Public arrears bulging year by year

KATHMANDU, Sept 11:

Statistics say that the government´s accumulated arrears stood at Rs 243 billion at the end of Fiscal Year 2012/13, which was an increase of 271 percent over the last six years.

Expenditure of taxpayers´ money worth Rs 24 billion was settled in Fiscal Year 2012/13, but an additional Rs 36 billion was added to the records of financial indiscipline to become the larger size of arrears.

With the completion of each fiscal year, it seems, the Office of the Auditor General (OAG) conducts auditing, prepares reports with bulging amount of ever-increasing arrears, submits its reports to the head of state and the same cycle goes on except for a few discussions on fostering financial discipline in the ministries and its line agencies that spend taxpayers´ money.

Ideally, arrears should to be cleared within a year of the OAG Annual Report coming out.

However the accumulated volume is seriously increasing every year, lamented Babu Ram Gautam, the spokesperson of OAG.

Arrears are of different types, including those in need of proper documentation for recovering from government officials and organizations to the contractors and other general people who have received the amount from government agencies but either have not been settled or money was received illegally.

Gautam is of the view that there are notable reasons why their report is taken for granted and not implemented as suggested and fueling deterioration in the financial good governance.

“Civil servants are rewarded and promoted, their foreign trips are approved and their annual performance appraisals are prepared but their performance records, including their financial discipline, are not considered anywhere. And these are the underlying reasons behind the bulging volume of arrears in the OAG report every year,” added Gautam.

Likewise, the recurring absence of the Public Accounts Committee (PAC) of the parliament, the government´s disobedience in implementing the directions of PAC, poor accounting systems, and lack of efficient and transparent internal management in fund disbursement are some of the reasons behind the degrading of financial discipline.

Former Chief of the Commission for the Investigation of Abuse of Authority Surya Nath Upadhyaya said that this suggests rampant financial indiscipline in the rank and file of the government.

PAC conducts discussions on the OAG reports by inviting government officials but it these discussions are delayed.

PAC is only just opening the OAG report for Fiscal Year 2008/09 and aims to complete discussions on all reports by mid-April 2015.

To make it worse its directions are not taken by ministries and top bureaucrats seriously and are left unimplemented. “Therefore, the size of arrears is getter bigger every year,” said Gautam.

Former PAC chairman Ram Krishna Yadav has a mixed experience in the implementation of its directions.

“Some directions are implemented but others are not, maybe personal interest of the heads of departments and ministries are behind such slackness in implementation,” Yadav says.

However, experience says that the presence of PAC and its discussion has largely affected the settling of arrears and caused improvement in the financial discipline relatively.

Upadhyaya says, “It can only be brought into track by necessary sanctions.”

CIAA should start investigating those cases even though they are reviewed by the Public Accounts Committee, Upadhyaya adds.

However, he maintains that CIAA looked into only few cases of the OAG report as other cases had higher priority at the time.

Gautam said performance appraisal of civil servants should others be linked with implementation of the report and recommendations of the OAG report. Likewise, the OAG budget should be approved directly by the parliament or the PAC instead of the Ministry of Finance to make it independent, Gautam said.

Visiting Auditor General of Norway Per-Kristian Foss also recently said Nepal´s OAG is not independent and its budget should be allocated directly from the parliament.

Upadhyaya said that an amendment in the civil service act six years ago gave the audit service an equal status to all civil services weakening the audit service.

Source: Republica