Kathmandu, October 18

Financial Comptroller General Office (FCGO) — the government agency responsible for treasury operation and internal audit of the government — has asked all the state entities and constitutional bodies to prepare their balance sheet as per the Nepal Public Sector Accounting Standards (NEPSAS).

NEPSAS is an international reporting format, which has been designed on the basis of the International Public Sector Accounting Standards (cash basis). It will be implemented in at least 10 ministries and all constitutional bodies this fiscal year.

It had been implemented as a pilot project in the Ministry of Physical Infrastructure and Transport (MoPIT) and Ministry of Women, Children and Social Welfare (MoWCSW) in last fiscal 2014-15.

The FCGO aims to implement the new accounting standards in all 44 central level government offices — ministries and constitutional bodies that are called economic entities in NEPSAS — by next fiscal, according to Kewal Prasad Bhandari, deputy financial comptroller general.

Only 16 ministries and constitutional bodies had prepared their balance sheets based on new accounting standards till last fiscal 2015-16. These include the Ministry of Health and Population, Ministry of Information and Communications, Ministry of Federal Affairs and Local Development, and Ministry of Agricultural Development.

FCGO has already asked all central level entities to prepare balance sheets based on NEPSAS. However, a vast majority has said they lack expertise to implement NEPSAS this fiscal. But some, namely, Commission for the Investigation of Abuse of Authority, President and Vice President Office, Election Commission, Office of the Auditor General, Ministry of Cooperatives and Poverty Alleviation, Ministry of Science and Technology, Ministry of Foreign Affairs and Ministry of Law, Justice and Parliamentary Affairs are working to develop balance sheets abiding by new accounting standards.

After implementation of this accounting system, receipts and payment accounts of the concerned ministries and constitutional bodies will be presented on a single sheet and in an easier format following the international accounting principles. Subsequently, disclosures and notes will be added in the report.

As per existing system, economic entities prepare separate reports on expenditure, revenue, royalty, foreign aid and materials without following the international accounting principles. The reports are difficult for accounting professionals, who are not familiar with our bookkeeping system, to understand.

NEPSAS was developed by the Accounting Standards Board, Nepal, and the Cabinet had endorsed it for implementation some five years back.