Financial Procedures Act, 2055 (1999)


Published: 1999

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$20 per month, or Get a Day Pass for only USD$4.99.
Financial procedure Act 2055, English

1
Financial Procedures Act, 2055 (1999)

Date of authentication and publication
2055.12.8(22 March 1999)
Amendments:
1. Public Procurement Act, 2063 (2007) 2063.9.30 (14 Jan. 2007)
2. Republic Strengthening and Some Nepal Laws
Amendment Act, 2066 (2010) 2066.10.7 (21 Jan. 2010)

Act number 27 of the year 2055(1999)
An Act made to regulate and mange financial procedures
Preamble: Whereas, it is expedient to operate financial procedur s in a regulated
and systematic manner, including the matters of operation of the consolidated fund
and the government fund, formulation, sanction and spending of budget,
maintaining accounts, making arrangements for internal control, auditing,
settlement of irregular amounts and recovery and realization of such amounts;
Now, therefore, be it enacted by the Parliament in the Twenty Seventh year
of the reign of His Majesty King Birendra Bir Bikram Shah Dev.
Chapter-1
Preliminary
1. Short title and commencement: (1) This Act may be called as the "
Financial Procedures Act, 2055 (1999).”
(2) This Act shall come into force immediately.


2
2. Definitions: Unless the subject or the context otherwise requires, in this
Act:
(a) "Constitution" means the Interim Constitution of Nepal, 2063
(2007);1
(b) "consolidated fund" means the consolidated fund or government
fund as referred to in Article 902 of the Constitution;
(c) "office" includes all constitutional Organs and Bodies, Ministries,
Departments of the Government of Nepal and offices thereunder,
Courts and offices of other Government Bodies;
(d) "pertinent higher office" means the office that is higher than the
concerned office;
(e) "subordinate office" means the office that is subordinate to the
concerned office;
(f) "secretary" means the secretary at the Ministry, and this term
includes, in the case of a constitutional organ or body, the secretary
or administrative chief of such an organ or body and, i the case of a
central level secretariat or commission, the secretary of such a
secretariat or commission;
(g) "chief of office" means, in the case of a constitutional organ or body,
the chief of such a constitutional organ or body, in the case of a
Ministry, the secretary at such a Ministry, in the case of a
Department, the departmental head, in the case of a project, the
project chief and in the case of an office, the chief of that office;
(h) "one level higher authority" means, in the case of a chief of office,
the concerned departmental head, in the case of a departmental head,
1 Amended by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066 2 Amended by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066


3
the secretary at the concerned ministry, secretariat o commission, in
the case of a secretary, the concerned departmental minister or
minister of state and, in the case of the secretary or administrative
chief of a constitutional organ or body, the chief of the concerned
constitutional organ or body;
(i) "Office of the Financial Comptroller General" means the office to
perform internal audit, give direction and prepare ccounts of central
incomes and expenditures of the Government of Nepal so as to
operate and control the consolidated fund and financial
administration, subject to this Act and the Rules framed under this
Act;
(j) "appropriation" means amounts appropriated to various offices for
expenditures under various headings for such services and works as
specified by any Vote on Account Act and Appropriation Act, and
this term includes amounts appropriated pursuant to any
Supplementary Appropriation Act and Vote of Credit Ac ;
(k) "accounts responsible officer" means the secretary who has duties to
operate financial administration of his or her office and subordinate
offices, prepare annual budget and obtain sanction of the budget and
delegate power to spend the same, maintain, or cause to be
maintained, accounts of budget, have internal and external audit of
the appropriated amounts, revenues, deposited amounts a d
inventories, as well, regularize, or cause to be regularized, irregular
amounts, recover, or cause to be recovered, or remit, or cause to be
remitted, such irregular amounts;
(l) "responsible person" means a person who has duties to carry out,
take charge of such functions, make expenses, maintain accounts,
settle, or cause to be settled irregular amounts upon having the


4
internal and external audit performed, recover, or cause to be
recovered, governmental cash and inventories and cre it the same
into the revenue as delegated by, and in accordance with the
delegation of powers by, the accounts responsible officer, and this
term includes a non-governmental person who takes the
responsibility of settlement of government business with or without
taking governmental cash or inventory for that busine s;
(m) "Bank" means the Nepal Rastra Bank, and this term includes such
other commercial bank as may be specified by the Government of
Nepal;
(n) "transaction" means any acts relating to taking charge of a
governmental movable, immovable property, cash and inventories
and expenditures or payment of the same for the specified purpose in
accordance with the prevailing law;
(o) "accounts" means such records, ledgers, books f accounts, etc. as
to be maintained in accordance with the prevailing aw in a manner
to reflect the transaction and other documents in support of the
transaction;
(p) "internal audit" means the audit to be performed by the Office of the
Financial Comptroller General;
(q) "external audit" means the audit to be performed by the Office of
Auditor General;,
(r) "irregular amount" means such a transaction indicated or found on
audit as a transaction carried on without fulfilling such requirements
as to be fulfilled in accordance with the prevailing law or a
transaction of which such accounting as to be maintained has not


