Half of local governments have failed to receive first instalment of federal grantsKathmandu has not sent the first tranche of federal grants to many local governments for not submitting the transaction details from the last fiscal year.
Around half of the country’s local governments have failed to receive much of the grants that they are supposed to receive from the federal government in the first quarter of this fiscal year due to their failure to submit transaction details of the last fiscal year amid the coronavirus pandemic.
According to the Financial Comptroller General’s Office, the agency that keeps records of income and expenditure of the government said it has already sent first instalment of fiscal equalisation grant to all the local governments but it has not yet sent the first instalment of conditional grant, supplementary grant and special grant to around half of the local governments as they have not submitted the transactions details of the last fiscal.
The central government provides a fiscal equalisation grant to provincial and local governments to implement the programme that they have initiated.
Conditional grants are given to implement the set programmes of the federal government including paying the centre’s liabilities such as salaries to the government staff. Likewise, special grants are given to provincial and local governments for the implementation of programmes that fall under the priority of the federal government government. Supplementary grants are given based on proposals on infrastructure development by the sub-national governments.
“We provided the first installment of fiscal equalisation grants to all the local governments because there is no condition attached,” said Bhesh Prasad Bhurtel, deputy financial comptroller general at the Financial Comptroller General Office. “In the case of other grants, only around half of local governments have received the first instalment because they should submit the details about the spending.”
According to him, the federal government should know whether the resources provided by the centre were spent as per the conditions attached. “In the case, the budget has not been spent for the specified purpose, that amount should be returned to the federal government,” he added.
As per the Appropriation Act, the federal government should send the grant in four instalments and first should be sent on Bhadra 2 ( August 18). In the first instalment, one-third of the total grant should be deposited in the consolidated fund of provincial and local governments.
As per the details released by the Finance Ministry, the local governments are supposed to receive Rs90.05 billion in fiscal equalisation grant, Rs161.08 billion in conditional grant, Rs6.83 billion in special grant and Rs4.78 billion in supplementary grant this fiscal year 2020-21.
“With many local governments not receiving conditional grants, they may not be able to pay the teachers’ salary provided they fail to submit the transaction details of last fiscal year 2019-20,” said Bhurtel. “As they have to pay the salary before the Dashain festival, we expect almost all of the local governments are expected to submit the transaction details of the last fiscal year.”
The failure to receive the grant in time will also affect the development projects being run with the federal grants under three windows of receiving grants.
Due to the Covid-19 prohibitory orders in several districts, the government staff have failed to reach their offices, which is delaying preparation of the transaction details in many local governments, according to officials.
In a recent interview with the Post, Ishwori Prasad Dhakal, chief of District Treasury Comptroller Office, Rautahat, had said that office chiefs and chief accountants in many offices haven’t gone to work due to restrictions imposed by the local administration to contain the spread of Covid-19.
District treasury offices fall under the jurisdiction of the Financial Comptroller General’s Office and they also work for the provincial financial comptroller offices.
“In the case of nearly three dozen local governments, they are not attached with the SuTRA (Sub-national Treasury Regulatory Application) software of the Financial Comptroller General Office, making it difficult for them to prepare and submit the transaction details electronically,” said Bhurtel. It is a web based system developed for facilitating and implementing a structured financial management procedure of the local and provincial government.
The local governments are not only behind the schedule in submitting the transaction details to the federal government but also to the provincial governments, which also provide chunks of budget as grants to the local governments. “Not a single local government in Dhanusa district has submitted the financial details of the last fiscal year,” said Radheshyam Giri, provincial financial comptroller at Province 2. His office looks after the financial transactions of local governments at Dhanusa and coordiates with the district treasury offices of other districts in Province 2 to receive financial details of provincial and local government offices.
“Local governments usually don’t care much about submitting transaction details to us because our grant to them is far lower than what the central government provides to them,” said Giri.
The provincial governments provide grants to the local governments to implement various development projects and office operations.