Prithvi Narayan Shah, the first king of unified Nepal, established an office called 'Kumarichok' in 1826 B.S. (1769 AD) to examine the income-expenditure accounts of government offices all over Nepal. This foundation was the initial form of the Auditor General of Nepal. After the establishment of the Auditor General's office in 2016 B.S. the responsibility of auditing the government offices was given to this office. However, the offices of Kumari Chowk and the Central Tehsil Office continue to exist for the collection of Tejarath Sapti, the collection of government arrears on Beruju and domestic side, the collection of other government arrears, and so forth. The office of the Auditor General has been given authority to conduct an audit of all government offices.
Although the "Government of Nepal Statutory Law, 2004 BS", contained a provision stating that Shri 3 Maharaj can appoint a Chief Auditor to oversee the audit of the government's income and expenses, no Auditor General was appointed. Similarly, according to Part 8, Article 61 of the “Act of Interim Government of Nepal, 2007”, there will be a Comptroller and Auditor General in Nepal who will be chosen by His Majesty the King based on the Council of Ministers' recommendation. The Comptroller and Auditor General, however, were not appointed accordingly. As a result, the abovementioned provision was not put into effect.
This office was established with the appointment of the first Auditor General of Nepal on 1959 July 1 (15th Ashadh 2016 BS) in accordance with the constitution of Nepal, 2015 B.S. to maintain financial discipline and accountability in the country through the auditing and to audit government income, expenditure, and activities on the basis of regularity, economy, efficiency, effectiveness, and propriety. Initially, this office was established under the name of "Auditor General's Department" and in 2063 B.S. its name was changed to "Office of the Auditor General".
This office has been diligently promoting the delivery of public services, encouraging transparency and accountability in financial matters, and establishing best practices. Through an independent and objective audit of the government's operations, including government income and expenditure, the office assists in protecting the public funds in the nation and offers recommendations for safeguarding financial discipline. As the Public Accounts Committee discusses the Auditor General's report regarding the execution of laws, regulations, policies, programs, and budgets passed by the legislature as well as the overall activities of the government, the final audit is also regarded as a method of parliamentary oversight of the government's financial operations. The Auditor General's Office is now conducting financial audits of all federal and provincial government offices as well as local-level financial audits. It has been conducting performance, operational, information technology, and special audits based on the utmost relevance of the subject matter.
Constitutional provisions related to the Auditor General:
1. Constitution of the Nepal, 2015 B.S. (1959 A.D.): For the first time, the provisions relating to the Auditor General are enshrined in Articles 61 and 62 of the Part 8 (Audit), of the Constitution of the Nepal, 2015 BS.
1.1. Appointment and Eligibility: According to Article 61 of the aforementioned Constitution, an Auditor General shall be appointed by His Majesty, and the remuneration, terms of service, and tenure of office of the Auditor General shall be governed by law. His remuneration shall be charged to the consolidated fund. The Auditor General shall not be removed from office until the end of his term of office, except on the same ground and in the same manner as the judges of the Supreme Court.
1.2. Functions, Duties, and Powers: Under Article 62 (Account Examination and Report), The accounts of all departments of Government, including the cabinet, the Secretary to the Senate, the secretary to the House of Representatives, the office of the Supreme Court, and the office of the Public Service Commission, shall be kept in such a form as the Auditor-General with the approval of His Majesty, may prescribe, and shall be audited by the Auditor-General. He and his deputies shall have the right at all times to have access to all books, records, and returns relating to such accounts. The Auditor-General shall perform such other duties and exercise other powers relating to the expenditure and accounts as prescribed by the law.
1.3. Submission of Annual Report: The Auditor-General shall submit a report annually to His Majesty including the works done under this Article 62, and His Majesty shall cause such reports to be laid before the Parliament.
2. The Constitution of Nepal, 2019 B.S. (1962 A.D.): The Constitution of Nepal, 2019 B.S. provides the Auditor General the authority and responsibility to audit all government offices, and the third amendment to this constitution passed in 1980, gave the office of the Auditor General additional authority to conduct performance audits based on Economy, Efficiency, and Effectiveness. Other major provisions are as follows:
2.1. Appointment and Eligibility: According to Article 75 of the Constitution, the Auditor General shall be appointed by His Majesty in consultation with the Rajya Sabha. The Auditor General shall remain in office for 6 years from the date of appointment, and the remuneration and conditions of service of the Auditor General shall be regulated by law. He may be removed from the post on the same ground and in the same manner as the Judge of the Supreme Court. There were provisions such as the person who has held office as an Auditor-General shall not be eligible for appointment in government service.
