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Budget transfers equal capital expenditure last year; a serious issue of credibility


Nepalnews
2023 Apr 15, 6:25,

Budget transfers equal capital expenditure last year; a serious issue of credibility

The 60th Annual Report of the Office of the Auditor General – the supreme audit institution of Nepal has revealed that budget expenditure system saw serious lapses in lack of compliance on part of the government on fiscal discipline.

Noting that anomalies were increasing in the decisions and actions in budget spending, the report has raised serious questions on the government's tendency and trends on budget transfers and spending at the end of the year.

It has come to a revelation that the government had made transfers of the budget equivalent to its capital spending in the fiscal year 2022/23. Total capital spending of the government last year was around Rs 216 billion whereas the transfer amount was also nearly Rs 200 billion.

In the last fiscal year, the government had come up with a total budget of over Rs 1632 billion and 829 million. It appeared that roughly 12.03 percent budget of the total budget i.e. 196 billion 415 million was transferred last year.

Out of the transferred budget, the government had made the payment for the procured goods and services at the end of the fiscal year or in Asar (June-July) – the concluding month of the Nepali fiscal year.

The OAG report stated, "Over 82 billion and 806.7 million was found transferred in Asar and around Rs 26 billion and 997 alone was transferred in the fourth week of the same month".

The government had allocated over Rs 88 billion and 707 million under the heading 'finance sundry' last year. But, it seemed the government had mobilized over Rs 15 billion and 728 million from various budget sub-headings while making transfers.

Likewise, the OAG report highlighted that roughly Rs 79 billion and 468.4 million was transferred except the headings described in the budget.

The report has further revealed that the government had made budgetary transfers in the projects and programmes which were not included in the Annual Appropriation Act and budget speech.

"Virements were made in the budget sub-headings in a situation when budget spending cannot be made. Transfers were done for different 10 programmes which were not manifested in budget appropriation", the OAG report noted.

"It was against budget principles to make spending from transferred budget in the programmes that were not included in the earlier budget appropriation", it is noted.

The government last year had transferred over Rs 2.97 billion for different 10 plans and programmes. The actual spending of the plans and programmes was Rs 2 billion and 33.9 million.

The supreme audit institution has raised questions on the trends of public spending at the end of the year.

According to the Rule 30 of the Financial Procedure and Financial Accountability Rule, 2077, the Treasury Control Office should update and close the payment process at least a week before the end of the fiscal year.

But, around Rs 100 billion was found transferred in the fourth week of Asar last year which raises a serious question on budget credibility.

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budget Office of the Auditor General government
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