Budget Process and LMBIS Quiz

Nepal's fiscal year begins on:

• A) Baisakh 1
• B) Shrawan 1 ✔
• C) Magh 1
• D) Asar 1

Why: Nepal's fiscal year (आर्थिक वर्ष) starts on Shrawan 1 and ends on the last day of Asar, roughly mid-July to mid-July. That is why the budget must be passed before Shrawan.

Under Article 119, the budget is presented on:

• A) Jestha 15 ✔
• B) Asar 15
• C) Shrawan 1
• D) Baisakh 1

Why: Article 119 of the Constitution says the Finance Minister presents the annual estimates of revenue and expenditure to the Federal Parliament on Jestha 15 each year, giving about six weeks to pass it before Shrawan 1.

Who presents the federal budget?

• A) Prime Minister
• B) Finance Minister ✔
• C) President
• D) Speaker

Why: The Finance Minister presents the federal budget in a joint sitting of both Houses. The Prime Minister leads the government, but the budget speech is the Finance Minister's constitutional duty.

The budget is approved through the:

• A) Appropriation Act ✔
• B) Civil Service Act
• C) VAT Act
• D) Audit Act

Why: Parliament approves spending by passing the Appropriation Act (विनियोजन ऐन). It lists how much each ministry may spend from the Consolidated Fund in that fiscal year.

LMBIS stands for:

• A) Line Ministry Budget Information System ✔
• B) Local Management Budget Integrated System
• C) Land Management Business Information System
• D) Line Monitoring Budget Index System

Why: LMBIS is the Line Ministry Budget Information System. Line ministries and their offices use it to enter programmes and budget estimates, so the Ministry of Finance can compile the federal budget.

LMBIS is run by the:

• A) Ministry of Finance ✔
• B) Election Commission
• C) Nepal Rastra Bank
• D) Supreme Court

Why: The Ministry of Finance runs LMBIS, because it prepares the federal budget. Nepal Rastra Bank is the central bank and does not manage ministry budgets.

Budget ceilings for ministries are set by:

• A) MoF and NPC ✔
• B) Local levels
• C) Banks
• D) Courts

Why: The Ministry of Finance estimates the resources available, and with the National Planning Commission it sets a budget ceiling (सीमा) for each ministry, in line with plan priorities.

Spending authority given to offices after approval is called:

• A) Akhtiyari (अख्तियारी) ✔
• B) Beruju
• C) Dharauti
• D) Tok

Why: After the budget is approved, offices receive akhtiyari (अख्तियारी), the formal authority to spend. Beruju means audit irregularities, and dharauti means deposits or security money.

Which is NOT a main expenditure head?

• A) Current
• B) Capital
• C) Financing
• D) Entertainment ✔

Why: Government spending is grouped into three heads: current (चालु), capital (पुँजीगत) and financing (वित्तीय व्यवस्था). 'Entertainment' is not a budget head.

Local levels prepare budgets in:

• A) SuTRA ✔
• B) LMBIS
• C) PAMS
• D) e-GP

Why: Local levels use SuTRA (Sub-national Treasury Regulatory Application) to prepare budgets and keep accounts. LMBIS is for federal line ministries, and PAMS is for procurement.

The last step of the budget cycle is:

• A) Audit ✔
• B) Presentation
• C) Ceiling
• D) Guidelines

Why: The budget cycle runs from estimating resources and setting ceilings, through preparation, approval, release and spending, to accounting and finally audit, which checks that money was used lawfully.

Taxes are changed each year through the:

• A) Finance Act ✔
• B) Appropriation Act
• C) Audit Act
• D) Civil Code

Why: The Finance Act (आर्थिक ऐन) is passed with the budget each year to change tax rates and revenue measures. The Appropriation Act covers spending, not taxes.

Capital expenditure is mainly for:

• A) Salaries
• B) Building assets like roads and buildings ✔
• C) Stationery
• D) Meetings

Why: Capital expenditure (पुँजीगत खर्च) creates long-lasting assets such as roads, bridges, buildings and machinery. Salaries, stationery and meeting costs are current expenditure.

Budget principles and priorities are presented:

• A) After the budget
• B) Before the budget ✔
• C) Never
• D) Only to the President

Why: The government presents the budget's principles and priorities (बजेटका सिद्धान्त र प्राथमिकता) in Parliament before the budget, so members can discuss its direction early.

The Nepali fiscal year ends on:

• A) Chaitra end
• B) Asar end ✔
• C) Poush end
• D) Jestha 15

Why: The fiscal year runs from Shrawan 1 to the end of Asar. So Asar end, around mid-July, is the last day for spending that year's budget.

A budget is the government's annual plan of:

• A) Estimated revenue and expenditure ✔
• B) Only salaries
• C) Only taxes collected last year
• D) Election dates

Why: A budget is the government's estimate of revenue (income) and expenditure for one fiscal year. It shows where money will come from and how it will be spent.