2.2. Functions, Duties, and Powers: Under Article 76 of the Constitution (Functions and Powers of the Auditor General), The accounts of all the departments and offices of the Government and of all the courts as well as the offices of the Supreme Court, the National Panchayat, the Raj Sabha, and the offices of the Public Service Commission and the Election Commission, and, also, the accounts of the government-owned corporate bodies, shall be audited by the Auditor-General in the manner prescribed by law, The Auditor-General and his deputies shall at all times be entitled to have access to all documents relating to such accounts. The Auditor General and his assistants will have the right to see all the documents related to such accounts at any time, the accounts audited by the Auditor General will be kept in the prescribed format.
2.3. Submission of Annual Report: The Auditor General would submit the annual report of the work done by him to His Majesty and such report would be placed to the National Panchayat.
3. Constitution of Nepal, 2047 B.S. (1990 A.D.): After the success of the First People's Movement in Nepal, the Constitution of the Nepal 2047 B.S., under Part 13, had provisions related to the Auditor General in Articles 99 and 100. In this constitution, the Auditor General is also referred to in relation to the audit of all government offices on the basis of regularity, economy, efficiency, effectiveness, and propriety and the accounting format is to be prescribed by the Auditor General. The main provisions of this constitution are as follows:
3.1. Appointment and Eligibility: In Article 99 of the Constitution, there was provision of an Auditor General of the Kingdom of Nepal who shall be appointed by His Majesty on the recommendation of the Constitutional Council.
3.2. Functions, Duties, and Powers: Under Article 100, accounts of the Court, all Constitutional Organs and Government Offices, Security Agencies, etc. shall be audited by the Auditor General considering the regularity, economy, efficiency, effectiveness, and propriety. The Auditor General shall be consulted when an auditor is appointed for the audit of State-Owned Enterprises by the government of Nepal. There were provisions such as the duties of the office, the accounts of the entities to be audited should be kept in a format prescribed by the Auditor General, and the accounts of any other office or organization should be audited by the Auditor General as per federal law.
3.3. Submission of Annual Report: The Auditor General would submit the annual report of the work done by him to His Majesty and such report would be placed to the parliament.
4. Interim Constitution of Nepal, 2063 B.S. (2007 A.D.): The laws related to the Auditor General are found in Articles 122 to 124 of Part 12 of the Interim Constitution of Nepal, 2063, which was established following the triumph of the Second People's Movement in Nepal. Although most of the subjects covered by this constitution are the same as those covered by the one before it, certain new provisions have been introduced, including provisions regarding the appointment of the Auditor General and matters to be covered in the Auditor General's annual report. The following are the important provisions of this constitution:
4.1. Appointment and Eligibility: According to Article 122 of the Interim Constitution 2063 B.S., the appointment of the Auditor General shall be made by the President on the recommendation of the Constitutional Council, his term of office shall be 6 years from the date of appointment, the position shall become vacant if he/she resigns in writing to the President or if the term of office is completed or if he/she does not remain in his/her position or if he/she dies. Having reached the age of 45, holding a bachelor's degree in management, commerce, or accounting from an accredited university or having passed the chartered accountancy examination, having worked in a specific area of the government of Nepal, or having at least 20 years of experience in audit-related work, not belonging to a political party and having high moral character, are all requirements for appointment to the position of Auditor General.
4.2. Functions, Duties, and Powers: According to Article 123, The accounts of the Supreme Court, Legislature-Parliament, Constituent Assembly, Commission for the Investigation of Abuse of Authority, Auditor General, Public Service Commission, Election Commission, National Human Rights Commission, Office of The Attorney General and other offices of constitutional entities and the Nepal Army and Armed Police and the Nepal Police as well as all other government offices and courts shall be audited by the Auditor General in the manner determined by law, with due consideration given to the regularity, economy, efficiency, effectiveness and the propriety thereof. The Auditor General shall be consulted in the matter of the appointment of auditors for carrying out the audit of any corporate body of which the Government of Nepal owns more than fifty percent of the shares or assets. The Auditor General may also issue necessary directives setting forth the principles for carrying out the audit of such corporate bodies. The Auditor General shall, at all times, have access to documents concerning the accounts for the purpose of carrying out the functions specified in clause (1). It shall be the duty of the head of the office in question to provide all documents or information which may be demanded by the Auditor General or his/her employees.
