Class 10 Account (Office Management and Accounting)

Office of the Auditor General (OAG):
The Office of the Auditor General is a supreme and independent constitutional body established by the Constitution of Nepal. It is headed by the Auditor General, who is appointed by the President on the recommendation of the Constitutional Council.

The main work of this office is to serve as the guardian and watchdog of the country’s public funds. It conducts the Final Audit of the accounts of all bodies at the Federal, Provincial, and Local levels of government — including constitutional bodies, courts, the Nepalese Army, Nepal Police, and fully government-owned public enterprises — to determine whether their accounts have been maintained in a lawful, regular, and prudent manner. This office performs an effective watchdog function on behalf of Parliament and the citizens to maintain financial good governance in the country, prevent corruption, and make government spending publicly accountable.

The Ministry of Finance, which serves as the backbone of Nepal’s economic and financial system, performs the following main functions:

• Policy and Planning Formulation: Formulating and implementing the country’s overall macroeconomic policy, revenue policy, banking and financial policy, and policies related to foreign aid and loans.
• Annual Budget Preparation: Estimating the country’s resources and revenues, presenting the National Budget (Annual Revenue and Expenditure Estimate) in Parliament each year, and allocating the approved budget among the various government bodies.
• Revenue Mobilization: Identifying new areas and sources for tax and non-tax revenue collection, and making the revenue administration efficient and effective.
• Public Debt Management: Identifying the need for, obtaining, and properly managing the repayment of principal and interest on the country’s internal and external loans.
• Economic Monitoring and Control: Monitoring government expenditure to maintain economy and financial discipline, and controlling the budget of bodies that violate financial discipline.

District Treasury Comptroller Office (DTCO):
The field offices of the Financial Comptroller General Office established in all 77 districts of the country — to implement, coordinate, and monitor the government’s financial activities at the district level — are called the District Treasury Comptroller Offices (DTCOs).

Their main functions are as follows:

• 1. Budget Release and Fund Operation: To release funds to all government offices located in the district according to the approved budget, and to operate the Treasury Single Account (TSA).
• 2. Internal Audit: To regularly conduct Internal Audits to check whether the financial transactions of government bodies in the district have been carried out in a regular and rule-compliant manner.
• 3. Financial Report Compilation: To prepare monthly summaries of revenue collection, retention deposits, and budget expenditure from across the district, and to forward these reports to the Financial Comptroller General Office.
• 4. Inspection and Advisory: To inspect whether the accounting records of the offices in the district are being properly maintained, and to provide technical advice and coordination for improving financial administration.

In Nepal’s federal structure, the Constitution has granted autonomy to Local Level bodies (Rural Municipalities and Municipalities) to exercise their own financial powers. The list of main activities related to financial administration at the Local Level is as follows:

• Local Budget Formulation and Approval: Based on local needs, projecting internal revenue and grants, and presenting and getting the annual budget approved at the Village or Municipal Assembly.
• Revenue Collection: Collecting local taxes (such as house rent tax, property tax, and business tax) and service charges as prescribed by law.
• Local Consolidated Fund Operation: Operating and managing the accounts of the local body’s own separate Local Consolidated Fund.
• Expenditure and Accounts Management: Mobilizing the budget for infrastructure development and administrative activities, and maintaining accounts in accordance with the prevailing government accounting system (G.A. forms).
• Internal and Final Audit: Getting their own financial transactions internally audited, and at the end of the financial year, getting the Final Audit conducted by the Office of the Auditor General (OAG) and settling audit irregularities (Beruju).

To operate Nepal’s Government Accounting System in a lawful, organized, and accountable manner, various government bodies at different levels work in an interconnected manner. These bodies are classified and briefly introduced as follows:

• 1. Policy and Budget Formulation Body (Ministry of Finance): This is the highest executive body of the country’s financial administration. It prepares the annual budget, allocates resources among government bodies, and sets the country’s fiscal policy. All of the government’s economic activities are conducted under its overall direction and oversight.
• 2. Supreme Account-Keeping and Fund Management Body (Financial Comptroller General Office — FCGO): Established in 2032 B.S. (1975 A.D.) under the Ministry of Finance, this office operates the Government of Nepal’s Consolidated Fund. It runs the payment system through the Treasury Single Account (TSA), maintains records of all government revenues, and prepares the country’s consolidated financial statements.
• 3. District-Level Coordination and Fund Release Body (District Treasury Comptroller Office — DTCO): These offices, located in all 77 districts of the country, function as the field representatives of the Financial Comptroller General. They release approved budget funds to the offices in their respective districts, maintain income records, and conduct regular Internal Audits.
• 4. Supreme Auditing Body (Office of the Auditor General — OAG): This is an independent constitutional body established by the Constitution of Nepal. It conducts the Final Audit of the financial transactions of all government offices at the Federal, Provincial, and Local levels, and submits an Annual Audit Report to the President. It serves as a watchdog for maintaining financial transparency.
• 5. Government’s Banker (Nepal Rastra Bank — NRB): This is the government’s financial agent and advisor. It manages the government’s funds securely, processes payment settlements through the banking system, and handles the government’s banking transactions, including acting as the custodian of government accounts.

In accordance with the federal structure, the Provincial Treasury Comptroller Office has been established to manage provincial-level financial administration and fund management. The main functions of this office and the Provincial Account Control Units at the district level are as follows:

• Operation of the Provincial Consolidated Fund: Since the Provincial Government has its own separate Consolidated Fund, this office is responsible for operating, managing, and overseeing the bank account of that fund.
• Provincial Budget Release: To provide expenditure authorization and fund releases to the ministries and offices under the Province, in accordance with the annual budget approved by the Provincial Assembly.
• Preparation of Consolidated Financial Statements: To collect monthly and annual expenditure and revenue data from all offices at the provincial level, and to prepare the consolidated financial statements of the Provincial Government.
• Internal Audit and Reporting: To have Internal Audits conducted of the offices under the Provincial Government, and to prepare consolidated reports on audit irregularities (Beruju) and forward them to the concerned ministry.
• Financial Regulation and Technical Support: To coordinate compliance with the financial procedures and financial accountability laws and regulations of the province, and to provide the necessary technical guidance to accounting staff.

Banking management plays a major role in making Nepal’s government financial transactions secure, simple, transparent, and modern. This system can be explained on the following grounds:

• Role of Nepal Rastra Bank (NRB): As the country’s central bank, Nepal Rastra Bank is the government’s main banker. It manages the government’s central Consolidated Fund and various other accounts. In areas where Nepal Rastra Bank does not have a branch, it grants permission (agency) to other commercial banks to carry out government transactions on its behalf.
• Treasury Single Account System (TSA): Nepal has implemented the Treasury Single Account (TSA) system to make government payments technology-friendly and efficient. Under this system, each district’s DTCO has a single main bank account. Payments made by spending offices are transferred directly (via Direct Transfer) by the bank into the bank account of the concerned individual or organization, thereby eliminating the hassle of cash payments and cheque-based transactions.
• Revenue Management Information System (RMIS): Citizens or organizations submit taxes, fees, or revenue payable to the government through the revenue counters of designated commercial banks. The revenue collected by the banks is then deposited into the government’s treasury account on a daily basis through the Revenue Management Information System (RMIS).
• Deposit and Other Fund Management: For retention/security deposit amounts received at government offices, a separate Deposit Account is also opened at the bank. The operation of this account is also governed strictly by the prescribed banking rules and regulations.