Research Study Abstract

Title: Budget Process Analysis of Butwal Municipality
Document Reference: researchstudy2.pdf

Executive Summary & Findings

Research: Budget Process Analysis of Butwal Municipality
Funding Partner: The Asia Foundation (TAF)
Start Date: April 1, 2008
End Date: September 30, 2008

The municipal budgeting system in Nepal has been governed by the Local Self-Governance Act,
1999. The challenge regard in making budgeting process effective are several but building strong
accountability system between municipalities and their constituencies is the critical one. There are
several tools such as Participatory Municipality Development Planning (PMDP) and budgeting
guidelines, capacity building and transparency available for improving municipal budgeting
process. Citizens very often complain that the municipalities are not addressing their problems.
They have no access to fiscal and budgetary information.

The objectives of the analysis are:
 At this backdrop the study is to conduct a budget analysis of Butwal Municipality based
on allocation and expenditure data from the period 2003-2008 A.D. and to analyze the
budget policies (system, allocation, and service delivery) and budget accountability
(transparency and public awareness/ engagement).
 To present relevant findings, especially sectoral and spatial allocations, in the Geographical
Information System (GIS) map.

Methodology
 Conducted a budget analysis of Butwal Municipality based on allocation and expenditure
data from the period 2003-2008.
 Analyzed the budget policies (system, allocation, and service delivery) and budget
accountability (transparency and public awareness/ engagement).
 Presented relevant findings, especially sectoral and spatial allocations, in the Geographical
Information System (GIS) map.
 Shared the findings with local and national partners, actors and stakeholders

The Major Key findings
 Butwal Municipality is found not adhering to the budgeting timeframe as required by the
law. In five studied fiscal years, the municipality approved the budget in time only once.
The municipal budget presentation format does not match with the format prescribed by
the existing laws and regulations. Similarly, the budget document does not show the past
expenditure history in some headings. The difference between budget estimation and actual
revenue ranged between 56% - 70%. The average performance is 61% on the revenue side
and 58% on expenditure. A huge gap is observed on revenue mobilization almost annually
in headings.

Policy Implications

Findings from this empirical study were presented at national policy roundtables and distributed to relevant ministries, parliamentary committees, and development partners to guide evidence-based policy making in Nepal.