37th Auditor General’s Report
Some Food For Thought

By Prem N. Kakkar

FINANCIAL discipline is a must if the budget allocated under the different headings are to lead to better management of the situation. In this respect, the ministries have a great responsibility on their shoulders. If financial irregularities are contained at the beginning itself then the task of development would be easier to a great extent

Measure

This is the fact highlighted by the 37th annual report of the Auditor General. The report was presented some ten days back at the House of Representatives. The report is necessary in gauging the amount of financial discipline that is present in the dealing of the ministries.

It is matter of worry that compared to the years 2053 and 2054 B.S. the amount of financial irregularities has shown an abrupt increase. Compared to the previous year, there was an increase of 19.1 per cent in the financial dealings of the ministries.

The scene is not quite palatable as many development activities suffer because of such a tendency. To maintain financial discipline is of utmost importance if development efforts are to receive top priority.

This is not for the first time that the Auditor General of the country has provided a picture of the lack of financial discipline. This itself should have been warning enough for the government to devise strategies so that the funds allocated should have been used under the headings specified.

The present report comes in the wake of the estimated budget speech by Finance Minister Mahesh Acharya in which there was a strong appeal for financial discipline. It also mentioned the fact that the public expenditure would go for wide ranging management, appropriate steps would be taken to control corruption and emphasis on good governance. These are the basic elements that go to control financial irregularities. The bold statement of the Finance Minister have to be translated into action by chalking out necessary strategies.

The government cannot act indifferent to the financial irregularities that are taking place. If such were to continue the development projects would suffer. The need therefore arises for coming up with measures to control the unwanted spending spree of the ministries.

A look at the Auditor General’s report shows that not only the government offices are affected by this malaise but the public corporations too have acted in an irresponsible manner as far as maintaining financial discipline is concerned.

Not only the government offices and public corporations come under the purview of the Auditor General’s auditing works but the accounts of the Supreme Court, the parliament, Election Commission, Royal Nepal Army, Nepal Police, and others too are looked into.

When it is an annual report, it must have alerted the government to take necessary action to contain financial irregularities but it is only this year that strongly worded commitment has been made in this regard.

It may be worthwhile herein to mention that the financial irregularities this year have increased by almost three billion compared to last year. The amount as mentioned by the report stands at almost Rs. 26 billion. This is by no means a small amount when the total estimated budget for fiscal year 2000/2001 stands at a little over Rs 90 billion.

This year’s report is specific on the point that in the past two years there has been a increasing trend of the financial irregularities while it was lower in 2053 and 2054 B.S. This suggests that remedial measures in this regard were not taken as the situation demanded.

But now the report is out, it must make sense to go for measures to check the rising trend of financial irregularities. Financial indiscipline can be controlled only with the framing of specific rules and regulations while transparency has also to be maintained. It should not be the whims and fancies of the office chiefs to spend money. They have to abide by the rules. Only if a sense of responsibility dawns the menace of financial irregularity can be checked.

On the question of financial indiscipline, the report states that ten ministries account for the most amount. In all they account for about 89 per cent of all the financial irregularity. This calls for appropriate guidelines so that the government offices, public corporations and others will follow them and thereby lead to a considerable reduction of the problem.

It is also necessary that the records of all financial transactions, whether incoming or outgoing, be kept upto date. This step, if embraced, will make it clear as to what degree can the concerned office go further without crossing the limit set by the budgetary allocation. It is clear that sticking to the dot is not possible most of the time and there may be a need to cross the limit set by the budget but there must be clear provision as to what degree this can be done.

The report has highlighted the problem. The problem has arisen basically because the rules and regulations for expenditure are not followed properly. The need therefore arises to review the rules and regulations and, if necessary, changes made so that there will exist no possibility to indulge in financial indiscipline.

Action Plan

With the economy not in good shape, it is necessary that a clear understanding of the Auditor General’s report will be translated into action plans. If this materialises then financial irregularities will come down and there will be enough scope for the development targets to be achieved.