chhatramani/nepal_legal_acts_corpus_english huggingface dataset:
Economic Procedure and Financial Accountability Act, 2019

Explanation: For the purpose of this sub-section, "proposed project or program" means a project or program for which a feasibility study and detailed study report have been prepared or which, after a feasibility study, can be implemented, that has been entered into the project bank, including details of the project or program and activities with confirmation of the cost estimate prepared for the implementation of such project or program.

(4) Other provisions relating to the Medium-Term Expenditure Structure shall be as prescribed. 7. Estimation of Resources and Determination of Expenditure Ceiling to be Made: Amended by the first amendment.(1) The Planning Commission shall, in coordination with the Ministry of Finance, make a preliminary estimate of resources likely to be available and the expenditure ceiling that can be incurred for the coming three years, by the end of the month of Magh of the current fiscal year, for the purpose of preparing the Medium-Term Expenditure Structure and the budget and programs for the coming fiscal year.

(2) For the purpose of sub-section (1), there shall be a National Resource Estimate Committee under the chairpersonship of the Vice-Chairperson of the Planning Commission.

(3) The Resource Estimate Committee pursuant to sub-section (2) shall estimate the total national resources for the Federal, Provincial and Local Levels for the coming three fiscal years, based on the investment and financial requirements projected in the periodic plan.

(4) When estimating resources pursuant to sub-section (3), the estimate shall be made objectively based on the annual macroeconomic indicators of the last fiscal year and the six-month indicators of the current fiscal year, as well as revenue likely to be available in the coming fiscal years, development assistance, internal loans, and other amounts that may be deposited into the Federal Consolidated Fund.

(5) After the estimation of resources pursuant to sub-section (3), the expenditure ceiling shall be determined considering the current year's Medium-Term Expenditure Structure as well.

(6) When determining the expenditure ceiling pursuant to sub-section (5), it shall be done in a manner that does not adversely affect macroeconomic stability, including the amount of liabilities created pursuant to Section 12 and the amount remaining to be paid according to commitments made, within the expenditure ceiling. Amended by the first amendment.(7) The Resource Estimate Committee shall submit a report on the estimation of resources and determination of expenditure ceiling prepared pursuant to sub-sections (3) and (5) to the Minister of Finance by the seventh day of the month of Falgun of each year.

(8) The composition, other functions, duties and powers of the Resource Estimate Committee pursuant to sub-section (2), and other provisions relating to the determination of the expenditure ceiling shall be as prescribed. 8.
Economic Procedure and Financial Accountability Act, 2019

10. Budget Appropriation: (1) The Ministry of Finance shall propose a budget for the coming fiscal year based on the budget discussion held pursuant to Section 9 and the evaluation and analysis of the proposed budget and programs. When making such budget proposal, the following shall be done:-
(a) When proposing a budget for current and capital expenditure and financial arrangements, submit justification including the clear basis and reasons for creating such expenditure, details mentioned in necessary policies, laws, treaties, agreements, expenditure norms, and for social programs, justification with details of state priorities, targets and results expected consistent with the objectives of the organization,
(b) When proposing a budget for a new plan or program, if it is of a capital nature, propose the amount likely to be spent in the coming year based on an approved feasibility study report along with technical and economic justification,
(c) In the case of projects for which feasibility studies have been conducted, approved, and are being implemented on a continuing basis, propose evidence of continuing project approval, procurement master plan and annual procurement plan or work plan for the coming year as per agreement, and the amount required to obtain results,
(d) When proposing a budget for projects and programs, propose projects and programs that yield higher results or achievements, have higher comparative advantage, and provide high social benefits,
(e) When proposing a budget, it shall be done according to the prescribed expenditure norms.

(2) When proposing a budget pursuant to sub-section (1), amounts for new plans and programs shall be proposed only after setting aside sufficient amounts for expenditures including salaries, allowances and administrative expenses that create expenditure liability according to liabilities and commitments created pursuant to Section 12.

(3) Amended by the first amendment.(3) When formulating the budget pursuant to this Section, the Ministry of Finance may, based on resource availability, expenditure necessity and spending capacity, increase, decrease or modify the budget amount, programs or activities proposed by Ministries and Central Bodies, and finalize the budget. If there is a substantive increase, decrease or modification in the proposed budget and programs, the concerned Accounting Officer shall be informed thereof. 11.
Economic Procedure and Financial Accountability Act, 2019

If there is a substantive increase, decrease or modification in the proposed budget and programs, the concerned Accounting Officer shall be informed thereof. 11. Principles and Priorities of Budget and Programs: Amended by the first amendment.(1) The Minister of Finance shall present to the Federal Parliament the details of the principles of the Government of Nepal's budget and programs and the priorities of projects or programs to be included in the Appropriation Bill, at least fifteen days before presenting the Appropriation Bill for each fiscal year pursuant to this Act.

