KATHMANDU: The Office of the Auditor General has concluded that the government has failed to implement major announcements made in its annual budget, despite setting ambitious targets each year.
Releasing its 62nd annual report on Wednesday after completing the audit for fiscal year 2080/81 BS, the Auditor General noted that several budgetary commitments have not been fulfilled.
Among the unimplemented commitments are key policy and legislative reforms, such as amending the Land Acquisition Act, revising standards for compensation determination, updating the Public Procurement Act and regulations, and ensuring contract management by Kartik (October/November) without shifting funds in the final month of the fiscal year (Asar/June-July).
The report also highlights that internal loans, which were supposed to be directed toward development projects, were not properly utilized.
The government also failed to control spending on new vehicles, furniture, and furnishings, did not halt the creation of new staff positions, and failed to stop the inefficient distribution of resources to small, non-prioritized projects.
The government also fell short on several innovative financial commitments, including raising capital through green and energy bonds in local currency, setting up a hedging mechanism to minimize foreign exchange risks for foreign investors, reforming laws such as the Nepal Rastra Bank Act, and issuing remittance bonds.
The report further criticizes the lack of progress on financial federalism reforms. It notes that commitments to amend the Local Government Operation Act (2017) and Intergovernmental Fiscal Arrangement Act (2017), divest shares of public enterprises like Nepal Telecom and Nepal Airlines, integrate development aid into the national budget system, reduce reliance on technical assistance by enhancing internal capacity, and sign development aid agreements only after full project readiness have not been fulfilled.
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