Narayan Municipality under scrutiny for misappropriating Rs 180 million

Published On: June 17, 2023 05:00 PM NPT By: Govinda KC

BIRENDRANAGAR, June 17: Narayan Municipality in Dailekh is facing severe criticism after it was revealed that they have misused 180 million rupees in violation of established regulations. The municipality has been found guilty of unauthorized payments of salaries and allowances to teachers, as well as spending funds without an annual procurement master plan.

According to the report by the Office of the Auditor General, Narayan Municipality paid Rs 9.2 million in salary allowances to teachers in direct contravention of the rules. While a conditional grant was designated for this purpose, the municipality utilized funds from the financial equalization grant instead. 

The Auditor General's report unequivocally states that this action is irregular and violates Section 9 of the Inter-Governmental Finance Management Act, 2074 BS. This act clearly outlines the provision of conditional grants to local levels for the payment of teachers' salaries and allowances within approved positions.

Furthermore, the municipality made payments to teachers who were not included in the approved positions, and the school had been utilizing internal resources to cover salary allowances in the past. This is a direct violation of the regulations, as only schools authorized by the erstwhile District Education Office, Dailekh and not benefiting from quotas or relief grants, are eligible to receive support grants for managing teachers during the 2079 BS academic session.

In addition to the teacher payment irregularities, Narayan Municipality has also spent 180.7 million rupees without an annual procurement plan. Various capital expenditures and construction works were carried out under different headings, disregarding the requirement to establish a regular purchase plan or master plan. The Public Procurement Act, 2063 BS, mandates that a procurement master plan and an annual procurement plan must be prepared when purchasing amounts exceeding the limits set by the public body.

Accordingly, Rule 7 of the Public Procurement Regulations, 2064 BS, stipulates the preparation of a master plan for purchases exceeding Rs 100 million per year, while Rule 8 necessitates an annual purchase plan for purchases exceeding 10 million rupees per year. 

However, it has been found that Narayan Municipality spent Rs 180.7 million annually across various categories without adhering to these regulations. The municipality's failure to establish its procurement regulations undermines the importance of following the law and regulations by not creating annual procurement and master plans.

Additionally, the municipality made payments for mid-day meals and textbooks without settling the bills. An amount of 5.7 million rupees for lunch and Rs 3.2 million for textbook purchases was disbursed without proper billing. The program implementation manual (FY 2021/22) outlines that schools are eligible for a subsidy of Rs 15 per student per day, provided that the school principal and chairman of the school management committee certify the attendance book.

Additional subsidies are only granted based on the actual student count after collection. However, despite disbursing funds based on the Integrated Educational Management Information System (IEMIS) records, the municipality failed to monitor daily expenses and submit the necessary documentation for compensation. Therefore, it is essential for the municipality to ensure that certified attendance books are monitored and submitted to verify whether the actual number of students attending received their entitled mid-day meals.

The program implementation manual published by the Center for Education and Human Resource Development in Sano Thimi outlines that 75 percent of students would receive a free textbook subsidy during the initial quarter of the academic session 2079 BS for the first time. The remaining portion of the subsidy would be determined based on the student enrollment details, as well as the records of textbook purchases and distribution. Only the outstanding 25 percent was eligible for the subsidy. Consequently, on May 19, 2022, the municipality disbursed 75% (Rs 2.6 million) of the allocated amount, followed by an additional 25 percent (Rs 644,000) on July 4, 2022.

However, concerns have been raised regarding the disbursement of the 25 percent amount without accurately determining the number of students and without providing the requisite documentation for textbook purchases and payments. As a result, it is uncertain whether the allocated funds were indeed utilized for the intended purpose of procuring textbooks.

The Auditor General's report has specifically highlighted the lack of updated details regarding the utilization of funds allocated for regular school monitoring. It remains unclear whether these funds were effectively used for the designated purposes.


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