(2) Amended by the first amendment.(2) After the details of the principles and priorities of the budget and programs are presented to the Federal Parliament pursuant to sub-section (1), the Federal Parliament may, after a general discussion thereon, if it deems necessary to include any matter, delete any matter, or give any suggestions or directives in relation thereto, send such suggestions and directives to the Ministry of Finance within seven days.

(3) If no suggestions or directives are received within the period pursuant to sub-section (2), it shall not prevent the finalization of the budget and programs.

(4) The Ministry of Finance shall, before preparing the estimates of income and expenditure for the coming fiscal year, make necessary consultations with relevant experts or stakeholders regarding the principles and priorities of the budget and programs to be presented to the Federal Parliament. 12.
Economic Procedure and Financial Accountability Act, 2019

12. Management of Contingent Liabilities and Commitments: (1) The Ministry of Finance shall maintain records in a manner that clearly shows the details of amounts corresponding to liabilities created pursuant to prevailing federal laws, as well as contingent financial liabilities arising from various treaties, agreements or court decisions and orders, or commitments made to grant revenue exemptions, based on which liability has arisen.

(2) No office or extra-budgetary public entity shall, without the prior consent of the Ministry of Finance, amended by the first amendment. create financial liability for the Government of Nepal or make expenditure commitments.

(2a) Added by the first amendment.(2a) Ministries and Central Bodies may, subject to the criteria determined by the Ministry of Finance pursuant to sub-section (4) of Section 24, and after analyzing the number of continuing and multi-year projects and created liabilities, propose resource consent for multi-year projects to the Planning Commission and the Ministry of Finance, with justification that the created liabilities can be managed within the budget ceiling of the coming year.

(2b) Added by the first amendment.(2b) If a proposal is received pursuant to sub-section (2a), the Ministry of Finance may grant resource consent based on resource mobilization and the state of the Consolidated Fund and resource availability.

(3) Other provisions relating to contingent financial liabilities, commitment management, and resource consent that the Government of Nepal amended by the first amendment. may have to bear shall be as prescribed. 13. Preparation of Estimates of Revenue and Expenditure: The Ministry of Finance shall include the following details in the estimates of revenue and expenditure:-
(a) Details of whether revenue was collected according to the revenue estimate of the previous fiscal year, and whether expenditure was made from the amount allocated to each Ministry and whether the targets according to the expenditure were achieved or not,
(b) The Medium-Term Expenditure Structure pursuant to Section 6,
(c) Details of programs to be borne for each expenditure heading from the Government of Nepal's resources, foreign assistance and internal loans,
(d) Projection of revenue and expenditure for the coming three fiscal years,
(e) Details relating to loans, investments and liabilities,
(f) Fiscal policy mentioning the strategy to be adopted to maintain economic balance,
(g) Macroeconomic situation mentioning the growth rate of Gross Domestic Product, inflation, current account balance and balance of payments position for the coming three fiscal years,
(h) Details of tax or non-tax exemptions granted,
(i) Details of foreign assistance received in the previous fiscal year. 14.
Economic Procedure and Financial Accountability Act, 2019

14. Estimates of Revenue and Expenditure to be Presented: (1) The Minister of Finance shall present the estimates of revenue and expenditure of the Government of Nepal for the coming fiscal year and the Bill, prepared pursuant to Section 13, to the joint sitting of both houses of the Federal Parliament on the fifteenth day of the month of Jestha of each year.

(2) Before presenting the estimates of revenue and expenditure pursuant to sub-section (1), the Minister of Finance shall present the Economic Survey of the current year to the Federal Parliament. 15. Deficit Budget May be Presented: (1) The estimates of revenue and expenditure to be presented pursuant to Section 14 may be presented as a deficit budget as necessary.

(2) When presenting a deficit budget pursuant to sub-section (1), the clear basis for mobilizing resources to meet the budget deficit shall also be stated.

(3) Notwithstanding anything contained elsewhere in this Section, a deficit budget shall not be presented to meet administrative expenses. 16. Projection of Macroeconomic Targets: Projection of macroeconomic targets shall be made as prescribed based on revenue mobilization, utilization of internal and external loans, and policy relating to overdrafts to be taken by the Government of Nepal. 17. Classification of Projects and Project Bank: (1) The classification of projects to be operated by the Government of Nepal at the Federal, Provincial and Local Levels shall be done by the Government of Nepal on the recommendation of the Planning Commission.

