Guidance Regarding the Budget Implementation of Fiscal Year 077/78:
Government of Nepal, Ministry of Federal Affair and General Administrative, Sinhadurbar, Kathmandu
Subject: - Guidance regarding the budget implementation of Fiscal Year 077/78.
- National Library, Harihar Bhavan, Lalitpur.
- Local Infrastructure Department, Pulchowk, Lalitpur.
- Nepal Administrative Training Institute, Jawalakhel, Lalitpur
- Local Development Training Institute, Jawalakhel, Lalitpur.
- Civil Servants Hospital Development Committee, Min Bhavan, Lalitpur.
- Tribal Upliftment National Foundation, Sanepa, Lalitpur.
- Terai-Madhesh Prosperity Program, Singha Durbar.
- Province and Local Government Assistance Program, Babarmahal, Kathmandu.
- Committees / Academies / Projects / Programs All.
In the present case, the guidance related to the budget implementation of Fiscal year 077/78 of Chalan No. 1 dated 2077/04/01 of the Ministry of Finance is attached herewith. It is requested to implement the budget and program of the Fiscal Year 077/78 effectively as per the order subject to the mentioned guidelines.
Government of Nepal, Ministry of Finance, Singha Durbar, Kathmandu
Subject: Guidance on-budget implementation for the Fiscal Year 2077/78.
Dear co-workers,
Appropriation Act, 2077 BS has been passed by the Federal Parliament and has been ratified by the Hon'ble President on 2073/3/15. According to the said Act, for the Fiscal Year 2077/78, I am confident that the responsibility of spending/making, keeping accounts, reporting, and conducting audits will be done by you in accordance with the prevailing law.
The measures are taken to prevent, control and treat the infection of COVID-19 have created a challenge in resource mobilization due to the reduction in economic activities and the need to manage budgets with priority in the health sector to maintain more cost-effectiveness, efficiency, and efficiency. In order to achieve the objective of maintaining overall financial discipline, it is mandatory to implement the Appropriation Act, 2077, and the Financial Procedure and Financial Accountability Act, 2076 to maintain financial responsibility including budget, disbursement, expenditure, and control.
I have sent this guidance regarding the implementation of the budget as per Article 9 of the Appropriation Act, 2077 BS.
As the following arrangements have been made to make the budget implementation of the Fiscal Year 2077/78 effective, I request you to do accordingly. !
(A) Preparation, program approval, and budget allocation:
1. The Office of the Comptroller and Auditor General will disburse the budget to the unit concerned to implement the budget, considering the program included in the Ministry Budget Information System (LMBIS) as an approved program and spending authority.
2. If the amount has been allocated to be spent from more than one unit in anybody, the amount will be distributed by mid-October, 2077 BS and the information will be given to the Ministry of Finance and the concerned Comptroller and Auditor General's Office. .
3. The budget allocated for Expenditure Title No. 28911 (Bhaipari Coming-Current Expenditure) and 31511 (Bhaipari Coming-Capital Expenditure) will have to be spent only after approving the distribution from the Ministry of Finance. Such distribution should be done at the end of Ashoj 2077. If the budget allocated for the annual sanctioned program is not spent by the second quarter or cannot be spent in the remaining period, such amount must be surrendered by 15th Chaitra 2077.
(B) Plan / program transfer and implementation
4. Pursuant to Section 5 of the Appropriation Act, 2077 BS, if any plan or program allocated by anybody of the Government of Nepal has to be implemented at the state and local level, eight arrangements will be made to implement the program at the state and local level.
5. If any program or project included in the budget and program of the state and local level is deemed necessary to be implemented by the state and local level through the concerned office of the Government of Nepal, the concerned state and local level shall implement such program or project through the concerned office of the Government of Nepal. Will make arrangements.
6. Arrangement to withdraw the amount as per the prevailing federal law from the concerned Comptroller and Auditor General's Office with the office code through the Ministry of Finance. Will match
7. The Office of the Comptroller and Auditor General shall inform the concerned provincial and local level, the concerned Comptroller and Auditor General's Office, and the concerned Provincial Comptroller's Office of the arrangements made as per points 4 and 5.
8. The thematic ministry shall keep up-to-date records of conditional grants, supplementary grants and special grants implemented at the state and local levels. When requesting additional budget for projects/programs to be operated with the conditional grant: Arrangements will be made to send it to the Ministry of Finance through the thematic ministry.
9. Pursuant to the Appropriation Act, 2077, if additional funds are required while implementing programs or projects handed over by the state and local level under the conditional grant, the amount as per the initial agreement of the previous project at the time of handing over the conditional grant. Arrangements will be made to demand additional amounts only on the basis of the progress of such a project/program including the amount.
