Project Concept Development 

Formulating Public Hearing, Public Audit and Social Audit Operating Guidelines

Following Nepal's transition from a unitary to a federal system, it became essential for Provinces and Local Governments to enhance their responsiveness and accountability to citizens. To achieve this, Provinces must ensure that public administration is people-centric, transparent, inclusive, and participatory, delivering benefits to the general public. They should adopt the core principles of good governance, such as the rule of law, corruption-free and efficient administration, decentralization, economic discipline, and effective management of public works and resources. This will enable citizens to access the services they are entitled to in a timely, efficient, and cost-effective manner. Additionally, Provinces must uphold citizens' rights to good governance by transforming the administrative system into a service-oriented and facilitation mechanism.

To strengthen transparency and accountability in public institutions, tools such as public hearings and public audits should be utilized. With this objective, a concept paper was developed to establish guidelines for conducting public hearings, public audits, and social audits. These measures aim to foster regular two-way communication between various ministries, directorates, and service-providing offices of the provincial government and the local communities in Madhesh Province. Based on the document, Public Hearing, Public Audit and Social Audit Operating Guidelines has been formulated.

Formulation of Fiduciary Risk Reduction Strategy and Action Plan

In a democratic governance system, transparent public financial management is essential. This involves efficiently managing resources from collection to allocation, ensuring legal compliance, and emphasizing economy, monitoring, and evaluation. Governments have implemented policies to align budgets with plans, optimize procurement, and enhance expenditure efficiency. The Office of the Comptroller and Auditor General has worked to improve disbursement systems, reduce costs, and promote transparency and accountability. However, provincial and local governments, crucial to federal governance, often fail to maintain financial discipline, leading to increased irregular spending and embezzlement, as highlighted in the Office of the Auditor General's reports. These issues undermine financial credibility and governance. Key challenges in fiscal federalism include financial risk management, governance risks, and public investment management. Recognizing these challenges, the Office of the Chief Minister and Council of Ministers (OCMCM) of Madhesh Province  decided to develop a Fiduciary Risk Reduction Strategy and Action Plan, for which I drafted the concept paper, initiated and finalized by the provincial authorities. Based on the document, Fiduciary Risk Reduction Strategy and Action Plan has been formulated.

Formulation of Human Resource Development and Training Policy

Human resources are vital for building a socialist-oriented, independent, and prosperous economy, as outlined in Nepal’s Constitution. A human resource development plan is essential to fulfill the constitutional right to employment and achieve the Sustainable Development Goals' target of decent work by 2030. Madhesh Province requires skilled human resources to connect education with skills, skills with production, production with markets, and markets with employment and economic growth. Additionally, enhancing employee skills through training and career development is crucial for improving organizational effectiveness and performance. A framework for human resource development should be established to foster intellectual, moral, psychological, cultural, social, and economic growth, enabling individuals to reach their full potential and increase productivity.

The provincial government approved a program and budget for the fiscal year 2020/21 to identify sector-specific human resource needs and develop a training policy. This concept paper aims to project the province’s human resource requirements for the next three years and address the lack of technical personnel in key sectors like education, agriculture, health, and infrastructure development. Despite the Local Government Operation Act, 2017 mandating short-, medium-, and long-term human resource plans, Madhesh Province has yet to formulate such a plan or training policy. Therefore, it was necessary to assess human resource demand and supply, develop a training policy, and enhance the skills of existing personnel to provide effective services to citizens.

Preparing of Internal Control System Guidelines

The Constitution of Nepal 2015 emphasizes the estimation, management, and utilization of public funds, as outlined in various articles related to executive authority, taxation, expenditure, and financial procedures. The Financial Procedures and Financial Accountability Act 2019 aims to create a responsible, transparent, and accountable financial management system by regulating budget formulation, expenditure, accounting, internal control, and auditing. Chapter 6 of the Act mandates that all federal, provincial, and local government offices must establish and implement an internal control system. Similarly, the Financial Procedures and Financial Accountability Regulations 2020 require ministries and central bodies to ensure economical, efficient, and risk-free operations, along with reliable financial reporting. The Intergovernmental Financial Management Act 2017 and the Local Government Operation Act 2017 also stress the need for an internal control system to ensure transparent financial management and accountability at all government levels. Therefore, the internal control system guidelines is essential to operationalize these legal provisions, enabling continuous supervision and monitoring to ensure compliance with laws. Its primary objective is to enhance public accountability and transparency by making government operations regular, economical, efficient, and effective, while maximizing resource utilization and ensuring credible reporting. However, the Office of the Auditor General report highlighted weaknesses in financial discipline, including irregular spending, ineffective internal controls, and unresolved audit issues. Non-compliance with laws, failure to implement internal control systems, and procedural lapses, such as unauthorized purchases and payroll tax discrepancies, further exacerbate these challenges in Madhesh province. Despite the legal mandate, provincial accounting officers have not yet established internal control systems, underscoring the urgent need for guidance to align with updated laws and improve financial governance. This concept paper aimed to address these gaps by formulating and implementing an internal control system guidance for Madhesh province. Based on the concept paper Internal Control System Guidelines of Madhesh province have been developed and implemented.