(1a) Added by the first amendment.(1a) When classifying projects pursuant to sub-section (1), the total cost of the project, the minimum limit of annual appropriation amount, and technical aspects shall also be taken as a basis. The total cost of the project and the minimum limit of appropriation for each fiscal year shall be determined before the start of the budget formulation schedule.

(2) There shall be a Project Bank at the national level in the Planning Commission.

(3) The concerned Ministry shall get projects entered into the Project Bank pursuant to sub-section (2) based on the criteria prescribed by the Planning Commission.

(4) Other provisions relating to classification, basis and determination of criteria for projects, and the Project Bank shall be as prescribed. Chapter-4
Budget Disbursement, Expenditure and Control

18.
Economic Procedure and Financial Accountability Act, 2019

Chapter-4
Budget Disbursement, Expenditure and Control

18. Budget Disbursement: (1) After the commencement of the Appropriation Act or the Vote on Account Act, an office may, on the basis of the approved budget statement and annual program, incur expenditure from the amount mentioned in the schedule of the Appropriation Act in accordance with this Act.

(2) In case the appropriated amount mentioned in the schedule of the Appropriation Act has to be spent by more than one office, the concerned Ministry or Body shall, within seven days of the issuance of the Appropriation Act or the Vote on Account Act, allocate source-wise to the concerned department or office, along with the results and achievements to be attained, and authorize expenditure.

(3) Information about the authorization given pursuant to sub-section (2) shall be sent immediately to the Ministry of Finance, the Office of the Comptroller General, and the concerned Fund and Account Controller Office.

(4) If it is necessary to operate a program and incur expenditure through an office under another Ministry or Body from the amount appropriated under one Ministry or Body, the Secretary of the appropriating body shall grant authorization to incur expenditure to the Secretary of the concerned Ministry or Body.

(5) The Secretary granting authorization pursuant to sub-section (4) shall be accountable as the Accounting Officer, and the Secretary receiving authorization to incur expenditure shall cause to fulfill the duties and responsibilities of both the Responsible Person and the Accounting Officer.

(6) The amount appropriated or allocated in the name of the concerned office shall be disbursed from the Federal Consolidated Fund based on the payment order of that office through a single account fund system or other prescribed system according to the procedure prescribed by the Office of the Comptroller General.

(7) The Head of the concerned office shall be responsible for receiving disbursement pursuant to prevailing law, incurring expenditure, maintaining accounts, reporting, arranging for audit, and settling irregularities of the amount appropriated or allocated in the name of the concerned office.

(8) Other procedures relating to disbursement and payment of government money and operation of funds shall be as prescribed. 19.
Economic Procedure and Financial Accountability Act, 2019

19. Implementation of Approved Budget and Programs: (1) If expenditure is not made in accordance with the approved budget target for his/her office and subordinate offices, the Accounting Officer shall be responsible therefor.

(2) The duty and responsibility of implementing the budget shall be of the concerned Accounting Officer and subordinate Responsible Persons, subject to the approved budget and programs pursuant to the Appropriation Act or other Act.

(3) The officers pursuant to sub-section (2) shall prepare an action plan in accordance with the direction of the Ministry of Finance or the Supervising Office and implement or cause to implement the budget.

(4) The action plan pursuant to sub-section (3) shall include, as prescribed, the annual procurement plan, monthly cash flow statement, achievement measurement indicators, and implementation timeline.

(5) For the implementation of the budget and programs, the departmental head or Responsible Person shall enter into a performance agreement with the Secretary, and the Head of Office or Responsible Person shall enter into a performance agreement with the departmental head, including necessary result indicators.

(6) An officer or Responsible Person achieving excellent results in the performance pursuant to sub-section (5) may be rewarded by the authority entering into the performance agreement, subject to the conditions mentioned in the performance agreement.

(7) Other provisions relating to the performance agreement and criteria for reward to be made pursuant to this Section shall be as prescribed. 20. Re-appropriation, Source Transfer and Program Modification: (1) If there is a shortfall in a budget sub-heading under one budget code mentioned in the Appropriation Act, the Ministry of Finance may, within the limit mentioned in the Appropriation Act, make re-appropriation from the amount that will be saved in sub-headings under one or more other budget codes mentioned in that Act.

(2) If there is a shortfall in current expenditure under a budget sub-heading under the budget code of his/her Ministry or Body, the concerned Secretary may, within the limit mentioned in the Appropriation Act, make re-appropriation from other current budget sub-headings where amount has been saved under that budget code, in a manner that does not change the source of expenditure, to current expenditure headings as prescribed:
Provided that, while making such re-appropriation, amounts appropriated for mandatory obligations such as salary, remuneration, allowance, uniform, food, water and electricity, communication charges and house rent, and for capital expenditure, shall not be re-appropriated to current expenditure.

