Financial Control Systems in Public Sector Facilitated by

Financial Control Systems in Public Sector Facilitated by: Chandra Kanta Bhandari, FCA, CPFA

Presentation Outline �Concept �Financial Control Measures �Internal Control �Auditing �Financial Non- compliance 2 Chandra Kanta Bhandari, FCA, CPFA

Why Financial Controls? ? ? �To ensure that: q. Optimum usages of financial resources q. Value for money is achieved q. Agent serves principal’s interest in using entrusted financial resources q. There exists effective accountability measure q. Financial transactions and events are made transparent �Ultimate objective in public sector is to: qmake a difference in the lives of citizen 3 Chandra Kanta Bhandari, FCA, CPFA

How Financial controls can be exercised? �Through management/ executive effected policies and procedures; �Laws, rules and regulations, directives, guidelines etc. �This may be in the form of internal control including internal audit �Through external scrutiny and audit including larger monitoring by civic society, lobbying groups �Parliamentary scrutiny or reporting to parliament �External audit �Civic society engagement 4 Chandra Kanta Bhandari, FCA, CPFA

Internal Controls – Why? �Internal control is an integral process that is effected by an entity’s management and personnel and is designed to address risks and to provide reasonable assurance that in pursuit of the entity’s mission to ensure that the following objectives are being achieved: �executing orderly, ethical, economical, efficient and effective operations; �fulfilling accountability obligations; �complying with applicable laws and regulations; �safeguarding resources against loss, misuse and damage. 5 Chandra Kanta Bhandari, FCA, CPFA

Controls- Why? To achieve entity’s objectives related to operations, reporting, and compliance 6 Chandra Kanta Bhandari, FCA, CPFA

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5 components of internal control Each components contains several principles which are the requirements of each component 8 Chandra Kanta Bhandari, FCA, CPFA

Principles of effective internal control Control Environment Risk Assessment Control Activities Information & Communication Monitoring Activities 1. 2. 3. 4. 5. Demonstrates commitment to integrity and ethical values Exercises oversight responsibility Establishes structure, authority and responsibility Demonstrates commitment to competence Enforces accountability 6. 7. 8. 9. Specifies suitable objectives Identifies and analyzes risk Assesses fraud risk Identifies and analyzes significant change 10. Selects and develops control activities 11. Selects and develops general controls over technology 12. Deploys through policies and procedures 13. Uses relevant information 14. Communicates internally 15. Communicates externally 16. Conducts ongoing and/or separate evaluations 17. Evaluates and communicates deficiencies

10 Chandra Kanta Bhandari, FCA, CPFA

3 F – Public Sector Perspective Function (Constitution, relevant Laws) Functionary (3 Tiers of Govt, Organs of Govt) 11 Accountability Transparency Integrity Chandra Kanta Bhandari, FCA, CPFA Fund/ Finance (Raising & Utilising)

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; fj{hlgs ljl. Qo Joj: yfkg. M g]kfnsf] ; Gbe{ �; +j}wflgs Joj: yfx? M cfly{s sfo{ k|0 ffn. L -efu !), !^ / !(_, �sfg"g. L Joj: yfx? M cfly{s sfo{ljlw P]g, ; fj{hlgs vl/b P]g, /fli 6 «o k|fs[l. Qs >f]t tyf lj. Q cfof]u P]g, : yfg. Lo ; /sf/ ; Grfng P]g, ljlgof]hg P]g �; /sf/sf] g. Llt tyf sfo{qmd / ah]6 a. St. Jo �ljle. Gg ; +: yfut Joj: yf M ; +a}wflgs lgsfosf] Joj: yf, dn]lgsf, ; fj{hlgs vl/b cg'udg sfof{no, ; fj{hlgs n]vf ; ldlt 13 Chandra Kanta Bhandari, FCA, CPFA

PFM Institutions in Nepal �Parliament (PAC and other committees) at Center and provinces and Local Level Assemblies �Ministry of Finance / Provincial planning and finance ministry �National Planning Commission �Public Procurement Monitoring Office �Financial Comptroller General Office/ Provincial FCGO �National Natural Resources and Fiscal Commission �Inter-government Fiscal Council Chandra Kanta Bhandari, FCA, CPFA 14 �Office of the Auditor General

