Government bodies splurge Rs 500b

April 12, 2018

Prithvi Man Shrestha, The Kathmandu Post, 12 April 2018


Government agencies spent over Rs500 billion in the last fiscal year, including splurging over Rs100 billion in the year’s last week, brazenly violating standard procedures and accounting principles, a new report reveals.

The amount of cumulative irregularities as of last fiscal year has increased by over Rs100 billion compared to Rs396 billion recorded in the fiscal year 2015-16.

Sources at the Office of Auditor General said its 55th annual report being submitted to President Bidya Devi Bhandari on Thursday shows the total amount of dubious practices in the last fiscal year alone stood around Rs125 billion.

The report shows expenditure irregularities in government offices stood at Rs100 billion followed by over Rs11 billion in various committees and District Development Committees, and over Rs14 billion in the local governments.

The total amount of improper spending surged in the last fiscal due to the addition of such amounts from local units—rural municipalities and municipalities. The OAG audited accounts of local units for the first time as per the constitutional mandate. “The cumulative expenditure done without following due procedure will cross Rs500 billion,” a senior official at the OAG office told the Post.

The report clearly exposes the extent of financial irregularities of government agencies. Distribution of huge amounts under miscellaneous heading, spending of over Rs100 billion in the last one week of the fiscal year, and extremely high amounts of budget transfer from one heading to another, surge in the spending under unproductive expenditure are some of the anomalies that have drained Nepal’s public expenditure. 

The OAG report reveals around Rs33 billion was distributed arbitrarily under miscellaneous headings in the last fiscal year. Of the total budget, 28 percent spending came in the last month (mid-June to mid-July) of the fiscal year. The budget transfer has increased by 21 times to Rs290 billion, of which Rs24 billion was transferred in the last week of the fiscal year.

The Financial Procedure Act says the government’s account must close on the second week of July. A whopping Rs117 billion was spent in the final one week of fiscal year 2016-17 covering 14 percent of the year’s total expenditure.

Among the government agencies, the Ministry of Physical Infrastructure has the highest amount of irregularities followed by the Ministry of Finance and the Ministry of Federal Affairs and Local Development.

Of the total irregularities, Rs18 billion (16 percent) is the amount to be recovered. As per the Financial Procedure Act, the irregularities are divided into three separate groups-to be recovered, to be regularised, and advance payment.

The OAG report mentions multiple examples of how government agencies misused the state coffer by not following due procedures. It says the government showed non-existent resources to make the budget size bigger in the fiscal year 2016-17. Although the treasury was negative by Rs22.65 billion at the end of fiscal year 2015-16, the government said in its estimate that Rs59.41 billion would be transferred from previous fiscal year’s reserve.

According to the report, the outstanding tax dues have been growing. In the last fiscal year, it stood at Rs161 billion.

Tax offices’ failure to take action has increased tax dues, the report says. The government continues to lose huge amount in tax exemptions.

The Public Procurement Act says public offices should not engage in promoting limited competition by avoiding calling tenders. Nonetheless, various ministries made purchases worth Rs1.4 billion without competition by fragmenting purchases.

The report mentions Nepal Oil Corporation’s alleged corruption in land purchase. It purchased 91 bighas of land worth Rs2.31 billion in Jhapa, Chitwan and Rupandehi without taking approval from the board of directors.