Govt tightens grip on expenditure.

Byline: Khaleeq Kiani

ISLAMABAD -- The government on Wednesday notified fresh mechanism for release of funds for recurrent and development budget and the policy for allocation of supplementary grants (SG) for unseen or emergency expenditures during the fiscal year 2020-21.

The decision falls under the ambit of the Public Finance Management Act 2019 to streamline utilisation of federal consolidated funds in line with revenue flows. A notification issued by the Ministry of Finance said the government was averse, on general principles to admitting demands of SG. The federal cabinet especially the National Assembly and the Public Accounts Committee have directed to discourage SG unless they are extremely critical in nature.

The Principal Accounting Officer (PAO) of any ministry or division shall resort to finance an unforeseen emergency or insufficient appropriation by examining the approved allocated budget within the grant under detailed heads and meet the requirement through re-appropriation under delegated heads or refer the case to Expenditure Wing of the Finance Division for re-appropriation under restricted heads.

Therefore, if additional funds are required, the concerned division or department shall provide matching funds through surrender order for technical supplementary grant (TSG). All applications submitted by PAOs for regular SG or TSG shall be accompanied with a full explanation of the reason for funds on a proforma.

Notifies new mechanism for releasing development funds

In case, the SG or TSG is required for expenditure pertaining to the Public Sector Development Programme (PSDP), the recommendations of Planning, Development and Special Initiatives Division shall be required before submission of the case to the Finance Division.

All proposals for SG and TSG shall be routed through the Expenditure Wing of the Finance Division which shall review the position of the grant as a whole with reference to verified actuals as on that date and that of the previous year.

After due diligence and satisfaction, the Expenditure Wing shall forward the case to the Budget Wing with full justification and recommendations. The Budget Wing shall provide endorsement, duly signed by the finance secretary to the concerned division or department for submission of case to the Economic Coordination Committee of the Cabinet for approval.

Release of funds

Under the new rules, the funds for recurrent budget shall be released by the Finance Division for the...