Auditor General’s report: Rs. 104bn arrears in public offices

Kathmandu, Aug. 20

Public offices in Nepal have about Rs. 104 billion arrears by the end of the last Fiscal Year 2020/21, according to the Office of the Auditor General (OAG).

The 58^th annual report of the OAG submitted to President Bidya Devi Bhandari by Auditor General Tanka Mani Sharma on Friday reported that the country had to recover Rs. 26.4 billion arrears in the last fiscal but only Rs. 6.1 billion was recovered.

According to the report,  Rs. 9.7 billion in FY 2017/18, Rs. 7.4 billion in FY 2018/19 and Rs. 6.1 billion in FY 2019/20 was recovered after the Auditor General indicated the arrears in its annual reports.

However, the amount of recovered arrears is continuously going down. According to the 57^th Report in 2020 Rs. 7.4 billion was recovered in that year while the amount was Rs. 9.7 billion in 2019. The OAG reports indicate less revenue collection, idle deposits at the treasury, higher payments and expenditures beyond the legal parameters as arrears.

In the last three years, arrears of the federal and provincial offices were gradually decreasing while they are continuously going up in local levels and other organisations and committees.

The size of arrears in the federal government offices has gone down to 2.86 per cent in 2021 from 5.29 per cent in 2019. The amount has also gone down significantly from Rs. 106.3 billion to Rs. 44.3 billion in the past three years.

Likewise, arrears in the provincial offices has decreased to 2.74 per cent from 7.25 per cent, however, in terms of the actual amount it has gone up significantly – from Rs. 19 million in 2019 to Rs. 6.5 billion in 2021.

In terms of local bodies, the size of arrears was 4.22 per cent three years ago which went up to 5 per cent in 2021. But in terms of amount, it increased to Rs. 40.8 billion from Rs. 24.1 billion.

The worst performers in terms of transparency are the other organisations and committees established by the federal and provincial governments. They have about 7.74 per cent of arrears which was Rs. 12.6 billion in the last fiscal.

The OAG has audited a total of 5462 institutions and agencies under various levels of government of which federal ministries and agencies have the lowest arrears in terms of per cent (2.86 per cent) but highest in terms of amount Rs. 44.3 billion. While the provinces have the lowest amount of arrears with Rs. 6.5 billion which makes just 2.74 per cent of the total budget.

The audited amount was Rs. 1555.8 billion of federal agencies, Rs. 237.4 billion of provincial agencies, Rs. 815.9 billion of local bodies. Likewise, Rs. 163.5 billion of 584 committees and other organisations, and Rs. 2555 billion of 81 organised institutions was also audited.

The OAG has commented that the public accountability was poor in terms of budget and project implementation, revenue administration, public property mangement, fiscal federalism execution and public service dissemination.

According to it, the budget of the subnational bodies is dependant on federal grant and most of their prorammes were unproductive and distributory, and administrative costs were high.

It also noted that the government agencies do not have standards and criteria for the facilities of the public office holders and the employees were facility-centred.

Published in The Rising Nepal daily on 21 August 2021.