- If it is decided to implement the projects and programs of the state or local level through the concerned office of the Government of Nepal, the local level will make an arrangement to withdraw the money in the name of the federal body and deposit it in the working fund account in the office of the Comptroller and Auditor General. Its report and audit should be done by the concerned level.
- In case of any dilemma for the implementation of the program or project to be implemented with conditional grants at the state or local level, arrangements will be made to solve the problem.
- Arrangements will be made to make available the approved criteria and procedures of expenditure for the implementation of programs or projects to be implemented through a conditional grant at the state or local level through an intergovernmental financial transfer at the concerned state and local level.
- While providing a conditional grant as per Section 9 (2) of the Intergovernmental Finance Management Act, 2074 BS, the Government of Nepal shall set necessary conditions for the implementation of the project, and the concerned states and local levels should comply with such conditions. Comply with the provisions of the Agreement and Project Implementation Guidelines.
- It will be mandatory to immediately obtain the details of the expenditure towards foreign sources included in the conditional grant to be transferred to the state or local level and to demand and keep records of it.
- In the case of conditional grant programs including foreign aid, among other things, financial agreements and provisions in the project implementation guidelines will be the conditions for implementation. As the reimbursement of expenses will not be received from the donor body due to non-implementation of the arrangement as per the said agreement and directive, arrangements will be made to reimburse the remittance by complying with the said provision. The documents of the agreement and directive will be made available to the concerned state and local level.
(C) Budget release and budget implementation arrangements:
16. If any new act required for the implementation of the program/project has to be formulated or the existing act has to be amended, the draft of the act has to be submitted to the Government of Nepal, Council of Ministers by mid-October. If the existing rules, procedures, guidelines, criteria, and guidelines need to be amended, it has to be completed by mid-July and if it has to be redesigned, it must be completed by the end of Bhadra 2077.
17. Necessary temporary posts including manpower plans for the duration of completion of the program/project should be approved by mid-July.
18. Of projects approved in the approved annual program. After completing the preparatory steps, you will have to prepare an annual purchase plan, detailed design, and cost estimate including quarterly division of the program/project, approve it by mid-July and invite bids. The contract will be signed by mid-October after evaluating the bids. Arrangements will be made to start work within 15 days of signing the contract.
19. The implementation process of programs/projects not included in the allocated budget and approved programs will not be taken forward. In this way, if the implementation process of the programs/projects not included in the allocated budget and approved program is taken forward, the concerned officials should be responsible. No budget release, remittance, and program amendment will be demanded the program/project which is not included in the allocated budget and approved program. If there is a demand for withdrawal of such amount, you will also inform the subordinate bodies about the non-disbursement.
20. Arrangements will be made to provide financial and non-financial incentives as per the law to the construction businessmen who complete the construction work within the stipulated quantity, cost, quality, and time limit. Arrangements will be made to cancel the contract agreement with the construction businessmen by taking legal action against the construction businessmen who do not maintain the prescribed quality and do not start the work on time, do not work as per the action plan and do not complete the work.
21. If the construction entrepreneur enters into a subcontracting contract for all or some of the works as per the agreement after concluding the contract, it will be mandatory to get the prior written approval of the concerned project head. Except for the most urgent work, you will not be allowed to sign subsidiary contracts at more than one level. The National Vigilance Center will conduct technical tests of construction quality of projects above Rs. 100 million. To complete the work in the stipulated time and cost and to maintain the quality, a project will be developed/made accountable to the project head and construction businessmen for the achievement (Outcome).
22. The project head and other staff will be assigned to the project with clear work descriptions, performance indicators, necessary rights, and responsibilities, and accountability. In this way, the staff will be based on the qualifications, capabilities, experience, honesty, and record of success achieved in the past in project implementation.
23. Orientation training will be provided to the project staff on technical aspects of the project, implementation method, expected return achievement, inter-agency coordination, and other issues at the outset. As there is an obstacle in the implementation of the program/project due to delay in the work of staff transfer, posting, etc., the transfer/posting of staff will be completed as soon as possible.
24. Arrangements will be made to pay only on the basis of physical progress and quality of the program/project. Physical progress will not be required for the first quarterly withdrawal/payment.
25. For the second and third quarterly withdrawal/payment, the physical progress up to that period should be at least 50 percent. In the case of less material progress, the cooperative will make a commitment to complete the material progress in the next four months and make arrangements for release/payment.
26. In order to facilitate the implementation of the project, the environmental impact assessment and preliminary environmental testing will be completed within the minimum time frame prescribed by the prevailing law. Until the foreign loan or grant agreement is effective, the budget of the foreign resource of the project and the matching fund of the Government of Nepal will be withheld on the basis of expenditure. However, in the case of the Retroactive Financing Agreement, payment can be made with the consent of the Ministry of Finance.
