Pandey spent highest, Bhattarai seconds in off budget expenses

The increased off budget expenses has not only worried National Planning Commission but also revealed the trend of misusing the tax payers money for the partisan interest.

"In recent years, the off budget spending has increased making the planning commission more worried of the financial indiscipline," said joint secretary at the National Planning Commission (NPC) Gopi Nath Mainali.

In the fiscal year, 2006-07, the off budget expenses by the finance minister stood at Rs 360 million, which has increased to Rs 1.03 billion in the fiscal year 2007-08," he said, adding that in the fiscal year 2008-09, it further increased to Rs 1.36 billion.

During the fiscal year 2006-07, the finance minister was Dr Ramsharan Mahat of Nepali Congress, whereas in 2007-08, Dr Baburam Bhattarai was the finance minister and in 2008-09, Surendra Pandey was the finance minister.

The successive finance ministers contributed in promoting financial indiscipline for their partisan interest hurting the public purse.

The increasing off budget expenses revealed the government's irresponsibility towards the people and national exchequer, whereas they should have been accountable for the public finance, according to the chairman of Freedom Forum Taranath Dahal.

The Forum is working on making the government more accountable and transparent in public finance. "The government must be transparent and accountable for the maximum utilisation of tax paid by the people," he said, adding that the Forum has also sought various information regarding the public spending using the 'Right to Information' Act.

National Planning Commission alone cannot stop such financial indiscipline until the public spending is made transparent, he added.

The planning commission as a policy think-tank only provides budget ceiling based on three-year Interim Plan or periodic plans. It also provides guidelines for the spending but the Finance Ministry is responsible for monitoring the spending.

The current three-year Interim Plan has planned to spend Rs  1,616.45 billion in the three years, which means the budget for the next fiscal year 2014-15 could stand at around Rs 600 billion as the budget for the current fiscal 2013-14 year stood at Rs 517.24 billion and the next fiscal year.

Transparency key to development

Transparency and accountability will help strengthen democracy and boost the performance of development activities coupled with better utilisation of internal and external resources, according to senior economic adviser to the finance ministry Dr Chiranjivi Nepal.

Addressing a launching ceremony of Open Nepal Initiative, which is a collective effort of various organisations including Freedom Forum, NGO Federation, Young Innovations and aidinfo programme at Development Initiative, in collaboration with the World Bank Institute, here today, he also said that aid transparency is not yet sufficient in Nepal.

"Along with the government, international non-governmental organisations should also be transparent and accountable to the public," said Nepal, adding that openness is the only tool that can increase the wealth and uplift the status of countries, people, and lifestyle of the poor.

Some 26 per cent of the foreign aid is off budget, which has to be brought to the red book for effective resource mobilisation, he said, urging development partners and international non-governmental organisations to open up.

The Open Nepal platform has been launched to make all people aware where the money — internal and external — that has to be spent on them for their betterment has gone.

It is not only the recipient country's population that needs to know where the money has been spent but people from the donor countries also need to know where the taxes being paid by them has been spent and has it been utilised or misutilised, said chairman of Freedom Forum Taranath Dahal, on the occasion.

"The initiative for open Nepal and open data was taken with the motto that every citizen should be provided data and information in an understandable form and format," he said, adding that the availability of information and data has not been adequate to ensure people's access to information.

"Usable and consumable data is the need of the hour to transform society through good governance which is the result of transparency and accountability where open data is fundamental," he emphasised.

The Open Nepal Week, which began on Monday, has brought together various national and international experts on data and information, development, information technology, journalists and civil society representatives for building an 'Open Nepal' with open data.

