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99. (1) There shall be an Auditor-General of the Kingdom of Nepal who shall be appointed by his Majesty on the recommendation of the Constitutional council.
(2). The term of office of the Auditor-General shall be six years from the date of appointment. He shall be eligible for reappointment provided that:
(a) if before the expiry of his term, the Auditor-General attains the age of sixty five, he shall retire.
(b) he may be removed from his office on the same grounds and in the same manner as has been set forth for the removal of a judge of the Supreme Court.
(3). The office of the Auditor-General shall be deemed vacant in the following circumstances:
(a) if he dies; or
(b) if his resignation submitted of His Majesty in writing is accepted by Him; or
(c) if pursuant to clause (2) his term expires or hr is removed from his office.
(4) No person shall be appointed as the Auditor-General unless he:
(a) holds a Bachelor's Degree from a university recognized by His Majesty's Government;
(b) has worked for at least five years as a special class officer of His Majesty's Government or has experience in the field of accounting of not less than fifteen years;
(c) is not a member of any political party immediately before appointment; and
(d) has attained the age of forty five.
(5) The remuneration and other conditions of service of the Auditor-General shall be as determined by law. The remuneration and other conditions of service of the Auditor-General shall not, so long as he holds office, be altered to his disadvantage.
(6) A person once appointed to the office of the Auditor-General shall not be eligible for appointment in other Government Service:
Provided that nothing in this Clause shall be a bar to appointment to any position of a political nature, or to any position which has the responsibility of making investigations, inquiries or findings on any subject, or to any position which has the responsibility of submitting advice, opinions or recommendations after carrying out studies or research on any subject.
100. Functions, Duties and Powers of the Auditor-General
(1) The accounts of the Supreme Court, the Parliament, the Raj Parishad, the Commission for the Investigation of Abuse of Authority, the Office of the Auditor-General, the Public Service Commission, the Election Commission, other offices of the Constitutional Bodies, the Royal Nepal Army and the Nepal Police, and all other government offices and courts shall be audited by the Auditor-General in the manner as determined by law, with due consideration given to the regularity, economy, efficiency, effectiveness and the propriety thereof.
(2) The Auditor-General shall be consulted in the matter of appointment of auditors for carrying out the audit of any corporate body of which His Majesty's Government owns more than fifty percent of the shares or the assets. The Auditor-General may also issue necessary directives setting forth the principles for carrying out the audit of such corporate bodies.
(3) The Auditor-General and his assistants shall, at all times, have access to documents concerning the accounts for the purpose of carrying out the functions stipulated in clause (1) above. It shall be the duty of the concerned office to provide all such documents or information which may be demanded by the Auditor-General or his assistants.
(4) The accounts to be audited pursuant to clause (1) above shall, subject to the relevant law, be maintained in such form as prescribed by the Auditor-General.
(5) In addition to the accounts of the offices referred to in clause (1) above, the law may also require that the accounts of any other office or institution be audited by the Auditor-General.
(6) The Auditor-General shall submit an annual report to His Majesty on the works he has performed. His Majesty shall cause such report to be laid before Parliament.
The following Act was published in the Nepal Gazette. Part II, Vol. 41, Additional Number 47, dated 2048/7/11 (October 28, 199l).
Act No. 16 of 1991
Whereas it is expedient to make necessary provisions on Audit,
Now, therefore, on the twentieth year of the reign of His Majesty King Birendra Bir Bikram Shah Dev, the Parliament has enacted this Act.
(1) This Act may be cited as "Audit Act 1991" This Act shall come into force immediately.
Unless repugnant to subject or context, in this Act-
(a) "Government Office" means all government office and courts, including the Supreme Court, Parliament, State Council (Raj Parishad) Abuse of Authority Auditor General Public Service Commission and Offices of other constitutional bodies, and Royal Nepalese Army and Nepal Police.
(b) "Accounts" means the records, ledgers books etc. maintained under existing laws showing particulars of transactions, and other documents substantiating-such transactions.
(c) "Audit" means examination of the accounts and the analysis and evaluation made on the basis thereof.
(d) "Corporate Body Wholly Owned by His Majesty's Government" means a corporate body whose all shares of assets are owned by His Majesty's Government, or a corporate body whose all shares or assets are owned by the aforesaid corporate body or by such corporate body and his Majesty's Government. The expression shall also include such corporate body for whom His Majesty's Government is required to bear full responsibility.
(e) "Corporate Body Substantially Owned by His Majesty’s Government" means a corporate body whose more than fifty-percent shares or assets are owned of His Majesty's Government.
(1) The Auditor General may conduct final audit of the financial activities and other activities relating thereto of the offices, bodies or organisations under its jurisdiction, either in detail or sporadically or in samples and present the facts obtained there from, make critical comments thereon and submit its reports.
(2) The Auditor General may. if it deems necessary in course of audit exercise the following powers -
(a) To check at any time the status of the program and project being operated under the grants obtained by his Majesty's Government and examine documents relating to accounts;
(b) To require contractors of government contracts to produce relevant documents or other evidence relating to the contract, which are supposed to be in his possession;
(c) To hire services of any expert on the task of audit and, if necessary, engage him under contract with reasonable remuneration.
