Audit Irregularities (Beruju) in Nepal: The Auditor General's Outstanding Arrears Explained

"Beruju" (बेरुजु) is the Nepali accounting and legal term for audit irregularities, public money that has been spent, collected, or accounted for in a way that does not comply with the law, prescribed procedures, or sound financial discipline. In its annual reports the Office of the Auditor General (OAG) describes beruju as amounts spent without following legal procedures, transactions for which required accounts or supporting documents were not maintained, sums that must be recovered, and advances that remain uncleared.

Importantly, beruju is not a synonym for corruption or embezzlement. Much of the total consists of expenditure that was probably genuine but was not properly documented or formally regularized, alongside revenue and advances still to be recovered. A subset of beruju, however, does involve misappropriation, loss, or recovery of funds, and these recoverable amounts are the most serious component. Outstanding beruju accumulates year after year until it is either settled (cleared with documents, recovered, or formally regularized) or written off through due process.

The Office of the Auditor General of Nepal (OAG), established in 1959, is the country's supreme audit institution. It is a constitutional body created under Part 22 of the Constitution of Nepal (2015), with its functions, duties and powers set out in Article 241 and its reporting duty in Article 294. The Auditor General is appointed by the President on the recommendation of the Constitutional Council for a single, non-renewable term of six years (Article 240).

Under Article 241 and the Audit Act, 2075 (2019), the OAG audits the accounts of nearly every public institution: the offices of the President and Vice-President, the Supreme Court and courts, the Federal Parliament and Provincial Assemblies, federal, provincial and local governments, constitutional bodies, the Attorney General, the Nepal Army, Nepal Police and Armed Police Force, and corporations fully owned by the government. Section 8 of the Audit Act requires the OAG to audit with regard to the regularity, economy, efficiency, effectiveness and propriety of public expenditure, blending compliance (financial) audit with performance audit. Audits follow Nepal Government Auditing Standards aligned with the standards of the International Organization of Supreme Audit Institutions (INTOSAI).

Each year the OAG completes its audits and the Auditor General submits an annual report to the President under Section 19 of the Audit Act and Article 294 of the Constitution. The President lays the report before the Federal Parliament through the Prime Minister, where it is examined by the Public Accounts Committee. The reports are numbered sequentially; the 62nd Annual Report covered fiscal year 2023/24 (2080/81) and the 63rd Annual Report covered fiscal year 2024/25 (2081/82).

Beruju identified in audits is recorded in a running ledger known as the Beruju Lagat. Audited entities are then expected to clear it, by submitting missing documents, recovering misused or overpaid amounts, settling outstanding advances, or seeking formal regularization. Amounts not cleared are carried forward, which is why cumulative beruju grows when new irregularities each year exceed what is settled. The OAG separately tracks a broader pool of unsettled accounts, including older audit backlogs, outstanding revenue, and unsettled foreign grants and loans, which is substantially larger than the headline beruju figure.

According to the 63rd Annual Report, cumulative outstanding beruju reached about Rs 755.17 billion by the end of fiscal year 2024/25, after fresh irregularities of roughly Rs 88.09 billion were added during the year and about Rs 63.12 billion was settled. The audit covered total transactions of approximately Rs 9.484 trillion across about 5,526 public entities. One year earlier, the 62nd Annual Report had put cumulative beruju at about Rs 733.19 billion at the end of FY 2023/24, with roughly Rs 91.59 billion added that year, illustrating how the stock keeps rising despite settlement efforts.

The new beruju identified in FY 2024/25 broke down broadly into amounts to be recovered (about Rs 32.64 billion), expenditures requiring regularization (about Rs 50.26 billion), and uncleared advances (about Rs 5.17 billion). Reported figures are rounded and may vary slightly between the OAG report and news summaries; the OAG's own annual report and updated Beruju Lagat are the authoritative source.

Nepal's federal structure means beruju is tracked across the three tiers of government plus committees and public enterprises. In FY 2024/25, the newly added irregularities were concentrated at the federal level, with smaller shares at the local, committee/enterprise, and provincial levels. The federal government consistently accounts for the largest single share of both annual and cumulative beruju, reflecting the scale of federal spending; among provinces, Madhesh Province has been reported as carrying the highest provincial arrears in recent years.

The OAG classifies beruju into three principal categories. Amounts "to be recovered" are the most serious, covering misappropriation, losses and overpayments that should be returned to the treasury. Amounts "to be regularized" are expenditures lacking proper documentation, approvals or transfer of responsibility, which can be cleared administratively if evidence is produced. "Advances" are sums released but not yet settled or accounted for. Across reports, the regularization category has typically been the largest, followed by recoverable amounts and then advances.

Beruju has grown almost every year because the amount of new irregularities added typically exceeds what entities manage to settle. The OAG and analysts attribute the persistent build-up to weak internal controls and documentation, slow follow-up by audited offices, limited enforcement of legal provisions, and heavy reliance on cash transactions. Recent Auditor General reports have recommended widening digital payments and tightening procedures to reduce future arrears.

As an indicator, beruju is widely read as a barometer of public financial discipline and accountability in Nepal rather than a direct measure of theft. A large and rising stock signals gaps in record-keeping, procurement, revenue collection and oversight across all three tiers of government. Because the figures change with each annual report and the updated Beruju Lagat, readers should treat the totals above as the durable structure and orders of magnitude, and consult the latest OAG report for the most current numbers.