Nepal not transparent in budgetary process

The country is not transparent with its budgetary process, according to a major biennial survey report released today globally.
"Nepal is among the countries with the biggest drops in transparency and accountability in their national budget," said Open Budget Survey 2012 that has revealed that the country has scored 44 out of 100, which is only marginally higher than the average score of 43 for all the 100 countries surveyed but is well below the scores of South Asian countries.
Nepal had scored 45 in 2010.
"It is unfortunate that Nepal has dropped in ranking with a score of 44 from 2010's 45," said chairperson of Freedom Forum Taranath Dahal. Freedom Forum had conducted the research for Nepal.
The country falls in a category that provides some information. The survey has categorically divided the countries into five — extensive information, significant, some, minimal and scant or no information — categories based on their scores.
"Nepal should produce and publish a pre-budget statement and a citizens budget to improve the score which has remained largely constant since the Open Budget Survey 2008," he said, adding that the incumbent government's apathy towards the public is also reflected in the report.
The International Budget Partnership releases the Open Budget Survey every two years as an independent, comparative, regular measure of budget transparency and accountability around the world.
Produced by independent experts not beholden to national governments, the report revealed that Nepal has dropped in terms of its ranking on the Open Budget Index, which uses internationally recognised criteria to give each country a transparency score on a 100-point scale.
"The low score means the government has made it more difficult for citizens to get information about what is being done with public money and to hold the government to account," Dahal added. "The survey report is important as budgets are the main tool for governments to set policies for raising and spending public funds, which promote development and meet the needs of its citizens."
The impact of an open and accountable public finance on development within countries is particularly important as the international community begins to think about the next set of Millennium Development Goals.
"Budget decisions and processes are critical to addressing many of the world’s most pressing problems," commented director of International Budget Partnership Warren Krafchik. "The success of efforts like those to reduce maternal mortality, eliminate persistent poverty, provide all children with access to high-quality education, and address the impact of climate change, among others, hinges on whether countries make the right budget choices and whether those decisions are implemented effectively," he said, adding that it is more than an abstract governance issue as it’s about the quality of life for millions of people around the world.
"At the current slow rate of progress it will take at least until 2030 for all countries to reach a reasonable level of budget transparency. This could mean a generation of wasted resources and missed opportunities," commented Krafchik.
Lack of transparent data for budget reporting makes it far more difficult to monitor progress against the current and next generation of the UN’s Millennium Development Goals (MDGs). As world leaders begin to think about the next set of goals, with an expected completion date of 2030, they should ensure that fiscal transparency and participation are at their heart. In this context, Nepal's decline is particularly troubling.
"Transparency along with opportunities for public participation in budgeting can maximise the positive outcomes associated with open budgeting," Dahal said. "Such opportunities should be provided throughout the budget cycle by the executive, legislature and supreme audit institutions."
The commitment of governments — accompanied by other favourable factors like donor interventions, international standards and civil society pressures — can yield significant and rapid improvements in budget transparency.
The Open Budget Survey 2012 also revealed that 77 of the 100 countries assessed that are home to half the world’s population fail to meet basic standards of transparency.
New Zealand, South Africa, UK, Sweden, India, France and Norway are the high scorers for the 2012 edition while Qatar, Saudi Arabia, Myanmar, Fiji, and China are the least transparent.

Finance Ministry fails to submit foreign aid details

An officer from the Office of Auditor General blamed the Finance Ministry for disobeying the Constitution.
According to the Constitution, the Finance Minister has to submit the detailed information of foreign aid inflow and expenses to the Office of the Auditor General and also to the Parliament but neither the Finance Minister not the ministry is giving any details of the aid flow and expenses, said Mohadutta Timilsina of the Office of Auditor General, during an interaction on Aid Transparency organised by Freedom Forum, in the capital today.
If only the ministry follows the Constitution, there could be more transparency of foreign aid that will help make it effective, he added. "The real allocation is never known to the Auditor General, which is against the Constitution."
In the fiscal year 2009-10, a finance minister presented a report of a technical assistance in the House, he said, without revealing the name of technical assistance and the minister. "The report failed to mention some 87.5 per cent spending of the total Rs 17.19 billion technical assistance that had 6.3 per cent spending on consultants, 3.57 per cent on goods and services, and 2.7 per cent on training and seminars," he said, giving an example of transparency of foreign aid, "The 87.5 per cent expenses was under the others heading."
"Once transparency is insured, the foreign aid could be more effective, economist Dr Chiranjivi Nepal said, adding that the country has been receiving foreign aid since last six decades, but there has been no visible impact of the aid.
The remittance has contributed more to the poverty reduction instead of foreign aid, Nepal said. "The foreign aid has neither contributed to economic development nor in the employment generation."
"The foreign aid that is not in the priority of the country has made Nepal more dependent and weakened the government," he said, "If the donors are serious in Nepal's development, they should strengthen the system, become transparent, and harmonise among themselves. "We also need Foreign aid management system for more effective results."
Freedom Forum is conducting a research on aid transparency, said chairman of the Forum Taranath Dahal. "The result of the research will help make the donors more transparent," he said, adding that transparency will lead to the effectiveness of the foreign aid that is key for the country's development activities, as it shares a major chunk of the budget.

AMP in pipeline
KATHMANDU: The Finance Ministry is working on Aid Management Platform (AMP) to make the foreign aid transparent, said facilitator for aid management and coordination under the Foreign Aid Coordination Division of Finance Ministry Julien Chevillard. "The project under the UNDP will help increase transparency, though it will not have off-budget aid," he said, adding that transparency will lead to the accountability too. The AMP — that will collect data in a detailed manner — will be useful for the donors and government agencies in the beginning but could go public by the end of the current fiscal year, he added.