Financial Procedural Act, 2055 �Provides procedures for regularize and manage financial events of the government relating to: �Operation of consolidated fund or other government funds �Budget formulation �Budget release and expenditure �Book keeping �Internal control arrangements �Audit �Settlement of irregularities pointed out by the audit 15 Chandra Kanta Bhandari, FCA, CPFA

sf/f]jf/sf] n]vf+sg / k|ltj]bg �Plss[t cfly{s ; +s]t tyf jlu{s/0 f / Jof. Vof, @)&$ �@)&$. )&. )! Dff dxfn]vf k/LIfsjf 6 : j. Ls[t �; +3 Lo ; +/rgf cg'? k ; /sf/sf t. Lg} txsf] cfly{s sf/f]jf/df nfu" x'g] �k|b]z / : yfg. Lo txdf cf=j= @)&$. &% b]lv nfu" �; +3 df cf=j= @)&%. &^ b]lv nfu" �kl/jlt{t zf; s. Lo k|0 ffn. L tyf Government Finance Statistics Manual 2014 (IMF) �Use of NPSAS as financial Reporting Standards 17 Chandra Kanta Bhandari, FCA, CPFA

: yfg. Lo tx -: yfg. Lo ; /sf/ ; ~rfng P]g, @)&$_ �n]vf ; ldltsf] Joj: yf -bkmf @@_ �: yfg. Lo /fh: j k/fdz{ ; ldlt -bkmf ^%_, ; |f]t cg'dfg tyf ah]6 ; Ldf lgwf{/0 f ; ldlt - bkmf ^^_ tyf ah]6 tyf sfo{qmd th{'df ; ldlt -bkmf ^&_ �ah]6 sf] cg'dfg sfo{kflnsfjf 6 : j. Ls[t u/f. O{ c; f/ !) ut] leq ; efdf k]z ug]{ -bkmf &!_. k]z e. Psf] ah]6 dfly sfo{tflnsf agf. O{ !% lbg leq 5 nkmn ; Dk. Gg u/L kfl/t ug{ jf ; 'emfj ; lxt sfo{kflnsfdf k 7 fpg' kg]{ �sfof{kflnsfn] % lbg leq kl/dfh{g u/L jf ; f] ug{ gkg]{ e. P sf/0 f ; lxt ; efdf k 7 fpg]. ; efn] c; f/ d; f. Gt leq ah]6 kfl/t ug{'kg]{. �n]vf k/LIf 0 f dxfn]vfk/LIfsjf 6 u/fpg' kg]{. -bkmf &&_ �sfg"g adf]lhd cfkmgf] cfo Joosf] cf. Gtl/s n]vfk/LIf 0 f u/fpg' kg]{. �cf. Gtl/s lgo. Gq 0 f k|0 ffn. L tof/ u/L sfof{Gjog ug'{kg]{. -bkmf &*_ 18 Chandra Kanta Bhandari, FCA, CPFA

; fj{hlgs vl/b P]g, @)^# tyf lgodfjn. L @)^$ �; fj{hlgs vl/b ; Da. Gw. L sfo{ljlw, k|ls|of tyf lg 0 f{onf. O{ cem a 9 L v'nf, kf/bz. L{, j: t'lgi 7 / lj. Zj; g. Lo agfpg, �; fj{hlgs vl/b k|ls|ofdf k|lt: kwf{, : j. R 5 tf, O{df. Gbf/Ltf, hjfkmb]x. Ltf / lj. Zj; g. Lotf k|j¢{g u/L ldt. Aoo. L tyf ljj]sk"0 f{ 9ªuaf 6 ; fj{hlgs vr{sf] clwstd k|ltkmn xfl; n ug{ / �; fj{hlgs lgsfon] lgdf{0 f sfo{ ubf{ u/fp. Fbf, dfn; fdfg, k/fdz{ ; ]jf tyf c. Go ; ]jf vl/b ubf{ To: tf] vl/bsf] Joj: yfkg Ifdtf clej[4 L u/L p. Tkfbs, ljs|]tf, cfk"lt{stf{, lgdf{0 f Joj; fo. L jf ; ]jf k|bfosnf. O{ lagf e]befj ; fj{hlgs vl/b k|ls|ofdf ; xefu. L x'g] ; dfg cj; / ; 'lgl. Zrt ug{ 19 Chandra Kanta Bhandari, FCA, CPFA

e|d 0 f vr{ lgodfjn. L @)^$ -; +zf]wg ; lxt_ �; /sf/L sfdsf] l; nfdf e|d 0 f ubf{ ljle. Gg txsf kbflwsf/L, sd{ef/L jf c. Go Jol. Qmn] kfpg] ; 'ljwf, e|d 0 f vr{, b}lgs e. Qf tyf c. Go vr{nf. O{ Jojl: yt ug{. � k]Zs. L lbbf a 9 L gx'g] u/L lbg]. �; dod} km 5of}{6 ug]{. �; dod} km 5of}{6 gu/]df Jofh ; lxt c; "n ug]{. 20 Chandra Kanta Bhandari, FCA, CPFA

Role of Central Bank �Bank of the Government �Support Govt’s financial policies through 21 monetary policy �Aggregate fiscal information �Controller of financial system �Support government to make balance fiscal position �Coordinate with FCGO (the treasurer) in making government payments and revenue collection Chandra Kanta Bhandari, FCA, CPFA

