Ensure Fiscal Discipline

The 62nd annual report by the Office of the Auditor General (OAG) is highlighting the growing arrears in Nepal. Arrears have increased by 9.45 per cent in comparison to previous years, standing at a whopping amount of Rs. over 733 billion. Arrears are referred to as financial transactions that cannot be verified. They are an indicator of the level of fiscal discipline and good governance in a country. Among the various areas, they have also been evident in initiatives like the mid-day meal programme and sanitary pad distribution in community schools.

The government launched its mid-day meal programme to encourage students’ enrollment, especially those belonging to the weak and marginalised sections of society. Also, it is a means to combat malnutrition and nutrition-based issues.  Likewise, sanitary pad distribution is concentrated on encouraging girls’ attendance, without causing menstruation to be a factor behind their absenteeism. It also aims to improve menstrual hygiene in young girls. 

These efforts are essential to uplift and empower children through education. Yet, the current report shows a disappointing side. OAG states that in the fiscal year 2080/81, 24 local levels had not kept records of student attendance, while indicating spending of over Rs. 280 million for the mid-day meal programme. Likewise, sanitary pads worth around Rs. 91 million had been purchased to be distributed in community schools at 151 local levels. However, they were never distributed and remain in the warehouses of the local levels.

Over the years, Nepal has made significant strides in social indicators, especially school enrollment. Such incidents can result in a reversal of progress made in the social areas of education, empowerment and enrollment. More importantly, it can force the vulnerable sections to further fall into a deep slump. Over the years, the reports have consistently provided recommendations on how arrears could be tackled. But they have never been heeded. The key issue lies with the regular supervision and monitoring and evaluation of the government’s spending in various areas. What is more important is the massive use of Information and Communication Technology (ICT) in record-keeping. Digitisation of record keeping means fewer arrears and more accountability and responsiveness on the part of the government authorities. 

The aforementioned programmes are closely linked to the Sustainable Development Goals (SDGs). So, the sub-national governments must internalise these global goals in their annual budget and programmes. Arrears can also happen when the human resources are not adequately skilled and trained. The absence of supportive documents proving that spending has been done in the specific heading requires adequate knowledge and skills. Therefore, priority should be given to enhancing the level of training and skills in government officials, especially at the local level. Local level’s closest link to the citizens in public service delivery makes it more susceptible to creating arrears. 

Nepal’s development is heavily reliant on the limited means and resources. Their prudent and efficient utilisation is the key responsibility of the three tiers of government. At this critical juncture, systemic reforms are required to better tackle arrears. People’s aspiration for development and the government’s responsibility to public welfare can only be fulfilled with reduced arrears and strong fiscal discipline in every government agency. Hopefully, this will be prioritised to contribute to the country’s sustainable development and prosperity in the long run.