High misappropriation of funds in local bodies: AG

Kathmandu, Apr. 17:

If one believes the report of the Office of the Auditor General (OAG), corruption has already become a new fashion in the newly formed local bodies.

About 278 local bodies have spent Rs. 228 million without any invoice or record, and 207 local units have not collected Rs. 112 million of its internal income. 

The OAG report for fiscal year 2016/17 has mentioned many such cases, which indicate that the local bodies are not sincere in keeping their accounts transparent.

However, some of the local bodies got their elected representatives much later than the end of the last fiscal year. The first phase of the local elections was held in Province 3, 4 and 6 on May 14, 2017, the second phase polls were organised in Province 1, 5 and 7 on June 21 and the third phase election was held in Province 2 on September 18. 

Some of the unaccounted expenditures were made before the elected representatives assumed their responsibilities. 

"As many as 675 local bodies have made payment of Rs. 50.5 million without raising the TDS (Tax Deductible at Source). Similarly, 71 local units have not submitted Rs. 219 million to the treasury," mentions the report. 

According to the OAG, local bodies in Bhaktapur, Panchthar, Chitwan and some other districts have paid Rs. 350.5 million for goods and services, such as public construction and furniture, which they procured without competitive bidding – an act which is barred by the Public Procurement Act, 2008.

The act has a provision that procurement should not be done by fragmenting the project or programme. 

Likewise, the Kathmandu Metropolitan City Office has procured only one thirds of its goods through competitive bidding. 

The KMC procured goods worth Rs. 152.2 million, of which goods worth Rs. 54.3 million were bought through bidding process while goods worth Rs. 51.5 million were procured by asking quotations from three business firms and materials worth Rs. 46.5 million were procured directly. 

The OAG has stated that such activities are against the rules, they need to be controlled. 

It has found that Rs. 221.6 million of the social security money has been remaining idle for more than a year in various bank accounts of the beneficiaries. According to the rules, if the account of any beneficiary does not make any transaction, the money should be withdrawn. 

Likewise, Hetauda Sub-Metropolitan City of Makwanpur district had misappropriated Rs. 1.13 million by giving it away to 23 organisations and individuals against the law. 

Chhayanath Municipality and Saru and Mugumakarmarong Rural Municipality of Mugu district also misappropriated Rs. 2.1 million, which includes about Rs. 1 million from the capital budget.

Likewise, property and liability of the erstwhile 3,157 Village Development Committees (VDCs) were not transferred to the newly created local units by the end of the last fiscal. 

According to the Economic Procedure Rules 2007, if any office was to be closed or merged with another office, the details of goods in the office should be recorded within 35 days of the decision, and the goods should go to the custody of the respective ministry or department. 

Though the government had decided to restructure the local bodies on March 10, 2017, the liabilities and properties of the erstwhile VDCs were not transferred to the newly created local bodies. 

"About Rs. 157 million in liabilities of 542 VDCs have not been transferred to 120 rural municipalities," said the report.

Published in The Rising Nepal daily on 18 April 2018.