Auditor General’s Report 2023/24, Arrears soar to Rs. 733 billion

Kathmandu, May 15: Arrears have increased by Rs. 91.59 billion in the last Fiscal Year 2023/24 and reached Rs. 733.19 billion. 

According to the Auditor General's Report for the fiscal year 2080/81 BS (2023/24), federal ministries and agencies have Rs. 47.74 billion in arears, provincial bodies Rs. 4.20 billion, local bodies 25.32 billion and other institutions Rs. 14.33 billion. 

The amount of arrears was related to a total of 5,759 institutions. It included 761 local bodies, 695 committees and other institutions from provinces, and 3,093 from the federal agencies. 

Although they are comparatively new institutions, arrears on the part of local bodies has raised alarm. 

Auditor General Toyam Raya submitted the annual report to President Ramchandra Paudel at the Office of the President, Sheetal Niwas Wednesday. 

Of the total arrears generated last year, 32.89 per cent (Rs. 30 billion) needed to be raised from the concerned offices and authorities while 61.27 per cent (Rs. 56 billion) of it should be regularised while 16.5 per cent (Rs. 15.1 billion) has been misappropriated and evidences or receipts were not submitted for 44.7 per cent (Rs. 40.94 billion). 

Ministry of Finance has the highest amount of arrears – Rs. 33 billion. However, it is 1.37 per cent of the total audited amount. In terms of percentage, the Ministry of Industry, Commerce and Supplies has 6.12 per cent arrears (Rs. 384 million). 

Likewise, Ministry of Physical Infrastructure and Transport has 5.57 per cent arrears although it has Rs. 6.43 billion arrears in terms of amount. 

Other agencies that have high arrears are the Ministry of Foreign Affairs (5.16 per cent), Ministry of Land Management, Cooperatives and Poverty Alleviation (3.75 per cent), Ministry of Communication and Information and Technology (3.47 per cent), Ministry of Energy, Water Resources and Irrigation (1.87 per cent) and Ministry of Health and Population (1.83 per cent). 

Ten ministries have 97.99 per cent of the arrears while the rest have 2.01 per cent. 

The Auditor General found that the government had offered discount worth Rs. 79.87 billion in the FY 2023/24 but the Ministry of Finance and the Inland Revenue Department did not maintain separate records of the revenue forgone on excise duty and value-added tax. 

Additionally, Rs. 4.87 billion was waived in the imports of goods under the SAFTA (South Asian Free Trade Area) facility. 

Furthermore, tax waivers were provided for goods imported under foreign aid or loan-funded projects. Imports worth Rs. 43.56 billion received tax exemptions totalling Rs. 7.53 billion under the terms of their project development agreements.

Meanwhile, the Auditor General said that after it sent the preliminary audited report, arrears worth about Rs. 14.48 billion have been cleared. 

Accepting the report, President Paudel emphasised the need for office-bearers of public bodies to become more responsible and accountable in order to uphold financial discipline and enhance fiscal responsibility, the President's Office said in a statement.

“An increase in irregularities in government transactions each year presents a serious challenge to good governance. I believe that the role of the Auditor General is crucial in ensuring greater responsibility and accountability among all officials involved in the management of public funds,” stated President Paudel.

He noted that the persistent rise in irregular expenditures in government spending over the years has become a matter of serious concern. 

“Given the current context, it is essential that government spending strictly adheres to existing laws and places greater emphasis on financial discipline,” the President added.