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Govt puts tighter fiscal controls in place

Govt puts tighter fiscal controls in place

ISLAMABAD: For ensuring tight fiscal control, the government has put restrictions on technical supplementary grants (TSGs) in the first quarter and imposed a ban on supplementary expenditure, both for developmental and current expenditure, throughout the current fiscal year, except in extreme and exceptional cases.

“To remain within the approved budgetary allocation, no additional funds through a supplementary grant (SG) shall be considered by the Finance Division during the CFY,” said the Ministry of Finance on Thursday, adding that “only under extreme and exceptional circumstances, the cases may be considered” and that too under strict conditions.

In an office memorandum to all the government ministries, divisions and related departments, the Ministry of Finance also explained the extreme conditions to be fulfilled by the principal accounting officers (PAOs) of all ministries and divisions before seeking supplementary allocations.

Before seeking supplementary grants, it would have to be certified by the relevant federal secretaries or other principal accounting officers that no funds could be made available through re-appropriation and TSG and that all avenues had been exhausted. This would also have to be verified by the relevant accounting officers. The principal accounting officer would have to provide valid justification and cogent reasons for demanding the special grants.

Bans additional funds for development or current expenditure

This would be examined by the expenditure wing or concerned wing of the finance ministry and make a recommendation or otherwise to the budget wing.

Likewise, the cases of the TSGs shall not be considered during the first quarter of the current fiscal year. Unlike supplementary grants that involve additional funding requirements beyond the budget approved by the parliament, TSGs are the transfer of funds from one head to another within the budgetary allocations of a respective ministry or a division and do not entail additional funding.

Utilisation of budgetary allocations

However, the cases of TSG shall be processed after fulfillment of provisions of the Public Finance Management (PFM) Act 2019 and Financial Management and Powers of Principal Accounting Officers Regulations 2021.

Under the revised procedure, the request for the provision of funds through the TSG shall be submitted to the Expenditure Wing of the Ministry of Finance for examination after being duly approved and certified by the PAO. The PAO and the expenditure wing of the finance ministry would also provide an up-to-date budget utilisation report under the systems, applications & products (SAP) system report, availability of matching funds under other demands, or certificate regarding non-availability of saving in other demands under the control of PAO.

The expenditure wing shall examine the TSG cases in detail and submit recommendations, either in support or otherwise of the proposal, with valid grounds and justifications for consideration by the Budget Wing of the Finance Division that shall process the cases in the light of the SAP system report, recommendation of Expenditure Wing and availability of funds before submission to Finance Secretary for consideration.

The TSG cases relating to Public Sector Development Programme (PSDP), after meeting the above requirements would be processed through the Planning, Development and Special Initiatives Division. On approval of funds through TSG from the Federal Cabinet, the PAO shall submit the schedule of TSG, duly endorsed by the Expenditure Wing of Finance Division, along with copies of the approved summary and decision of the Economic Coordination Committee (ECC) of the Cabinet, ratification of the Cabinet and surrender order Budget Wing of Finance Division for entry in SAP system. The memorandum said the funds approved through TSG shall be released by Finance Division keeping in view the fund availability in line with the release strategy. Likewise, no proposal for the TSG shall be processed in any case during the last month of the financial year.

Moreover, the finance ministry has also made it clear to all the ministries that re-appropriation of funds shall only be allowed, within an approved demand for grant and appropriation, from one “Head of Account” to another “Head of Account”, provided that no re-appropriation shall be made from Employees Related Expenses (ERE) to any other “Head of Account” (Non-ERE).

Published in Dawn, August 5th, 2022

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