The rampant exhaustion of funds is made mostly to inflate the size of capital expenditure every year

KATHMANDU, June 10: The government carried out cash transfers of Rs 2.40 billion in one month during mid-April and mid-May.

According to the Ministry of Finance (MoF), it allows cash transfers for 30 projects, which are mainly related to the Ministry of Energy, Water Resources and Irrigation, the Ministry of Physical Infrastructure and Transport, the Ministry of Defence and the Ministry of Urban Development. The budget amounting over Rs 10 million which was allocated under one heading of capital expenditure was transferred to other sub-heads during the period.

Budget transfer means moving funds from one assigned program or project to another. In many cases, government agencies seek to adjust budgetary allocations after being unable to spend the earmarked money.

Most of the time, the government hardly spends around 70 percent of the capital expenditure every year. The government agencies attempt to exaggerate their spending capacity just by making last-hour spending rampantly when the end of fiscal year comes nearer.  

The annual report of the Office of the Auditor General (OAG) shows that there are massive budget transfers conducted by the government offices almost every year. The budget transfer of around Rs 200 billion was made in the fiscal year 2021/22, which was almost equal to the amount that the government allocated for the development projects for the year. The OAG underlines the budget transfers as one of the means for increasing cases of irregularities in the bureaucratic system.

The government during mid-April and mid-May this year disbursed additional funds worth around Rs 3 billion to a number of authorities; most of them are related to the Ministry of Defence and the Ministry of Energy, Water Resources and Irrigation. The National Priority Project Sunkoshi-Marin Diversion Multipurpose Project got an additional Rs 1.40 billion, the largest amount, through the budget transfers.

The Army Headquarter received additional Rs 384.4 million, while its directorate got Rs 73.4 million through budget transfers. The Ministry of Urban Development received transfers of Rs 353.6 million for ‘construction of special buildings.’ An additional Rs 121.7 million was released to the Ministry of Energy, Water Resources and Irrigation for flood control measures.

The Financial Comptroller General Office (FCGO) has barred all three tier governments from making unnecessary expenses in the last week of the fiscal year. Citing the provision, the MoF is found transferring the maximum budget before the FCGO prescribed deadline every year.