; +3 Lo cfly{s sfo{k|0 ffn. L -efu !)_ !!%= s/ nufpg jf C 0 f lng gkf. Og] !!^= ; +3 Lo ; l~rt sf]if !!&= ; +3 Lo ; l~rt sf]if jf ; +3 Lo ; /sf/L sf]ifaf 6 Joo !!*= ; +3 Lo ; l~rt sf]ifdfly Jooef/ !!(= /fh: j / Joosf] cg'dfg !@)= ljlgof]hg P]g !@!= k"/s cg'dfg !@@= k]Zs. L vr{ !@#= pwf/f] vr{ !@$= ; +3 Lo cfsl: ds sf]if !@%= cfly{s sfo{ljlw ; Da. Gw. L P]g 22 Chandra Kanta Bhandari, FCA, CPFA

efu–!^ k|b]z cfly{s sfo{k|0 ffn. L �@)#= s/ nufpg jf C 0 f lng gkf. Og] �@)$= k|b]z ; l~rt sf]if �@)%= k|b]z ; l~rt sf]if jf k|b]z ; /sf/L sf]ifaf 6 Joo �@)^= k|b]z ; l~rt sf]ifdfly Jooef/ �@)&= /fh: j / Joosf] cg'dfg �@)*= k|b]z ljlgof]hg P]g �@)(= k"/s cg'dfg �@!)= k]Zs. L vr{ �@!!= pwf/f] vr{ �@!@= k|b]z cfsl: ds sf]if M �@!#= cfly{s sfo{ljlw ; Da. Gw. L P]g 23 Chandra Kanta Bhandari, FCA, CPFA

efu–!( : yfg. Lo cfly{s sfo{k|0 ffn. L �@@*= s/ nufpg jf C 0 f lng gkf. Og] �@@(= : yfg. Lo ; l~rt sf]if �@#)= ufp. Fkflnsf / gu/kflnsfsf] /fh: j / Joosf] cg'dfg 24 Chandra Kanta Bhandari, FCA, CPFA

Effu @@ dxfn]vf k/LIfs �@$)= dxfn]vf k/LIfs �@$!= dxfn]vf k/LIfssf] sfd, st{Jo / clwsf/ �; j} txsf] ; /sf/sf ; j} c+ux? , ; '/Iff lgsfo �k"0 f{ : jfld. Tjsf ; +ul 7 t ; +: yfsf] n]vfk/LIf 0 f �clwsf+z : jfld. Tjsf ; +ul 7 t ; +: yfsf] n]vfk/LIfs lgo'l. Qm ubf{ k/fdz{ �n]vf 9 f+rf : j. Ls[t ug]{. �lgoldttf, ldt. Joo. Ltf, sfo{b. Iftf, k|efjsfl/tf / cf}lr. Tosf] b[li 6 sf]0 fjf 6 n]vfk/LIf 0 f ug{'kg]{. 25 Chandra Kanta Bhandari, FCA, CPFA

PFM Success Source: CAPA 26 Chandra Kanta Bhandari, FCA, CPFA

Why Audit ? To Promote Accountability, Transparency and Integrity Accountability? ? ? �Accountability is the obligation to render an account for a responsibility conferred. �It presumes the existence of at least two parties: �one who allocates responsibility; Citizen to their representative to Executives and �one who accepts it with the undertaking to report upon the manner in which it has been discharged 27 Chandra Kanta Bhandari, FCA, CPFA

Financial Accountability �Financial accountability is primarily understood as the relationship between the citizens, as accountors, and the Government, as an accountee, where the citizens hold the Government to account for the stewardship of public money. �The essence of financial accountability is an obligation of the Government to assure the citizens that money is spent in the best possible and effective way. �The Government has to provide answers and justifications for its actions and to regularly inform the public on how it spends the public funds. 28 Chandra Kanta Bhandari, FCA, CPFA

Financial Accountability contd…… �Financial accountability results from holding an individual accountable for effectively performing a financial activity, such as a key control procedure within a financial transaction process. �A well-defined financial accountability structure serves as the foundation for establishing effective financial processes. �Ultimate result is sound financial discipline 29 Chandra Kanta Bhandari, FCA, CPFA

Financial Accountability and Fiduciary Risk �A risk is probability of an unintended occurrence causing a negative result. �Fiduciary risk is the risk that funds will not be used for their intended purposes, will not achieve value-formoney and/or will not be properly accounted for. �Fiduciary risks are the combination of both process risks and result risks. �Country systems aimed at financial accountability need to address fiduciary risks 30 Chandra Kanta Bhandari, FCA, CPFA

Dimensions of accountability q who is accountable? q to whom? q for what? q how it is secured and measured? 31 Chandra Kanta Bhandari, FCA, CPFA

