One-third of total arrears reveal financial irregularities

Balkrishna Gyawali / Kathmandu: Although all political parties that have formed a government claim to have corruption control and good governance as their priority, the report of the Office of Auditor General (OAG) has revealed that good governance is weakening in the country.

According to the audit report of the fiscal year 2021/22 released by the OAG on Wednesday, a total of Rs 115.5 billion was found as arrears in the three levels of government, public committees and organizations of the country. With this, the total arrears in the government agencies have reached Rs 483.59 billion so far. Adding the total arrears to the total dues, the total amount to be received by the government has reached Rs 829 billion.

According to the audit report, a total amount of Rs 4.37 trillion from 5,665 different entities was audited and 2.63 percent of the total audited amount was found to be arrears.

The OAG reports that Rs 33.74 billion has to be recovered from the total arrears. This is 29.33 percent of the total arrears. Similarly, Rs 69.61 billion from the total arrears have to be regularized. This is 60.51 percent of the total arrears.

The OAG has classified the arrears into three types: that which must be recovered, that which must be regularized, and advances. Among these three, the arrears which must be recovered have the most irregularities. It seems that there is extreme corruption and weak governance in the country as nearly one-third of the total arrears need to be recovered.

On the other hand, it appears that the most amount of recovery has to be done from offices under the federal government that have long experience in accounting. Out of the total Rs 33.74 billion that is to be recovered, the federal government owes Rs 26.37 billion. As much as 18 percent of the total arrears are irregular.

Similarly, the report has pointed out that there is an increasing trend among the officials in government positions to take advances for expenditures and not make settlements. Last year, such advances that were not settled amounted to Rs 11.69 billion. This constitutes 10.16 percent of the total arrears.

Among the total audited amount, the federal government, provincial governments, local governments and other public committees and organizations accounted for Rs 49.47 billion, Rs 7.48 billion, Rs 46.90 billion, and Rs 14.19 billion of the total arrears respectively. Arrears accounted for 1.75 percent of the audited amount in the federal government, 2.50 percent of that in the provincial government, 4.18 percent of that in local government, and 6.89 percent of that in the public committees and organizations.

Among the three tiers of the government, most arrears are seen at the local level. The same has been witnessed in the past years as well. The OAG also reports that the unsettled amounts summed up to Rs 3.45 trillion. This is 34.17 percent more than that of the previous year. Revenue arrears constituted most of the unsettled amounts. As a consequence of the tendency of big business houses and organizations to not pay taxes on various pretexts, the revenue arrears amounted to Rs 312 billion.

Similarly, the arrears have also increased due to the government’s proclivity to use foreign grants and loans to finance the budget but not to recover reimbursements. As of now, such kinds of arrears have reached Rs 2.39 trillion. The government has also not been able to ask for reimbursements even for the amounts received as grants. So far, it has been unable to ask for reimbursement of Rs 11.56 billion which was supposed to be given as a grant. This situation has come about due to the extreme negligence of government employees.

The OAG says that if the total unsettled amounts are added to the total arrears, the total money that the government needs to receive seems to have reached Rs 829 billion.

The OAG report reveals that among the offices in the federal government, the Ministry of Communications and Information Technology had the highest amount of arrears, constituting 25.15 percent of the total arrears of the federal government.

Based on the total amount audited in each province, Karnali has the most arrears at 5.06 percent and Lumbini has the lowest at 1.09 per cent. Similarly, at the local level, Pipra Rural Municipality of Mahottari has the most arrears at 23.87 percent while Sirijunga of Taplejung and Mallarani and Suramarani of Pyuthan recorded zero percent. There are 533 local units with less than 5 percent as arrears, 193 local units with 5 to 15 percent as arrears and 18 local bodies with more than 15 percent as arrears.

While releasing the report on Wednesday, Auditor General Tanka Mani Sharma said that the arrears increasing every year show the financial discipline in the public administration weakening. He also blamed the government agencies for not taking seriously the suggestions made by the office.

According to Sharma, there is a need for improvement not only in arrear management but in budget resource management, construction and implementation of the country. Even though the Auditor General has suggested paying attention to the increasing arrears and maintaining financial discipline, those running the government do not seem to care. Additionally, the parliamentary Public Accounts Committee often discusses and gives instructions on the issues pointed out by the Auditor General. However, the discussions and instructions in the committee appear to be ineffective. Courtesy: Myrepublica