Kathmandu, December 15

The local units that are functioning as the local government will be solely responsible for the monitoring of their expenditures, says the Ministry of Finance (MoF).

Local units that are receiving grants from the central government and also collecting taxes at the local level and handling development works and other recurrent works across the country will be responsible for monitoring those activities.

Finance Secretary Shankar Prasad Adhikari informed that local units are autonomous bodies and they will have to handle and monitor their expenditures. “The constitutional provision states that there will be local legislatures and the local units will be responsible towards them in terms of budget spending,” he informed.

MoF believes that the local units will be honest regarding their expenditure and follow the prescribed rules as they will have to answer to their legislatures.

Adhikari further informed that all the 753 local units will have to report about their income and expenditure to the central Treasury Single Account (TSA) system of the Financial Comptroller General Office (FCGO).

Adhikari also stated that the central government’s interference in the expenditure procedure of the local units will be against the principles of decentralisation.

“If the central government continues monitoring the expenditure of local units, it will be against the spirit of federal system. So, local governments will have to report to FCGO, but the monitoring aspect is their own responsibility.”

As per Adhikari, the Office of the Auditor General — the supreme audit institution of the country — will audit the income and expenditure of the local units. “The principles of spending are already set and the local units will have to follow them,” he said.

Local units have received Rs 150 billion as equalisation and conditional grants in two instalments. The central government has to release next tranche of the grant in mid-March. The government has allocated Rs 225 billion for local units under the two aforementioned grants, which is released in three instalments.

Meanwhile, the FCGO is preparing a software that will be connected to the central government’s TSA system. The FCGO is developing the Computerised Government Accounting System and Revenue Management Information System to interlink the income and spending of local units with the central accounting system of the government.

However, Rudra Singh Tamang, spokesperson for the Ministry of Federal Affairs and Local Development, informed that it will be difficult to get real time data of revenue collection and expenditure of the local units within this fiscal.

“The tracking system has not been finalised yet, and we will have to test it before applying it. So I think real time data of revenue collection and expenditure will come only from next fiscal year,” he said.