Whose Accountability �Organs of Government (Legislature, Executive, Judiciary at all level of government) �Public servants �Those holding public posts �Those receiving benefits from public purse WHY THEY are accountable? Because they are entrusted with public resources for performance of certain well-defined functions and given power to ……. 32 Chandra Kanta Bhandari, FCA, CPFA

Accountability for WHAT? Criteria �Accountability for results – output, 33 outcome �Accountability for financial considerations in decision-making - due regard for probity, prudence, and value for money �Accountability for management of financial resources �Readily available information and advice on financial management, Chandra Kanta Bhandari, FCA, CPFA

Mechanism of Accountability � Lead by the legislature – PAC and 34 other committees � Oversight by ministry of finance � Performance reports by ministries and departments � Internal audit � Audit by Supreme Audit Institution � Making audit reports accessible to public Chandra Kanta Bhandari, FCA, CPFA

cf. Gtl/s n]vfk/LIf 0 f (Internal Audit) �æcf. Gtl/s n]vfk/LIf 0 fÆ e. Ggfn] cfly{s sfo{ljlw P]g, @)%% sf] bkmf !^ -!_ cg'; f/ dxfn]vf lgo. Gqs sfof{no c. Gt{ut sf]if tyf n]vf lgo. Gqs sfof{non] ug]{ n]vfk/LIf 0 f ; D´g' k 5{. �; +u 7 gleqs} : jt. Gq lgsfoåf/f Joj: yfkgsf] ; xof]usf] nflu ul/g] n]vfk/LIf 0 f xf]. �sf/f]af/sf] l; nfdf e. P u/]sf u. Nt. Lnf. O{ lgoldttfsf] b[li 6 n] t. Tsfn} ; Rofpg Joj: yfkgnf. O{ cf}+Nofpg] sfo{ u 5{. �cl. Gtd n]vfk/LIf 0 fsf] k"jf{wf/ tof/ u/L To; sfo{nf. O{ sd ; do / vr{ nf. Ug] agfpg] sfo{{ u 5{. �; Nnfxsf/sf] e"ldsf u 5{. 35 Chandra Kanta Bhandari, FCA, CPFA

cf. Gtl/s n]vfk/LIf 0 f (Internal Audit) �dxfn]vf lgo. Gqs sfof{non] cf. Gtl/s k|of]hgsf] nflu cf. Gtl/s n]vfkl/If 0 f lgb]{lzsf hfl/ ul/ nfu" u/]sf] 5. �ljsf; ; ldlt P]g, @)!# cg'; f/ : yflkt ; ldltx? , k|lti 7 fg, kl/ifb cflb : jfo. Q ; /sf/L lgsfox? df cf. Gtl/s ? kdf u 7 g u/]sf cf=n]=k= zfvfaf 6 jf g]kfn rf 68{ Psfp. G 6]G 6 ; +: yf -ICAN) df btf{ e. Psf n]vfk/LIfs Chartered Accountant (CA) / Register Auditor (RA) jf 6 cf. Gtl/s n]vfk/LIf 0 f sfo{ ; Dkfbg x'G 5. �lgh. L If]qsf s. Dklg jf ; +: yfsf] cf. Gtl/s n]vfk/LIf 0 f g]kfn rf 68{ Psfp. G 6]G 6 ; +: yfdf btf{ e. Psf CA / RA jf 6 x'G 5. 36 Chandra Kanta Bhandari, FCA, CPFA

; /sf/L n]vfk/LIf 0 fsf] p 2]Zo l l l 37 cfly{s sf/f]af/df lgoldttf, ldt. Jolotf, sfo{b. Iftf, k|efjsfl/tf / cf}lr. To k'li 6 e. P ge. Psf] d"Nof. Fsg ug'{. ; fwg ; |f]tsf] kl/rfngdf b. Iftf sfod u/L ; Defljt gf]S; fg. L /f]Sg d 2 t ug]{. ; +u 7 gf. Tds ; +/rgf, g. Llt / k|lqmofdf ; 'wf/ ug{ ljs. Nkx? klx. Nofpg ; 'emfp lbg'. ; fj{hlgs hjfkmb]x. Ltf, kf/blz{tf / lgi 7 f ; bfrf/ sfod ug{ p. Tk|]l/t ug'{. n. Io / pknl. Jw lar d"Nof. Fsg ug{ ; 'rgf, t. Yof. Fs / hfgsf/L k|bfg ug'{. Chandra Kanta Bhandari, FCA, CPFA

