In order to elicit inputs from diverse stakeholders, including government, CSOs, media and individual experts/champions on the strategic areas and entry points of citizen engagement in public financial management (PFM) in Nepal, Freedom Forum in collaboration with the Public Expenditure and Financial Accountability (PEFA) Secretariat organized consultations at all three tiers of the government.
FF has conducted the consultations for verification with key stakeholder participants where detailed discussions of findings, recommendations and conclusions were presented and the proposed CE Strategy was reviewed by key stakeholders. The virtual consultations were hosted as part of the review of the current situation of citizen engagement in PFM and develop a comprehensive Strategy for CE in the PFM system in Nepal that will guide the process of mainstreaming citizen engagement throughout the budget process for all tiers of the government.
Findings of the assessment of existing and potential forms of CE, along the budgeting cycle for federal, provincial and local levels, have been structured around three questions: 1. What are existing policy commitments and regulatory entry points for CE (based on analysis of policies and regulations)? 2. How the existing policy and regulatory entry points are being used in practice? What is working and what is not and why (limitations and challenges)? 3. What is missing in policies and regulations (based on review of international standards and best practices)?
The diagnostic assessment along with recommendations were made in six phases of the budget cycle in all three tiers of the government, including strategic and periodic planning and fiscal forecasts, budget formulation, budget enactment, budget execution, accounting and reporting and external audit and oversight. Altogether 200 stakeholders had provided their inputs in refining the national strategy for citizen engagement in PFM of Nepal.
The strategy would build upon and leverage existing experiences in-country and internationally. It would provide guidance on institutionalizing and strengthening sustainable systematic practices for CE across all tiers and all budget phases in line with the principles of participation and inclusion, transparency and accountability, effectiveness and responsiveness.
During the consultations the participants recommended improving policy and legal frameworks related to citizen engagement in the PFM process. Among the key inputs with recommendations are —
- Based on this analysis, the PEFA Secretariat in consultations with key stakeholders should approve a Strategy for Citizen Engagement in PFM in Nepal, followed by an Action Plan (including communication/ awareness building and capacity building measures for those involved in its implementation).
- The MoF should produce and make public the MTEF in timely manner and disclose it through its website.
- The federal parliament should amend the Financial Work Procedure and Fiscal Responsibility Act and the Ministry of Finance to improve Budget Formulation Guidelines to mainstream the concept of public engagement in the budgetary process. Existing provisions related to preparation and disclosure of financial reports enshrined in federal, provincial and local Financial Work Procedures and Fiscal Responsibility Acts should be reviewed to make them compatible with federal Right to Information laws.
- The Parliament should review and adjust the Right to Information Act, 2007 ad Regulations, 2009 to improve the practice of proactive disclosure of the stipulated PFM related information and also reflect the recent Open Data and ICT trends in information and public data domain.
- There should be institutional mechanisms within Ministry of Finance regarding disclosure of fiscal information including allocations, virements and expenditure every month and interface for public feedback and inputs during emergency
- An Independent Fiscal Institution (IFI) should be set up to conduct studies and analysis of macroeconomic status, budget and different aspects of public finance management. IFI can be mandated with the responsibilities of preparing tools and instruments of CE, monitor their implementation and collect public opinion and inputs on different stages of the budget process and institutions. IFI should prepare reports of their work and submit to the government and the parliament in a timely manner.
- Existing capacity of the federal level budget agencies including ministry of finance and national planning commission should be optimally utilized in systemic disclosure of financial information on open and accessible formats
- A training manual containing procedures for citizen engagement in different stages of the budget cycle should be prepared and training on PFM and CE should be provided to the concerned representatives and staff in different agencies under line ministries, departments or units at federal, provincial and local levels. Central budget agencies (MoF/NPC) should take this responsibility. Ideally, PFM training center under the Ministry of Finance can be strengthened and mobilized.
- Federal PFM training center and provincial training academy or good governance center should design and deliver training to the CSOs, media, elected local representatives and concerned local staffs on fiscal transparency and different aspects of CE in PFM. Training manuals for such training should include components of CE in PFM.
- All three levels of governments should review and make required improvements on the practices of citizen engagement and make sure that inputs and feedback collected and used from both representatives and open citizen participation approaches are well documented, reported and published.
- The budget agencies or units at each level should have minimum human resources and technical capacity in course of the preparation of key budget documents and related data, releasing them in timely fashion and implement the citizen engagement strategies and approaches throughout the budget cycle
- All three tiers of governments should identify and map CSOs with experiences or interest to work on different aspects of PFM should be identified and mapped at their respective level.
- All tiers of the governments should widely disseminate public service announcements through mass media and social media to strengthen demand side of budget information and citizen engagement, and enhance budget oversight. Moreover, budget literacy campaigns should be launched at each level. Governments should collaborate with media to promote budget literacy and improve citizen access to budget information
- Special departments, divisions or units should be established or assigned the responsibilities of preparation and disclosure of fiscal data and information, development and execution of CE tools and other aspects of public finance management in key PFM agencies including federal ministry of finance, provincial ministry of finance and planning, OAG, federal and provincial parliamentary secretariat and office of comptroller general
- List of projects to be implemented at subnational level from federal budget and local projects to be implemented from provincial budget should be listed separately, sent to the concerned provincial ministry of finance and local level and made public before finalizing the provincial and local budget. The purpose is to reduce duplication in resource allocation and execution.
- Provinces should make or amend good government policies and laws and include the provisions of budget information disclosure and citizen engagement in budget processes
- Local government self-assessment tools should be institutionalized to align the indicator of fiscal transparency and citizen engagement in budgeting process and linked with extra federal and provincial grants
- Local best practices such as development of budget transparency portal and releasing budget data, formation and engagement of citizens’ advisory councils and thematic groups in periodic plan development and annual budgeting process etc. should be replicated by local levels to promote fiscal transparency, citizen engagement.
- With few exceptions, municipalities and rural municipalities do not have dedicated budget or PFM units, and secretariats under the program and budget formulation committee are weak. Therefore a dedicated budget unit should be established and also given responsibilities of executing strategies of CE in local PFM.
- CSOs and media should promote practices of filing RTI application to get budgetary data that have not been publicly disclosed and use them for facts-based budget advocacy
- Local CSOs should receive individual audit reports, demystify audit recommendations and widely disseminate to the public to promote citizen advocacy for settling arrears and monitoring the progress. CSOs should conduct budget literacy campaigns and social accountability tools including public expenditure surveys.