(3) The Ministry of Finance shall make re-appropriation of capital expenditure, financial arrangement and loan repayment.

(4) The Ministry of Finance shall have the authority to transfer source from one source of expenditure under the Appropriation Act to another source, and to change the payment method.
Economic Procedure and Financial Accountability Act, 2019

Added by the first amendment.(4a) If a program under the approved budget and programs cannot be implemented, and the amount appropriated for such program needs to be spent on any other activity within the approved program, the Ministry of Finance may, on the recommendation of the Ministry, modify the program. Added by the first amendment.(4b) If a foreign grant or loan agreement is concluded in the middle of a fiscal year and additional amount needs to be included in an ongoing project, the Ministry of Finance may, upon request from a Ministry or Central Body, re-appropriate or transfer source for such project, provided that the total amount under the foreign assistance heading included in the Appropriation Act is not exceeded. Added by the first amendment.(4c) Notwithstanding anything contained elsewhere in this Section, if expenditure has to be made on disaster management and immediate source arrangement is necessary, the Ministry of Finance may, within the limit of the total annual budget, include additional programs or activities in the approved program of the Ministry or Central Body and make re-appropriation, source transfer or additional disbursement.

(5) Other provisions relating to re-appropriation, source transfer and program modification of the budget shall be as prescribed. 21. Budget Freeze or Control and Surrender: (1) Notwithstanding anything contained in Section 18, considering the economic situation of the country and the amount remaining in the Federal Consolidated Fund, the Ministry of Finance may, as necessary, fully or partially freeze or control the appropriated amount other than the amount creating expenditure liability on the Federal Consolidated Fund.

(2) If the amount appropriated in the Appropriation Act that needs to be divided among various bodies and subordinate offices is not divided by the Accounting Officer by the end of the month of amended by the first amendment. Ashwin of the fiscal year, the Ministry of Finance may freeze such amount.

(3) If any amount included in the Appropriation Act and the program operated from such amount is not spent by the end of the month of amended by the first amendment. Falgun of the fiscal year, or cannot be spent in the remaining period, the Accounting Officer shall surrender such amount to the Ministry of Finance by the fifteenth day of Chaitra.

(4) If the amount not surrendered pursuant to sub-section (2) or (3) is not divided according to the expenditure details, or is not spent by the end of amended by the first amendment.
Economic Procedure and Financial Accountability Act, 2019

Falgun, or cannot be spent in the remaining period, the Ministry of Finance shall freeze such amount and cause it to be surrendered.

(5) If a letter is received from the Ministry of Finance for surrender pursuant to sub-section (4), the Accounting Officer shall surrender such amount within seven days and send it to the Ministry of Finance.

(6) The amount surrendered pursuant to this Section may be re-appropriated by the Ministry of Finance to

28. Deposit of Cash and Kind and Accounting: (1) The responsible person shall, in the case of government cash under their responsibility, deposit it at the appropriate place and maintain records on the same day or the next day, and in the case of goods in kind, within seven days.

(2) If it appears that government cash under their responsibility has not been deposited at the appropriate place on the same day or the next day, if the delay is up to ten days, the concerned controlling office or departmental head shall impose a penalty of ten percent of the outstanding amount and the amount to be deposited, and cause that to be deposited as well, and if the delay is longer, impose a penalty at the rate of ten percent and cause it to be deposited, and may also initiate or cause to initiate departmental action in accordance with the prevailing law based on the severity of the offense. Provided that, considering the distance between the bank and the office, if the Office of the Comptroller General has specified a deadline for depositing cash, it must be done according to that deadline.

(3) If the responsible person is unable to maintain records of the deposit of cash and kind within the period mentioned in sub-section (1), they may request an extension of the period from the officer one level above, stating reasonable cause.

(4) Upon receipt of a request for an extension of the period pursuant to sub-section (3), if the officer one level above finds reasonable cause, they may grant an extension of up to a maximum of thirty days, either at once or in two installments. 29.
Economic Procedure and Financial Accountability Act, 2019

29. Submission of Accounts and Financial Statements: (1) The Office of the Comptroller General shall submit, within the specified period, the accounts of additional foreign grants, loan assistance, and investments of the Federal Consolidated Fund, and the consolidated financial statement of the central accounts including appropriation, revenue, deposits, and other funds for each fiscal year to the Office of the Auditor General.

(2) The Account Officer shall prepare the central financial statement of all income and expenditure of each fiscal year of subordinate offices added by the first amendment.and public entities outside the budget system (extra-budgetary), and submit it to the Office of the Comptroller General and the Office of the Auditor General within the specified period.

(3) The responsible person shall submit the accounts of the transactions of their office and related documents to the Account Officer or the office designated by them, or to the Auditor General, within the specified period and as prescribed.

