(1) Provinces and local levels shall spend the revenue collected by them and the grants received in accordance with this Act by making laws. (2) When making a law according to sub-section (1), it should be made in such a way that the following matters are followed:-
(a) To follow the economic and financial policy of the Government of Nepal,
(b) to deposit all income in its reserve fund,
(c) To spend the amount of subsidy only for the purpose for which it was received,
(d) Funds allocated towards capital expenditure shall not be transferred to current expenditure (e) To implement the classification, accounting and reporting system of income and expenditure as specified by the Economic Procedures and Financial Responsibility Act, 2076 and other prevailing federal laws.