cl. Gtd n]vfk/LIf 0 f M ; +j}wflgs tyf sfg"g. L Joj: yf � Part 22 of the constitution in Article 240 and 241 contains provisions relating to: �appointment of AG, terms of office, remuneration, functions, duties and powers of the AG � AG is empowered to carry out audits of the accounts of : �the office of the Prez and Vice-prez, the Supreme Court, Federal Legislature-Parliament, Provincial Government, Local Bodies, Constitutional bodies and their offices, the courts, the Office of the Attorney General, Nepal Army, Nepal Police or Armed Police Force including all federal and provincial government offices and other entities as per prescribed in Laws � in such manner as may be determined by law, with due consideration given to the regularity, economy, efficiency, effectiveness and the propriety thereof. 38 Chandra Kanta Bhandari, FCA, CPFA

n]vfk/LIf 0 f ; Dj. Gw. L tl/sf M n]vfk/LIf 0 f P]g, @)$* sf] bkmf # M n]vfk/LIf 0 f ; Da. Gw. L t/Lsf M • n]vfk/LIf 0 f ug]{ ; /sf/L sfof{no, g]kfn ; /sf/sf] k"0 f{ jf clwsf+z : jfld. Tj e. Psf] ; +ul 7 t ; +: yf jf c. Go ; +: yfsf] ; a} jf t. L c. Gtu{tsf s'g} Osf. O{dfq 5 gf}6 u/L cfly{s sf/f]af/ / ; f]; Fu ; Dal. Gwt c. Go lqmofsnfkx? sf] Ps Ps u/L jf a. Lrdf 58s] u/L jf s]x. L k|ltzt dfq k/LIf 0 f ug]{ u/L n]vfk/LIf 0 fsf] tl/sf, If]q / cjlw tf]s. L cl. Gtd n]vfk/LIf 0 f ug{, To; af 6 k|f. Kt e. Psf t. Yox? bzf{pg, To; df cfnf]rgf ug{ / cfly{s ljj/0 f pk/ cfj. Zostfcg'; f/ /fo; lxtsf] k|ltj]bg ug{ ; Sg]. • g]kfn ; /sf/åf/f cg'bfg k|f. Kt u/L ; +rfng e. Psf sfo{qmd tyf cfof]hgfsf] l: ylt tyf n]vf; Da. Gw. L sfuhft h'g; 's} avt x]g{, 39 Chandra Kanta Bhandari, FCA, CPFA

n]vfk/LIf 0 f ; Dj. Gw. L tl/sf M bkmf # � ; /sf/L sfdsf] 7]Ssf lng] lgdf{0 f Joj; fo. L / cfk"lt{stf{ jf ; /sf/L sfdsf] lh. Ddf lng] ; +: yf jf Jol. Qmnf. O{ ; d]t To: tf] 7]Ssf jf cfk"lt{ jf c. Go ; /sf/L sfd; Fu ; Dal. Gwt sfuhft, cf. Gtl/s /fh: j sfof{noaf 6 s/ k/LIf 0 f e. Psf kmf. On tyf yk k|df 0 f sfuhft k]z ug{ nufpg, � n]vfk/LIf 0 fsf] sfddf s'g} ljz]if 1 sf] ; ]jf pkn. Aw ug{ / cfj. Zos k/]df plrt kfl/>lds lb. O{ s/f/df sfd nufpg. � n]vfk/LIf 0 f ul/g] lgsfon] ckgf. Psf ; "rgf k|ljlwdf dxfn]vfk/LIfs jf dxfn]vfk/LIfssf] sfof{nosf sd{rf/Lsf] kx'Fr x'g]. 40 Chandra Kanta Bhandari, FCA, CPFA

n]vfk/LIf 0 f ; Dj. Gw. L tl/sf M -bkmf #s= ljljw ljifosf] n]vfk/LIf 0 f_ / bkmf #v= ; fdlos n]vfk/LIf 0 f_ �n]vfk/LIf 0 f ug'{kg]{ lgsfosf] lj. QLo n]vfk/LIf 0 fsf] cltl/Qm sfo{d"ns, ; "rgf k|ljlw, ljlwlj 1 fg, n}lus, jftfj/0 f. Lo h: tf ljifosf] n]vfk/LIf 0 f ug{ ; Sg]. �n]vfk/LIf 0 f ug'{kg]{ lgsfosf] ; fdlos n]vfk/LIf 0 f ug{ ; Sg]. �o; /L ul/g] n]vfk/LIf 0 fsf] ljlw, tl/sf, If]q / k/LIf 0 f ug]{ s'/fx? dxfn]vfk/LIfsn] tf]lslb. P adf]lhd x'g]. 41 Chandra Kanta Bhandari, FCA, CPFA

n]vfk/LIf 0 f k|sf/ – k|fo M # k|sf/n] ug{ ; ls. G 5. 42 Chandra Kanta Bhandari, FCA, CPFA

n]vfk/LIf 0 fsf] b[li 6 sf]0 f �lgoldttf, �ldt. Joo. Ltf, �sfo{b. Iftf, �k|efjsfl/tf / �cf}lr. To 43 g]kfnsf] ; +ljwfg / n]vfk/LIf 0 f P]g -k|yd ; +zf]wg_ @)&# b'j}df o. L b[li 6 sf]0 f cg'; f/ n]vfk/LIf 0 f ug'{kg]{ s'/f p. Nn]v 5. Chandra Kanta Bhandari, FCA, CPFA

