The rural municipality's capital budget in the second year of the new structure was, in round numbers, twelve crore. It returned a little over four. Not stolen — returned, to the federal treasury, unspent, at the close of the fiscal year, in accordance with the rules.
This is now the standard fact that gets recited about Nepal's federalism, and it gets recited by people who want it to mean that the restructuring failed. I have spent eight years watching these units and I want to argue that the unspent money means almost the opposite of what it is being used to mean, and that the mistake is a specific one about sequence.
In 2015 the country replaced a centralised district administration with seven hundred and fifty-three local units, each with an elected executive, a council, and — this is the part that matters — a constitutionally protected share of revenue that arrives whether or not anybody in the building knows what to do with it.
What did not arrive on the same schedule was an engineer. Or a procurement officer. Or an accountant who had ever prepared a tender document. Consider what actually has to happen for twelve crore to become a road. Somebody must scope the work. Somebody must produce a cost estimate that will survive audit. A tender must be published in a form that is legally sound, evaluated against criteria that can be defended, and awarded to a contractor who exists. Progress must be certified before payment. Every one of those is a trained function, and in 2018 a very large number of these units had none of them, because the people who could do that work were in Kathmandu or in district offices that had just been dissolved, and the salary a rural municipality could offer did not move them.
So the money sat. Then, in the last quarter, the pressure to spend arrived — because returning it looks like failure and because the following year's allocation is affected — and what happens in the fourth quarter is the second half of the story: a rush of small contracts, poorly specified, awarded to whoever is nearby, for work that can be certified quickly. Concrete. Retaining walls. Short stretches of road that stop where the fiscal year stopped.
I want to be precise about my anger here, because measured is the only useful register for this and I have watched people lose the argument by shouting it. The problem is not that local politicians are incompetent or crooked. Some are. Most of the ward chairs I have dealt with are ordinary people doing a job nobody trained them for, under an audit regime designed for a district administration with a professional staff, and being blamed in the national press for the gap between those two things.
Now the objection, and it is the one I have come around to taking as the strongest.
Capacity of this kind is only ever built by doing. There is no version where you train seven hundred and fifty-three procurement officers first and then devolve; the training has no content without the budget, the people will not take the posting without the authority, and any sequencing that says wait means never, because the centre has never in the history of this country voluntarily surrendered a function it was still performing. The people who wrote the constitution knew the first years would be bad and accepted that, and I think they were right to, and I would not have voted the other way.
Fine. Accept it. It still does not follow that the transition needed to be blind.
Here is what I would have wanted, and it is not a large thing. Publish, per unit, per year, three numbers: allocation, spend, and how much of the spend was contracted in the final quarter. The first two are already collected. The third is derivable from data the treasury already holds. Put them side by side and the difference between a unit that cannot spend and a unit that spends badly in March becomes visible, and those two problems have entirely different remedies — the first needs a shared engineer across four municipalities, the second needs the fiscal year rule changed.
At the moment both appear identically in the national conversation as evidence that villages cannot handle money.
The chair of the unit I know best told me he had learned to write a tender by reading three old ones from the dissolved district office that a former staff member had kept in his house. He said it took him two years and he still gets things back from the audit. He said it without complaint, as a fact about his job, and then he asked me whether I knew anyone who could look at a drawing.