KATHMANDU: In the span of one month, between mid-April and mid-May, the government executed cash transfers totaling Rs 2.40 billion, as disclosed by the Ministry of Finance (MoF). These transfers were directed towards 30 projects, primarily under the purview of key ministries such as Energy, Water Resources and Irrigation, Physical Infrastructure and Transport, Defence, and Urban Development. Notably, funds initially allocated for specific capital expenditure categories exceeding Rs 10 million were reallocated to different sub-heads during this period.
Budget transfers, a practice of reallocating funds from one designated program or project to another, are commonly pursued by government agencies when faced with challenges in utilizing earmarked funds. Despite annual capital expenditure budgets, government entities typically fall short of spending around 70 percent of the allocated amount. Often, there's a surge in spending towards the end of the fiscal year, as agencies attempt to demonstrate higher expenditure levels, leading to last-minute ramp-ups in spending.
The Office of the Auditor General's (OAG) annual report highlights the regular occurrence of substantial budget transfers by government offices, with the fiscal year 2021/22 witnessing transfers amounting to nearly Rs 200 billion. This figure nearly equates to the government's allocation for development projects for that year. The OAG underscores budget transfers as contributing to growing irregularities within the bureaucratic system.
During the specified period this year, additional funds amounting to approximately Rs 3 billion were disbursed to various authorities, with a significant portion allocated to the Ministry of Defence and the Ministry of Energy, Water Resources and Irrigation. Notably, the National Priority Project Sunkoshi-Marin Diversion Multipurpose Project received the largest share of additional funds, totaling Rs 1.40 billion, through budget transfers.
Other beneficiaries of these transfers included the Army Headquarters, which received an additional Rs 384.4 million, and the Ministry of Urban Development, which obtained Rs 353.6 million for construction projects. Additionally, funds were directed towards flood control measures under the Ministry of Energy, Water Resources and Irrigation, with an extra Rs 121.7 million allocated for this purpose.
The Financial Comptroller General Office (FCGO) has implemented measures to curtail unnecessary expenditures by all three tiers of government in the final week of the fiscal year. In adherence to this provision, the MoF routinely executes maximum budget transfers before the deadline set by the FCGO each year.
