Institutions Related to Government Accounting

The Office of the Auditor General (OAG) is the supreme audit institution of Nepal, established under the Constitution of Nepal (Articles 240 and 241). Five of its functions are:

1. Audit of government accounts: it audits the accounts of federal, provincial and local government offices, the courts, the Federal Parliament and other constitutional bodies, to see that money was spent for the purpose it was appropriated.
2. Audit of public corporations: it audits government-owned or controlled corporations, companies and authorities and reports on their finances.
3. Examining regularity, economy and efficiency: it checks whether expenditure is lawful, economical, efficient and effective, and points out misuse, loss and irregularity.
4. Submitting the annual report: it submits its annual audit report to the President, who lays it before the Federal Parliament, where the Public Accounts Committee reviews it.
5. Advice on accounts and audit: it advises on the maintenance of accounts and on audit standards, supporting financial discipline and accountability.

1. To audit the accounts of all government offices, government-owned corporations, and other bodies as prescribed by law.
2. To submit an annual audit report to the President, who causes it to be laid before the Parliament.

Office of the Auditor General

The Office of the Auditor General (OAG) is the apex auditing body in Nepal. It audits the accounts of all government offices and other bodies as provided by law and reports to the President.

Five functions of the Ministry of Finance:

1. Formulation of the annual budget: It prepares the government's annual budget (statement of estimated revenue and expenditure) and presents it in Parliament for approval. It decides how much to spend on different sectors and how the money will be raised.

2. Revenue collection and management: It formulates tax policies and directs the collection of government revenue through its departments (such as the Inland Revenue Department and Customs). It decides tax rates, exemptions and the scope of taxation.

3. Control of government expenditure: It releases funds to ministries and departments, monitors whether the money is spent as sanctioned, and keeps expenditure within the limits approved by Parliament.

4. Management of public debt: It arranges internal and external loans needed to meet budget deficits and makes arrangements for timely repayment of principal and interest on the national debt.

5. Formulation of financial policies and economic control: It frames monetary, fiscal and foreign-exchange policies, regulates the banking and financial sector, and coordinates with Nepal Rastra Bank to maintain economic stability and control inflation.

(Other acceptable points: management of government property and assets, financial administration and accounting of public funds, providing economic advice to the government, and coordination with international financial institutions.)

The District Treasury Comptroller Office (DTCO) is the district-level office of the Financial Comptroller General Office (FCGO). It acts as the custodian of government funds and the chief accounting and payment authority at the district level. Its five main functions are:

1. Release of funds (budget release): The DTCO releases the budgeted amount to the concerned government offices of the district in instalments as per the authority given by the Ministry of Finance. No government office can spend money without the fund release made by this office.

2. Payment of government expenses: It makes all payments on behalf of the government offices of the district. It checks the bills, bills vouchers, and supporting documents submitted by the offices and pays the amount only if the expenditure is lawful, within the released budget, and supported by proper evidence.

3. Collection and deposit of government revenue: It collects various government revenues such as taxes, fees, fines, and other receipts collected by the district-level offices and deposits them into the consolidated fund (the government's central account). It also keeps a record of such revenue collection.

4. Keeping accounts of income and expenditure: It maintains the detailed accounts of all amounts received and spent by the government offices of the district. It keeps the ledger, cash book, and other accounting records, and prepares the monthly and annual financial reports of the district.

5. Audit and financial control: It checks and controls the financial activities of the district offices. It ensures that public money is spent only for the sanctioned purpose and in a lawful manner, and it provides the necessary financial statements and records to the Office of the Auditor General for audit.

6. Reporting to the centre: It sends the monthly and annual statements of income and expenditure of the district to the Financial Comptroller General Office (FCGO) and the Ministry of Finance, so that the government can know the actual financial position of the district.

(Any five of the above may be written.)

The President appoints the Auditor General, on the recommendation of the Constitutional Council.

The Financial Comptroller General Office (FCGO) carries out the internal audit of government offices in Nepal. The Auditor General conducts the final (external) audit.

The Financial Comptroller General Office (FCGO) is the central government accounting and treasury office under the Ministry of Finance. It is responsible for the treasury, accounting system and financial reporting of the Government of Nepal.

Three rights and duties of FCGO:

1. Maintain the central accounts: It keeps the consolidated account of government income, expenditure and balances, and prepares the government's financial statements.
2. Operate the Treasury Single Account (TSA): It controls the release of funds and the bank accounts of government offices, and manages government cash balance.
3. Prescribe and supervise the accounting system: It sets accounting formats, standards and procedures, and gives directions to government offices on keeping records and reporting, including internal control and monitoring of accounts.