Business

Local levels told to maintain financial discipline

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Kathmandu, June 17

The Ministry of Federal Affairs and Local Development has issued a circular to all district coordination committees, metropolitan cities, sub-metropolitan cities, municipalities and rural municipalities, directing them to keep up with service delivery as per the Local Levels’ Service Operation and Management Order, 2017.

The order prohibits local levels from taking any decision on increment of social security allowance in excess of the amount previously determined by the government of Nepal. “In order to maintain fiscal discipline under Article 58(7) of the Constitution of Nepal, no local level shall be permitted to take a decision in contravention of the laws, polices, plans and programmes of the government,” read the ‘financial administration’ section of the order.

Earlier, the MoFALD had drawn its serious attention to the recent decision of some office-bearers of local levels to provide additional social security allowance and other facilities to beneficiaries. After assuming his office, Mayor of Kathmandu Metropolitan City Bidya Sundar Shakya had announced that KMC would provide to men and women above 80 and 75 years respectively an additional Rs 12,000 a year as an incentive on the top of the social security allowance. Some other local levels had also taken similar decisions.

Municipalities and rural municipalities have also been told to provide for local consolidated fund in accordance with Article 229 of the constitution. Amount received in considerations of internal revenue and other incomes, grants and loans and the amount received from the government shall be deposited in the fund.

“The amount deposited in the fund shall not be permitted to be spent for purposes other than those provided in the existing laws. It requires the local levels to open a separate expenditure account and transfer the amount there from the local consolidated fund to spend the money,” it said.

Similarly, DCCs shall also create a fund to deposit the amounts they receive from the government and other sources. For the purpose of spending the amount available in the local consolidate fund and DCC’s fund, the concerned local levels and DCCs should open separate expenditure (recurrent and capital) accounts.

“The amount deposited in the local consolidated fund and DCC’s fund shall be spent as per the plans and programmes approved by the assembly of the concerned local levels,” it read. However, the local levels will not be allowed to spend the amount provided for social security allowance for any other purposes.

The local levels have been told to conduct audit of all financial transactions carried out by them and send their records to the MoFALD to reduce financial risk and maintain good governance by delivering service to the public in an easy and simple manner.