Page 184 - Account 10

New Accounting System

3. Introduction
As the autocratic Rana Regime was overthrown by the historic people’s movement
in 2007 and a democratic government was established in the country. The democratic
government declared the budget system in 2008 B.S. to let the people know about the
financial affairs of the government. Similarly, it started in 2013 B.S. the economic planning
in the country for the all round development of the country. The existing accounting
systems i.e. the Shyaha and Faram Shresta Pranali, could not supply the necessary data
and financial information to the government for the preparation and execution of the
budget and the economic planning. Then it was felt necessary of a scientific system of
accounting for the government offices to make complete record of the transactions, to
facilitate the preparation and execution of budget and economic planning, to decentralise
the job of accounting and to establish uniformity in accounting and so forth. As a result,
Payment Accounting System was brought into practice in the year 2017 as the outcome
of the “Procedural Rule for Government Fund Expenditure 2016”. But this system,
although, was scientific and based on the principle of double entry system, could not
fulfil the accounting need of the government offices because of its serious limitations
and practical difficulties, such as lack of the provision of budget transfer, non-unifomity
of advance transactions, concentrations only towards the payments, etc. Besides, the
Payment Accounting System could not show the actual position of the foreign aid and
donation and the picture of their utilization to the foreign countries because of the lack of
such a provision under this system.

Hence, for the improvement, decentralisation, and modernisation of the accounting
system in the country, the government formed a committee in the name of ‘Account
Committee 2017’ on the 20 Magh, 2017. It was of 4 members:
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i. Accountant General of Government,
ii. Under Secretary, Ministry of Finance,
Foreign Aid Department, Government of Nepal.
iii. Account Specialist, UNO.
iv. Public Administration Advisor of U.S. Aid.
The committee studied, in detail, about such an accounting system, for 288 days and
presented a draft to the finance secretary on the 18 of Kartik 2018 B.S. by suggesting a
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New Accounting System for the country.
Since, it was quite a new system of accounting, it was implemented in the country on trial
basis. It was first implemented in the offices of Kathmandu Valley from the fiscal year
2019/ 020, then in the offices on Narayani Zone and the rest of Bagmati Zone from the
fiscal year 2020/021 and again in the phase, it was implemented in the offices of Janakpur
and Gandaki Zone from the fiscal year 2021/022, and finally, all over the country from
the fiscal year 2025/026, after being proved as an appropriate accounting system.
According to the ‘Accounts Summary Book’ of Government of Nepal, “The act of all those
processes of collecting revenue, making expenditure and recording them as well as preparing
statements of those transactions or their result in part or full.”

184 Aakar’s Office Practice and Accountancy - 10 Government Accounting System 185