5
been maintained or a transaction which has been carried on in an
irregular or unreasonable manner;
(s) "amount to be recovered" means such an irregular amount as held on
audit to be recoverable by the reason that such payment as not to be
made pursuant to the prevailing law has been made or payment has
been made in excess or that less amount has been recove d, and this
term includes any amount that has been misappropriated or
embezzled and such other amount or money as payable to the
Government of Nepal;
(t) "verification" means the examination or monitoring of the evidence
and documents attached with any explanation or comment submitted
in relation to any irregular amount indicated in the internal or
external audit report and this term includes the examination or
monitoring to be carried out on the basis of the suggestions or
directions received from the Public Accounts Committee of the
Legislature-Parliament;3
(u) "financial statement" means a statement so prepared as also to set
out headings with object to reflect the overall situation of the
financial transactions carried in any given period, and this term
includes an income and expenditure statement indicating a budget
estimate, sanctioned amount, expenditure, income/revenue, paid
amount and due amount, according to headings in a manner to
reflect the situation of transaction;
(v) "Central Recovery Office" means the Central Recov ry Office
established by the Government of Nepal for the purposes of Section
29;
3 Amended by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066


6
(w) "office of public accountability" means such office with public
functions, duties and powers as recognized by law and s to be
appointed in any manner or elected or nominated irrespective of
whether remuneration for the same is specified or not; and
(x) "prescribed" or "as prescribed" means prescribed or as prescribed in
the Rules framed under this Act.
Chapter-2
Operation of consolidated fund
3. Operation of consolidated fund: The Office of Financial Comptroller
General shall operate the consolidated fund, subject to the Constitution, this
Act and the prevailing law.
4. Responsibility to keep accounts of consolidated fund: (1)
Maintenance of up to date accounts of the consolidated fund and
preparation of its annual financial statement shall be the duty and
responsibility of the Office of the Financial Comptroller General, and for
that and other function including submission of accounts, the Office of the
Financial Comptroller General may prescribe responsibility for the
government office, Nepal Rastra Bank and other banks.
(2) It shall be the duty of all respective offices and Bank to take and
execute the responsibility as prescribed pursuant to Sub-section (1).
(3) Other procedures relating to the operation of consolidated fund,
maintenance of central accounts and preparation of fi ancial statement shall
be as prescribed.




7
Chapter-3
Preparation of budget, sanction, expenditure, transfer of
budget heading and control
5. Preparation of budget and programme: (1) The Ministry of Finance
shall be responsible for preparing, or causing to be prepared, budget, as
prescribed, for the government business and development programmes to
be carried out in the next financial year.
(2) It shall be the responsibility of the concerned accounts
responsible officer to submit to the Ministry of Finance such periodic work
description, estimate of incomes and expenditures as required by the
Ministry of Finance and the statement of budget sanctio ed to and spent by
his or her office and subordinate offices pursuant to Sub clause (2) of
Article 934 of the Constitution and progress made according to the targets.
(3) Cash or commodity assistance to be received by the Government
of Nepal from friendly countries and international organizations as a grant
or loan shall be included, or caused to be included, in the budget. A
separate statement of any kind of assistance other than such assistance
shall, along with the budget, be submitted to Parliament.
(4) Prior to receiving the assistance as referred to in Sub-section (3),
it shall be the duty of the accounts responsible officer to obtain approval of
the Ministry of Finance, after making consultation, i normal cases, with
the National Planning Commission on whether such an assistance is in
consonance with the priority, policy and programme as specified by the
plan and annual programme or not and prepare a statement thereof and
submit the same to the Ministry of Finance.
4 Amended by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066


8
(5) The concerned Ministry shall provide the statements of foreign
loans, grants and assistance to be received by non-governmental
organization and local bodies to the Ministry of Finance. The Ministry of
Finance shall submit the statements so received to the Parliament.
(6) The other procedures to be followed in the prepa ation of budget
and programme shall be as prescribed.
6. Budget sanction: (1) After the issuance of the Vote on Account Act or
Appropriation Act, Office of the Financial Comptroller General shall, based
on the authority given by the Ministry of Finance, as per the approved
budget statement, give budget sanction, from the consolidated fund,
through the Bank, to the concerned office.
(2) Immediately upon receipt of the office-wise budget statement
and authority to make expenditure from the Ministry of Finance, the
concerned Ministry shall give authority to make expnditure to the
departmental head, and the departmental head shall give such authority to
the chief of subordinate office.
Provided that, in the case of any office that has no department, the
Ministry may give authority to the chief of office.
(3) After the sanctioning of budget to the office pursuant to Sub-
section (1), the bank account shall be operated in the name of the office, by
counter-signature of such officials as specified by Office of the Financial
Comptroller General.
(4) It shall be the responsibility of the concerned chief of office to
obtain the sanction of approved appropriated amount from the Office of
Funds and Accounts Controller, make expenditure, subject to the authority
and approved budget and in accordance with the prevailing law, maintain,


