Financial Crime World

Bhutan: Embezzlement Scandal Rocks Thimphu Thromde, Nu 8 Million Missing

Shocking Revelation by Royal Audit Authority (RAA)

The Royal Audit Authority (RAA) has uncovered an embezzlement scandal at the Thimphu Thromde, with a staggering Nu 8 million missing from its revenue and fine accounts. The RAA’s Performance and Compliance Audit Report reveals that the shortfall occurred mainly due to irregular deposits made by dealing officials during weekends and lockdowns.

Key Findings

  • A shortage of Nu 7 million was not deposited into the Thromde’s account.
  • Physical verification of cash balances on July 22, 2022, resulted in a total short deposit or embezzlement of around Nu 8 million.
  • The RAA attributed the irregularities to the lack of an effective internal control system for revenue management and inadequate monitoring and supervision by the Thromde’s management.

Causes of Embezzlement

  • Lack of periodic revenue reconciliation and reporting, which is a basic requirement for any agency handling public revenue.
  • Inadequate monitoring and supervision by the Thromde’s management.

RAA Recommendations

  • The RAA has asked the Thimphu Thromde to recover the amount from the dealing officials and deposit it into the Audit Recoveries Account.
  • The Thromde management has threatened legal action against The Bhutanese newspaper over its story on the embezzlement, citing that the case is still under review by the RAA.
  • This is the first time a government agency has threatened legal action over a story and more so over audit findings.

Concerns Raised

  • Lack of transparency and accountability in the Thimphu Thromde’s financial management.
  • Questions about the need for better financial controls, especially with the recent announcement of large fines for various offenses, which will be deposited into its own accounts.

Future Steps

  • The RAA has declined to share the entire report, saying it will be presented to Parliament first.
  • Sources have revealed that the RAA is confident of its auditing process and findings, and has written acknowledgements from the Thromde over the missing money and efforts to recover it.