The Finance Division has made changes in the procedure of past unnecessary funds releases and decided to release funds on the actual requirement and utilization basis during the next third and fourth quarters of the fiscal year 2022.
The Finance Ministry has issued an office memorandum about the strategy for the release of funds for recurrent and development budgets during the third and fourth quarters of the current fiscal year.
According to the memorandum of the new strategy, the Finance Division shall release 15 percent of total recurrent budget allocation in the third quarter for the approved demand for grants and appropriations, bringing the total released amount to 75 percent cumulatively, up to 31 March.
The Finance Division has brought some strict changes for the last quarter of the financial year and said Principal Accounts Officer (PAO) would ensure these changes.
“The funds would be released on actual requirement and utilization basis duly reconciled with the Accountant General Pakistan Revenue (AGPR), its sub-offices, and Accounts offices. The expenditure without recurrent budget allocation shall not be allowed in any demand, cost center, and head of account. The Controller General of Accounts (CGA) and accounting organizations shall ensure its implementation,” stated the office memorandum.
“It would be the prime responsibility of the PAO to review budgetary allocation and monthly actual spending. If [the] need arises for the additional allocation of a recurrent budget under any head of account or cost center, the PAO shall make additional allocation through re-appropriation of funds. If a shortfall occurs in a demand for a grant under a PAO, he may propose Technical, Supplementary Grant, by surrendering the amount from another demand for a grant under his control,” further stated the memorandum.
The office memorandum also stated that if funds under any head of the account, especially Employees Related Expenditure becomes insufficient, it would be the sole responsibility of the PAO to ensure re-appropriation of recurrent funds from another head of account for timely payments of salaries.
It is also mentioned in the office memorandum that a grant in aid shall be released by the PAOs after detailed head-wise scrutiny of the spending.
Contractual and obligatory payments, subsidies and grants, and funds under various budget heads must be paid well within time and these shall not either be postponed till the last quarter or a liability is created for coming years.
An office memorandum on a strategy for the release of funds for the development budget from January to June 2022 was also issued.
According to the new strategy, the Ministry of Planning, Development, and Special Initiatives (MoPD) will release 20 percent of the total allocated development budget during the third quarter for approval projects, bringing the total released amount to 70 percent up to 31 March. The remaining 30 percent allocated development funds will be released on actual requirements and utilization basis, duly reconciled with AGPR, its sub-offices, and account offices, in the last and fourth quarter of the current fiscal year.
The Finance Division also imposed a ban on exceeding the allocated budget and stated that expenditures without budget allocation shall not be allowed for any project. It also made it clear that the PAO will have to review budgetary allocation and actual spending for each project, and if there is a need for additional allocation, under any development project, the PAO can take necessary steps for additional allocation through re-appropriation immediately.
Earlier, the Finance Ministry had been releasing funds more than one-fourth of the total allocated budget during as quarter. In most cases, the departments surrender the unused amount before the second week of May, usually due to lack of capacity or shortage of time for using the amount.
