Govt’s arrears climb to Rs 669 billion, with an addition of Rs 95.60 billion in FY 2022/23: OAG report

Published On: May 27, 2024 11:30 AM NPT By: Republica  | @RepublicaNepal

Increasing accumulated arrears shows growing financial irregularities in government offices

KATHMANDU, May, 27: The government’s arrears increased by Rs 95.60 billion in the fiscal year 2022/23, while taking the total arrears to Rs 669 billion as of now.

According to the 61st annual report of the Office of the Auditor General (OAG) unveiled on Sunday, the arrears amount increased by a notable rate in the last FY. Although the amount was less compared to Rs 119.77 billion in FY 2021/22, it shows the large scale of financial irregularities prevailing in the government’s working mechanism every year.

Any financial transaction carried out without providing the required documents and fulfilling the processes is listed under arrears. A large amount of arrears hints at higher possibilities of corruption in the government bodies concerned.

The OAG report shows that the arrears increased by 16.28 percent last year. In the previous year, the non-transparent amount soared by 21.45 percent.

The aforementioned amount represents the cumulative arrears of all three governments — federal, provincial and local. In the last FY, the OAG carried out audits worth Rs 7.881 trillion of the 5,605 state-owned enterprises, institutions and committees of all three subnational governments.

Of the total amount of arrears added last year, Rs 46.54 billion was with the institutions of the federal government. The OAG conducted financial assessments of 3,277 federal government institutions worth Rs 2.461 trillion.

Likewise, arrears of Rs 6.57 billion was recorded out of the audit of Rs 323.34 billion of 1,270 institutions belonging to provincial governments.  

The OAG has classified the arrears into three types: the ones which must be recovered, those which must be regularized, and advances. In the first category includes the amount misappropriated, losses and the amount left to be recovered.

Likewise, the arrears to be regularized involve inadequate documents and processes, failing to delegate authorities and non-reimbursed amounts. The advance category includes the amount taken in advance by civil servants and expenses for mobilization. 

The OAG’s 61st Annual Report shows that the recoverable arrears make 24.47 percent of the total amounts. Those which must be regularized are 68 percent and the amounts misappropriated make up 18 percent.  

The OAG has also raised the question on the tax discount worth Rs 341.74 billion provided by the Ministry of Finance (MoF) and related institutions in the last five years. The MoF was found to have failed in keeping proper records and not carrying out proper assessment while providing the tax discount for the given time period.  

Likewise, the MoF and its related offices are yet to recover revenue dues, and principal amount and interests of the loans provided to various government entities worth Rs 415.03 billion.     

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