Principles Governing an Audit

n]vfk/LIf 0 fsf] ljlw k|0 ffn. Lsf] d"Nof+sg n]vf clen]vsf] k/LIf 0 f kmf. O{n / sfuhftsf] k/LIf 0 f : ynut cjnf]sg tyf lg/LIf 0 f / c. Go pko'St ljlw 45 Chandra Kanta Bhandari, FCA, CPFA

; /sf/L -cl. Gtd_ n]vfk/LIf 0 fsf cfwf/x? �g]kfnsf] ; +ljwfg, �; /sf/L g. Llt, ah]6, sfo{qmd, lgb]{lzsf, �n]vfk/LIf 0 f P]g, @)$*, �; fj{hlgs lgdf{0 f lgb]{lzsf, �cfly{s sfo{ljlw P]g, @)%% / P]= lgodfjn. L, �lgdf{0 f sfo{ ; Dj. Gw. L : j. Ls[t gd{z, @)^$, �; fj{hlgs vl/b P]g, @)^# / P]= lgodfjn. L, �lh. Nnf b/ /]6, @)^$, �Jfflif{s sfo{qmd, �e|d 0 f vr{ lgodfjn. L, @)^$ �cfof]hgf ljj]rgf k|ltj]bg jf cjwf/0 ff kq �lghfdlt ; ]jf P]g, @)$( / P]= lgodfjn. L �; /sf/L n]vfk/LIf 0 f dfgb 08 cfb. L. @)%), �g]kfn ; /sf/ / cy{ d. Gqfnosf] lg 0 f{o Pj+ kl/kqx? �ljle. Gg ljifout P]gx? , ; +ul 7 t ; +: yfx? ; Dj. Gw. L P]gx? , �c. Gt{/fli 6 «o bft[ ; +: yf; +u e. Psf] ; Demf}tf, �c. Gt{/fli 6 «o n]vfk/LIf 0 fsf dfgb 08 x? , 46 Chandra Kanta Bhandari, FCA, CPFA

47 Chandra Kanta Bhandari, FCA, CPFA

48 Chandra Kanta Bhandari, FCA, CPFA

dxfn]vf k/LIfsn] cf}lr. Tosf] b[li 6 sf]0 faf 6 k/LIf 0 f ug]{ s'/fx¿ -s_ lgsf; f cg'; f/ vr{ u/]sf] e. P tfklg a]d'gfl; a t/Lsfn] jf rn crn /fli 6 «o wg a/afb x'g] u/L vr{ e. Psf] dxfn]vf k/LIfssf] lr. Qn] b]v]df To: tf] vr{ / lgsf; fsf] ; Da. Gwdf, / -v_ rn crn /fli 6 «o wgsf] cg'bfg jf /fh: jsf] clex: tfÍg jf vfg. L, h+un, hnzl. Qm cflbsf] ; 'ljwf k|bfg ; Da. Gwdf k§f, nf. O; ]G; , clwsf/ / s'g} c. Go k|sf/af 6 /fh: j jf rn crn /fli 6 «o wg Tofu ug]{ u/L hf/L ul/Psf ; a} lgsf; fx¿sf] ; Da. Gwdf. �a]¿h'sf ; fdf. Go sndx¿ / cf}lr. Tosf] b[li 6 sf]0 faf 6 p. Nn]vg. Lo gb]v]sf c. Go sndx¿ ; d]t cfkmgf] k|ltj]bgdf gkfg{ klg ; Sg]5. 49 Chandra Kanta Bhandari, FCA, CPFA

cl. Gtd n]vfk/LIf 0 f k|lqmof != n]vfk/LIf 0 f of]hgf th'{df, @= n]vfk/LIf 0 f of]hgf sfof{Gjog, #= n]vfk/LIf 0 f k|ltj]bg, $= cg'udg. 50 Chandra Kanta Bhandari, FCA, CPFA

lgsfosf] hfgsf/L KYC n]vfk/LIf 0 f of]hgf ; Dk/LIf 0 f cg'udg Audit Plan (Follow Up) n]vfk/LIf 0 f k|s[of sfof+Gjog (Audit k|ltj]bg Execution) (Reporting) la. Zn]if 0 f Joxf]/f tof/ ug]+ 51 Chandra Kanta Bhandari, FCA, CPFA

