Records of nearly Rs 47 billion in government investments across public institutions remain unverified, raising serious concerns about financial oversight and accountability.

According to the Ministry of Finance and the Public Debt Management Office (PDMO), records of long-standing share investments and loans do not match between the government and recipient institutions. Discrepancies persist in the reported investment amounts, utilization, and expected returns, leaving large gaps in the official accounting of public funds.

The PDMO told the state-run news agency RSS that investments worth Rs 26.34 billion in shares and Rs 20.53 billion in loans - totaling Rs 46.87 billion - could not be verified against institutional books. While the government’s records indicate higher investment figures, many institutions have reported lower amounts, making it difficult to determine responsibility for decades-old accounting gaps. Weak internal control systems and inconsistent accounting methods have further compounded the problem.

Public entities implementing major infrastructure projects - including hydropower, airports, telecommunications, and drinking water supply - are among the largest recipients of these investments. Despite the introduction of the Share and Loan Investment Policy 2081, the lack of standardized accounting practices and integrated monitoring systems has prevented accurate verification of past investments.

Examples include the Nepal Electricity Authority’s rural electrification programs, where total government investment remains unclear due to mismatched treatment of foreign grants and loans. Similarly, records held by the Civil Aviation Authority of Nepal do not align with assets transferred from the former Civil Aviation Department at the time of the authority’s formation. Kathmandu Valley drinking water board also shows sizable differences between loan disbursements and project expenditures.

The PDMO has identified several additional reasons for the discrepancies, including varying interest rates, changes in loan repayment schedules, and ambiguity over adjusting loan terms when project timelines shift. Even when the government channels development partner loans to institutions through subsidiary loan agreements, delays in repayments or rescheduling requests continue to create new accounting gaps. While institutions cite construction delays, the central government must still repay external lenders on time, further widening discrepancies.

Despite total investments of Rs 930.88 billion in shares and loans across 159 public institutions - of which Rs 404.81 billion is in shares and Rs 526.6 billion in loans - returns remain weak. Outstanding principal and interest have risen to Rs 400.82 billion in FY 2024/25, undermining the government’s fiscal management efforts.

Regular audits, essential for transparency, are severely lagging. Only 21 institutions completed audits for FY 2023/24. Others have multi-year backlogs, some dating as far back as FY 2007/08. Entities such as Udayapur Cement, Public Service Broadcasting Nepal, and Gorkhapatra Corporation have not completed audits for recent years, while several insurance and industrial institutions have pending audits spanning a decade or more.

According to the PDMO, the absence of clear documentation, signed agreements, and complete accounting of past decisions makes it impossible to determine the exact status of government investments. Until institutions reconcile their accounts, the PDMO’s figures remain the official record.

The office said it is continuing discussions with entities including the Kathmandu Valley Drinking Water Management Board and the Civil Aviation Authority of Nepal to complete reconciliation by the end of the current fiscal month.