KATHMANDU: The Public Accounts Committee (PAC) of the House of Representatives has expressed concern over the growing volume of arrears, stating that it not only reflects improper utilization of public funds but also erodes public trust in state institutions.
Speaking at a national workshop on arrears organized by the Committee in Kathmandu, participants emphasized that unchecked spending in violation of legal provisions poses a significant challenge to the nation’s economic governance.
“Rising arrears raise serious concerns about the country’s commitment to economic discipline and transparency,” it was noted, with a call for improved management of public resources.
According to the 62nd annual report of the Office of the Auditor General (OAG), total arrears for fiscal year 2080/81 BS have exceeded Rs 733 billion—an increase of 9.34 percent compared to the previous year.
PAC Chairperson Rhishikesh Pokhrel highlighted that arrears now account for approximately 12 percent of the Gross Domestic Product (GDP), underscoring the gravity of the situation.
“This is not just a number; it directly impacts fiscal discipline and good governance,” he said, calling for policy reform, better law enforcement, digital record-keeping, and enhanced coordination among concerned agencies.
Speaker Devraj Ghimire stressed the need for a systematic and transparent approach to state spending, supported by robust accounting practices. “A well-maintained record of the government’s income and expenditure is essential for effective state functioning,” he said.
He also emphasized the importance of cooperation among representatives at all three levels of government to ensure transparent and accountable financial practices.
Referring to the Auditor General’s report, the Speaker said the growing arrears are alarming and pose a serious challenge to the principles of economic good governance.
Deputy Speaker Indira Rana echoed these concerns, highlighting the importance of integrity, honesty, and transparency in managing public funds. She emphasized the need for fiscal discipline in all areas of government financial operations, including auditing and record-keeping.
Auditor General Toyam Raya clarified that while arrears may indicate a lack of financial discipline, not all instances point to illegal or irregular spending. In the last fiscal year, the OAG audited 5,700 offices and identified arrears amounting to Rs 733 billion.
These included amounts to be recovered, regularized, or supported with documentation, as well as issues related to unverified procurements, pending responsibilities, outstanding advances, and reimbursements.
Raya also mentioned that auditors are instructed to maintain financial discipline and to utilize government accommodations during fieldwork whenever possible. He noted that it is a misconception to equate all arrears with corruption or irregularities.
As per Article 294 of the Constitution, the Auditor General is required to submit the annual report to the President, who then presents it to the Federal Legislature through the Prime Minister. The PAC then reviews and discusses the findings.
PAC Secretary Eakram Giri stated that the Committee is committed to enhancing transparency and accountability in public financial management. He added that the PAC aims to analyze the root causes of arrears and recommend practical solutions for their reduction and control.
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