4.3. Submission of Annual Report: Under the provisions of Article 124, the Auditor General shall submit an annual report of his work to the President and such report shall be submitted to the Legislature-Parliament through the Prime Minister. It was arranged that the details of the achievements and improvements to be made in the future should be mentioned in relation to the efforts.
5. Constitution of Nepal, 2072 B.S. (2015 A.D.): The provisions related to the Auditor General are subject to Articles 240 and 241 under Part 22 and Article 294 under Part 32 of the Constitution of Nepal, which was drafted by the historic Constituent Assembly that was established following the success of the second people's movement in Nepal in 2062/2063 B.S. In this constitution, the provisions regarding the appointment and qualifications of the Auditor General remain the same as in the previous constitution. However, some new provisions have been added regarding the Auditor General's scope of work and reports. According to this constitution, the audit up to the local level has been arranged by the Auditor General, and the scope and responsibilities of this office have been widened. The main provisions of this constitution are as follows:
5.1. Appointment and Eligibility: According to Article 240 of the Constitution of Nepal 2072 BS, the appointment of the Auditor General shall be made by the President on the recommendation of the Constitutional Council. His term of office shall be 6 years from the date of appointment. For appointment to the post of Auditor General, having obtained a bachelor's degree in management, commerce, or accounting from a recognized university or having passed the chartered accountancy examination, having worked in a specific category of the Government of Nepal or having at least twenty years of experience in audit-related work, not being a member of any political party, having completed 45 years of age, provisions such as requiring qualifications such as maintaining high moral character are included.
5.2. Functions, Duties, and Powers: According to Article 241 of the Constitution, the functions, duties, and powers of the Auditor General are as follows:
· The accounts of all Federal and Provincial Government Offices including the Office of the President, Office of the Vice-President, Supreme Court, Federal Parliament, Provincial Assembly, Provincial Government, Local Level, Constitutional Bodies and Offices thereof, Courts, Office of the Attorney General, Nepal Army, Nepal Police and Armed Police Force, Nepal shall be audited by the Auditor-General in accordance with law, having regard to, inter alia, the regularity, economy, efficiency, effectiveness and the propriety thereof.
· The Auditor General shall be consulted in the matter of appointment of an auditor to carry out the audit of a corporate body of which the Government of Nepal or the Provincial Government owns more than fifty percent of the shares or assets. The Auditor General may also issue necessary directives setting forth the principles for carrying out the audit of such corporate body.
· The Auditor General shall have the right to examine any books of accounts for the purpose of carrying out its functions, and it shall be the duty of the concerned chief of the office to provide such documents and information as may be demanded by the Auditor General or any of his or her employees.
· In addition to the designated office, any other office or organization should be audited by the Auditor General according to federal law.
· Accounts of the entity to be audited shall be kept in the format prescribed by the Auditor General in accordance with federal law.
5.3. Submission of Annual Report: Article 294 (Annual Report of Constitutional Bodies) of the Constitution stipulates that constitutional bodies, including the Auditor General, must submit an annual report of their work to the President and such a report shall be submitted to the Federal Parliament through the Prime Minister. According to section 19 of the Audit Act, 2075 BC, the things to be disclosed in the annual report in sub-section 2 of the said article shall be audited by the Auditor General during the year, the details of the actions taken, the summary of the main transactions observed from the audit, the status of the implementation of the audit report and the improvements to be made in the future and the necessary It has been arranged that other things should be included. In addition, there is a provision in the Audit Act to issue an audit report with an opinion after completing the audit of the designated entity. In Article 294 of the Constitution and Article 19 of the Audit Act, the Auditor General prepares a separate annual report on the activities of each province and submits it to the head of the respective province and the report is submitted to the provincial assembly through the chief minister.
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