n]vfk/LIf 0 fsf k|lqmofut s'/fx? �z'? df n]vfk/LIf 0 f k|j]z a}7 s. �ul. De/ q'6 L b]lv. Pdf lardf hfgsf/L u/fpg]. 5 nkmn ug]{. �c. Gtdf alxu{dg a}7 s. of] a}7 ssf] df. O{Go'6 clgjfo{. �k|f/l. Des n]vfk/LIf 0 f k|ltj]bg hf/L. �#% lbgleq k|f/l. Des n]vfk/LIf 0 f k|ltj]bg pk/ k|ltlqmof. �; Dk/l. If 0 fsf] nflu cg'/f]w ug{ ; Sg]. �!% lbg leq ; Dk/l. If 0 fsf] hfgsf/L lbg'kg]{. 52 Chandra Kanta Bhandari, FCA, CPFA

a]? h' M kl/efiff �cfly{s sfo{ljlw P]g, @)%%, bkmf @ -b_ æa]? h'Æ e. Ggfn] k|rlnt sfg"g adf]lhd k'¥ofpg' kg]{ /Lt gk'¥of. O{ sf/f]af/ u/]sf] jf /f. Vg' kg]{ n]vf g/fv]sf] tyf clgoldt jf a]dgfl; a tl/sfn] cfly{s sf/f]af/ u/]sf] eg. L n]vfk/LIf 0 f ubf{ cf}+Nof. OPsf] jf 7 x¥of. OPsf] sf/f]af/ ; D´g' k 5{. a]? h' = n]vfk/LIf 0 fsf] cfwf/ / n]vfk/LIf 0 fjf 6 b]lv. Psf] Joxf]/f ljr km/s e. Psf] cj: yf Criteria Condition � ; }4 fl. Gts a]? h' / nut. L a]? h' 53 Chandra Kanta Bhandari, FCA, CPFA

a]? h'sf] lsl; d / o; sf] cj: yf -%%cf}+ k|ltj]bg @)&$_ 54 Chandra Kanta Bhandari, FCA, CPFA

a]? h'sf] lsl; d / o; sf] cj: yf -%%cf}+ k|ltj]bg @)&$_ 55 Chandra Kanta Bhandari, FCA, CPFA

a]? h' k|ltzt ; /sf/L lgsfo tkm{ 56 Chandra Kanta Bhandari, FCA, CPFA

a]? h' a 9 b} hfg'sf d'Vo sf/0 fx? �sfof{Gjogdf Nofpg g; lsg] sfg'gsf] lgdf{0 f, � 7'nf b]lv ; fgf ; a} sfof{nonf. O{ Pp 6} sfg'gsf] Joj: yf, �P]g, / lgodx? c: ki 6 / bf]xf]/f] cy{ nf. Ug] vfnsf x'g', �a]? h' u/fpg] / gu/fpg] sd{rf/L ljr le. Ggtf gx'g', �j]? h' km 5{of}6 sf] sfd n]vfsf] dfq xf] e. Gg] efjgf /f. Vg' / j]? h' km 5{of}6 nf. O{ sd k|fyldstf lbg', �clwsf/ vf]Hg] t/ lh. Dd]jf/L jxg gug]{ k|j[lts]f xfj. L x'g', �k]Zs. L lb. Psf] /sd klg nult a]? h' sfod x'g], Dofb leq k]Zs. L km 5 of}{6 df pbfl; gtf, �cf. Gtl/s hf+r -Internal check_ k|0 ffn. L lkmtnf] / k|efjlxg e. Psf] / cf. Gtl/s n]vfkl/If 0 f k|efjsf/L ? kdf x'g g; s]sf]. 57 Chandra Kanta Bhandari, FCA, CPFA

a]? h" ; +k/LIf 0 fsf cfwf/x? �k|df 0 f k]z u/]/, �sfg'g, g. Llt lgodsf] Jof. Vof u/]/, �/sdf. Gt/, ; |f]tf. Gt/ / vr{ ; dy{g u/f. P/, �c; "n pk/ u/]sf] k|df 0 f k]z u/]/, �; f]wegf{ lng] lbg] sfo{ u/]/, �Goflos lgsfosf] km}; nf jf cfb]z, �lg 0 f{o jf km}; nf sfof{Gjog e. Psf] k|df 0 f k]z u/]/, �clwsf/ k|f. Kt clwsf/Laf 6 ldgfxf u/]sf] k|df 0 f k]z u/]/ / �; fj{hlgs n]vf ; ldltsf] lg 0 f{o sfof{Gjog u/]sf] cfwf/df. 58 Chandra Kanta Bhandari, FCA, CPFA

