Nepal | January 22, 2020

Editorial: Arrears on the rise

The Himalayan Times

The ever-increasing arrears cannot be minimised unless the government revamps the existing accounting system

The Office of the Auditor General (OAG) submitted its 56th annual report to President Bidhya Devi Bhandari on Friday, highlighting the growing trend in arrears in the government agencies. The report made public by Auditor General Tankamani Sharma said the arrears, of the total audited agencies, during fiscal 2017/18 rose by 36.7 per cent, to Rs 683 billion, compared to the previous fiscal 2016/17, when the arrears were recorded at Rs 500 billion. Provincial governments appear to have recorded more arrears (Rs 190 billion) than those of the federal government (Rs 106 billion). The local governments have arrears of Rs 24 billion. The OAG had carried out auditing of 6,644 offices of the three tiers of government. The report states that total arrears account for more than half of the country’s current budget. The federal Ministries of Finance, Defence, and Ministry of Physical Infrastructure and Transport Management have the largest arrears.

Arrears generally get accumulated when expenses are made unlawfully or without producing proper documents as required by law. They may also get accumulated if the government agencies fail to receive reimbursement on time or the amount is paid in advance to staffers or to contractors. The arrears continue to swell every year by billions of rupees despite the fact that the Financial Procedures Act calls for settlement of such amounts within 35 days of getting a financial reminder. Most of the ministries, including the Ministry of Home Affairs, spend tax payer’s money without following the due process of the law. The Home Ministry, for example, disbursed Rs 296 million in fiscal 2017/18 to persons for relief, medical treatment, compensation and financial assistance without adhering to the procedures endorsed by the Council of Ministers in 2012. Most of the time, such largesse is made to those people who have access to the corridors of power.

The OAG has highlighted flaws in the procurement process of the government agencies, misuse of grants at the local levels, ineffective budget and expenditure management, weak project monitoring, ineffective revenue administration and weak implementation of polices related to financial management. Non-implementation of the laws is the biggest challenge every government has been facing. No tangible progress has been made even on the national pride projects due to poor spending and their poor monitoring. Once the annual report is made public, the parliamentary Public Accounts Committee discusses the report in detail and also tells the concerned ministries to mend their ways to minimise the arrears in the next fiscal. However, the ministries and their departments hardly seem to heed the directives of the sovereign parliamentary panel. Non-implementation of the existing laws, lack of accountability and transparency, and a poor accounting system are the major reasons for the ever-increasing arrears. If the arrears are allowed to grow, there are chances of more corruption at all levels. In order to ensure fiscal discipline, Finance Minister Yubaraj Khatiwada had vowed to modernise the existing accounting system by adopting the electronic transaction system in all the government agencies. He must now act on it.

Protect our children

Nepal’s relaxed immigration policy, which allows trouble-free visas to any foreigner, especially from the developed world, has made this country a haven for visitors with deviant behaviour. Over a period of three years, the police have arrested 12 foreigners for their involvement in paedophilia. The latest case involves a 69-year-old French national, who had been luring boys from underprivileged families with promises of foreign trips and good education and then sexually abusing them. According to the police, the earthquake of 2015 has given many a foreigner with “malicious intention” just the opportunity to visit the devastated rural areas, posing as saviours, and ensnare unsuspecting poor children.

It is not feasible for the police to put all visitors who are suspect under surveillance. The community and the hotels at large have a duty to report any suspicious behaviour on the part of a foreigner, or local, to the police. In most cases, pedophilic activities have taken place in the hotel room. Community surveillance apart, it will require strong laws with harsh punishment to deter visitors with sexual perversion from entering Nepal in search of easy prey.


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