AG Audit Objections - KMC Financial Irregularities

Executive Summary

The Auditor General's office has identified significant financial irregularities totaling Rs 121.5 million in Kathmandu Metropolitan City's accounts during Mayor Balen Shah's tenure. This comprehensive audit report details systematic violations of financial regulations and procurement procedures.

Key Findings

Financial Irregularities

• Unauthorized Expenditures: Rs 45.2 million in unauthorized spending without proper approval
• Missing Documentation: Rs 32.8 million in transactions lacking proper documentation
• Procurement Violations: Rs 28.5 million in contracts awarded without competitive bidding
• Overpayments: Rs 15.0 million in overpayments to contractors and suppliers

Specific Violations

1. Lift Procurement Scandal: Rs 10 million contract awarded without proper bidding process
2. Grant Disbursements: Rs 8.5 million in grants distributed without approved project maps
3. Foreign Travel: Rs 2.3 million in unauthorized foreign travel expenses
4. Equipment Purchases: Rs 5.2 million in equipment purchased without proper justification

Recommendations

1. Immediate recovery of unauthorized expenditures
2. Implementation of proper procurement procedures
3. Enhanced financial oversight and controls
4. Regular audit compliance training for staff
5. Establishment of independent oversight committee

Conclusion

The audit findings reveal a systematic pattern of financial mismanagement that requires immediate corrective action and accountability measures.