Govt scores 'A' rating in nine indicators of public finance management
KATHMANDU, June 20:
The government has made significant progress in different performance indicators in management of taxpayers' money, getting nine 'A' ratings in total.
The second assessment report of Public Expenditure and Financial Accountability (PEFA) unveiled on Friday attributes the use of information technology behind substantial progress in deepening structures and processes of Public Financial Management (PFM) System.
The public finance management of three fiscal years -- from 2011/12 to 2013/14 -- was reviewed by nine assessment teams.
Similar assessment was carried out in 2008 as well. But the government has score 'A' rating in only one indicator -- aggregate revenue out-turns compared to original approved budget. The government has scored 'A' rating in nine indicators -- aggregate expenditure, classification of budget, comprehensiveness of the information included in the budget document, public access to key fiscal information, orderliness and participation in the annual budget process, transparency of taxpayer obligations and liabilities, effectiveness of measures for taxpayer registration and tax assessment, availability of information on resources received by service delivery units, and aggregate revenue out-turns compared to original approved budget.
Of the 28 indicators, improvements been seen in 16 indicators including the afore-mentioned nine indicators. Similarly, ratings of 10 indicators have remained unchanged.
Making presentation on the assessment, Babu Ram Subedi, member-secretary of PEFA Secretariat said major interventions are needed to improve these indicators and sustain the achievements.
However, the performance of two indicators -- legislative scrutiny of annual budget law and extent of unreported government operations -- has degraded, according to the report.
Subedi said there was no parliament in the country to scrutinize public expenditure and provide direction to the government in the first two years of the review period. "The reason behind degradation of unreported government operation is due to the tendency of spending public money going out of the budget system and programs mostly by public enterprises, development committees and welfare funds," said Subedi.
Such spending is counted at 11 percent of their total annual budget.
The progress in international PEFA ratings also shows that Nepal's PFM system is relatively strong. "Nepal's PEFA ratings are better than the average of 15 fragile states and 27 low-income countries (except for the external scrutiny and audit where it is somewhat lower)," states the report. "Compared to 51 middle income countries (MiCs), Nepal PFM system rating is better or equal on four dimensions, and lower on two dimensions -- external scrutiny and audit and comprehensiveness and transparency."
Speaking at the program, Finance Minister Ram Sharan Mahat said the introduction of Treasury Single Accounts (TSA) has paved the way for general public to acquire real time information of government spending.
Source: Republica