9
or cause to be maintained, the accounts thereof and submit the same, get
audit of accounts performed and settle irregular amounts.
(5) The other procedures relating to the sanction of government
amounts and operation of the funds in accordance with the Vote on
Account Act and Appropriation Act shall be as prescibed.
7.5 Procedures for making expenditures: Provisions on financial
administration relating to operation of government business and project,
collection of deposits, fees, service charges, payment of advances and
settlement thereof, protection, auction sale, and remission, of governmental
cash and inventories and other various provisions and procedures relevant
thereto shall be as prescribed.
8. Transfer of budget: (1) If the amount under any heading specified in the
Appropriation Act is not sufficient and such a shortfall amount is surplus
under any one or more than one heading specified in that Act, the Ministry
of Finance may make transfer of budget from one heading to another
heading, subject to the ceiling specified in the Appropriation Act.
(2) The provisions relating to the transfer of budget under Sub-
headings, other than that set forth in Sub-section (1) shall be as prescribed.
9. Power to withhold or control budget: Notwithstanding anything
contained in Section 6, the Ministry of Finance may, in view of the
economic condition of the country and the funds avail ble in the
consolidated fund, fully or partly withhold or control the appropriated
funds/amounts, as required, other than the amounts chargeable on the
consolidated fund.

5 Amended by the Public Procurement Act, 2063.


10
Chapter-4
Accounts of transaction
10. Keeping of accounts of transaction: (1) Accounting system of
transaction shall be as prescribed by the Government of Nepal. Unless and
until so prescribed, the accounts of transaction shall be maintained as per
the currently prevailing accounting system.
(2) Accounts of transaction shall be maintained in the format
approved by the Office of the Auditor General.
(3) It shall be the duty of the Office of the Financial Comptroller
General to get approval of the format as per Sub-section (2) and to apply, or
cause to be applied, the same. If the Auditor General deems necessary to
improve the prevailing accounts format, he or she may, on the advice of the
Office of the Financial Comptroller General, issue directive mentioning the
improved format to the Office of the Financial Comptroller General.
(4) The Office of the Financial Comptroller General shall be
responsible for maintaining central accounts of foreign aid, loan, grant,
investment, appropriation, revenue and deposits, in addition to the
consolidated fund. It shall be the duty of the Office of the Financial
Comptroller General to maintain accounts of all kinds of transactions other
than the appropriation and revenue, prepare a central/consolidated
statement thereof and submit the same to the Auditor General. The
concerned office shall maintain accounts of expenditures from any kind of
grant or source which is not included in the budget and submit its statement
to the Office of the Financial Comptroller General within Fifteen days after
the end of the financial year.


11
(5) The accounts responsible officer shall get the central accounts
prepared after obtaining all the financial statements of appropriation,
revenue and deposits from the subordinate offices.
(6)It shall be the responsibility of the accounts re ponsible officer to
arrange for maintaining statements of the other kinds of assistance received
pursuant to Sub-section (3) of Section (5) in the subordinate offices and to
maintain a central statement thereof.
11. Responsible person to be accountable: (1) The responsible person
shall so maintain, or cause to be maintained, accounts in fulfillment if the
procedures prescribed by the prevailing law in such a manner as to clearly
reflect each transaction.
(2) It shall be the responsibility of the accounts re ponsible officer to
look after, examine and inspect, as required, whether t e subordinate
offices have observed the prevailing law in carrying out financial
administration and to get the accounts of the subordinate offices included in
the central account or statement and examine, or cause to be examined, the
same.
(3) If, in the course of looking after, examining and inspecting by the
accounts responsible officer pursuant to Sub-section (2) or performing
audit, it appears that any transaction has been carried on without fulfilling
the procedures specified by the prevailing law or any other irregularity is
found, the responsible person shall be accountable for the same.
(4) If any irregularity on account related activity happens for any
reasonable reason, the responsible person may, within the prescribed
period, make a submission, setting out the reason, t the competent
authority to have the same regularized; and if such a submission is made,


