The Ministry of Finance’s monitoring and evaluation unit is closely examining how budget allocations are being used across all government ministries.
In an interview on The Lens@177 this week, Finance Minister Professor Biman Prasad did not specify which ministries had underutilized their funds. However, he emphasized that the entire Cabinet is committed to ensuring the proper and timely use of allocated funds.
“We are aware that when a budget is allocated, for example, to the Ministry of Health, it is crucial to ensure that all health centers and hospitals have the necessary consumables and equipment,” said Prof Prasad. “It is the responsibility of the permanent secretary, the ministry, and the staff to make sure this is delivered.”
He highlighted the importance of timely execution by saying, “Similarly, if we have a water project with a set budget, it must be completed within the year.”
As a new Government, Prof Prasad noted that some ministries performed better in budget utilization than others. While some departments were adept at using their full budget, others faced challenges beyond their control, such as contractor hiring and tender processes, which can be time-consuming.
“We have observed that in some ministries, the utilization was not as effective as expected. This impacts the services and delays necessary actions,” he said. “This year, our newly established monitoring and evaluation unit within the Ministry of Finance will closely track the ministries’ budget utilization.”
When asked if he had to employ a softer approach to convey his message, Prof Prasad responded that it was unnecessary.
He explained that in discussions with permanent secretaries and ministers, some ministries requested increased allocations. He cited an example where a ministry asked for $10 million more despite not fully spending $5 million from the previous budget. As a result, some ministries had their budgets reduced, with the funds reallocated to other ministries where they could be better utilized.
“In the last budget, we carefully reconfigured expenditures,” he said. “All ministries have received a clear message from the Ministry of Finance, the Government, and the Prime Minister regarding the importance of proper fund utilization.”