(4) If a request for an extension of the period is made by showing a reasonable cause for the inability to submit the account statements pursuant to sub-sections (2) and (3), the officer one level above may grant an extension of up to a maximum of thirty days. Provided that, while granting an extension of the period in this manner, it must be done in such a way that the timeframe for submitting the central accounts to the Office of the Auditor General is not affected.

(5) If the Account Officer or responsible person is unable to submit the accounts and financial statements to the Office of the Auditor General within the specified period and requests an extension of the period by showing a reasonable cause, the Auditor General or an officer designated by them may grant an extension of up to a maximum of thirty days.

(6) If an extension of the period is not requested pursuant to sub-section (5), or if the accounts and financial statements are not submitted even within the extended period, the Auditor General may issue a directive to the Account Officer, if they are the responsible person, or to the officer one level above, if they are the Account Officer, to submit such accounts and financial statements.

(7) If an official fails to submit accounts and financial statements even after being directed pursuant to sub-section (6), the Auditor General may send a letter to the concerned ministry to initiate departmental action against that official in accordance with the prevailing law.

(8) Other procedures relating to the submission of revenue, cash, kind, and deposits, and maintaining updated accounting records thereof shall be as prescribed. 30.
Economic Procedure and Financial Accountability Act, 2019

30. Recovery of Loss or Damage: If any kind of loss, damage, or harm is caused to the Government of Nepal due to failure to properly maintain transaction accounts required to be kept under this Act, such loss, damage, or harm shall be recovered from the responsible person in the same manner as government arrears. Chapter-6

Internal Control and Audit

31. Internal Control System: (1) All government offices at the Federal, Provincial, and Local levels shall prepare and implement an internal control system for their office and subordinate offices.

(2) The Account Officer shall, themselves or through a senior officer under their authority, regularly inspect and supervise whether the internal control system of the office has been effectively implemented or not.

(3) The format and procedure of the internal control system shall be as prescribed. 32. Audit and Internal Control Committee: (1) For the implementation of the internal control system, internal and final audit reports, there shall be an Internal Control Committee in each ministry or body as follows:

(a) Account Officer of the concerned ministry or body, or an officer designated by them - Coordinator
(b) Chief of the Planning Division of the concerned body - Member
(c) Chief of the Administration Division of the concerned body - Member
(d) Concerned official working in the concerned body, having knowledge and experience in the subject area, designated by the Coordinator - Member
(e) Chief of the Monitoring Division or Section of the concerned body - Member
(f) Chief of the Financial Administration of the concerned body - Member-Secretary

(2) The Committee pursuant to sub-section (1) shall perform the necessary work to ensure that the tasks performed by its office or body and subordinate offices are carried out efficiently and economically, result-oriented, to mitigate financial risks, to make financial statements reliable, and to strengthen and make effective the internal control system by settling or causing to settle irregularities pointed out in the audit.

(3) Other procedures of the Audit and Internal Control Committee shall be as prescribed. 33.
Economic Procedure and Financial Accountability Act, 2019

33. Internal Audit: (1) Internal audit of the transactions of each office of the Government of Nepal shall be conducted by the Office of the Comptroller General or the Office of the Fund and Account Controller designated by that office, based on regularity, economy, efficiency, and effectiveness.

(2) The responsibility for having the internal audit of its office conducted shall lie with the concerned office chief.

(3) The functions, duties, and powers of the internal auditor shall be as follows:

(a) To conduct a thorough examination of the accounts, supporting documents, and figures regarding the mathematical accuracy and compliance with the law of transactions related to the performance of work in accordance with the objectives of the concerned body, and according to the accounting directives approved by the Government of Nepal,
(b) To review the result-oriented use and effectiveness of resources mobilized during the performance of work of the concerned office or body based on risk analysis, provide recommendations, and present recommendations after evaluating the managerial practices of policy and procedural first aspects including the internal control system adopted,
(c) While examining pursuant to clause (a), to inquire into the adequacy of the internal control system of the concerned body, promoting public financial accountability and transparency, and provide recommendations regarding its strengthening and compliance with financial discipline,
(d) To inspect, examine, and check the financial transactions and related documents, records, and decisions of the concerned body for the purpose of internal audit.

(4) The internal auditor shall conduct an internal audit every three months and submit a report including the details pointed out during the audit along with recommendations to the concerned office or body chief and the controlling office that delegated the authority within one month of the completion of the internal audit.

(5) The internal auditor shall, while performing their duties and exercising their powers, be accountable to the body that deputes them and conducts the internal audit, and shall adhere to integrity, objectivity, confidentiality, competence, and other prescribed conduct as prescribed.

