently addressed.
Sonam Yuden, Kelzang Chhophyel & Tashi Dekar