12
the competent authority shall give necessary decision thereon within the
prescribed period.
Provided that, if it appears that any irregularity on account related
activity has been made without any reasonable reason, the competent
authority may fine the responsible person with a sum of Fifty Rupees for
the first instance, and that of Seventy Five Rupees for each instance if such
act is repeated and also take departmental action against such a person in
accordance with the prevailing law.
(5) If the authority required to make decision pursuant to Sub-
section (4) fails to make decision within the prescibed period, the one level
higher authority shall fine that authority with a sum of Fifty Rupees for the
first instance and that of Two Hundred Fifty Rupees if the same authority
repeats such act.
(6) If, in the course of looking after, examining and inspecting by
the accounts responsible officer pursuant to Sub-section (2), it appears that
any transaction has been carried on without fulfilled the procedures
specified by this Act and the Rules framed hereunder or that any irregular
act has been done, the pertinent higher office causing such examination or
inspection or the departmental head or chief of office may impose a fine of
Twenty Five Rupees for each instance. If such act is repeated by the same
responsible person after being subjected to punishment for more than Three
instances, such person shall be subjected to a fine of Thirty Rupees for each
instance and also the departmental action in accordance with the prevailing
law.
(7) The responsibility to make internal control and supervision by
examining and inspecting, from time to time, as to whether accounts have
been maintained and submitted and audit has been caused to be performed
or not in accordance with this Act or the Rules framed hereunder shall lie


13
with the chief of the concerned constitutional organ or body, in the case of
a constitutional organ or body, and within the departmental Minister or
Minister for state in the case of a Ministry and central level secretariat and
commission, with the secretary at the concerned Ministry in the case of an
office which the same identity and jurisdiction as a department has and with
the departmental head of the pertinent higher office in the case of an office.
12. Payment/deposit of revenue and accounts of revenue: (1) Any
revenue and government amount to be received by the Government of
Nepal in accordance with the prevailing law shall, upon receipt by the
office of such a revenue and amount, be credited to/deposited in the Bank
as prescribed.
(2) It shall be the responsibility of the chief of ffice to maintain
records and accounts of revenue and submit statemens, get the accounts
audited and maintain records thereof.
13. Deposit and accounting of cash and inventories/stock: (1) The
responsible person shall deposit the government cash and inventories/stock
in his or her custody in the appropriate place on the same day or the
following day of receipt in the case of the government cash and within
seven days of the receipt in the case of the inventories/stock, and maintain
the records of the same.
(2) If the responsible person fails to maintain reco ds of the deposit
of the cash and inventories within the time-limit as referred to in Sub-
section (1), he or she may make a request, accompanied by the reason for
such failure, to the one level higher authority for the extension of the time-
limit. If a request is so made, the one level higher authority may, if he or
she deems it reasonable, extend the time-limit of a maximum of Forty Five
days at one time or two times.


14
(3) The one level higher authority may fine the responsible person
who fails to maintain the records even within the time-limit extended
pursuant to Sub-section (2) with Fifty Rupees or a sum no exceeding Ten
percent of the amount in question for each instance.
(4) If it appears that the responsible person has not deposited the
government cash in his or her custody in the appropriate place on the same
day or the following day, the concerned pertinent higher office or
departmental head shall cause such cash to be deposited by imposing a fine
of Ten percent on that person if it is delayed for up to Ten days and a fine
of Fifteen percent if it is delayed for more than Fifteen days and may also
take, or cause to be taken, departmental action agai st that person according
to the magnitude of the offence.
(5) Notwithstanding anything contained in Sub-section (4), the
Office of the Financial Comptroller General may, also having regard to the
distance between the Bank and the office, specify additional time-limit for
the deposit of such cash.
14. Submission of accounts: (1) The Office of the Financial Comptroller
General shall submit financial statement of central/consolidated accounts of
each financial year and accounts of the appropriation, revenue, deposit,
foreign aid and loan and investment, in addition to the consolidated fund, to
the Office of the Auditor General, within the period specified by the
Auditor General.
(2) The accounts responsible officer shall prepare and submit the
central/consolidated financial statement of all revenue and expenditures of
each financial year, including that of the subordinate offices, to the Office
of the Financial Comptroller General and the Office of the Auditor General.


15
(3) The responsible person shall submit the accounts of ransactions
and related documents to the concerned office or auditor as prescribed.
(4) If a request is made for the extension of time-li it, showing a
reasonable reason for failing to submit accounts pur uant to Sub-sections
(2) and (3), the one level higher authority may extend the time-limit of a
maxim of Thirty Five days.
(5) The one level higher authority may fine the responsible person
who fails to submit accounts even within the time-limit extended pursuant
to Sub-section (4) with Twenty Five Rupees for each item for the first
instance and Fifty Rupees for each item for the second instance and also
take departmental action in accordance with the prevailing law if such a
person repeats the same action.
(6) The accounts responsible officer or responsible person shall
submit accounts and financial statements with the tim -limit specified by
the Office of Auditor General. Provided that, if the accounts responsible
officer or responsible person makes a request, accompanied by a reasonable
reason for failing to submit the same within the spcified time-limit, for the
extension of the time-limit, the Auditor General or the official designated
by him or her may extend the time-limit not exceeding Thirty Five days.
(7) If a request is not made for the extension of the ime-limit
pursuant to Sub-section (6) or if the submission accounts and financial
statements is not made even within the time-limit extended, the Auditor
General may give direction to the accounts responsible officer, in the case
of the defaulter being the responsible person and to the one level higher
authority in the case of the defaulter being the accounts responsible officer,
and it shall be his or her duty to abide such a direction.