(6) The internal auditor shall not provide any information or fact learned during the course of the audit to anyone in any form other than including it in the audit report.

(7) No legal action shall be initiated against the internal auditor solely on the basis of exercising the powers pursuant to this Act and conducting internal audit during the course of their performance.
Economic Procedure and Financial Accountability Act, 2019

Provided that, if the internal auditor commits an improper act or is proven to have performed duties with mala fide intention, it shall not be deemed to prevent action or prosecution in accordance with the prevailing law.

(8) The Account Officer shall cause the details included in the internal audit report to be settled and reviewed before the final audit and present them to the final auditor.

(9) Regarding the suggestions of the internal audit presented at the time of the final audit, the auditor may present suggestions other than those removed with reasons in the final audit report as their own suggestions.

(10) The Office of the Comptroller General shall, to make the internal audit independent, impartial, and effective, make arrangements to depute employees of the accounts group for internal audit by specifying a minimum period. Provided that the same employee shall not be assigned to both accounting and internal audit work.

(11) The Office of the Comptroller General shall prepare an integrated annual report of the internal audit and submit it to the Minister of Finance within the month of Kartik each year.

(12) Other procedures relating to internal audit shall be as prescribed. 34. Internal Audit of Province and Local Level: (1) The Province and Local Level shall conduct or cause to conduct an internal audit based on the regularity, economy, efficiency, and effectiveness of accounts and financial transactions.

(2) Based on the matters pointed out in the internal audit report pursuant to sub-section (1), it shall be the duty of the concerned Province and Local Level to make necessary corrections.

(3) The Province and Local Level shall constitute an audit committee to examine whether corrections have been made as mentioned in the internal audit report and to take necessary action.

(4) The Province and Local Level shall submit the report presented by the internal auditor and the report on the action taken thereon, in the case of the Province, to the concerned Minister, and in the case of Local Level, to the Chief. 35. Final Audit: (1) Every office shall submit the accounts and financial statements as prescribed of all types of income, expenditure, and transactions and have them finally audited by the Office of the Auditor General.

(2) The Auditor General shall also take the report of the internal auditor as a basis while conducting the final audit. 36.
Economic Procedure and Financial Accountability Act, 2019

36. Accounts and Statements of Transactions to be Submitted: (1) It shall be the duty of the concerned official or responsible person to submit, within the prescribed period, answers to questions asked or accounts and statements requested by the auditor during surprise inspection of the accounts of government cash, kind, income, and expenditure of the office, or during the course of internal or final audit.

(2) If the concerned official or responsible person requests additional time, stating a reasonable cause for the inability to submit the requested statement within the prescribed period pursuant to sub-section (1), the auditor may grant them reasonable time to submit the answers to the questions asked or the requested accounts and statements.

(3) If unable to submit answers to the questions asked or the requested accounts and statements within the period given pursuant to sub-sections (1) and (2), the concerned official or responsible person shall be held responsible for the irregularity or defect revealed from that cause. 37. Action on Preliminary Audit Report: (1) Regarding the irregularities pointed out in the preliminary report after audit by the Auditor General, the concerned office shall, within thirty-five days of receiving the notice of such irregularity, settle it as prescribed and submit it to the Auditor General for review.

(2) If there is a reasonable cause for not being able to settle and cause review of the matters mentioned in the preliminary report within the period pursuant to sub-section (1), the responsible person may submit a request to the Auditor General for an extension of the period, mentioning the cause.

(3) Upon receipt of a request for an extension of the period pursuant to sub-section (2), the Auditor General may grant an extension of up to one month.

(4) If the matters mentioned in the preliminary report are not settled or reviewed even within the extended period granted pursuant to sub-section (3), the Auditor General shall inform the Account Officer.

(5) After receiving information from the Auditor General pursuant to sub-section (4), the responsibility for performing the task accordingly shall lie with the concerned Account Officer.

(6) If the Account Officer fails to fulfill their responsibility within the specified time pursuant to sub-section (5), the Auditor General shall inform the concerned departmental Minister or Minister of State of that fact and include the details of the amount that could not be settled or reviewed in their annual report. 38.
Economic Procedure and Financial Accountability Act, 2019

38. Maintaining Register of Irregularities: (1) The responsible person shall maintain a register of irregularities at the office level which, according to the preliminary audit report under section 37, need to be regularized, recovered, or are determined to be payable.

(2) Central-level bodies shall maintain a central register of irregularities of their office and all subordinate offices.

(3) While maintaining the register pursuant to sub-sections (1) and (2), registers of internal and final audit reports shall be maintained separately.

added by the first amendment.(3a) The Office of the Auditor General shall maintain separate registers of irregularities office-wise, ministry-wise, and central body-wise, and provide information thereof to the concerned Account Officer.

added by the first amendment.(3b) The central body shall reconcile and maintain the register of irregularities of its office and subordinate offices and the register of irregularities of the Office of the Auditor General on an annual basis.