In Nepali, the Appropriation Act is:

• A) विनियोजन ऐन ✔
• B) आर्थिक ऐन
• C) आयकर ऐन
• D) लेखापरीक्षण ऐन

Why: The Appropriation Act is विनियोजन ऐन. It authorises spending from the Consolidated Fund. आर्थिक ऐन is the Finance Act, and लेखापरीक्षण ऐन is the Audit Act.

In Nepali, current expenditure is:

• A) चालु खर्च ✔
• B) पुँजीगत खर्च
• C) वित्तीय व्यवस्था
• D) धरौटी

Why: Current expenditure is चालु खर्च: recurring costs such as salaries, allowances, office running costs and grants. It does not create a lasting asset.

In Nepali, capital expenditure is:

• A) पुँजीगत खर्च ✔
• B) चालु खर्च
• C) राजस्व
• D) पेश्की

Why: Capital expenditure is पुँजीगत खर्च: spending that creates assets, such as building roads, schools and hospitals or buying equipment.

Loan repayment and investment heads are part of:

• A) Financing (वित्तीय व्यवस्था) ✔
• B) Current expenditure
• C) Revenue
• D) Deposit

Why: Financing (वित्तीय व्यवस्था) covers repaying the principal of loans and making investments such as share or loan investment. It is the third head after current and capital.

Who estimates available resources and sets ceilings?

• A) Ministry of Finance and National Planning Commission ✔
• B) Each ward
• C) Supreme Court
• D) Election Commission

Why: At the start of the budget cycle, the Ministry of Finance and the National Planning Commission estimate the resources available and set the budget ceiling for each ministry.

Budget guidelines and formats are sent to:

• A) Ministries ✔
• B) Political parties
• C) Foreign embassies
• D) Private banks

Why: After ceilings are set, the Ministry of Finance sends budget guidelines and formats to the line ministries, which pass them to their offices for preparing estimates.

Offices prepare programmes and estimates:

• A) Within the ceiling ✔
• B) Without any limit
• C) After the budget is passed
• D) Only for salary

Why: Offices must prepare programmes and estimates within the ceiling they receive, because total spending must match the resources the government expects to have.

Line ministries compile estimates in:

• A) LMBIS ✔
• B) SuTRA
• C) ASYCUDA
• D) PIS

Why: Line ministries compile their offices' estimates in LMBIS. SuTRA is for local levels, ASYCUDA is the customs system and PIS is the personnel information system.

After ministries prepare estimates, the next step is:

• A) Discussion with MoF and NPC ✔
• B) Audit
• C) Retirement
• D) Election

Why: Next, each ministry discusses its estimates with the Ministry of Finance and the NPC. Programmes are checked against plan priorities and the ceiling before the budget is finalised.

The budget is approved by:

• A) Federal Parliament ✔
• B) Ministry of Finance alone
• C) Supreme Court
• D) President alone

Why: The Federal Parliament approves the budget by passing the Appropriation Act. Without Parliament's approval, the government cannot spend money from the Consolidated Fund.

In Nepali, spending authority is:

• A) अख्तियारी ✔
• B) बेरुजु
• C) धरौटी
• D) पेश्की

Why: Spending authority is अख्तियारी. बेरुजु means audit irregularities, धरौटी means deposit or security money, and पेश्की means an advance.

Funds are released to offices through:

• A) FCGO and treasury offices ✔
• B) Political parties
• C) Courts
• D) Schools

Why: Approved funds reach offices through the Financial Comptroller General Office (FCGO) and its treasury and accounts offices, which release money and keep government accounts.

Implementation, accounting and audit come:

• A) After budget release ✔
• B) Before resource estimate
• C) Before guidelines
• D) Never

Why: Once the budget is released, offices implement programmes, keep accounts and are audited. These are the final stages of the budget cycle.

LMBIS is:

• A) Web-based ✔
• B) Paper-only
• C) A court
• D) A tax

Why: LMBIS is a web-based system, so offices across the country can enter and update budget data online, and the Ministry of Finance can see it centrally.

Which is a benefit of LMBIS?

• A) Standard formats and faster consolidation ✔
• B) More errors
• C) Slower work
• D) No link with accounts

Why: LMBIS uses standard formats and codes, so budget data from many ministries can be combined quickly and accurately, with fewer errors than paper forms.

LMBIS links budget with:

• A) The Chart of Accounts ✔
• B) Weather data
• C) Election lists
• D) Exam results

Why: LMBIS uses the government's Chart of Accounts (budget and expenditure codes), so each budget line matches the accounting heads used later for spending and reporting.

Which law got a legal definition of LMBIS in 2081?

• A) FPFA Act, 2076 ✔
• B) Civil Service Act
• C) Local Administration Act
• D) RTI Act

Why: The Financial Procedures and Fiscal Accountability (FPFA) Act, 2076 governs budgeting and accounts. Its 2081 amendment added a legal definition of LMBIS.

