Controlling fiduciary risks in public finance

Fiduciary risks are heightened when public finances are not used for intended purpose.

Nepal has pursued the course of federalism with three tiers of government, resulting in horizontal and vertical expansion of 5,758 spending units across the country. With the distribution of power of the purse, the incidences of fiduciary risks have also increased, which are manifested in the growing size of arrears recorded by the Office of Audit General each year and the number of corruption cases filed by the Commission for the Investigation of Abuse of Authority. The country is facing shortages of resources for public investment to generate growth and employment. Widening fiscal space and erecting the architect of sound fiscal governance by controlling the fiduciary risks is necessary for our prosperity.