Local levels are found to have spent the revenue collected from the people. Instead of depositing it in the banks within the stipulated timeframe, they are found to have misusing the amount for the personal benefit.
Bharat Pandey: Centre for Investigative Journalism-Nepal
Jhimrukh Rural Municipality of Pyuthan deposited just over Rs 5.1 million in its bank account much later than the specified date. The revenue was collected under various titles over the course of the year with the municipality collecting Rs 250,000 from each ward only to deposit the amount at the end of the fiscal year – never within the stipulated timeframe.
According to Nim Prasad Bhandari, the municipality’s Information Officer, the municipality had deposited the total amount of revenue sometime in July 2019.
Jhimruk Rural Municipality is not the only municipality to deposit the revenue at the end of the fiscal year. Other municipalities, too, have not stayed on the provision of depositing the revenue collected from the wards.
After collecting the revenue over the course of the year, the Bidhiyatal Rural Municipality deposited its revenue at the end of the 2018/19 fiscal year. In fact, the practice of depositing the revenue at the end of each fiscal year has been a rather common practice among office bearers, who use the money to finance their personal expenses.
Moreover, some wards have been found to be spending the revenue and only depositing them at the end of the year at best. If we refer to the municipality’s accounts, wards 4, 6, 7, 8 and 9 only deposited the revenue for fiscal year 2018/19 on September 16 – two months later after the end of the fiscal year. Ward 1, 2, 3 and 5 deposited even later on November 6.
Rule 9 (3) of Chapter 3 of the Financial Procedure Rules, 2007 states,” The office will have to receive Rs 10,000 in cash and deposit it in the account in line with Sub-rule 1 on a daily basis and keep it in the record.” In case of failure to submit the revenue daily, the chief of the office will have to submit it within one week mentioning the reason.
Section 27 (1) of the Financial Procedure and Fiscal Responsibility Act, 2019 has said that the concerned staff has to furnish the revenue amount in the bank account on the same day it is collected or the following day in line with the existing law. Similarly, the amount collected in the fund of rural municipality and municipality has to be deposited in the bank account in accordance with Section 69 (3) of the Local Government Operation Act, 2017.
Despite this, Jhimruk and Badhaiya Rural Municipalities have been taking liberties with when they choose to deposit the money and even the amounts. Sources claim that the office bearers only deposit the amount in order to avoid arrears (the amounts of expenditure incurred, or advances or payments made, which are not in compliance with the rules and regulations). The proclivity to do this has been observed in many local level offices in Province 5.
Madane Rural Municipality of Gulmi was given “Grade B” from the Office of the Auditor-General. The audit uncovered that they had deposited the revenue and tax only three times in the 2017/18 fiscal year – on October 15, June 3, and July 15. The ward no. 1 made their first deposit of 10 months into the new fiscal year on May 8 and one more on July 14.
In Rupandehi district, the Sainamaina Municipality- 1 made their first deposit of the year on September 24, 2018, again, in violation of the law. Ward no. 3 of Sainamaina Municipality deposited the money 3 months after the start of the new fiscal year on October 2. In fact, according to the municipality’s Information Officer, Keshav Raj Aryal, most wards in the municipality have not been depositing the revenue in accordance with the law. Some of these wards have their excuses.
“The bank is around 9 kilometers away and we have an acute shortage of employees to be able to deposit the money on a daily basis,” Kamal Prasad Nepal, Secretary of ward 9, Sainamaina Municipality puts forward the excuse of depositing the amount.
Meanwhile, refuting the allegation, Chief Administrative Officer of Sainamaina Municipality, Krishna Prasad Bhandari says they have been regularly depositing the amount in recent times. “Forget yesterday, at present we have been depositing the amount on a regular basis,” he claims.
Chandrakot rural municipality of Gulmi is one such example that has never deposited the collected revenue on time. In the last fiscal year, this municipality deposited the revenue three months after the end of the fiscal year. The wards of this municipality, too, never complied with the rules, and have been depositing the revenue only thrice in a year.
The story of Ruru rural municipality of Gulmi, too, is no different. It deposited the revenue for the first time on October 10. The municipality then deposited the revenue on December 11, 2018; January 3, 2018; January 28, 2018; and March 12, 2019; March 28, 2019; May 26, 2019; and June 22, July 3, July 13, and July 16. According to the Chief Administrative Officer, Chetnath Giri, the Ruru rural municipality had collected total revenue of Rs 96 lakh 96 thousand 217 in a year.
Palpa’s Mathagadi rural municipality is no exception. The ward no 1 of this municipality took the initiative of collecting the revenue from August and deposited the amount for the first time on December 30, 2018. This ward has so far deposited the revenue six times in a year.
Likewise, ward no 2 of Mathigada rural municipality, which, too, started to collect the revenue from August, has deposited it once a month while ward no 3 deposited the amount 10 times in a year. Similarly, ward no 4 of the municipality deposited it twice – one time in December and the second time in July. While ward no 5 deposited the revenue 10 times in a year, ward no 6 deposited the amount 11 times, ward no 7 deposited four times and ward no 8 made it four times in a year.
Ward no 1 of Purbakhola rural municipality deposited the revenue three times in a year, ward no 2 made it nine times, ward no 4 deposited 11 times, ward no 4 did it eight times, and ward no 6 deposited it seven times in a year. Similarly, Ribdikot rural municipality of Palpa also did not deposit the revenue within the timeframe. Even though it had collected a revenue of a total of Rs 28 lakh 3,855, it did not deposit it in the Local Deposit Fund.