Article 119 is about:

• A) Annual estimates of revenue and expenditure ✔
• B) President's election
• C) Citizenship
• D) Fundamental rights

Why: Article 119 of the Constitution of Nepal covers the annual estimates of revenue and expenditure, that is, the federal budget, and fixes Jestha 15 as the day it is presented.

Jestha 15 is important because:

• A) The federal budget is presented ✔
• B) Elections are held
• C) Fiscal year begins
• D) Civil Service Day

Why: Jestha 15 is the constitutional budget day: the Finance Minister presents the federal budget to Parliament under Article 119. The fiscal year itself starts later, on Shrawan 1.

The fiscal year begins on Shrawan 1 and ends at:

• A) The end of Asar ✔
• B) The end of Chaitra
• C) Magh 1
• D) Baisakh 1

Why: Nepal's fiscal year runs from Shrawan 1 to the end of Asar. It does not follow the Bikram Sambat calendar year, which starts on Baisakh 1.

Which ministry runs LMBIS?

• A) Ministry of Finance ✔
• B) MoFAGA
• C) Home Ministry
• D) Education Ministry

Why: The Ministry of Finance runs LMBIS for preparing the federal budget. MoFAGA (Federal Affairs and General Administration) works with local levels, which use SuTRA.

Local levels manage budgets in:

• A) SuTRA ✔
• B) LMBIS
• C) CGAS
• D) e-GP

Why: SuTRA is the treasury and budget system for Nepal's 753 local levels. CGAS is the federal accounting system, and e-GP is for electronic public procurement.

Budget principles and priorities are presented in Parliament:

• A) Before the budget ✔
• B) After audit
• C) Never
• D) After elections only

Why: The principles and priorities are presented before the budget, so Parliament can discuss the main direction and give suggestions before the detailed budget comes on Jestha 15.

The Finance Act mainly deals with:

• A) Taxes and revenue measures ✔
• B) Spending authority
• C) Civil service
• D) Courts

Why: The Finance Act (आर्थिक ऐन) sets each year's tax rates and revenue measures, such as income tax, VAT and customs changes. Spending authority comes from the Appropriation Act.

Roads, bridges and buildings are funded mainly under:

• A) Capital expenditure ✔
• B) Current expenditure
• C) Deposit
• D) Grant from citizens

Why: Roads, bridges and buildings are long-lasting assets, so they are funded under capital expenditure (पुँजीगत खर्च), not current expenditure.

Salaries and office running costs fall under:

• A) Current expenditure ✔
• B) Capital expenditure
• C) Financing
• D) Revenue

Why: Salaries, allowances, rent, fuel and office running costs recur every year and create no asset, so they fall under current expenditure (चालु खर्च).

Who presents the federal budget in Parliament?

• A) Finance Minister ✔
• B) Prime Minister
• C) President
• D) Speaker

Why: The Finance Minister presents the federal budget in Parliament on Jestha 15, as set by Article 119. The Speaker chairs the House but does not present the budget.

Budget ceiling means:

• A) The maximum amount a ministry can plan for ✔
• B) The roof of the office
• C) Minimum salary
• D) Tax rate

Why: A budget ceiling (बजेट सीमा) is the maximum amount a ministry may plan for in the coming year. It keeps requests within the resources the government expects to have.

Which is the correct budget cycle order?

• A) Estimate & ceiling → preparation → discussion → presentation → approval → release → implementation → audit ✔
• B) Audit → release → presentation
• C) Approval → estimate → guidelines
• D) Release → approval → preparation

Why: The budget cycle starts with the resource estimate and ceilings, then preparation, discussion, presentation and approval, then release, implementation, and finally accounting and audit.

Why is a resource estimate needed first?

• A) Spending must match expected resources ✔
• B) To increase debt only
• C) To avoid planning
• D) To set exam dates

Why: Spending plans must match the revenue, grants and loans the government expects. Estimating resources first keeps the budget realistic and avoids an unplanned deficit.

Monitoring of spending is supported by:

• A) LMBIS and accounting systems ✔
• B) Rumours
• C) Guesswork
• D) Social media gossip

Why: Systems such as LMBIS, together with accounting systems like CGAS and the FCGO reports, record budget and spending data, so ministries can track progress and spending.

Without the Appropriation Act, government:

• A) Cannot spend from the Consolidated Fund ✔
• B) Can spend freely
• C) Collects more taxes
• D) Holds elections

Why: The government can spend from the Consolidated Fund only with Parliament's approval, given through the Appropriation Act. This is how Parliament controls public money.

Audit of budget spending is finally done by:

• A) The Auditor General ✔
• B) The Finance Minister
• C) The Speaker
• D) The ward chair

Why: The Office of the Auditor General (OAG), a constitutional body, carries out the final audit of government accounts and reports its findings, including beruju, to the President.

A budget helps the government to:

• A) Plan, prioritise and control public money ✔
• B) Avoid accountability
• C) Hide spending
• D) Stop development

Why: A budget is both a plan and a control tool: it sets priorities, allocates limited money among sectors and makes spending accountable to Parliament and the public.