Stern govt policy leads to swift reimbursement

KATHMANDU, MAR 23 -

The government policy of not to provide additional budget to donor-supported projects that fail to claim timely reimbursement from donors has paid off handsomely, bringing about sharp decline in outstanding amount to be reimbursed this year.

According to the Financial Comptroller General Office (FCGO), the amount to be reimbursed has now come down to Rs 8.63 billion until mid-March, which was Rs 24.6 billion for the same period in the last fiscal.

“If the amount required to be adjusted in accounts stands at Rs 6.34 billion, the actual amount to be reimbursed will be just around Rs 2.29 billion,” said Mahesh Dahal, joint Financial Comptroller General. Failure on the part of certain government agencies to adjust their accounts in line with the donors has been causing delay in the getting the reimbursement.   

The government, since fiscal year 2009-10, adopted a tougher stance—not to release budget to the projects that failed to get reimbursement on time. Although this year’s budget is unclear in this regard, it has stated that the release of budget will be linked to the expenditure of the projects, results achieved from the implementation and timely preparation and submission of financial and audit reports. The government received Rs 21.08 billion in reimbursement out of the total unclaimed amount as of the first eight months of the current fiscal, according to the FCGO. Likewise, the government has also managed to collect reimbursement of Rs 460 million so far out of the total Rs 4.94 billion this fiscal.

“This noticeable progress was only possible due the government’s decision to connect projects’ performance with their ability to get timely reimbursement,” said Dahal. “Even the donors have responded positively to the move as it was one of the topics raised during the annual Nepal Portfolio Performance Review meet held last year.”

The non-reimbursement of budget from the donors was one of the major causes leading to higher deficit in balance of payment deficit over the last two years.

Officials say that not seeking reimbursement has been the main problem instead of donors delaying payment. The Financial Procedure Regulations state that the concerned ministries should claim reimbursement from the donors within 45 days from the expenditure of the budget. However, many projects do not follow the rule resulting in a huge amount remains not reimbursed. “Once expenditure details are presented to the donors on time, they will reciprocate with timely payment,” said Dahal.

Source: Kantipur