(4) The Account Officer shall update the register with the irregularities of the internal audit settled and reviewed pursuant to sub-section (8) of section 33 and the irregularities of the final audit settled pursuant to section 39 and settled and adjusted pursuant to section 40, and have them examined during the subsequent period's audit.

(5) The procedure for maintaining the register of irregularities shall be as prescribed. 39. Settlement of Irregularities: (1) The primary responsibility and liability for settling irregularities pointed out in the audit by presenting evidence, regularizing them, or recovering them shall lie with the responsible person concerned with the irregularity and the official involved in the financial transaction. If such responsible person or official involved in the financial transaction is not in the office due to transfer, promotion, or other reasons before the irregularity is settled, the responsibility for presenting such records and archives and settling or causing to settle the irregularity shall lie with the current responsible person.

(2) If the irregularity is not settled pursuant to sub-section (1), the concerned Account Officer shall cause an inquiry to be made, and if it appears necessary to recover from the official who conducted the financial transaction causing such irregularity to remain and the person involved in the transaction, they shall cause recovery and settle or cause to settle the irregularity.
Economic Procedure and Financial Accountability Act, 2019

40. Settlement, Review, and Adjustment of Irregularities: (1) The duty of settling and adjusting irregularities pointed out in the audit report or irregularities to be discussed pursuant to sub-section (1) of section 41 by recovery, regularization, or presentation of evidence shall lie with the concerned Account Officer.

(2) For the purpose of sub-section (1), in the case of irregularities pointed out as recoverable and payable, the Account Officer shall take necessary details or explanations from the official involved in the transaction, cause recovery of such irregularities, and settle or cause to settle them in time.

(3) In the case of irregularities other than those pointed out as recoverable and payable, if evidence with reasons confirming that there is no loss of government cash or kind is obtained, but the procedures required under prevailing law have not been completed, the concerned Account Officer shall, following the procedure as prescribed, regularize and settle such irregularities.

(4) The settled register of irregularities pursuant to sub-sections (2) and (3) shall be sent to the Office of the Auditor General within seven days for deduction from the register, and the Office of the Auditor General shall, after deducting from the register, inform the concerned Account Officer within seven days.

added by the first amendment.(4a) Among the irregularities included in the annual report pursuant to sub-section (1) of section 41, if the amount of irregularity pointed out as recoverable is recovered and evidence presented, documents required to be presented are submitted, advance amounts are settled and evidence presented, or the amount of irregularity regularized by the Account Officer is settled by the authorized officer for review, the Office of the Auditor General shall, after review, deduct it from the register. Information of such deduction from the register shall be given to the Public Accounts Committee and the concerned Account Officer within seven days.

(5) Other procedures relating to the settlement and adjustment of irregularities shall be as prescribed. 41.
Economic Procedure and Financial Accountability Act, 2019

Information of such deduction from the register shall be given to the Public Accounts Committee and the concerned Account Officer within seven days.

(5) Other procedures relating to the settlement and adjustment of irregularities shall be as prescribed. 41. Discussion on Annual Report: (1) Regarding the irregularities pointed out in the annual report of the Auditor General, when discussion takes place in the Public Accounts Committee of the House of Representatives, the responsibility for attending the committee meeting, participating in the discussion, submitting opinions, reactions, or written views in that regard, and performing or causing to perform work related to the settlement of irregularities shall lie with the Account Officer.

(2) Following discussion in the Public Accounts Committee of the House of Representatives pursuant to sub-section (1), the responsibility for implementing the recommendations presented to the House of Representatives as approved by the House of Representatives shall lie with the Auditor General and the concerned Account Officer.

(3) The Auditor General shall, within thirty days, remove from the register of irregularities matters that need to be removed according to the report of the Public Accounts Committee approved by the House of Representatives, and provide information thereof to the Public Accounts Committee and the concerned Account Officer.

(4) Monitoring of the work pursuant to this section shall be done by the Public Accounts Committee of the House of Representatives. 42. Irregularity Settlement Committee: (1) To settle irregularities that cannot be settled through ordinary procedure, the Government of Nepal may, after taking the opinion of the Public Accounts Committee and the Auditor General, publish a notice in the Nepal Gazette and constitute an Irregularity Settlement Committee as follows:

(a) Member of the committee designated by the Public Accounts Committee of the House of Representatives - Chairperson
(b) Deputy Auditor General or Assistant Auditor General designated by the Auditor General - Member
(c) Secretary of the Ministry of Finance or at least a gazetted first class officer designated by them - Member
(d) Comptroller General or a gazetted first class officer of the Office of the Comptroller General designated by them - Member
(e) Chief of Kumari Chowk and Central Treasury Office - Member-Secretary

(2) The jurisdiction of the Irregularity Settlement Committee formed pursuant to sub-section (1) shall be as specified by the Government of Nepal.

