Table of Contents

What is Public Audit?

Public Audit can be described as a systematic process of objectively obtaining and evaluating evidence based on established criteria to determine the information or actual status of the projects or their activities. It is also defined as a systematic process in which purposively, the financial, delivery, technical operations, quality assurance, and benefit sharing carried out are evaluated as well as the objectives, input, output, and goals achieved by the entities and agencies of the development sector. According to the Cambridge Dictionary, ‘public’ means relating to or involving people in general, rather than being limited to a particular group of people, and ‘audit’ means making an official examination of the accounts of a business and producing a report. Seeing the meaning of both words ‘public audit’ is a process of evaluating a particular business or project in a relevant group of people. Sometimes and somewhere ‘public audit’ is often referred to as a ‘public hearing’ but both terminologies are familiar to carry out their same work. It is a participatory process aiming to strengthen transparency and accountability.

The culture of participatory planning, implementation, monitoring, and evaluation in the direct participation of the community is needed to emphasize making development projects very effective and qualitative. It is necessary to eliminate financial irregularity, paradox, disharmony, abuse of authority, and abuse of resources by developing the trend of participatory appraisal and assessment (involving beneficiary groups and relevant actors and stakeholders) to ensure the stipulated results as per the predefined objectives of the investment grant. Public Audit helps to develop community unity, coalition, trust, and accountability toward the project. Since several decades ago, transparency, community participation, and accountability issues have been established as the prime principle in the development projects applied by different entities and organizations. Although there is no common understanding of the concept and principle. In the context of Nepal, Public Audit is recognized as a tool for ensuring transparency and public participation in the development projects for rural development.

Public Audit in Nepal

Public Audit has been known as a tool for ensuring transparency, public participation, and accountability in Nepal. It can contribute to strengthening good governance in the country. As the Public Audit directly concerns the public, it is executed through the way of a participatory approach. According to Manoj Khadka (Public Audit: Principle and Practical Use in the Context of Nepal), “the public assessment or appraisal conducted in a participatory way of public activities and expenditures for the public through the public in the public and presence of stakeholders is called a Public Audit.’’ Thus Public Audit is conducted in mass public for ensuring a lot of things including public participation, resource mobilization, quality assurance, benefit sharing, ownership building, and accountability of the development projects.

The Public Audit is also known as a social audit, a public hearing, etc. in Nepal. Through this tool feedback from the key persons and actors concerned with the projects are taken place where all of the things of the project, including investment, grant, actual expenditure, procurement system, implementation modality, participation, quality assurance, benefit sharing, hindrance, and strength are associated. Public Audit is also used to collect the opinion of the multi-stakeholders concerned with the projects to assess the part of administrative and financial effectiveness and qualitative measure, which ultimately helps assess the stipulated outcomes compared to the investment grant.

The clause ‘every citizen has the right to get and demand the information of any subject of the public concern’ has been mentioned in article no 27 of the constitution of Nepal (2072). The right to information to the citizen has been guaranteed by the constitution of Nepal. Similarly, the provision of access to information of all public entities for every citizen is there in clause no 3 of the information act 2064. Thus, public entities must provide information like budget, program, and expenditure upon request of any citizen. The development projects always keep concern with the public. Therefore the citizens have the right to get and perceive information about the development projects. Public Audit can be taken as a tool or medium to claim public rights and give and take feedback about the projects.

According to Public Audit Procedure 2067 issued by the Ministry of Local Development, ‘‘Public Audit is called as an act of informing, assessing, and evaluating goals, objective, budget, income and expenditure, and outcomes of the project implemented under the local entities financial administrative manual 2064 (rule 201-2)’’. Similarly, there is a provision for ‘social audit’ in the education manual (third amendment) 2062 to be executed in the school compulsory. According to this procedure, ‘the social audit is the method of qualitative and quantitative audit of all activities of the school indicated by the school improvement plan’. A tool of Public Audit has been applied by government entities and development agencies to ensure transparency, public participation, and accountability for development projects.

Why Public Audit is Important?

The Public Audit helps materialize the principle of ‘value for money’ and maintains transparency, quality, effectiveness, and accountability of public activities or projects implemented for the public. It also helps service providers increase their responsibility, accountability, and integrity for the rights holders. Since the Public Audit is a tool for ensuring public participation, trust, results, and accountability of the projects, it is paramount for beneficiaries of the projects. Through this tool service providers and concerned agencies are more responsible and accountable toward projects and the public. Public Audit encourages hearing and addressing public interests and grievances. It also plays an important role in increasing public ownership of development projects. As it is the democratic process of getting information on the project’s grant, outcome, learning, and good practices, it helps in bringing quality and effectiveness to the development projects.

Public audit guides to follow the important learning and practices experienced during the project phase for the future course. As Public Audit also applies the major elements of efficiency, efficacy, inclusion, ownership, and effectiveness, service providers and the public both are accountable for the development projects. These major elements are reviewed and measured by this tool that’s why service providers and concerned agencies are also responsible to achieve stipulated results for the public. It is a great tool to analyze investment grants, output, outcomes, and impact of the development projects. Thus, Public Audit plays an important role in ensuring quality, public participation, and accountability of the development projects.

Conclusion:

Public Audit is a systematic process in which purposively, the financial, delivery, technical operations, quality assurance, and benefit sharing carried out are evaluated as well as the objectives, input, output, and goals achieved by the entities and agencies of the development sector. Public Audit has been known as a tool for ensuring transparency, public participation, and accountability of development projects. It helps eliminate financial irregularity, paradox, disharmony, abuse of authority, and abuse of resources by developing the trend of participatory appraisal and assessment to ensure the stipulated results as per the predefined objectives of the projects. It also helps to develop community unity, coalition, trust, and accountability toward the project. As Public Audit is recognized as a tool for ensuring transparency, accountability, and public participation, it must be used in the development projects for rural development.

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