15 April 2019, Kathmandu
According to the Office of the Auditor General, INGOs are found to be receiving nearly three times more funds than they showed to the concerned government agencies in the past three fiscal years.
This, according to the constitutional body, has raised questions over the transparency of funds received by the international NGOs.
As per the project agreement signed between INGOs and the Social Welfare Council, the government body responsible for regulating international and domestic non-government sectors, INGOs brought in Rs 58.58 billion from abroad between fiscal years 2015-16 and 2017-18.
As per the data entered by the INGOs into the Aid Management Platform (AMP), a software managed by the Finance Ministry which keeps track of foreign aid received by the country from the government and non-government sectors, foreign NGOs brought in Rs51.87 billion in the three-year period.
But funds received by the organisations and deposited at commercial banks showed that they received Rs153.72 billion during the period, the OAG said in its 56th annual report released on Friday.
As per the Social Welfare Act and its Regulations, INGOs can run the programme after signing a general agreement and a project agreement with the Social Welfare Council. As per Clause 17 of the Project Agreement Appraisal Guidelines of the council, the INGOs should provide data on financial assistance to the Social Welfare Council and Aid Management Platform of the Finance Ministry.
But the auditor general’s report states that INGOs have received more amounts than what they reported to the council and the Finance Ministry, going against the legal provision.
“The mobilisation of funds received by INGOs to implement the projects should be made transparent,” the report states. “Monitoring should be strengthened.”
According to Finance Ministry officials, data available at the Social Welfare Council and the Aid Management Platform might not represent the exact amounts the INGOs received.
“All the INGOs are not affiliated to the Council. Aid Management Platform, on the other hand, is a platform where INGOs can report about their funding only on voluntary basis,” said a senior official at the Finance Ministry requesting anonymity because he was not authorised to speak to the
media. “But such a massive gap between their reporting to the government agencies and bank accounts certainly raises questions over the transparency of funds received by them.”
Officials at the council said that INGOs which receive funds from residential donor agencies usually don’t report about their source of funding to the council and that this could have resulted in discrepancies in funds between what they showed and what they actually received.
Shiva Kumar Basnet, spokesperson for the council, told the Post that the INGOs that received funds from donor agencies having residential office here claim that they should not sign a separate agreement with
the council to implement the project after the donor agency signs an agreement with the government for the entire assistance.
“As per the existing laws related to the non-government sector, INGOs should be affiliated to the Social Welfare Council and work after signing an agreement with us, but a number of INGOs are yet to be affiliated to us,” Basnet said.
Although the government advocates that funds received in the form of official development assistance to Nepal should not be channelised through international non-governmental organisations, it has failed to stop the trend. In the fiscal year 2017-18, residential donors had provided as much as $134.33 to INGOs, according to the Development Cooperation Report-2018 published by the Finance Ministry. The amount constitutes around 10 percent of the total aid disbursed by the donors that year.
The USAID, the European Union, Australia, the World Food Programme, the United Nations Children’s Fund, the German Aid Agency (GIZ), Norway, and the Swiss Agency for Development and Cooperation are among the donors with residential offices in Nepal which contributed to INGOs in last fiscal year, according to the report.
In the previous fiscal 2016-17, the residential donors had provided up to $147.45 million to INGOs.
According to the Finance Ministry official, the fund earmarked by donors for Nepal should not be provided to INGOs as per the Development Cooperation Policy of the country.
“The government’s position is that INGOs should bring funds with their own efforts from abroad, but this policy largely remains unimplemented,” the official said.
When the Post asked Shibesh Chandra Regmi, chairperson of the Association of International NGOs in Nepal, about the issue raised by the auditor general’s report, he said: “I am not aware of this matter. What I know is all INGO funds raised either from outside or inside the country should technically be reported in their project agreements with the Social Welfare Council.”
In line with the government’s position, the NGO Federation of Nepal, a group of local non-government organisations, during its ninth general convention in December last year demanded that INGOs operating in Nepal should have no access to funds from the United Nations and donor agencies having their offices in the country.
Local NGOs are of the view that mobilisation of such funds to INGOs leads to higher administrative costs due to high salary for INGO workers, leaving little fund for actual works on the ground.
