9. Main Policy Mechanisms

9.1 Policies and strategies can be implemented only through practical and implementable policy mechanisms. It is an important aspect to establish a clear relationship between policies, tactics, instruments and institutional arrangements to put the policy objectives into practice. These policies and strategies cannot be implemented in the absence of appropriate policy mechanisms and identification of institutional arrangements.

9.2 Prudent allocation of funds and management procedures – among other things, a realistic budget system, prioritized public spending programs and prudent mechanisms for project selection. Aid effectiveness depends on assurance. In this regard, attention will be given to improve the budget formulation process as follows-

(a) Strong coordination between the Ministry of Finance, the National Planning Commission and related ministries in the planning and budget formulation of the development program through medium-term expenditure arrangements and annual budget and Coordination will be established between the national plans.

(b) Budget will be arranged according to the clearly defined priorities and priorities of the project in the context of the possibility of achieving the goals of regional and national development. Emphasis will be placed on adopting the concept of advance planning in order to complete the project within the stipulated time and to meet the needs of the resources of the ongoing projects to prevent the cost increase when the time period is extended.
(c) In order to manage the inclusion of prioritized programs in the development budget, it will be mandatory to complete the detailed selection and evaluation process before inclusion of projects involving foreign aid in the development budget. Resources will be directed towards priority areas based on donors' priorities and excellence, and joint investment in large projects that require the involvement of various donor countries and organizations will be encouraged. Design, resource management and implementation of such programsWayan Vidhi will be under the prior consultation and leadership of the Government of Nepal. This will eliminate duplication of work and establish an effective partnership for development. Arrangements will be made for a joint investigation by the donor and recipient parties to find out the reasons for the utilization of funds being below the target and to submit suggestions for solutions. will be done. In addition to other things, such exercises will emphasize on the overall aspect of project identification, formulation, selection and monitoring and evaluation, including confirmation of the justification of the project, requirement of foreign resources, implementation schedule. The institutional capacity to practice project planning will be enhanced.

9.5 The Government of Nepal will focus on achieving effectiveness in the implementation of foreign aid and government funded projects. For this, emphasis will be placed on the following aspects-

(a) The expenses to be incurred on behalf of the Government of Nepal will be provided on time.
(b) Decentralization of decision-making and delegation of authority will be made effective in order to assist project managers in the process of quick decision-making at the project site.
(c) To eliminate the problems related to procurement, the standards of spoken documents will be brought into practice. 9.6 Improvement in project evaluation, impact study, supervision and monitoring - Provision will be made for effective project evaluation and effective study of major projects. A feedback mechanism will be established to include the voices of stakeholders and interested parties. A public hearing will be arranged on the project impact study. A certain number of projects conducted in each area will be regularly studied by experts. The supervision and monitoring system of the project will be strengthened to solve the problem and achieve the target achievement. Initiative to form Ionja Monitoring Committees at operational level to improve effectiveness in supervision and monitoring

9.7 Encouraging the concept of "common fund" - In the programs presented for joint investment, the concept of common fund should be encouraged so that the project implementation body does not have to present different reports according to the needs of different donor countries or organizations and these decisions Arrangements will be made not to put more pressure on the limited capacity. According to the concept of the recently developed donation expenditure system, a simple reporting format will be used to be applied equally for each of the donor groups. In this kind of framework, the distribution of project costs will be determined by a mutual decision between the Government of Nepal and the donor parties. In the implementation of this kind of program, the Government of Nepal has to bear full ownership. The Government of Nepal will be held responsible for the results of the program and the use of funds. But the government will also be allowed to operate the project according to the provision of separate operation of the project as at present. In this way, the expenditure arrangement of projects and programs will be based on a two-door system. Regardless of the door, the project should be compatible with the sectoral priorities.

9.8 Improving financial management - The financial management of projects operated with foreign aid will be strengthened as follows -

(a) Expenditure on budget release. The detailed expenditure report to be submitted by the implementing unit will be attached to the physical progress index of the project.
(b) In the case of projects and programs conducted with foreign aid, the process of taking research admissions will be ensured in a timely manner.
(c) The audit report shall be prepared within six months of the end of the financial year. In case of delay in submitting the statement of expenses, action will be taken.
(d) Expenditure shall not be allowed before an agreement is reached on a project operated with foreign aid, except in cases where prior consent has been obtained from the donor.
(e) Financial accountability will be developed (f) The process and basis for disbursing the budget will be made fully transparent.Necessary mechanism will be arranged to utilize the foreign aid and reduce the gap between the approved aid amount and its utilization. In order to solve this problem, the Government of Nepal will make necessary arrangements to reduce the delay that may occur at various levels. For this, high priority will be given to increase efficiency in project management by reducing the problems and difficulties that hinder the project's activities and schedule. Likewise, necessary steps will be taken to give it more dynamism by reviewing the inquiry methods and procedures.

9.10 Improving the procurement process - The Government of Nepal is confident that a systematic procurement policy and process is necessary for the full use of financial instruments. Nepal government will make the procurement process more transparent. An effective national procurement system will be established in accordance with internationally accepted principles and practices, for example, procurement process model laws, European directives, procurement process agreements of the World Trade Organization, etc. Along with this, the policy and financial transaction distance between the Government of Nepal and the donors in relation to the procurement process will be minimized as much as possible. In addition to other things, they will be as follows -

(a) Taxes and other exemptions in activities conducted under foreign aid will be taken in accordance with the prevailing laws. Also, efforts will be made to bring uniformity by creating a certain basis for exemption.
(b) To increase the efficiency and effectiveness of foreign aid by bringing uniformity in the process of reform, coordination and management of foreign resources, the treaties, agreements, terms of understanding and other provisions concluded with foreign donor countries and organizations in the past will be clarified. (c) In terms of reducing the burden of debt, the necessary criteria for accepting foreign aid, especially loan aid, will be prepared and implemented. 9.12 A guideline will be prepared and implemented to give effect to the policies and strategies mentioned above. It foreignIt will provide guidance on policy and institutional arrangements for the effective deployment of aid. This will help in bringing simplicity, uniformity and speed in the decision-making process related to foreign aid.