Irregularities dog NA Welfare Fund

KATHMANDU, Jan 18: The Office of the Auditor General has painted a picture of a Nepal Army Welfare Fund that is non-transparent and not in compliance with the Welfare Fund Regulations, raising questions about the hard-earned money of Nepal Army pecekeepers serving in UN missions abroad.

The regulations provide that NA can spend only the interest earned from the Welfare Fund money. However, in the last fiscal year, NA spent about Rs 960 million while the interest received from the fund was only about Rs 660 million.

"This shows NA has overspent about Rs 300 million," Radha Krishna Paudel, director at the AG office, told the parliament´s Public Accounts Committee on Monday.

The AG office says the regulations have been violated raising questions about the transparency of the fund, which comprises deductions from the allowances of Nepal Army peacekeepers in UN missions abroad.

NA deducts a maximum of 22 percent per person per month for deposit in the fund. One army peacekeeper on an average receives US$ 1,025 per month. Likewise, NA deducts 5 percent per person per month from military observers.

In one instance, the AG office said it coincidentally traced about US$ 2.8 million in a Himalayan Bank account. The money had not documented at the NA accounts.

"NA had failed to furnish details of about US$ 2.8 million in its last year´s balance sheet. However, we investigated after obtaining a document from the archives and located the money in the Himalayan Bank," Paudel told Republica. "The bank later returned the money."

The AG office has also raised questions over the burgeoning of the fund saying it could be utilized in fruitful ventures rather than letting it remain idle. While the amount was about Rs 16 billion last year, it is projected to be around Rs 18 billion this year.

The internal audit of the fund shows, Rs 1.39 billion and US$11.6 million have been tagged as unsettled amounts. However, the AG report said NA´s consolidated balance sheet has failed to mentioned the amount under unsettled category.

Likewise, the AG office has also pointed out the lack of transparency in the process of reimbursement from the UN, distribution of pensions, deposit transactions, monitoring and evaluation of equipment sent on missions and selection of financial institutions for depositing the Welfare Fund money.

This is not the first time transparency of the welfare fund has been questioned. The government on December 22 had formed an eight-member high-level taskforce under the chairmanship of Defense Accounts Controller to properly manage the fund. However, the taskforce has failed to take full shape as NA has yet to send names of its three representatives to the mechanism.

Despite NA´s repeated claims that the Welfare Fund money is deposited at sound financial institutions, over Rs 400 million of the Fund´s money is currently at risk.

While about Rs 180 million of the fund is hard to recover from Nepal Development Bank, which has turned bankrupt, Rs 16 million at Samjhana Finance Company faces the same problem.

Nepal Sri Lanka Merchant Bank and United Development Bank where Rs 149.2 million and Rs 60 million respectively have been deposited have not returned the deposits even after maturity.

http://www.myrepublica.com/portal/index.php?action=news_details&news_id=27291