(3) The procedure to be adopted by the Irregularity Settlement Committee formed pursuant to sub-section (1) while settling irregularities shall be as prescribed. 43.
Economic Procedure and Financial Accountability Act, 2019

43. Functions, Duties, and Powers of the Irregularity Settlement Committee: The functions, duties, and powers of the Irregularity Settlement Committee formed pursuant to section 42 shall be as follows:

(a) To regularize or waive such irregularities and deduct them from the register of irregularities, based on merit, if irregularities under any constitutional organ or body, ministry, secretariat, department, court, or office that cannot be settled or reviewed through ordinary procedure, other than irregularities determined as embezzlement, misappropriation, and recoverable from audit, are recommended for settlement by the concerned constitutional organ or body, ministry, or secretariat with confirmation that there is no loss of government cash or kind,
(b) If the irregularities recommended to the committee for settlement pursuant to clause (a) cannot be settled, to send a letter to the concerned constitutional organ or body, ministry, or secretariat to regularize or recover the irregular amount. Chapter-7

Handover, Auction Sale, and Remission

44. Handover: (1) An employee, upon transfer, promotion, retirement, or going on long-term deputation or leave, shall handover the cash, kind, or government documents under their responsibility as prescribed, within the specified period if any, or within twenty-one days if not specified, and obtain a certificate of handover in the prescribed format.

(2) If handover cannot be completed within the period pursuant to sub-section (1) for any reasonable cause, they shall state the reason for the inability to handover within the period and submit an application to the concerned controlling office and act as per the instructions received.

(3) If handover cannot be completed pursuant to sub-section (1) or (2), the concerned Account Officer may set a time and cause necessary inquiry within that set time.

(4) If a person who does not handover even within the time given pursuant to sub-section (3) is a serving employee, the concerned office chief shall withhold their salary and allowances in accordance with the prevailing law, and if the person has left the service, withhold their pension or gratuity, and if the person is not entitled to pension or gratuity or has already taken gratuity, cause them to be arrested by the police and cause them to handover.

(5) If any loss is caused to government cash, kind, or property due to failure to handover in time, the amount of loss and an equivalent amount of penalty shall be recovered from the concerned person in accordance with the prevailing Nepal law.

(6) Other procedures relating to handover shall be as prescribed. 45.
Economic Procedure and Financial Accountability Act, 2019

45. Auction Sale: If, upon inspection of goods in kind under this Act and the rules made hereunder, goods are found broken, damaged, and unusable for reuse, or even if goods can be repaired and reused after inspection by a technician, spare parts are not available and repairing would cost more than twenty-five percent of the market price of the goods, or the report mentions that efficiency decreases due to outdated technology, and the office chief, upon inquiry, determines that such goods should be auctioned, they may be auctioned following the procedure as prescribed. 46. Remission: Notwithstanding anything written elsewhere in this Act, government arrears remaining due but uncollectible under this Act, due to natural calamities, accidents, or circumstances beyond control, or due to drought, erosion, decay, or other causes, goods that have not been sold or are not likely to be sold even after lawful auction, and goods and software that are obsolete and unusable, or unsuitable for use due to security reasons, may be remitted as prescribed based on a technical report. Chapter-8

Recovery of Government Arrears

47. Irregularities Not Settled Through Ordinary Procedure to Remain as Government Arrears: (1) If the amount determined by audit as embezzlement or misappropriation cannot be settled and adjusted pursuant to sections 39 and 40, such irregular amount shall be deemed government arrears and recovered from the concerned responsible person.

(2) If the amount determined to be recoverable under this Act cannot be regularized, recovered, settled, or adjusted even after trying for three years, it shall be recorded as government arrears and notice thereof shall also be given to the responsible person.

(3) The details of the amount recorded as government arrears pursuant to sub-section (2) that is recoverable shall be sent by the concerned Account Officer in writing to Kumari Chowk and Central Treasury Office as prescribed for recovery.

(4) It shall be the duty of the concerned Account Officer to provide necessary assistance to Kumari Chowk and Central Treasury Office for the recovery of the amount pursuant to sub-section (3). 48. Irregular Amount to be Recovered from Property: The irregular amount received for recovery pursuant to sub-section (3) of section 47 shall be recovered by Kumari Chowk and Central Treasury Office from the property of the concerned person in the same manner as government arrears. 49.