PEs, FCGO name their own figures

The government investment in the Public Enterprises (PE) differs in the records of the PEs and Financial Comptroller General's Office (FCGO). A representative of the Office of the Auditor General (OAG) raised this issue during an interaction with the chiefs of state-owned enterprises at the Finance Ministry last week. After the OAG expressed its concern, the Finance Ministry directed the public enterprises whose records do not match the FCGO's to reconcile the accounts by the end of the current fiscal year. "We have directed them to come clear on it," said Tanka Mani Sharma, joint secretary at the Finance Ministry.

A few years ago, the cabinet had decided to transfer shares of Nepal Industrial Development Corporation worth Rs. 47.5 million owned by Nepal Rastra Bank (NRB) to the government. Nepal Industrial Development Corporation transferred the shares from NRB to the government, but failed to inform the Financial Comptroller General's Office (FCGO) about it. As a result, the records kept by the two institutions differed.

Likewise, the government had made a loan investment of Rs. 8.2 million in Nepal Telecom in the fiscal year 2000/01. The FCGO kept a record of the investment, but Nepal Telecom did not, and so their records differed.

These are some instances provided by the FCGO about how their records have differed and need to be reconciled. There is a difference of Rs. 15.38 billion in the records of state-owned enterprises and the FCGO as of fiscal year 2007/08 which comprise both shares and loan investments of the government, shows the records of the Finance Ministry. The FCGO data shows that the government's share investment in 13 state-owned enterprises remained at Rs. 72.80 billion it was Rs. 66.13 billion in state-owned enterprises' records. Likewise, the loan investment in 12 state-owned enterprises stands at Rs. 63.95 billion as per the FCGO records against Rs. 55.37 billion of state-owned enterprises' records.

The amount of investment as shown by some state-owned enterprises is bigger than what the FCGO recorded and vice versa in some cases. The Nepal Electricity Authority, Nepal Drinking Water Corporation, Nepal Telecom and Civil Aviation Authority of Nepal have witnessed bigger differences in records.

The OAG has long been asking the government in its successive reports that the gap should be reconciled. According to an OAG report of 2008, the lack of a one-window system in investment, the failure of the investment making agency to report to the FCGO and direct investment by a government agency without going through the OAG are the reasons behind the gap in records.

The FCGO audits the financial transactions of 37 public enterprises in which the government has a 100 percent stake. "Although we continue to follow up the state-owned enterprises and FCGO to reconcile their differences in records in the run-up to preparing our annual report, they have been failing to do so," said Ramesh Raj Satyal, deputy auditor general. "It shows the accounting inefficiency of government agencies," he added.

The state-owned enterprises showing lower investment of the government in them means they have to pay less dividends to the government in case they make a profit and those reporting higher investment are paying more dividends. An official at the FCGO said that the FCGO had already sent letters to 12 state-owned enterprises two months ago asking them to reconcile their records with the FCGO records within three months.
Source:eKantipur