During the auditing period from July 2021 to June 2022, the Royal Audit Authority (RAA) found lapses in the restoration and water supply for the 22 Kw backwash pump at the Jungshina water treatment plant (WTP).
The financial audit report of Thimphu Thromde audited by the RAA states that Thimphu Thromde should recover the amount of Nu78,000 and deposit it into the Audit Recoveries Account besides justifying the lapses.
This is for the restoration and supply of the 22 Kw backwash pump at the Jungshina WTP was directly awarded to GP Enterprise, Thimphu at a cost of Nu 343,120.
A review of the documents revealed that the cost estimation for the supply and installation of the wash pump was prepared by the supplier and approved by the management.
On inquiry, it was stated that the supplier had fixed the old wash pump and subsequently claimed a bill of Nu 78,000. “It transpired from the records that the wash pump worked only for a month after the repair was done and stopped functioning.”
Subsequently, the management decided to buy a new Grundfos Pump from the same supplier for Nu 245,000.
The supplier, according to the audit report prepared the new Grundfos pump’s cost estimate and approved it by the management without any price comparisons. Further, no documents related to restoration works of the old wash pump were produced for RAA.
After the breakdown of the backwash pump at Jungshina WTP, according to the Thimphu Thromde, the water supply team sought support from the electrical section. However, the electrical section determined that the issue was with the pump itself and not an electrical problem. This led to the plant being unable to function properly without a backwash pump. To restore functionality, “We approached an external supplier who is dealing in high-capacity pumps. We requested a quote from them since we did not have in-house capacity.”
Upon receiving the supplier’s estimation, Thimphu Thromde compared it with the rate at which the Thromde had previously procured a Grundfos pump in 2019.
It said the earlier purchase was for a 15kw/20hp pump, which cost us Nu 277,000 through an open tender. In contrast, “We managed to procure a 22kw/30HP pump at the rate of Nu 245,000 which is lower by Nu 32,000 despite having a higher capacity and power. Therefore, the rate at which we procured the pump is reasonable and not unrealistic,” said the Thimphu Thromde.
Regarding old pipe restoration, it said procuring a new pump is likely to take the same time as it is not readily available in the market. It was decided to restore the old pump and continue using it until the new pump arrived.
Therefore, “We sent the old pump to Phuentsholing through the supplier for rewinding, as there was no local expert for pump restoration (rewinding). The supplier conducted the restoration work and installed the pump at the site. We were able to use it for one month, but then it started experiencing problems as had to be replaced with a new pump.”
Following an audit observation, Thromde said they held a meeting with the supplier to discuss the issues, and after a lengthy discussion, the supplier agreed to redo the restoration work on the pump. They would take the pump to Phuentsholing, and conduct the necessary testing and commission. The restored pump will be used as a standby pump.
“Therefore, once the restoration of the pump is redone and the testing and commissioning are completed, we will submit a report,” said the Thimphu Thromde.
As the old pump could not be made functional even after spending Nu 78,000, the RAA said that the expenditure could have been avoided if necessary technical assessments were carried out. Further, it said that the purchase of a new washer pump directly from the same firm without following the tendering norms was irregular.
Therefore, RAA said that Thimphu Thromde should produce or else the repair cost of Nu 78,000 must stand recoverable within one month from the date of issue of the report beyond which penalty at the rate of 24 percent per annum shall be levied as per section 55(21) of the Audit Act of Bhutan 2018.
As per section 55(21) of the Audit Act of Bhutan 2018, the levy penalty of 24 percent per annum on financial dues to the Government or to the public entities resulting from the audit report for the amount not deposited within the prescribed time frame.
“Thromde must ensure that proper assessment of works to be completed and appropriate procurement methods are adopted based on the urgency. The evidence of having initiated the corrective action should be furnished to RAA,” added the audit report.