DAWA ZANGMO | Thimphu
The Ministry of Finance (MoF) ongoing efforts of the Integrated Financial Management Information System (IFMIS) is expected to address long-standing issues surrounding the misuse of Closed Work Accounts (CWAs), Finance Minister Lekey Dorji informed Parliament during a joint sitting on June 12.
The discussion followed concerns raised by Members of Parliament regarding irregularities associated with the management of Closed Work Accounts and measures being taken to improve financial accountability.
The Public Accounts Committee (PAC), in its review of the Royal Audit Authority’s (RAA) Annual Audit Report 2024–2025, recommended that the government conduct a comprehensive review of existing provisions governing Closed Work Accounts and adopt international best practices to enhance transparency, control, and accountability.
Closed Work Accounts are intended to hold funds for projects that have been completed and formally closed. However, the RAA identified systemic weaknesses in the way these accounts are being used.
According to the audit findings, some agencies have been booking funds under CWAs for projects that have either not commenced or remain unfinished. The practice allows agencies to avoid returning unutilized funds to the government at the end of a fiscal year when projects are not completed as scheduled.
During the deliberations, Dramedtse-Ngatshang MP from Monggar, Kinzang Wangchuk, questioned the ministry on its plans to address the issue.
“When projects remain incomplete at the end of a fiscal year, there is no provision from the MoF to release funds in the following fiscal year for continuation of the work. Although such projects could be considered as spillover activities, the funds are generally not disbursed. While digitalisation efforts are underway, these challenges may persist. What strategies does the ministry have to minimise or prevent such practices?” he asked.
National Council Member from Lhuentse, Kelzang Lhundup, attributed the issue partly to delays in project implementation and a shortage of technical personnel.
“Funds are often not released on time, and project implementation also begins late. Human resource shortages remain a major challenge. For example, among the 205 gewogs, a single engineer may be responsible for two or three gewogs. Having dedicated engineers in every gewog would significantly improve project delivery. Due to limited manpower, deposit works increase. Funds remain with central ministries and agencies for eight to nine months, delaying implementation at the gewog level and contributing to the misuse of Closed Work Accounts,” he said.
National Council eminent member, Phuntsho Rapten raised concerns about the timeline for the completion of the new financial management system.
The finance minister mentioned that the IFMIS is currently under development.
“However, if its completion takes another two years or longer, these challenges will continue in the meantime,” he said.
Following the discussions, the House directed the MoF to submit an action taken report on measures to regulate CWAs during the upcoming winter session of Parliament.
Responding to the concerns, Finance Minister Lekey Dorji acknowledged the issue and said efforts were underway to strengthen athe country’s public financial management framework.
“I agree that this is an issue. Previously, systems such as the Electronic Public Expenditure Management System and the rolling budget system had become outdated and faced several limitations. To improve public financial management, we are developing the IFMIS. The issues relating to CWAs will be addressed through this system. It is currently under development, and we are also introducing a unified chart of accounts,” the finance minister said.
In addition to the issue of CWAs, the joint sitting deliberated on three other recommendations put forward by the PAC in its review of the Annual Audit Report.
One of the recommendations calls for stricter enforcement of contract penalties. According to the PAC review, when contracts are terminated, responsible agencies should recover both delay damages and the 20 percent recovery amount for incomplete work, in accordance with existing provisions.
The committee also recommended the full activation of the government inventory management system to ensure that public assets are properly recorded, monitored, and managed.
Another recommendation urges the MoF to digitise all financial records to improve efficiency, record management, and accountability across government agencies.
The RAA had proposed a total of 10 general recommendations in its Annual Audit Report. However, after reviewing the proposals, the Public Accounts Committee decided to submit only four recommendations for parliamentary deliberation and consideration.
According to the committee, the remaining recommendations were either already implemented or had been adequately addressed through existing measures.
The discussions reflected Parliament’s continued focus on strengthening public financial management systems, improving accountability in the use of public resources, and ensuring that government funds are utilised for their intended purposes.
