Govt forms public expenditure review commission

Kathmandu, August 19

The government has formed a public expenditure review commission under the leadership of senior economist Dilli Raj Khanal, today. The Cabinet meeting formed the one-time commission to provide recommendations to the government for effective public expenditure at federal, provincial and local level.

The fiscal budget of this fiscal had announced the formation of a commission to initiate the entire reform process based on the recommendation of the commission, so that the government can create synergy from public expenses made by each layer of government.

Talking to The Himalayan Times, after being appointed the convener of the commission, Khanal said that the commission will look into the flaws of the overall budget system - budget formulation, resources allocation, project preparedness and project selection, execution and timely accounting and reporting. The commission will provide the needful suggestions for the effective utilisation of the budget through the lower layers of administration as well.

“Cost and time overrun are the major challenges of development projects that we have faced since long,” said Khanal. “We must review it and seek ways for the execution of the projects in a timely manner to benefit the public, which is considered as ‘development dividend' for peace and stability in society.”

Khanal further said that last-hour development expenses must be prevented, which have created multiple problems like lack of transparency, misuse of public money or corruption, delivery of substandard work and lack of liability of the project chiefs and contractors. He added that some of the laws like Public Procurement Act should be amended to bring reforms in public expenses and expedite the development works and make the project chiefs and contractors liable.

Another major area is rampant transfer of funds from one heading to another at the end of the fiscal. “First they select projects without any preparedness and towards the end of the fiscal they transfer the fund to another heading citing that the allocated resources cannot be spent by the selected project due to lack of preparatory works that are a must to execute the project,” informed Khanal.

He said that the government should be careful about the expanding size of the recurrent type of expenses, mainly, salaries and allowances and other administrative types of expenses. “We must be efficient regarding administrative expenses and focus on expanding the size of development expenditure annually in a rational manner.”

He further stated that the public expenses should be measured based on output instead of the amount spent, like the length of roads constructed, number of skilled human resources produced, number of drinking water and energy projects completed, and how have people benefited from them. “We will not be able to develop unless we can mobilise development expenses in a result-based approach,” Khanal asserted.