After 20 years of civil war and continuous instability fuelled by caste-based, ethnic and geographical instability, Nepal adopted a new constitution in 2015 that created a whole new federal system of decentralized government.
This meant that public funds were now channelled into 753 separate local government entities to ensure decision-making and accountability for delivering basic services. To ensure success, a new approach was needed to manage those public funds transparently and effectively.
The FCDO-funded Improving Public Financial Management and Accountability (PFMA) Phase 2 programme, in collaboration with the Ministry of Finance (MoF) and the support of British Embassy Kathmandu (BEK), engaged a team of Nepali software specialists to develop the Subnational Treasury Regulatory Application (SuTRA). SuTRA is a financial management system which includes modules on budgeting, accounting and financial reporting to ensure transparency, accountability, efficiency and effectiveness in financial management at the local level.
More specifically, SuTRA aims to fulfil requirements such as managing consolidated funds, fiscal transfers, revenue sharing, domestic and foreign source management, integrated financial control and reporting. It also addresses all the backlogs of multiple databases for the same sets of information, data migration issues, data reconciliation issues and procedural flaws on internal controls. It furthermore provides the actual status of planning versus implementation to key personnel supporting output-based programming and budgeting.
SuTRA also enables tracking of expenditure based on gender, caste, wealth and ethnicity. Within two years of development, SuTRA is now used by 752 out of 753 local government entities.
During the pandemic, SuTRA was enhanced to enable the tracking of COVID-19 response spending and management of local level revenue.