AG approves classification chart of Economic Codes

Kathmandu, Nov. 5: The Auditor General (has) approved the classification chart of the Economic Codes for the government revenue and expenditure, developed by the Financial General Comptroller Office (FCGO).

Chief of Budget Division at the Ministry of Finance Kewal Prasad Bhandari informed in a tweet that the new codes were approved a couple of days ago.

Murari Niraula, Member Secretary of the Public Expenditure and Financial Accountability (PEFA) Secretariat said that the new chart was created in order to address the changed political and economic structure of the country.

PEFA has created the codes in collaboration with the FCGO.

 “We have three tiers of governments therefore in absence of uniform codes, it will be difficult to keep track of the income and expenditure of all the governments,” he said.

The new codes will be implemented in the provincial and local levels from the current Fiscal Year 2017/18, and in federal level from the next fiscal 2018/19.

As the elections to create the provincial governments are just being happen, provinces will use the codes from the next fiscal.

According to Niraula, the PEFA has classified and explained the government revenue and expenditure in line with the Government Finance Statistics (GFS) Manual 2001 and GFS Manual 2014 prescribed by the International Monetary Fund.

GFS Manual 2014 describes a specialized macroeconomic statistical framework the government finance statistics framework, designed to support fiscal analysis.

There will be separate reserve funds in federal, provincial and local level.

FCGO said that the new codes were created on the basis of Local Government Act 2017, Intergovernmental Fiscal Management Act 2017, and National Natural Resources and Fiscal Commission Act 2017 – the newly created legal instruments to operate the federal governments and manage the government funds.

The chart includes topics for organizational classification, programme classification, functional classification, economic classification and fund/source.

Financial Comptroller General Ram Kumar Acharya said that revenue, current expenditure, and capital and liabilities will begin with the numbers 1, 2 and 3 respectively.

In the same way, the Office of the President has been given ‘1’ as the initial code, constitutional bodies ‘2’, executive ‘3’, provincial government ‘7’ and local government ‘8’.

Every budget sub-head will be identified by eight numerical characters that includes one character initial code, two character agency code, two character department code and three character programme code.