The central government will keep a close watch over the income and expenditure of the local units and provinces by using computer software called Sub-National Treasury Regulatory Application (Sutra).

The programme has been installed by the Public Expenditure and Financial Accountability (Pefa) Secretariat at seven provinces and all 753 metropolitan and sub-metropolitan cities, municipalities and rural municipalities.

The software has been launched at a time when the central government has not been able to keep track of budget utilised by local bodies. The government started trasferring grants to local bodies from this fiscal year following shift from unitary to federal system of government. Sutra is designed to enhance consistency and effectiveness of financial reporting across all tiers of government and aid the federal government in monitoring and implementing various budgetary and accounting activities. “Sutra will help to overcome logistical challenges related to budget allocations for various projects and programmes at the sub-national level. It will also help provincial and local governments to formulate plans on resource mobilisation.

This will help the central government to assess the needs of sub-national governments and earmark resources accordingly,” said Pefa member secretary Murari Niraula. He was speaking at an interaction entitled Financial Function of Local and Provincial Governments organised jointly by the Society of Economic Journalists-Nepal (Sejon) and Pefa Secretariat on Wednesday. Sutra is a web-based software developed and maintained by the Pefa Secretariat, a body under the Ministry of Finance.

The programme will help ensure that all 753 local bodies and seven provinces maintain consistency and avoid confusion and repetition in keeping records of income and expenditure. The software will also help all tiers of government to produce reports on income and expenditure on a real-time basis.

The data will help the Finance Ministry, National Natural Resource and Fiscal Commission and Financial Comptroller General’s Office to make various decisions.

The implementation of the Sutra software across all local and provincial units was approved by the government last November. The Pefa Secretariat will roll out both online and offline modes of the software to enable local bodies and provinces to enter data even when there is no access to the internet. The Pefa Secretariat has said it will upgrade the programme at regular intervals.

“Launching Sutra is an important step in implementing and optimising the decision-making process at the federal government through timely and consistent supply of information from sub-national governments,” said Niraula.

Damodar Regmi, coordinator of the Pefa Secretariat, said Sutra would help strengthen administrative federalism. Administrative federalism, according to Regmi, is the bridge between political and fiscal federalism, which together form three major aspects of federalism.

“We will continue to train officials at the local and provincial levels to familiarise them with Sutra. This, we believe, will strengthen administrative federalism,” Regmi said.