The Ministry of Finance’s monitoring and evaluation unit is closely examining how budget allocations are being used by all government ministries.
During an appearance on The Lens@177 this week, Finance Minister Professor Biman Prasad did not specify which ministries had underutilized funds. However, he emphasized that the entire Cabinet is committed to ensuring the proper and timely use of funds.
“We are aware that when a budget is allocated, such as for the Ministry of Health, it is to ensure that all necessary consumables and machines are available in our health centers and hospitals,” said Prof Prasad. “It is the responsibility of the permanent secretary, the ministry, and the staff to ensure that those resources are delivered.”
Prof Prasad also highlighted that for projects like water infrastructure, once the budget is allocated, there is a one-year window to implement it.
Noting that as a new government, they have observed varying degrees of efficiency among ministries, Prof Prasad said some are more adept at utilizing their budgets, while others face uncontrollable challenges such as contractor hiring and tender processes, which can be time-consuming.
“We have seen that in some ministries, budget utilization was not as efficient as we expected. When utilization is poor, it affects essential services that need prompt attention,” he said. “To address this, we now have a monitoring and evaluation unit within the Ministry of Finance that will closely monitor budget utilization.”
When asked whether he needed to adopt a softer approach to communicate his message, Prof Prasad responded that it was unnecessary. He mentioned that during evaluations with permanent secretaries and ministers, some ministries requested increased allocations. He questioned the rationale behind these requests, especially when prior allocations had not been fully utilized.
“For some ministries, we’ve actually reduced their budget, reallocating those funds to other ministries where they are needed,” Prof Prasad said. “In the last budget, we carefully restructured expenditures.”
He concluded by stating that all ministries have received a clear directive from the Ministry of Finance, the Government, and the Prime Minister regarding the importance of budget utilization.