Friday, April 12, 2013

Gross misuse of revenue, development aid

Government agencies, various committees and local government bodies including District Development Committees (DDCs), and public enterprises have misused taxes — paid by the public from their hard earned income — and aid received from development partners in gross violation of financial laws.
The Auditor General's report has pointed out gross violation of financial discipline and law, also in internal resource mobilisation making the country more dependent for development expenses.
The cumulative questionable expenses of the government, various committees including DDCs, and public enterprises stood at Rs 204.26 billion till the last fiscal year since 2003-04, that is almost equal to revenue mobilised by the government last fiscal year.
The government had mobilised Rs 241.77 billion revenue last fiscal year.
"However, government agencies, various committees and public entities have misused revenue through questionable spending of non-budgetary expenses coupled with massive transfers against financial regulations at the end of the financial year," said acting auditor general Bimala Subedi, here today.
The selection of development projects without proper study and inefficient implementation have increased the cost of the projects and desired outcomes have not been realised, she said, adding that delayed budget, out of the budget expenses of technical and goods help from development partners have also increased budgetary indiscipline.
"Likewise, there is no scientific base for revenue mobilisation target and lack of tax net increment have hurt revenue mobilisation, apart from the increase in revenue dues and no improvement in internal resource mobilisation."
The report also highlighted that lack of timely amendment of Public Procurement Act, non-transparent public purchase process, and disregarding procurement regulations had made public procurement more non-transparent, ineffective and inefficient. "Lack of monitoring by higher authorities and authentic information and data have not only made accounting a herculean task but also encouraged leakages and financial irregularities," Subedi said, suggesting the government to take up the issue seriously to make the audit report of its agencies more authentic.
According to the Constitution, the auditor general hands over the report to the President, who then hands it over to the prime minister for it to be tabled in the Parliament for discussions. The Public Accounts Committee (PAC) under the Parliament further scrutinises the report.
But due to the absence of Parliament since May 28 last year, the Auditor General's report of fiscal year 2010-11 also has not been tabled, let alone the current report of last fiscal year 2011-12.
However, once the auditor general publishes its report, the responsibility to settle questionable expenses rests with the respective agencies themselves within 35 days, according to law.
They can however, ask for more time to settle the questionable expenses. "However, there has been no action from government agencies and other public enterprises on people involved in financial irregularities, which has encouraged and increased financial indiscipline year after year.
The questionable expenses of last fiscal year 2011-12 stood at Rs 35.80 billion, according to the Auditor General's report. Recoverable accounts, need-to-regularise accounts and unsettled advances accounts come under questionable expenses.


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