2015年-世界发展银行全球_Public_Expenditure_and_Financial_Accountability_Assessment___Nepal_PFM_Performance_Assessment_II_100页_3mb

Summary of Nepal PFM Performance Assessment II (FY2013/14)

Core Content

The Second Public Expenditure and Financial Accountability (PEFA) Assessment of Nepal, conducted in FY2013/14 and published in May 2015, evaluates the performance of the country's Public Financial Management (PFM) system. The assessment is based on 31 PFM indicators and highlights both progress and areas needing improvement.

Main Findings

1. Overall Progress

• Nepal has made substantial progress in strengthening its PFM system, especially through the use of information technology.
• 19 out of 31 indicators (61%) have improved, with 7 'A' scores compared to 1 'A' score in the 2008 assessment.
• 10 indicators (32%) remained the same, while 2 indicators (7%) deteriorated, mainly due to the absence of parliament and an increase in extra-budgetary funds.

2. Key Improvements

• Budget credibility has improved with the implementation of the Treasury Single Account (TSA) and Financial Management Information System (FMIS).
• Transparency in budget information has increased, particularly through the adoption of Government Finance Statistics (GFS) classification and TSA.
• Budget coverage and timely reporting have improved, although comprehensiveness of fiscal reports remains an issue.
• Donor predictability and use of national procedures have improved.
• Tax collection has become more efficient, supported by IT systems and a transparent tax appeals mechanism.
• Audit quality and coverage have improved, but performance audits and correction of irregularities are still limited.

3. Areas for Improvement

• Budget execution and control are still weak, with inconsistent enforcement of rules.
• Parliamentary scrutiny needs enhancement to ensure greater accountability.
• Extra-budgetary funds require better monitoring and control.
• Internal control systems need to be strengthened, especially in reconciliation of revenue accounts and payroll management.
• Procurement systems are based on international standards, but non-competitive procurement methods are not well justified, and compliance with rules is lacking.
• Financial statement analysis is weak due to limited technical capacity and lack of refresher training.

Key Views and Recommendations

1. Government Commitment

• The Government of Nepal has shown a strong commitment to PFM reforms.
• The PFM Steering Committee, chaired by the Finance Secretary, is playing a key role in driving reforms.
• The Budget Management and Financial Accountability Act is being prepared to address the identified gaps.

2. Reform Initiatives

• The Second Phase PFM Reform Action Plan is being developed based on the findings of this assessment.
• Multi-Donor Trust Fund (MDTF) is supporting the reform process, with contributions from World Bank, Australia, UK, Norway, Denmark, Switzerland, EU, and USAID.
• The use of IT has been a major enabler in improving transparency and efficiency.

3. Challenges

• Political instability during the transition period (2006-2010) delayed some reforms.
• Earthquakes in April and May 2015 caused significant damage, but also created an opportunity to rebuild with a stronger PFM system.
• Weak enforcement of PFM rules, especially in budget execution and internal control, continues to be a challenge.

Critical Dimensions of PFM

1. Credibility (PI 1-4)

• Budget credibility is now internalized.
• Budget variance is decreasing due to better planning, but expenditure composition is still a concern.
• TSA and FMIS have improved promptness and monitoring of payments.

2. Comprehensiveness and Transparency (PI 5-10)

• Budget information is more transparent.
• However, comprehensiveness is lacking, and many autonomous agencies and donor projects operate outside the TSA/FMIS framework.
• Fiscal relations between central and local governments are complex and need better coordination and monitoring.

3. Policy-Based Budgeting (PI 11-12)

• Rolling MTEF has improved fiscal prudence.
• Sectoral strategies and business plans are still missing, leading to non-realistic budgets.
• Implementation capacity is weak, especially in capital expenditure and procurement planning.

4. Predictability and Control in Budget Execution (PI 13-21)

• Tax liability frameworks are clear and well-defined.
• Tax arrears continue to rise, and there is insufficient focus on their clearance.
• Budget execution is uneven, with a delay in spending and a rush at the end of the fiscal year.
• Virement rules help mitigate this issue but are not fully effective.

5. Accounting, Recording and Reporting (PI 22-25)

• Cash-based accounting is strengthened with the TSA.
• Revenue account reconciliation is still an issue.
• Financial reporting is being piloted using international standards, but capacity and training are lacking.

6. External Scrutiny and Audit (PI 26-28)

• Audit quality has improved, but performance audits are limited in scope.
• Internal auditors often act as accounts officers, leading to conflicts of interest.
• Audit focus is on transactional irregularities rather than internal control systems.

Conclusion

The assessment concludes that Nepal has made significant progress in PFM, particularly through the use of information technology. However, there are still gaps in areas such as budget execution, parliamentary scrutiny, and control of extra-budgetary funds. The government is committed to reform and is working on a Second Phase PFM Reform Action Plan to address these issues and improve the efficiency and accountability of public financial management. Continued support from development partners is essential for the success of these reforms.