The Auditor General, with due regard to the regularity, economy, efficiency, effectiveness and propriety, shall audit following matters to ascertain whether:
(a) The amount appropriated in the concerned heads and sub-heads by the Appropriation Act for respective services and tasks have been expended for the specified purposes of designated services or tasks within the approved limit;
(b) The financial transactions comply with the existing laws and the evidence relating to items of income and expenditure are sufficient;
(c) The accounts have been maintained in the prescribed forms and such accounts fairly represent the position of the transactions;
(d) The inventory of government assets is accurate and up to date and the arrangement for protection and management of governmental property is adequate;
(e) The arrangements for internal audit and internal control of cash, kind and other governmental property against any loss, damage and abuse are adequate and if so, are they pursued;
(f) The accounts of revenue, all other incomes and deposits are correct and the rules relating to evaluation, realisation and methods of book keeping are adequate and if so, are they followed;
(g) The accounts relating to public debts, security, deposit, Debt Relief Fund and the amounts set aside for debt services and repayment of debts are accurate;
(h) The accounts of income and expenditure of industrial and business services, and their balance of cash and kind, and the arrangements and rules relating to their financial transactions are adequate and if so, are they observed;
(i) The organisation, management and job allocation of the office are sufficient and proper and are that operating accordingly;
j) Any function is being unnecessarily performed in duplication by any employee or agency or any essential function is being omitted;
(k) The available resources, means and assets are properly utilised and the maintenance and perspiration thereof against any loss or damage has been properly arranged;
(l) The progress has been achieved within scheduled time and the quality and quantity of the work is satisfactory;
(m) The objective and policy of the Office is explicit and the program is delineated conforming to the specified objective and policy;
(n) The program is being implemented within the limits. of approved cost estimate and the proceeds received in comparison to the cost is reasonable;
(o) The arrangements for maintaining data relating to target, progress and cost are adequate and reliable;
(1) The Auditor General shall audit following matters considering the propriety thereof-
(a) On the propriety of any expenditure and its authorization, if in the opinion of the Auditor General such expenditure is a reckless one or is an abuse of national property, whether fixed or current, despite that the expenditure confirms to the authorization, and
(b) On the propriety of all authorizations issued in respect of any grant of national property whether fixed or current, or underwriting of any revenue, or any contract, licence or permits relating to mining, forest, water resources, etc. and any other act of abandoning fixed or current assets of the nation.
(2) The Auditor General may not include in his report minor items of discrepancy and other items deemed by him as insignificant in view of their property which were observed during the audit of income and expenditure.
(1) Notwithstanding anything contained in the existing laws, the audit of the corporate bodies wholly owned by His Majesty's Government shall be audited by the Auditor General pursuant to this Act.
(2) If the Auditor General is constrained by time and resources to audit the corporate bodies wholly owned by His Majesty's Government pursuant to Sub-section (1) he may appoint professional auditors according to the existing laws as his assistants. While appointing auditor as such, he shall give priority to the Nepali citizens.
(3) The auditors appointed pursuant to Sub-section (2) shall act under the direction, supervision and control of the Auditor General.
(4) The powers, functions, duties and responsibilities of the auditors appointed pursuant to Sub-section (2) and the procedures to be followed by them in course audit and provisions relating to their report shall be as prescribed by the Auditor General.
(5) The remuneration to be paid by the concerned organisation to the auditors appointed pursuant to Sub-section (2) shall be General keeping in view the volume of financial transactions, status of accounts, number of branches and sub-branches, work load and work progress of the concerned organisation.
(1) The audit of the corporate bodies substantially owned by his Majesty's Government shall be done in accordance with the existing laws relating to such body.
(2) Notwithstanding anything contained in Sub-section (1), the Auditor General shall be consulted while appointing and auditor for auditing of the corporate bodies substantially owned by His Majesty's Government.
(3) The procedures to be followed while consulting the Auditor General for appointing auditors pursuant to Sub-section (2) and on matters to principles of audit to be followed by the auditors during their audit shall be as prescribed by the Auditor General.
(4) The concerned organisation shall deliver at the Office of the, Auditor General a copy of the report submitted by the auditor appointed in consultation with the Auditor General pursuant to Sub-section (2).
(5) The Auditor General may issue directives to the concerned organisation in respect of the irregularities observed in the report received pursuant to Sub-section (4) and it shall be the duty of concerned organisation to abide by such directives.
The Auditor General shall submit its annual audit report, including his critical comments and recommendations thereon, to His Majesty on the final audit of Government Offices and other offices and organisation prescribed by existing laws, which are subject to audit by the Auditor General.
Provided that the Auditor General may submit at any time a report to His Majesty if he deems necessary to take immediate action against any loss or damage already happened or impending upon the fixed and current national assets.
(1) There shall be officers and employees as approved from time to time by His Majesty's Government in order to assist the Auditor General in the performance of his duties. The number of such employees shall not be reduced without the approval of the Auditor General.
(2) A separate cadre of officers and employees in the Office of the Auditor General shall be constituted. The recruitment and other conditions of services of the officers and employees within the cadre shall be as prescribed in the Rules to be framed under this Act.
The Auditor General may, subject to the Constitution of the Kingdom of Nepal, 1990 and the existing laws, issue directives to the concerned Government Offices, and Corporate Bodies wholly or substantially owned by His Majesty's Government, from time to time to make proper arrangements on matters of accounts and to maintain regularly therein. It shall be the duty of the concerned offices or organisations to abide by such directives.
His Majesty's Government may in consultation with the Auditor General, frame Rules for the implementation of this Act.
Necessary legal action shall be taken in respect of the faults and irregularities observed during the audit of income and expenditure and other financial matters of His Majesty's Government, according to the existing laws.
(1) Audit Act, 1961 is here by repealed.
(2) Accounts to be audited under the Audit Act. 1961 shall be audited according to this Act.
DATE OF ROYAL SEAL OF ASSENT - 2048/7/11/2
