obi 2010_nepal

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www.openbudgetindex.org

2010IndexBudget

Open

Overall score:(Out of 100)

Scant or none Minimal Some Signifcant Extensive

10050

OBI ScoresOver Three Surveys

How Does Nepal Compare to Its Neighbors?

Provides some information to the public in its budget documents during the

year.

45

Nepal

Key Findings

The scores or 92 questions rom the Open Budget Survey 2010 (see text box) are used to

compile objective scores and rankings o each countrys relative transparency. These scores

constitute the Open Budget Index (OBI).

Nepals OBI 2010 score is 45 out o 100, slightly higher than the average score (42) or the 94

countries surveyed, but lower than several other South Asian countries in the survey including

Bangladesh (48), India (67) and Sri Lanka (67) . Nepals score indicates that the government

provides the public with some inormation on the central governments budget and nancial

activities assessed by the survey. This makes it challenging or citizens to hold the government

accountable or its management o the publics money.

Nepals OBI score stayed essentially the same rom 2008 to 2010.

Information in Public Budget Documents

Adequacy & Availability o Eight Key Budget DocumentsDocument Level of Information Grade* Publication Status

Pre-Budget Statement E Not Produced

Executives Budget Proposal C Published

Enacted Budget E Produced, Not Published

Citizens Budget E Not Produced

In-Year Reports C Published

Mid-Year Review B Published

Year-End Report D Published

Audit Report D Published

21

48

67

45

38

67Sri Lanka

Pakistan

Nepal

India

Bangladesh

Afghanistan

0

5

10

15

20

25

30

35

40

45

50

4543

36

YR 2010YR 2008YR 2006

21Afghanistan

38 Pakistan

45 Nepal

48 Bangladesh

67 India

67 Sri Lanka

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Review, but it does not include program-level detail or expenditures.

A Year-End Report compares the actual budget execution to the Enacted Budget. Year-End

Reports can inorm policymakers on tax policies, debt requirements, and major expenditure

priorities, acilitating adjustments or upcoming budget years. However, Nepals Consolidated

Financial Report, or scal Year 2007-08 (Year-End Report) is ar rom comprehensive. For

example, it does not explain the dierence between the original macroeconomic orecast and

the actual outcome.

An Audit Report is an evaluation o the governments accounts by the country s supreme

audit institution (SAI). It reports whether the government has raised revenues and spent

national revenue in line with the authorized budget, whether the governments bookkeeping is

balanced and accurate, and whether there were problems in the management o public unds.

Nepal publishes the Annual Audit Report 2065 (Audit Report) but it is ar rom comprehensive.

For example, it does not present audits o extra-budgetary unds.

Public Participation and Institutions of Accountability

Beyond improving the availability and comprehensiveness o key budget documents, there are

other ways in which Nepals budget process can be made more open. These include ensuringthe existence o a strong legislature and SAI that provide eective budget oversight, and

providing greater opportunities or public engagement in the budget process.

Are oversight bodies efective in their budget role?

Oversight Institution Strength**

Legislature Weak

SAI Moderate

** Legislature and SAI strengths are calculated rom the average scores received or a subset

o questions rom the Open Budget Survey 2010. An average score between 0-33 is graded as

weak, 34-66 as moderate, and 67-100 as strong.

According to the Open Budget Survey 2010, budget oversight provided by Nepals legislature is

weak because the legislature does not:

have ull powers to amend the Executive Budget Proposal at the start o the year;1.

have ull powers to make any changes to the budget over the course o the scal year;2.

have sufcient time to discuss and approve a budget; and3.

hold open budget discussions which would allow the public to be present during4.

legislative hearings when the executive testies on its proposed budget.

According to the Open Budget Survey 2010, budget oversight provided by Nepals SAI is

inadequate due to the ollowing reasons:

the SAI does not issue timely Audit Reports on the nal expenditures o national1.

departments;

it does not have proper channels o communication with the public;2.

it does not issue reports on the ollow-up steps taken by the executive to address audit3.

recommendations; and

it does not have the authority to audit the projects directly unded by the donors and that4.

account or about one third o annual expenditure.

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Recommendations

Nepal should:

publish the Enacted Budget;

produce and publish a Citizens Budget and Pre-Budget Statement;

improve the comprehensiveness o the Executives Budget Proposal;

provide opportunities or the public to testiy at legislative hearings on the budget; and

empower SAIs to publish comprehensive Audit Reports, including reports on extra-

budgetary unds.