Economy, business, politics and society
Essex research into public sector accounting in Nepal has benefitted the government, investors, development partners such as the World Bank and Nepalese society by ensuring decision makers are truly accountable.
Governments can only be properly held to account if they provide clear information about the performance of public services, explain decision making; and justify their conduct and decisions. This requires transparency of decision making and openness to scrutiny by the public.
The standardisation of public sector accounting practices has been part of Nepal’s reform agenda since 2009, but the big challenge was how to develop the capacity of government accountants, increase their engagement, and streamline and harmonise the implementation of new standards and policies across a country with over 4,000 public sector bodies in a sustainable way.
Dr Pawan Adhikari has been conducting theoretical and empirical research on public sector accounting and accountability in Nepal since 2001. He has analysed and compared practices in Nepal with those operating in Russia, Norway and Sri Lanka. This work showed the reforms adopted in Nepal have not always functioned as intended. He was also able to highlight the benefits of potential technical improvements. This inspired the government to engage with his research to improve the implementation of reforms.
Dr Adhikari’s research and his involvement in reform efforts, underpinned reform of Nepalese public sector accounting and accountability in three key areas:
Dr Adhikari was consulted throughout the development of the manual. Once piloted, the manual was mandated across 4,000 public sector bodies. This promoted consistency and enabled best practice to be identified and developed a policy of capacity building of government accountants.
Dr Adhikari’s research highlighted international trends in public sector accounting and identified national requirements and the need for an incremental approach to building the standard. This included a pilot in two ministries to enable analysis of the challenges experienced in the process and to arrange the required resources to extend the standard to the remaining ministries. All 42 central level agencies now prepare their consolidated financial statements using the forms recommended in the NPSAS.
Dr Adhikari helped identify the barriers to change and building the competences of government accountants. The Financial Comptroller General Office used his research on scheduling to develop policies on capacity building. This was then rolled out through training programmes, facilitated jointly by the pilot companies and the Financial Comptroller General Office, covering the development of new accounting forms and systems based on the accounting manual.
The reforms influenced by Dr Adhikari’s research have strengthened public accountability in Nepal in the following ways:
A blog Adoption of international public sector accounting standards in emerging economies has been produced by Dr Pawan Adhikari and others.