27. The first quarterly budget of the project and IDA / DPC, IMF / RCF and ADB / DBL budgetary support assistance have been released. Apart from that, approval of this Ministry will be sought through the Office of the Comptroller and Auditor General before paying all other donations and grants. Before spending the budget money from foreign sources, you will make arrangements to spend only by ensuring that the money is received from that source. If the payment method is different due to any reason, you will send a letter to modify it by mid-August 2077.
28. Due to the lockdown for the transition management of COVID-19 and suspension of movement across the international border, the agreed programs/projects have not been completed within the Fiscal Year 2076/77 and the obligations created in the Fiscal Year 2077/78 from the work as per the previous agreement. Payment arrangements will have to be made for the program/project
29. The programs/projects under a multi-year contract will be implemented from the allocated budget. Only by allocating sufficient budget for the obligations created by the multi-year contract agreement will it be distributed to other programs. While managing the contract of the new project for the infrastructure projects above Rs. 50 million which will be in operation for a long time such as roads, bridges, dams, irrigation canals, the concerned construction businessmen will make arrangements to maintain it for at least five years after the completion of construction.
30. As per the research guideline, if the threshold amount has been reached immediately and if the threshold amount has not been reached, you will be asked to request the research from the concerned project management office within the next four-month period. When sending the division of monthly expenses, you will be required to submit the report of direct payment and in-kind assistance to the concerned Comptroller and Auditor General. The Project Management Office must inform the Office of the Comptroller and Auditor General of the details requested for the inquiry.
31. Arrangements will be made to inform the Public Credit Management Office in the case of public credit. If the recruitment process is not started within the stipulated time, the next quarterly withdrawal will be stopped. The project head and the head of the account who do not demand timely payment will be prosecuted in accordance with the Financial Procedure and Financial Accountability Act, 2076.
32. Arrangements will be made to procure goods and commodities in the public bodies as per the directive on the use of indigenous goods, 2069 BS.
33. While inviting contracts for road construction, the works including drinking water and sewerage, electricity pole/wire management, or undergrounding will be included in a single package and will be implemented by inviting bids. Except in case of disaster, the decision of the Council of Ministers of the Government of Nepal, and in special cases, no more release will be given beyond the limit of appropriation. The program will be implemented/implemented within the limits of the allocated amount.
D. Budget Expenditure, Remittances, Program Amendments and Reports
34. If any program included in the Ministry-wise Budget Information System (LMBIS) needs to be amended, the consent of this Ministry should be sought to amend the program in a way that is different from the objective.
(A) In order not to reduce the annual target of the activities mentioned in the program included in the Ministry Budget Information System (LMBIS), the accounting authority of the concerned body towards the resources of the Government of Nepal shall be responsible for (a), (b) and (c). Accordingly, the program will be amended and remitted. The money transfer/program amendment made pursuant to subsection (7) of section D of the Appropriation Act, 2077 shall also be entered in LMBIS by the Accounting Officer in accordance with sub-section (8) of section (8) of the same Act.
(B) If the quarterly division needs to be amended, the concerned body has to get the approval of the head of the office above one level or the gazetted special category officer can amend the program himself. If it is seen that the previous budget will be reduced while amending the program in this way, the concerned ministry will make the amendment by withholding the budget in LMBIS.
- If the program has to be amended as per the prevailing canon, the process of program modification will have to be taken forward only after completing the process of remittance, resource transfer, and additional disbursement. Generally, no remittances and program modifications will be made until the first quarterly period.
- In case of a multi-year procurement/contract on the basis of approved program and budget of the current Fiscal Year, the consent of the Ministry of Finance must be obtained for the budget arrangement with the approval of the National Planning Commission in accordance with the approved criteria for the multi-year contract of projects.
- Arrangements will be made to keep and report from the electronic information system specified by the Office of the Comptroller and Auditor General while keeping accounts of expenses, revenue, operating funds, and other funds, assets, and liabilities, and collateral.
- Expenditure under mandatory liability without the consent of the Ministry of Finance is mandatory such as salary, allowance, local allowance, clothing, food, rent, etc. Liability costs. Money transfer will not be available from the title. Expenditure on salaries, allowances, clothing, food, water and electricity, communication tariffs, and rent for the coming year will be managed. The arrangement will be made to pay the amount of salary and allowance only after passing the salary report from the concerned body.
- While distributing the amount allocated under 'Current Grant', adequate amount will be allocated for mandatory liabilities like salary, dearness allowance, food, clothing, house rent, water, electricity, and communication tariff and the remaining amount will be distributed for other services and works. There will be no remittance or additional disbursement for liabilities created due to a reduction in distribution due to mandatory liabilities. In addition, such liability will be shifted to the last financial year and the remaining days of payment will be included
- The amount allocated for capital expenditure and financial management will not be converted into recurrent expenditure and the amount allocated for the capital grants will not be converted into challan.
