For all of its achievements, the conduct of Nepal’s local government has not been without flaws. Municipalities and wards, in particular, have been pulled up for budget discrepancies.
The 58th report of the Office of the Auditor General showed that Rs40.83 billion out of the Rs814 billion allocated to the local government was unaccounted for during the 2020 fiscal year, with metropolises accounting for a larger part of the mismanagement.
At some level, this has been attributed to corruption at the local levels, but there is also insufficient training in proper financial management of budgets.
“Discrepancies might have occurred due to improper book-keeping, and a lack of accounting knowledge on the part of local officials,” says Rameshore Khanal. “This will improve local governments take the steps to become aware of accounting practices.”
Corruption is indeed rife at all three levels of government, be it irregularities in job recruitment, commission for government services, favouritism and nepotism, as well as bribery to circumvent government-mandated policies.
Nearly 30% of complaints lodged at the Commission for Investigation of Abuse of Authority (CIAA) since municipal elections in 2017 pertain to local institutions and officials. However, experts say this does not mean that local bodies are more or less corrupt than other government bodies, since complaints lodged at the CIAA are not limited to corruption.
Dhulikhel mayor and Nepal Municipal Association chair Ashok Banju disagrees that local governments are more corruption-ridden, citing transparency in the local political mechanism.
“Details of our spending and decision-making processes are subject to public knowledge,” says Banju. “This has strengthened the local democracy.”
Balananda Poudel, chair of the National Natural Resources and Finance Commission, agrees that local leaders are closer to the people, and this forces them to be more accountable.
He adds, “Citizens find it difficult to find out what national or provincial leaders are up to. But across local communities, they have close access to their local representatives to hold them responsible for any act of political and personal extravagance.”
More than two-thirds of the total spending of the local governments is facilitated by financial transfers from provincial and federal levels. In the 2021 fiscal year, Rs259 billion out of Rs391 billion spent by the local governments came through grants provided by the provincial and federal government, which local governments were generating only a small proportion of internal revenue.
National Assembly member Khim Lal Devkota says that although there are plenty of opportunities for Nepal’s local governments to earn more revenue through taxes, they have not been able to make use of them. However, there are some municipalities like Chandranagar of Sarlahi district, which have contracted 21 acres of land for fish farming, earning up to Rs16.5 million annually in tax revenue.
The general consensus is that the performance of Nepal’s local governments has exceeded expectations, considering the confusion and limited guidelines for them to operate under the new federal system. In fact, most local leaders did not even have offices and buildings to work out of five years ago.
Indeed, when local governments were elected in 2017, there were no specific legal mechanism representatives could look to for guidance, until the Local Government Operation Act 2018 was ratified a year later, which meant that they were nomads for one year.
Experts blame the inability of Nepal’s local governments to function at maximum capacity to a lack of cooperation and support on the part of the federal government in Kathmandu. The local level has not been able to exercise its right to access funds due to the absence of legislation.
A lack of guidance in staff management has meant that about 200 local institutions have been forced to rely on acting administrative heads who might not have the proper experience and human resources. Most ward offices are still without secretaries and are short-staffed.
All local governments are required to have an auditor, secretary, overseer, engineer, agriculture and livestock manpower, and an environmental expert. However, local leaders say much of the development work in their constituencies have been put on hold because of the lack of these personnel. This is compounded by the absence of an integrated data collection system on local level performance and expenditure to track the progress.
Dhulikhel Mayor Ashok Banju adds that local governments face difficulties because the federal government has still not been able to do away with the centralised political mechanism, setting agendas that have led to duplication of development programs at the local level.
The absence of coordination and the lack of implementation of a three-tiered structure that would give local governments autonomy have seriously affected the efficiency of the local level, from minor administrative work to budget implementation, agrees Khim Lal Devkota.
Indeed, even though there are village and municipal councils with authority, they have not been able to legislate and enforce their jurisdictions.
“Local governments have not been able to exercise its intervening power,” says Rajendra Pyakurel, executive director of the National Federation of Rural Municipalities. “We should not be waiting for the go-ahead from any other authority because we are the authority.”
Another major weakness of Nepal’s local governments is the lack of communication with the people they serve. Works are undertaken largely without social mobilisation, or any input from the local civil society.
Local government expert Bhurtel acknowledges the lack of cooperation with local and rural organisations and partnerships with community organisations in planning, implementation and decision-making processes.
“The local government is not there to serve only those who voted for the representatives,” says Bhurtel. “Governance should not cater to the majority, but be open to participation from all citizens.”
As the country approaches its second local government elections on 13 May, experts stress the need for capable and committed elected leadership across Nepal’s local communities. But filling leadership positions alone will not be enough.
“Existing vacancies at local levels need to be filled, and resources need to be increased on par with the responsibilities of the local level,” says Gopi Krishna Khanal, joint secretary at the Ministry of Federal Affairs. “The power of the local government cannot be reduced. The more grassroots our government becomes, the stronger democracy and system of governance will be.”
Deputy Chairman of Madhes Planning Commission Bhogendra Jha also sees the need to change the way Nepalis look at positions of power.
Says Jha: “At present, personal gain, not public welfare, prevails at all levels of government. Only when we change that thought-process will we be able to deliver on our promises of good governance.”
Read also: All politics is local, Sahina Shrestha