; fj{hlgs lj. Q Joj: yfkgsf r'gf}t. Lx¿ � Establishing balance between/ among Functions, Functionary and fund/ finance � Enable institutional and staffs capacity specially at local level � ; fj{hlgs ; |f]t–; fwgsf] pkof]u glthfd'v. L t'Nofpg' / b. Iftfk"j{s kl/rfng ug'{, � a 9bf] rfn' vr{sf] lgo. Gq 0 f ug'{, k'Fh. Lut vr{df j[l 4 ug'{, the persistent and increasingly significant under-performance of the capital budget. � The pattern of actual expenditure is skewed heavily towards the end of the fiscal year. [Asar Syndrom] � cf. Gtl/s ; fwgn] ah]6 sf] 7"nf] c+z wf. Gg ; Sg] t'Nofpg' � ah]6 cg'dfg sfo{qmddf cfwfl/t tyf oyfy{k/s agfpg', � ; dod} sfo{qmd : j. Ls[t u/L jflif{s vl/b of]hgf tof/ ug{', ; dodf 7]Ssf a. Gbf]a: t ug'{, � cf. Gtl/s n]vfk/LIf 0 f tyf lgo. Gq 0 f k|0 ffn. L ; 'b[9 Ls/0 f ug'{, � cl. Gtd n]vfk/LIf 0 fnf. O{ k|efjsf/L agfpg' 59 Chandra Kanta Bhandari, FCA, CPFA

; fj{hlgs lj. Q Joj: yfkgsf r'gf}t. Lx¿ �a]? h'sf] dfqf 36 f. O{ a]? h' g} gx'g]u/L vr{ Joj: yfkg ug'{ �ljl. Qo hjfkmb]lxtfdf ; 'wf/ ug'{. �hgtfsf] clt glhssf] zf; s. Lo tx; Dd ; fj{hlgs ; ]jfsf] k|jfx / ljt/0 fnf. O{ lgl. Zrttf k|bfg ug{ ; fj{hlgs lj. QLo Joj: yfkgnufot c. Go zf; s. Lo ; 'wf/sf] sfo{ cl 3 a 9 fpg' �lj. QLo ; f. If/tfdf sd. L �k|fb]lzs / : yfg. Lo tx; Dd ljsf; Joj: yfkgsf] Ifdtf a 9 fp. Fb} ; a} txdf hjfkmb]x. L, : j. R 5 / k|efjsf/L ljsf; k|zf; g sfod ug]{ sfo{ �s'zn Pjd hjfkmb]x. L ; fj{hlgs lj. Q -rf}wf}+ of]hgfsf] /0 fg. Llt_ �: yfg. Lo lgsfosf] cf. Gtl/s cfo tyf lj. QLo ; |f]tsf] Joj: yfkg k|efjsf/L agfpg' 60 Chandra Kanta Bhandari, FCA, CPFA

; fj{hlgs lj. Q Joj: yfkgsf r'gf}t. Lx¿ � the approach to setting overall budget ceilings; � incomplete coverage of government operations; � the high level of in-year re-budgeting (virement) which weakens the credibility of the budget preparation process � Overall system (laws, Institutions) is generally well designed but unevenly implemented � large fiscal activities remain outside the scope of the Government budget � lack of/ or unrealistic procurement plans and nonobservance of competitive tendering; � focus of internal audit on transactions and external audit only on “irregularities” as opposed to systemic improvements; � gaps in the monitoring systems 61 Chandra Kanta Bhandari, FCA, CPFA

Fundamental Problem �We have good foundations in terms of: �legal provisions, �Institutional arrangements �Roles and responsibilities �However, weak in implementation/ Application �WHY SO? ? ? �How can it be Addressed? ? 62 Chandra Kanta Bhandari, FCA, CPFA

Due to: �What happens when one does not discharge his/ her duties as expected? Nothing, Instead he/she gets rewards. Impunity �Tolerant societal structure. Even honors/ encourages those getting undue benefits misusing public funds and powers and improving lifestyles. kmnfgf]n] k|ult u/]sf] 5. � Trend of making everyone happy �No Whistle blowing mechanism �Lack of will at Political Leadership, �Policy and operational decisions taken not on righteous basis but based on immediate political benefit that will fetch it out. �Lack of integrity at all sector (Politics, Public administration, business, Non-state actors) Chandra Kanta Bhandari, FCA, CPFA 63 �Biased Media and Civic Society

Theory of Change �Be flexible in framing requirement (laws, policies, programme) but be cruel in implementation/ application �Walk your talk (Do what you say – in policies, laws, regulations, election manifesto) �Promote public integrity �Encourage speak out culture against any wrong doings �Make for appropriate whistle blowing mechanism and protect to the whistle blowers �Make public life of those holding public positions more transparent through various disclosure policies 64 Chandra Kanta Bhandari, FCA, CPFA

Thank you !!!!!! 65 Chandra Kanta Bhandari, FCA, CPFA