𝐒𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧𝐢𝐧𝐠 𝐅𝐢𝐬𝐜𝐚𝐥 𝐃𝐢𝐬𝐜𝐢𝐩𝐥𝐢𝐧𝐞 𝐀𝐬 𝐑𝐀𝐀 𝐄𝐧𝐬𝐮𝐫𝐞𝐬 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐚𝐧𝐝 𝐑𝐞𝐟𝐨𝐫𝐦

…𝒘𝒊𝒕𝒉 𝑵𝒖. 405 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 𝒓𝒆𝒄𝒐𝒗𝒆𝒓𝒆𝒅 𝒇𝒓𝒐𝒎 𝒊𝒓𝒓𝒆𝒈𝒖𝒍𝒂𝒓𝒊𝒕𝒊𝒆𝒔, 𝒕𝒉𝒆 𝑹𝑨𝑨’𝒔 𝒂𝒖𝒅𝒊𝒕𝒔 𝒅𝒓𝒊𝒗𝒆 𝒊𝒎𝒑𝒓𝒐𝒗𝒆𝒎𝒆𝒏𝒕𝒔 𝒊𝒏 𝒈𝒐𝒗𝒆𝒓𝒏𝒂𝒏𝒄𝒆, 𝒄𝒐𝒎𝒑𝒍𝒊𝒂𝒏𝒄𝒆, 𝒂𝒏𝒅 𝒑𝒖𝒃𝒍𝒊𝒄 𝒔𝒆𝒄𝒕𝒐𝒓 𝒕𝒓𝒂𝒏𝒔𝒑𝒂𝒓𝒆𝒏𝒄𝒚

The Royal Audit Authority (RAA) has reinforced its role in ensuring financial accountability, as outlined in the Annual Performance Report: 2023-2024. The report highlights the recovery of Nu. 405 million from financial irregularities, improvements in public financial management (PFM) systems, and enhanced compliance across government agencies. The audits have also contributed to project rectifications and institutional reforms, underlining the RAA’s role in safeguarding public resources.

RAA’s audits uncovered substantial financial irregularities, leading to cash recoveries amounting to Nu. 405 million. These findings reflect the effectiveness of the audit mechanisms in detecting and addressing mismanagement of public funds. Additionally, the audits facilitated the completion of 12 previously stalled public infrastructure projects, ensuring that public investments are utilized as intended.

The report highlights progress in financial discipline, with 57% of financial and compliance audit recommendations implemented within the fiscal year. A significant decline in unresolved audit irregularities was also noted, with over 90% of pending cases from 2010 onwards resolved through consistent follow-ups. These improvements indicate a growing culture of compliance and responsiveness among audited agencies.

The classification of financial irregularities provides further insights into systemic weaknesses. Non-compliance with laws and regulations accounted for 79.04% of total irregularities, while 19.56% were categorized as shortfalls and lapses. Cases of fraud and corruption, though lower in proportion, amounted to Nu. 39.6 million, emphasizing the need for continued vigilance in governance.

The impact of RAA’s audits extends beyond financial recoveries. The rectification of 91 project deficiencies across 35 audited agencies ensured that government-funded projects adhered to execution standards, minimizing risks of inefficiencies and resource mismanagement. These interventions reinforced compliance, preventing deviations that could compromise project sustainability.

The audits also contributed to strengthening financial oversight in government operations. The RAA certified 439 financial statements from audited entities, reinforcing transparency and public confidence in government financial processes. Audit coverage expanded significantly, with financial audits reaching 98.58% of government agencies, surpassing the 85% target set for the year. Compliance audits covered 86 agencies, reflecting increased scrutiny in public sector financial management.

The RAA’s oversight role has contributed to Bhutan’s improvement in the Corruption Perception Index (CPI) score, which rose from 68 to 72. This progress aligns with the 13th Five-Year Plan (FYP) target of reaching 73 by 2029. The improvement is attributed to strengthened accountability measures, alongside coordinated efforts from other regulatory institutions such as the Anti-Corruption Commission (ACC).

Despite these achievements, the RAA identifies persistent inefficiencies that require further attention. Excess payments, non-compliance with procurement norms, and delays in project execution remain recurring challenges. The cumulative impact of these irregularities has resulted in unresolved financial discrepancies amounting to Nu. 2.82 billion as of February 2024.

Parliament, in deliberating the Annual Audit Report (AAR) 2022-2023, recognized the urgency of financial governance reforms. It endorsed seven key recommendations from the RAA, focusing on strengthening internal control mechanisms, stricter enforcement of financial regulations, enhanced monitoring of government-funded projects, and increased accountability in public expenditure. These measures aim to address systemic weaknesses that continue to affect fiscal discipline.

To tackle these challenges, the RAA has proposed strategic reforms, including the adoption of digital auditing techniques, leveraging data analytics for decision-making, and improving coordination among oversight institutions. The report details advancements in information and communication technology (ICT) solutions, such as the development of an audit reconciliation module, an enhanced performance rating system, and new data-sharing capabilities to improve case tracking and enforcement.

RAA continues to implement institutional reforms to enhance the effectiveness of its audits. The performance audit of the State Mining Corporation Limited (SMCL) exemplifies this effort, revealing operational inefficiencies and environmental concerns. The findings led to eight recommendations aimed at improving governance and sustainability within the corporation.

Human resource development has also been a priority, with RAA recruiting new auditors, conducting induction and mentorship programs, and expanding professional development opportunities to enhance audit competencies. The continued implementation of the Performance Management System (PMS) has reinforced internal accountability. Over the past year, 92 research papers submitted by auditors contributed to evidence-based policy recommendations, ensuring that audit findings translate into meaningful governance reforms.

RAA has also strengthened stakeholder engagement through close collaboration with Parliament, the ACC, and media organizations. Increased media coverage of audit reports has helped raise public awareness, fostering a culture of transparency and adherence to financial regulations within government agencies.

The Annual Performance Report: 2023-2024 reinforces RAA’s role in safeguarding public resources and ensuring fiscal discipline. The findings highlight the need for sustained policy-driven interventions and institutional reforms to strengthen financial accountability across government institutions.

Looking ahead, RAA aims to expand its audit coverage, implement more stringent follow-up mechanisms on unresolved cases, and leverage advanced auditing technologies to improve efficiency. Strengthened inter-agency collaboration will also play a crucial role in promoting compliance and financial accountability. With continued reforms and enhanced oversight, RAA remains positioned to uphold transparency, ethical governance, and responsible public financial management in Bhutan.