Origin of Government accounting system
Government accounting in Nepal was first introduced in Nepal in Lichhavi period to record the revenues and expenditure of the government. In this period government revenues were collected from trust, tax, and custom duty and expenditures were made for war, renovation and construction of temples, pati, pauwas etc.
The trade and industry further developed in the Malla period, the sources of government revenue were increased. The expenditures were made for the same purpose of Lichhavi.
When the number of financial transactions increased in Shah Period, it was necessary to originate the systematic accounting system. As a result, in 1871 B.S, a book called “Laldhadda” was introduced to record revenues and administrative expenses of the government.
In 1879, another book of accounts called “Mothdhadda” was introduced for recording details about land and its revenues. These two books of accounts were the important steps in the history of accounting in Nepal.
After a long gap, an office Kitabkhana was established in 1925 B.S. for recording the salary paid to the employees of government offices, which is still in practice.
In 1936 B.S, an important contribution made by Kharidar Gunawanta, a senior professional who propounded Syaha Sresta Pranali which was used to present a real picture of government revenues and expenditures.
After the restoration of democracy in 2007 B.S., the government became more responsible towards the people and financial administration. As a result, the budgeting system was started in 2008 B.S.
Under the constitution of 2015 B. S. of Nepal, on 2016 Ashadh 16, the Auditor General was appointed as the constitutional body. The main objective of appointment of the Auditor General was to maintain systematic accounting and avoid frauds and misappropriation of government fund and to maintain the uniformity in financial administration Procedural rule for government fund expenditure 2016 was passed and enacted in 2016 B.S.
For bringing the uniformity in accounting system throughout the country, government formed the committee called “account committee” on 20th Magh 2017 B.S. which composed of four member;
Account General as Coordinator
Secretary of ministry of finance ( Foreign Aid Development)
Public Administrative Advisor of US Aid
Account specialist of the UNO
On Baishakh 2017 B.S. Bhuktani Sresta Pranali was introduced based on double entry book keeping system but it also become unsuitable and unable to maintain the systematic record of revenues and expenditures of government offices.
As a result the new accounting system based on double entry book keeping system was introduced in 2018 B.S. as per the recommendation of “Account Committee” to remove the difficulties of old system to established uniformity in accounting. It has systematic and scientific system that has been followed by the government of Nepal since the fiscal year 2019/20 B.S and it is still in practice in Nepalese government offices. This is a complete system and the most important revolution in the field of accounting in Nepal.
Types of accounting system used in Nepal
There were various types of accounting systems used in Nepal before introducing the New Accounting System. Some of the accounting systems used in Nepal was as follows:
- Wasil Banki Sresta Pranali: Wasil Banki Sresta Pranali was a simple statement based on single entry system and regarded as a first accounting system used in Nepal; it was used to record incomes and expenditures in different pages. The accounts were closed at the end of the fiscal year or after the completion of the job. This system was unscientific and impracticable because financial transactions were not classified and analyzed into different heads.
- Syaha Sresta Pranali: Syaha Sresta Pranali was introduced by Kharidar Gunawanta in 1936 B.S. Under this system, there was a provision to record income and expenditure separately. This system was more scientific than Wasil Banki Sresta Pranali which was in practice up to 2022/023 B.S. Various types of books, which were used under Syaha Sresta Pranali, are as follows:
- Syaha: Syaha was the primary record of financial transactions like journal voucher. It was used as the first step Syaha Sresta Pranali to record the incomes and expenditures of government offices. Syaha was prepared in a Nepali Kagaj. This page used to fold into 16, 24, 32 or 36 folds according to requirements to provide different columns for incomes and expenditures. It was divided into two parts. The right hand side was used to record expenditures and left hand side was used to record incomes. Syaha was closed at the end of month or year. Different books were in practice for recording financial transactions which are as follows;
Nagadi Syaha was used to recording for cash.
Jinsi Syaha was used to recording physical property.
Dharauti Syaha used to recording the security deposit.
- Awarje: Awarje is the second step of Syaha Sresta Pranali. It was familiar to the ledger. It was to keep the record of financial transactions in a classified manner according to the heads of income and expenditures. It facilitated to accumulate the similar nature of transactions under a single heading.
- Dhapot: Dhapot was the third and final step to record keeping in Syaha Sresta Pranali, which was used to report revenues and expenses in summary form to present the real position of the public fund on a given date. It was similar to the balance sheet.
- Form Sresta Pranali: When the number of financial transactions of the government offices became voluminous, Syaha Sresta Pranali became unable to fulfill the requirement. As a result, Form Sresta Pranali was introduced in 1968 BS specially to record the land revenue of Terai and city area of Kingdom of Nepal. Different types of 51 forms were used in practice to record the financial transactions and hence it was called Form Sresta Pranali.
- Bhuktani Sresta Pranali: Bhuktani Sresta Pranali was developed in Baishakh 2017 B.S. to maintain the systematic record of revenues and expenditure of government offices according to the budget heads. It was based on double entry book keeping system, which classified the government offices into the central level and operating level for systematic recording of public fund.