16
(8) In the event of failure to submit the accounts and financial
statements despite a direction being given pursuant to Sub-section (7),
departmental action may also be taken in accordance with the prevailing
law.
(9) The other procedures relating to the payment of revenue, cash,
inventory and deposits and maintenance of updated records and accounts
thereof shall be as prescribed.
15. Recovery of loss and damage: If the Government of Nepal sustains any
kind of loss and damage as a result of failure to properly maintain accounts
of transactions required to be maintained pursuant to this Chapter, the loss
and damage so sustained and compensation for the same shall be recovered
from the responsible person as a governmental due.
Chapter-5
Audit and recovery and settlement of
irregular amounts/audit findings
16. Audit: (1) The Office of the Financial Comptroller General shall carry out,
or cause to be carried out, the internal audit as pre cribed.
(2) Each office shall submit accounts and financial st tements of all
kinds of incomes and expenditures as prescribed and get the external audit
of the same to be carried out by the Office of Auditor General.
(3) If, in the course of the internal audit or the external audit, it
appears that the record of a government cash or inventories or that the
Government of Nepal has sustained a loss or damage as a result of
misplacement of the record for any reason or cause, the concerned chief of
office or departmental head shall, immediately when information thereof is


17
received, recover the amount so such loss or damage and also take
departmental action according to the magnitude of the offence.
(4) The authority who does not take action even upon receipt of the
information pursuant to Sub-section (3) shall be liable to a fine of up to
Fifty Rupees for each instance, to be imposed by the chief of the concerned
constitutional organ or body, in the case of a constitutional organ or body,
by the departmental Minister or Minister for state in the case of a Ministry
and central level secretariat and commission, by the secretary at the
concerned Ministry in the case of an office with the same identity and
jurisdiction as a department has and by the departmental head of the
pertinent higher office in the case of an office.
(5) The accounts responsible officer of a constitutional organ or
body who does not submit accounts and financial statements pursuant to
Sub-section (2) shall be punished by the chief of the concerned
constitutional organ or body and the accounts responsible officer of a
Ministry or central level secretary, by the concerned departmental Minister
or Minister for state and the other person, by the accounts responsible
officer with a fine not exceeding Twenty Five Rupees for each item.
(6) In the event of failure to submit accounts and financial
statements despite imposition of fine pursuant to Sub-section (5), action
may also be taken in accordance with the prevailing law.
17. Action against one who does not furnish explanation: (1) It shall
be the duty of the concerned accounts responsible officer or responsible
person to furnish or submit replies to the question put, or accounts and
statements as demanded, in the course of carrying out a casual inspection of
the accounts of incomes and expenditures of governmntal cash and
inventories of the office or the internal or external audit of the same, within
the prescribed time-limit.


18
(2) If it is not possible to discharge the function within the time-limit
specified pursuant to Sub-section (1), and a request, accompanied by a
reasonable reason, is made for the extension of the time-limit and if such a
reason seems to be reasonable, the authority or body putting such questions
or demanding such statement may extend a reasonable time-limit.
(3) The concerned person who fails to furnish replies to the
questions asked or accounts demanded within the time-li it given pursuant
to Sub-sections (1) and (2) shall bear the irregular amount or amount found
by audit.
18. Responsibility for settlement of irregular amount: (1) The
responsible person shall be accountable for the settlement of irregularities
reported by the auditor, by providing evidence/documents thereon or
regularizing the legibility of the transaction or recovering the same.
(2) The account responsible officer shall be responible for
supervising whether irregular amounts have been settled or not pursuant to
Sub-section (1) and settling, or causing to be settled, he irregular amounts
in accordance with the prevailing laws.
19. Verification and settlement of irregular amounts: (1) The concerned
office shall, in relation to irregular amounts as reported by the Office of
Auditor General in the course of audit, have settlement and verification
hereof as prescribed, within Thirty Five days from the date of receipt of
such irregular amounts.
(2) If there is a reasonable reason for being unable to have
verification and settlement of irregular amounts within the time-limit as
referred to in Sub-section (1), a request, accompanied by the reason, may be
made to the Office of Auditor General for the extensio of time-limit, and if