Widespread Issue
The issue widespread in Province-5 is not limited to a certain province but a nationwide problem. In the fiscal year 2017/18, Baglung’s Badiguard rural municipality failed to deposit Rs 62 lakhs, Tripurasundari rural municipality Rs 11 lakh 57 thousand, and Rubi Valley rural municipality Rs 1 lakh 17 thousand; and Baitadi’s Bhailoli municipality Rs 3 lakh 28 thousand totaling to Rs 78 lakh 2 thousand, according to the 56th report of the Office of the Auditor-General. The Office has directed them to deposit the revenue at the earliest.
Similarly, the revenue collected from Ramechhap Municipality-2 of Ramechhap was not deposited for eight months in the bank as ward chairman Nir Bahadur Shrestha spent the collected amount for his personal use. Shrestha even challenged the municipality’s instruction to deposit the amount as soon as possible saying that he, as the chairperson, deserved the right to spend the revenue.
According to ward secretary Som Bahadur Shrestha, the ward chairman even threatened the office bearers during a meeting held on March 26, 2019, when he was reminded to deposit the revenue amount. Nir Bahadur, however, defended his move saying he ‘stashed’ the amount for its safety. He also claimed to have purchased some necessary items for the ward.
Allowance to collect revenue
The collections of revenue and bank deposits come under the regular duty of a government employee. However, several government employees are found to have claimed Traveling and Dearness Allowance (TDA) when making their way to the banks to deposit the collected revenue. According to Bhupal Pokhrel, Chairperson of Ghurkot rural municipality of Gulmi District, employees claim allowances with the reason that the banks are far away. “Employees do not go to the banks without getting allowances,” Pokhrel said adding, “We are worried that the employees spend the collected money by claiming their allowances.”
Employees of Malika rural Municipality of Gulmi District have been found to be taking a monthly fuel allowance of Rs 10 thousand to deposit the revenue in the banks. Dipak Bhandari, Chief Administrative Officer of the municipality conceded that they have been providing 10 liters of petrol to employees who are tasked with depositing the money to the bank.
Wards of Butwal Sub-Metropolitan City are found to have been depositing the revenue in the ward’s bank account instead of the Local Deposit Fund. According to Damodar Gyawali, Senior Officer of the Sub-Metropolitan’s Revenue Administrative Branch, they have been transferring the amount from their bank account to the Local Deposit Fund at the end of the month. “We have opened bank accounts for all wards that are made easily accessible to them. The ward offices deposit the revenue in the banks every two to three days. They will later transfer the deposited amount to the Deposit Fund at the end of every month,” says Gyawali adding, “The Sub-Metropolis then carry out other formalities, including calculating the income on the basis of the deposit voucher.”
However, Acting Auditor General Bishnu Prasad Rijal says, depositing the revenue amount in the ward’s account would be an action that is against the law. He was shocked to know that Butwal Sub-Metropolis, despite the facility, has been depositing the revenue into its own account. “Depositing the amount in the ward’s bank account is against the law given that it is vital to know the name of the account holder.”
Moreover, most of the local levels have failed to update the accounts on a regular basis. This is due to the fact that the collected revenue details are not properly or consistently updated. Rijal says this will lead to confusion and lacks the exact status of the revenue in the process of auditing. “In fact, the monthly and triennial status of the revenue needs to be updated and maintained,” he said, adding that this will ease the auditing process. Lack of proper maintenance of the budget and revenue has made it difficult for auditing. “Failure to maintain the accounting system will lead to abuse and waste of revenue,” Rijal said.
The collections of revenue and deposit at the local levels in Rukum, Rolpa, Arghakhanchhi, Banke, and Bardiya of Province-5 have not been updated. The status of the revenue in Dhurkot, Malika, Resunga, Gulmi, Durbar, Musikot, Satyawati, Chatrakot, and Kaligandaki of Gulmi has been erroneous. Likewise, Jhimruk, Pyuthan, Swargadwari, Gaumukhi, Mandabi, Sarumarani, Naubihani and Airawat of Pyuthan; Lamahi, Bangalachuli, Dangisaran, Gadawa, Rajpur, Rapti, Shantinagar and Babai of Dang; Devdaha, Lumbini, Siddharthanagar, Tillottama, Marchawari, Mayadevi, Omsariya and Rohini of Rupandehi; Bardaghat, Ramgram, Sunwal, Susta, Palhinandan, Pratappur and Sarawal of Nawalparasi (West); Kapilvastu, Shivaraj, Maharajgunj, Krishnanagar, Banganga and Yasodhara of Kapilvastu do not have the data of revenue collection.
According to the Chief Administration Officers of the local levels, they would keep the records of the revenue deposit if the wards brought the bank deposit vouchers. However, the wards are not in a habit of keeping the record intact. The wards do not produce other documents and evidence except the vouchers and bank statements during the audit.
The Ministry of Finance had developed software, called ‘Local Deposited Fund Management System’ to manage and update the financial dealings in the province and local levels. However, most of the local levels have not used this software.
The Auditor General’s Office has provided training for the operation and usage of the software to the local level employees. But, according to the Deputy Auditor-General Controller Dilli Ram Giri, the local levels do not use the software. “Not all the local levels have been using the software. Besides, they have never approached any concerned experts to help resolve any problems that arise while using the software.”
