Irregularities galore in NRCS

The Nepal Red Cross Society (NRCS) is facing serious allegations of corruption, financial mismanagement and governance failures.

A recent report by an investigation committee formed by the Social Welfare Council highlights multiple instances of governance breakdowns within the NRCS. According to the report, court orders, including a Supreme Court directive to reinstate the executive committee, were blatantly ignored. Instead, a politically backed faction has reportedly seized control of the institution, preventing the reinstated executive committee from functioning. This has allowed a group with vested interests to maintain illegal control over the organization, it added.

Likewise, the probe committee has raised concerns about the quality of blood distributed by the NRCS’s blood transfusion centers. The report states that the executive director was appointed in an illegal manner and that money was embezzled in the procurement of land in Bhaktapur.

According to the report, irregularities were observed in the procurement of goods and services, corruption was detected in the leasing of buildings and land, fixed deposits were provided to banks without competition, and management was not complying with existing rules and regulations. As many as 16 probe committees have been formed to investigate irregularities in the NRCS. Since the recommendations and suggestions given by these committees have not been implemented, the Social Welfare Council has requested the federal government to take immediate action to implement these suggestions and recommendations.

The latest probe committee was led by Sanjay Kumar Shah. Durga Prasad Bhattarai, Dipendra Pant, Dhruba Bhandari and Giriraj Kandel were the members of the committee.

Outstanding amounts not collected

The investigation committee found that the NRCS management was not putting efforts to recover a total of Rs 20.19m in outstanding rent fees from various individuals and firms. Among the defaulters, Star Enterprises alone owes Rs 1.89m to the NRS in unpaid rent. Additionally, the NRCS needs to collect Rs 7.12m from the Public Health Concern Trust, Rs 1.38m from Santosh Sapkota, Rs 936,380 from Gauri Shankar Dahal, Rs 904,805 from Gaurav Pokharel, and Rs 899,376 from Pramod Dhungana. Likewise, total recoverables, amounting to Rs 19.41m, have not been recorded in the NRCS accounts.

The committee also uncovered significant irregularities in the leasing of NRCS properties, including the building housing Kathmandu Model Hospital. Proper procedures were bypassed, and properties were rented out without competitive bidding or public notices, resulting in substantial financial losses, the committee stated in its report. Outstanding rent fees amounting to Rs 20.19m from various individuals and firms have not been collected, with some pending since the fiscal year 2020/21, it added.

Leadership issues 

According to the report, Umesh Dhakal lacks the legal grounds to continue serving as the Executive Director of the NRCS. It states that Dhakal’s financial transactions and activities during the transitional phase have not complied with existing laws and regulations. Dhakal’s term, along with that of another director, expired two and a half years ago. Although the District Administration, Kathmandu, permitted them to continue their roles until further arrangements were made, both have remained in their positions even after a new executive assumed office in June last year.

Irregularities in land procurement

The committee has concluded that Rs 210m was embezzled during the procurement of land in Bhaktapur. The NRCS purchased a land plot measuring 5 ropani 13 ana 3 paisa from Rajesh Deshemaru in Bhaktapur Municipality-4 for Rs 63.28m. However, various reports revealed that the actual land measurement was only 5 ropani 7 ana and 2 paisa.

The report highlights several irregularities in this transaction. It points out that the maximum cost for the land purchase was not determined beforehand, an unusually large amount of money was spent, and the procurement notice was published with a shortened notice period of 15 days instead of the standard 30 days. Additionally, the notice did not specify the frontage of the land.  

Furthermore, it was discovered that the purchased land lacked road access. To address this, the NRCS bought an additional 13 ana 3 paisa of land to construct a road to the plot, costing another Rs 9.95m.

Operational irregularities

According to the report, elections for the NRCS central committee, seven provincial committees, and over 50 district committees were conducted by violating established regulations. The NRCS statute specifies that only the general secretary and the executive committee have the authority to conduct elections. However, the report states that the executive director unilaterally appointed election officers and held elections across the center, provinces, and districts, bypassing the NRCS statutes and election regulations.

The report also highlights illegalities in the NRCS’s earthquake response program and staff management. Volunteers were found to have been reimbursed for airline tickets without the required approved travel orders, violating organizational rules and directives. It was unclear what work these travels were for, and no reports were submitted post-travel to justify the expenses, it added.

Further, the justification for travel undertaken by executive committee members and the disaster management committee coordinator during the earthquake response was not transparent. The report states that the NRCS failed to adopt cost-cutting and austerity measures despite its severe financial constraints.

Given the severity of the findings, the Ministry of Women, Children and Senior Citizens has recommended forming a new ad-hoc committee to hold a general assembly of the NRCS and implement the technical report's recommendations. Likewise, immediate action has been urged to address the serious quality issues at the blood transfusion centers. 

The investigation committee has called for the implementation of recommendations from various bodies, and suggested amending the NRCS constitution to limit the tenure of office-bearers to no more than two terms to prevent individuals from holding positions for prolonged periods.