- The amount allocated in the conditional grant will have to be spent for the specified program with sufficient allocation for the committed expenditure. The remaining amount spent within the Fiscal Year will have to be repaid within the same Fiscal Year.
- In order to reduce the risk of cash transactions, construction business suppliers, service providers, and consultants will be required to make payments to the respective bank accounts. Arrangements will be made to pay all types of payments directly to the concerned through bank account including salary allowance, medical treatment, allowance, accumulated leave, and social security allowance.
- If the amount is to be transferred from one budget sub-heading to another sub-heading or from one expenditure heading to another expense heading, from one office to another, the deductible budget sub-heading or expenditure heading will be withheld in the Ministry Budget Information System (LMBIS).
- The procurement process should be started only after completing the pre-planning works including the arrangement of the construction site, ensuring removal of trees and plants to be removed from the construction site and other permanent structures, acquisition of land and approval of environmental study report to be done as per prevailing law.
- To maintain austerity in public expenditure issued by the Government of Nepal in accordance with the criteria of maintaining austerity in public expenditure, 2077.
- Except for the posts of office assistant and driver, no new appointments will be made on a temporary, salaried, or contractual basis with additional financial obligations. Employees will not be hired on a contract basis. In case of a vacancy in the permanent post of contract, a letter will be sent to the Ministry of Federal Affairs and General Administration to fill the vacancy. If the vacancy cannot be filled by the staff in Fazil, the consent of the Ministry of Finance will be sought before signing the contract.
- Water, electricity, communication tariff, house rent, fuel, maintenance expenses, spices and office supplies, allowances, training, seminars, service charges, travel expenses, etc. should be spent with maximum economy.
- Arrangements will be made to use the meeting hall of the government body while conducting programs such as meetings, conferences, seminars, interactions at the government's expense. In case of non-availability of the concerned institution or government meeting place, the program should be organized in such a way as to be maximum economical.
- Except in case of an emergency, I will maintain and use the new furniture and office decoration items without purchasing them. When submitting a new/additional purchase proposal. It is mandatory to auction old and unusable furniture. Apart from the newly established office, the policy of not purchasing additional furniture and fixtures, computers, laptops, printers for the old office will be followed.
- When determining the compensation for land for public use, the government assessment determined for the registration purposes of the Land Revenue Office should also be taken as the basis.
- Government offices should give priority to vacant government buildings as much as possible. If this does not happen, the house in the business area and on the main road will not be rehabilitated and the house with minimum requirements and facilities will have to be rehabilitated.
- In thematic bodies. In order to make maximum use of the existing manpower, the tendency of appointing consultants from outside bodies/institutions/individuals will be discouraged.
- Due to its diplomatic importance and international relations, it is mandatory to attend only international meetings, conferences, and intergovernmental meetings, with the prior consent of the Ministry of Finance.
- When deciding on the creation of financial obligations other than those included in the approved budget and program, or when submitting a proposal to the Government of Nepal, Council of Ministers, it must be done only with the prior consent of the Ministry of Finance.
(E) Provisions related to financial transparency, accountability, and monitoring
- Financial discipline shall be maintained by following the prevailing laws related to financial management including Appropriation Act, Financial Procedure and Financial Accountability Act, Financial Procedure Rules, Public Procurement Act and Rules, Policy Guidelines, and Criteria for Maintaining Economy and Effectiveness in Public Expenditure.
- Except under the financial arrangement, no expenditure will be allowed to be paid at the end of the fiscal year after the 25th of Asar without prior internal audit.
- Arrangements will be made for the effective implementation of the budget by making an action plan with a time limit.
- Project Implementation Action Plan including detailed activities of the program/project, duration and cost to be completed, achievement indicators, and responsible staff will be prepared by 15th July and made public at the project site and through the website of the concerned ministry.
- For the implementation of programs and projects, the Ministry / Body will have to give a certain weight to the activities as per the performance agreement made with the departmental head and project head and make arrangements for rewards and punishments by measuring the performance level on an objective basis.
- Details related to the work at the construction site (name, cost, date of commencement of work, date of completion of work, contract number, name and address of the contractor, expected quantity of achievement after completion of work) shall be made public for public information till the completion of work.
- Arrangements will be made to make public the sale of income and expenditure of government offices and government grant receiving bodies on a monthly basis. :
- Arrangements will be made to regularly monitor and review the budget implementation and send it to the National Planning Commission and the Ministry of Finance stating the progress report with regional achievement indicators, problems encountered in the implementation and reasons. He will participate in the budget implementation review held at the Ministry of Finance every two months.
Publications related to the budget of the Fiscal Year 2077/78 can be viewed and downloaded on the website of this Ministry www.mof.gov.np.
