The National Natural Resources and Fiscal Commission (NNRFC) has said that it implemented programs related to fiscal federalism and public financial management in partnership with the United States Agency for International Development (USAID), following approval from the Ministry of Finance.
This clarification was provided in response to a complaint brought before the Finance Committee under the House of Representatives, alleging that the Commission was implementing programs in collaboration with USAID without proper authorization. The Committee had summoned Commission officials on Sunday to seek clarification on the matter.
During the meeting, Acting Chairperson of the Commission, Juddha Bahadur Gurung, said that the collaboration with USAID was established following the permission and coordination of the Ministry of Finance.
"The Ministry of Finance and USAID reached an agreement on February 6, 2023 for the implementation of certain projects. Following this, the Ministry sent a letter to the Commission on February 16, 2023, requesting it to nominate a representative. The subsequent process was undertaken in coordination with and with the permission of the Ministry," Gurung informed the Committee.
The Commission has been accused of directly receiving funds from the USAID for implementing programs related to fiscal federalism and public financial management.
Previously, US President Donald Trump had publicly criticized US assistance of 20 million dollars granted for fiscal federalism implementation and 19 million dollars for biodiversity conservation projects in Nepal, labeling the aid as "fraudulent."
Gurung further alleged that former Commission member Amar Raj Mishra had approached various authorities with complaints against the Commission with the intention of tarnishing its image and creating unnecessary trouble.
Meanwhile, Mishra, who on July 17, 2025 resigned from the Commission, stating that he decided to step down due to increasing malpractices within the organization and his failed attempts to bring about reforms. His resignation was accepted by the President.
Likewise, a complaint was lodged against Commission's member Bipin Raj Niraula at the Finance Committee that he repeatedly traveled abroad under the sponsorship of various governmental and non-governmental agencies and without the permission of the government of Nepal.
Niraula, providing an explanation at today's meeting, refuted the allegation and clarified that he had never visited foreign countries at the expense of any government and non-governmental agencies so far. He, however, admitted that he had participated in some United Nations' events at his own personal expenses and that's even for his professional career growth.
He also shared before the meeting that he had traveled abroad due to some personal reasons.
Acting Chairperson Gurung informed the Finance Committee that the suggestions and recommendations furnished by the Commission to the government were far from implementation.
Since casino and lotteries fall under the concurrent list of powers of the federal and provincial government, the Commission had suggested inclusion of a provision for royalty distribution in the Intergovernmental Financial Management Act-2074 BS. But it has not been implemented yet, complained Gurung.
He also criticized the federal government's decision to cut the equalization grant, arguing that the decision was against the constitutional provision and recommendation of the NNRFC.
"The Council of ministers decided to cut the equalization grant by the end of the last fiscal year 2024/25 due to failure to meet the revenue collection target," he said, demanding that such grants should not be slashed in the middle of the fiscal year under any circumstances.
Furthermore, he called for clarity on the delineation of responsibilities among the three-tier governments concerning the distribution of equalization grant on the basis of the expenditure need and revenue capacity.
Similarly, he highlighted the need to formulate an integrated legal framework for implementation of the provisions outlined in Article 59(4) and Article 251(1) of the Constitution of Nepal.
Although NNRFC had sought consent to formulate laws, he frowned that approval was not granted yet to proceed with it.
NNRFC further asserted that the provision to deposit revenue from the sales of forest products in the Forest Development Fund contradicts the Intergovernmental Financial Management Act-2074 BS.
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