ISLAMABAD: The Finance Division has unveiled a strategy to apply budget check on payroll -expenditure within allocated budget - and directives to the ministries, divisions and departments that there shall not be any expenditure approved by the accounting officer without availability of fund through a budgetary mechanism.
A circular issued by the Finance Ministry titled "Strategy to apply budget check on payroll expenditure within allocated budget" stated that the Public Finance Management Act, 2019 has been enacted to strengthen management of public finances in the federal government.
Section 22 of the Act provides that custody and operation of the Federal Consolidated Fund and Public Account of Federation will vest in the Finance Division under the supervision of the federal government.
Furthermore, under Section 23 of the Act, no authority "shall incur or commit any expenditure from the Federal Consolidated Fund and Public Account until sanctioned by a competent authority and funds have been provided for a financial year through the budgetary mechanism".
As per Section 5(b) of the Controller General of Accounts (Appointment, Functions and Powers) Ordinance 2001, it is the function of the CGA to authorise payments and withdrawals from the Consolidated Fund and Public Accounts of federal and provincial governments against approved budgetary provisions after pre-audited checks as the Auditor General may, from time to time, prescribe.
The Office of the AGPR has intimated that some government departments/offices have kept insufficient budget in relevant heads of accounts to meet requirements of Employee Related Expenses (ERE) for the current financial year.
This practice may result into excess expenditures, over and above the budgetary allocation, thus, adversely affecting the prudent budget and cash management of the federal government.
It may be mentioned here that the Finance Division has provided a one-line budget to the PAOs for the current fiscal year, with the responsibility to keep availability of funds in all heads of accounts, particularly ERE.
While the PFM Act provides for delegation of financial powers to the PAOs, it also balances authority with responsibility for financial propriety as per applicable rules and regulations. The Finance Division has been emphasising time and again that the first charge on the allocated budget is to meet the ERE.
The provisions of the Act and rules lay down procedures for re-appropriation of funds and supplementary grants. The PAOs have to regularly monitor the expenditures in various heads of accounts and take appropriate measures to keep availability of funds during a financial year.
The Finance Division, in consultation with the AGPR, has prepared a brief strategy to maintain financial propriety in order to ensure that all expenditures are made within the allocated and released budget.
There shall not be any expenditure approved by the accounting officer without availability of fund through budgetary mechanism. The accounting officer would issue alerts to the concerned principal accounting officer and also to inform the DDOs having left with insufficient balances against the ERE heads for arrangement of funds through budgetary process.
All those divisions, departments and offices, which will have insufficient allocation under ERE heads, will be shifted from payroll to supplementary payroll in Phase-I. This will result in delays in receipts of salaries by the employees.
Copyright Business Recorder, 2020
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