19
such a request is made, the Office of Auditor General may extend the
reasonable time-limit.
(3) If the settlement and verification of irregular mounts is not
made even within the time-limit extended pursuant to Sub-section (2), the
Auditor General shall give information thereof to the accounts responsible
officer, and it shall be the responsibility of the accounts responsible officer
to take action as set forth in the information so received. If accounts
responsible officer fails to take action, the Auditor General shall give
information thereof to the departmental minister or minister of state.
20. To maintain records of irregular amounts: (1) There shall be
maintained the records of the irregular amounts indicated in, and amounts
found recoverable and payable as mentioned in, the audit report at the
central and office levels.
(2) The recovery of embezzled and misappropriated amounts as
found from the audit or irregular amounts that could not be regularized in
pursuance of the prescribed procedures shall be recovered from the
responsible person.
(3) If the irregular amount held to be recoverable pursuant to Sub-
section (2) cannot be recovered from the regular procedures, the accounts
responsible officer shall send such records to the Central Recovery Office
in such manner as prescribed.
(4) Monitoring related to settlement of irregular amounts shall be
carried out as prescribed.
21. Recovery, settlement and regularization of irregular amounts: (1)
The procedures for the recovery, settlement and regularization of irregular
amounts as indicated in the audit report and verification thereof shall be as
prescribed.


20
(2) If, in the case of irregular amounts other than those found to be
recoverable and payable, there are supporting documents and reasonable
reasons that the procedures required to be fulfilled pursuant to the
prevailing law but no loss or damage has occurred to the governmental cash
and inventories, the settlement of such irregular amounts may be made by
regularizing such amount in accordance with the prescribed procedures and
verifying the same.
(3) It shall be the responsibility of the accounts re ponsible officer to
give responses in writing in the public accounts committee of the
Legislature-Parliament6 in relation to the irregular amounts indicated in the
annual report of the Auditor General, to appear at the meeting of the
committee, take part in the discussions and express his or her comments
thereon at the meeting and take, or cause to be take, acts and actions on the
settlement of irregular amounts.
(4) After the suggestions submitted to the Legislature-Parliament7
following discussions at the public accounts committee of the Legislature-
Parliament8pursuant to Sub-section (3) have been approved by the
Legislature-Parliament9, it shall be the duty of the concerned Ministry to
implement or cause to be implemented the suggestions set forth in the
report.
(5) The procedures relating to the settlement of irregular amounts
shall be as prescribed.
22. Recovery of irregular amounts from assets: The irregular amounts of
which records have been established pursuant to Sub-section (2) of Section
20 shall be recovered as prescribed. If recovery cannot be so made, the
6 Amended by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066. 7 Amended by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066. 8 Amended by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066. 9 Amended by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066.


21
central recovery office shall recover the irregular amounts to be recovered
as a governmental due.
23. Formation of irregular amounts settlement committee: (1) The
Government of Nepal may, on the advice of the public accounts committee
and the Auditor General, form an Irregular Amounts Settlement Committee
consisting of the following persons as its members, from time to time, by a
Notification in the Nepal Gazette for the settlement of irregular amounts
that could not be settled through normal procedures.
(a) A member of the committee as
designated by the public accounts
committee -Chairperson
(b) Joint Auditor General or Deputy
Auditor General designated by the
Auditor General -Member
(c) Secretary at the Ministry or at
least Gazetted first class officer
designated by him or her -Member
(d) Financial Comptroller General or
at least Gazetted first class officer
on accounts designated by him or
her -Member
(e) One chartered accountant
nominated by the Nepal Chartered
Accounts Association -Member
(f) A person designated by the
Government of Nepal -Member secretary


22
(2) The terms of reference of the Irregular Amounts Settlement
Committee formed pursuant to Sub-section (1) shall be as prescribed by the
Government of Nepal in consultation with the Auditor General, by a
notification in the Nepal Gazette.
(3) The procedures to be followed in settling irregular amount by the
Irregular Amounts Settlement Committee formed pursuant to Sub-section
(1) shall be as prescribed.
24. Functions, duties and powers of Irregular Amounts Settlement
Committee: The functions, duties and powers of the Irregular Amounts
Settlement Committee formed pursuant to Section 23 shall be as follows:
(a) If, in respect of such irregular amounts under any constitutional
organ or body, ministry, secretariat, department, court or office as
could not be settled and verified through normal regular procedures,
other than the irregular amounts fount to have been misappropriated,
embezzled and to be recoverable as found from audit, a
recommendation is made by the concerned constitutional rgan or
body, ministry or secretariat for the settlement of such irregular
amounts, such irregular amounts shall be regularizes or remitted on
the basis of propriety and records of such irregular amounts shall be
obliterated.
(b) If the settlement of the irregular amounts recommended for
settlement pursuant to Clause (a) cannot be settled, h concerned
constitutional body or organ, ministry, secretariat, department, court
or office shall be written to regularize or recover the irregular
amounts.




