Government recommended to develop separate mechanism for arrears settlement

KATHMANDU: The government has been advised to develop a separate committee to deal with arrears issues and find an effective way for its settlement and for an improvement in the public finance management system.

According to a study report prepared by the National Planning Commission, the government requires a separate body to address overdue issues. The NPC in the report entitled ‘study report about the situation of public auditing and settlement of arrears in Nepal, 2079 BS’ proposed that the government should have a separate body for looking after the arrears issues.

The 59th annual report of the Auditor General, 2079 BS puts the arrears till the fiscal 2077-78 BS (2020-21) at over Rs 829 billion.  As the report cites, the overdue in the given fiscal date alone was increased by Rs over 115 billion.

The document mentions about the lack of enough discussions on the report of the Auditor General in a parliamentary committee, indicating the need for making the account officer more responsible for arrears management and increasing the effectiveness of monitoring and supervision in the relevant sector.

According to Commission Spokesperson, Rajendra Kumar Poudel, the size of arrears is increasing in the recent years and its impacts are visible in the public finance management, prompting the urgent need to control it in time.

The report points out issues in the plans and policies since their formulation as one of the leading causes for the increasing figure of arrears. It insists the need for identification and pre-preparations before incorporating plans and policies in the budget, stating that coordination and consonance among the periodic plans, government policies and programmes and the budget were missing and it caused challenges to the arrears management.

The lack of fiscal discipline, the agreement for multi-year projects without permission, and the lack of effective monitoring and supervision are among other factors fueling the problem, it has been said. RSS