23
Chapter-6
Provisions relating to hand-over, auction and remission
25. Handover: (1) When an employee transfers or promotes or retires o goes
on deputation or leave for a long period, the employee shall hand over, as
prescribed, the cash, inventories or governmental documents in his or her
custody within the prescribed time-limit if such a time-limit is so prescribed
and within Twenty One days if such a time-limit is not prescribed and
obtain the certificate of hand-over in the prescribed format.
(2) In the event of failure, for any reason, to make hand-over within
the time-limit as referred to in Sub-section (1), application, accompanied by
the reason for failing to hand over within the time-limit, has to be made to
the pertinent higher office, and action shall be taken as sanctioned by that
office.
(3) In the event that hand-over cannot be made pursuant to Sub-
sections (1) and (2), the concerned accounts responsible officer may
determine the time and cause necessary examination to be made within the
time so determined.
(4) In making examination pursuant to Sub-section (3), the accounts
responsible officer may fine the responsible who has not made the hand-
over recklessly with a sum not exceeding Fifty Rupees and give a
reasonable time-limit for making the hand-over.
(5) In the event of failure to make hand-over even within the time-
limit given pursuant to Sub-section (4), the hand-over shall be caused to be
made by withholding the salary and allowance of the person who has failed
to make the hand-over within such time-limit if that person is an incumbent
employee, by withholding his or her pension or gratuity if that person is a


24
retired one and by getting the police to arrest himor her if such person is
not entitled to pension or gratuity or has already received gratuity.
(6) If any damage is caused to governmental cash, inventories or
property as a result of failure to make the hand-over within the time, the
recovery of the damaged amount and the amount in question equal to that
damaged amount shall be made from the concerned person in accordance
with the prevailing Nepal law.
(7) The other procedures of making hand-over shall be as prescribed.
26. Action to be taken in the event of misuse and embezzlement of
governmental cash, inventories: (1) If, in performing the internal or
external audit of the governmental money and inventory stock of an office
or examining the same in any manner whatsoever, it appears that the
governmental amount has been embezzled, the concerned chief of office or
pertinent higher office or prescribed authority shall t ke, or cause to be
taken, necessary action against the embezzler in accordance with the
prevailing law.
(2) If, in performing the external audit of the governmental money
and inventory stock of an office, it appears that any of such money or stock
has been embezzled, the Office of Auditor General sh l write, along with
its office, to the concerned chief of office or departmental head to institute
action against the embezzler in accordance with the prevailing law.
(3) If action is not taken in making examination pursuant to Sub-
section (1), or where it is written to take action pursuant to Sub-section (2),
the defaulter shall be punished with a fine of up to Fifty Rupees by the
departmental head if the defaulter is the concerned p rson and by the
departmental Minister or Minister of State if the defaulter is the
departmental head and by the chief of a constitutional rgan or body if the


25
defaulter is the administrative chief of such a constitutional organ or body,
and such a defaulter shall also be liable to departmen al action.
(4) If the Auditor General is of the opinion that accounts relation act
is not being done in time, he or she may procure the relevant documents
and cause the same to be examined; and if in making such examination,
there appears some error or deficiency, he or she shall write to the
concerned pertinent higher office for necessary action, and if so written, the
concerned office shall take necessary action immediat ly.
(5) The other provisions relating to the custody of g vernmental
property, records, protection and hand-over of the same shall be as
prescribed.
27. Governmental money or property to be protected and used only
for specified purpose: (1) It shall be the duty of the responsible person to
make arrangement for the protection of all cash and inventories received by
the office. The amount received by the office shall be spent only for the
specified purpose or work. If it appears that such amount has been spent for
other purpose or work other that that specified, the amount so spent shall be
recovered from the responsible person, and departmental action may also be
taken against such a responsible person.
(2) All kinds of damage and loss caused to the governm ntal
inventory, money and property used in or allowed to be used in personal
purpose shall be recovered from both the giver and receiver of such
inventory, money and property.
28. Auction sale: Such goods as hold to be sold by auction in making
necessary examination by the chief of office of the goods set forth in the
report as to be out of order and useless owing to being worn and torn and
obsolete made upon making inspection of the inventories pursuant to this


26
Act and the rules framed hereunder may be sold by auction by following
the procedures as prescribed.
29. Remission: Notwithstanding anything contained elsewhere in this Act,
any government due that could not be recovered under this Act or any
governmental loss or damage caused as a result of a natural calamity,
accident or a force majeure event and decomposition or decay or otherwise
or that could not be recovered despite auction sale m de pursuant to law or
there does not seem any situation that such due can be recovered, the
Government of Nepal may make remission by following the procedures as
prescribed.
30. Functions, duties and powers of central recovery office: (1) It shall
be the responsibility of the Central Recovery Office to recover the amount
required to be recovered from the responsible person pursuant to this Act
and other prevailing law and the amount required to be recovered from the
person who has not paid the same as required to be paid in accordance with
the bond made with the Government of Nepal and from the person who has
embezzled the governmental cash and inventory property.
(2) It shall be the functions, duties and powers of the Central
Recovery Office to establish records of the amounts remaining due in the
Central Recovery Office at the time of the commencement of this Act and
recover the same.
(3) If, except those set forth in Sub-sections (1) and (2), if a person
who is liable to pay the penalty, fine imposed by a judgment passed by a
quasi-judicial body or authority in exercise of the powers conferred by the
prevailing law does not pay such penalty, fine, the concerned quasi-judicial
authority or the chief of such quasi-judicial body shall write, setting out the
details of such a penalty, fine, to the central recov ry office for the recovery
of the penalty, fine, and if such details are received, the Central Recovery


27
Office shall establish records according to the details, recover the penalty,
fine as referred to in the judgment, from the concer ed person as a
government due and pay the same to the consolidated fund.
(4) In recovering the amount required to be recovered, the Central
Recovery Office may exercise such powers as the court has in relation to
examine necessary evidence from, take depositions of the concerned
person, body or office-bearer, summoning and examintio of witnesses
and taking action by holding the concerned person in detention subject to
the prevailing law.
(5) The other procedures to be followed in recovering any irregular
amounts or penalty, fine that have been held to be recoverable and records
whereof maintained have not been paid shall be as prescribed.
(6) In recovering any irregular amounts or penalty, fine that have
been held to be recoverable and records whereof maintained, the central
recovery office may on its own recover such amounts or penalty or cause
the same to be recovered by another office. If the Central Recovery Office
makes a request for assistance in the recovery, it shall be the duty of the
concerned office to render necessary assistance.
(7) After the recovery of the penalty, fine required to be recovered
pursuant to Sub-section (3), the central recovery office shall give details
thereof to the concerned accounts responsible officer and the chief of the
concerned quasi-judicial body.
(8) The other functions, duties and powers of the Central Recovery
Office and procedures relating to the recovery and settlement of irregular
amounts shall be as prescribed.
(9) In the event of the recovery of more than Ten prcent of the total
records of the irregular amounts required to be recov red, a reward of up to


28
Ten percent of the recovery that is over and above that Ten percent or of up
to Ten Thousand Rupees for each person or organization may be given to
the employee, person or organization involved in the recovery of irregular
amounts.
31. Functions, duties, powers and responsibilities: The functions, duties,
powers and responsibilities of the accounts responsible officer,
departmental head, chief of office, accounts officer and official dealing
with inventories shall be as prescribed.
32. To be accountable: The person holding office of public accountability
shall bear responsibility, in accordance with this Act or the Regulation
framed hereunder, for any transaction done at the ord r or direction issued
by that person or for any transaction done by that person himself or herself.
33. Penalties: (1) Except as provided for punishment in various Sections of
this Act, if a person violates this Act or the Rules framed hereunder, the
authority as referred to in Section 31 may fine that person with up to Fifty
Rupees.
(2) If any authority does not impose punishment andfi e as required
to be imposed pursuant to this Act, the one level higher authority may warn
that former authority for the first time and punish him or her with up to
Fifty Rupees for the second time onwards.
34. Fine may be remitted or lessen: If an order is issued for any
punishment in accordance with the provisions set forth in this Act and an
application in writing, accompanied by a reasonable reason for non-
imposition of such punishment, is made to the punishment awarding
authority within Fifteen days after the date of issuance of such order of
punishment, the punishment awarding authority may, if he or she thinks
that such a reason is reasonable, remit or lessen the fine imposed originally.


29
35. Appeal: (1) If a person or employee is not satisfied with a decision of
imposition any fine or obligation to bear any irregular amount in
accordance with this Act and the Rules framed hereund r and with a
decision made in relation to the application made pursuant to Section 34,
the person or employee who is not so satisfied may ke an appeal to the
authority that is one level higher than the punishment imposing authority
within Fifteen Days after the date of such a decision, and the decision made
by the appeal hearing authority on the appeal so made shall be final.
36. Power to frame Rules: The Government of Nepal may frame necessary
Rules to implement the objectives of this Act.
37. Saving: This Act and the Rules framed hereunder shall govern the matters
set forth in this Act and the Rules and the prevailing aw shall govern the
other matters.
38. Repeal: The Government Amount Recovery Act, 2025 is, hereby,
repealed.