Development budget for FY2022-23: Finance Division issues strategy for release of funds

ISLAMABAD: The Finance Division has issued a strategy for the release of funds for the development budget for the fiscal year 2022-23, under the Public Finance Management Act and stated that these guidelines should be strictly followed.

As per the strategy, funds for the development budget shall be released by the Ministry of Planning, Development and Special Initiatives out of the Public Sector Development Programme (PSDP) allocation for the current fiscal year for the approved projects at the level of 20 percent for first quarter, 25 percent for second quarter, 30 percent for third quarter, and 25 percent for fourth quarter.

The Finance Division issued a notification in this regard which stated that in pursuance of the provisions of the Public Finance Management Act, 2019, Rule 3(9) of the Cash Management and Treasury Single Account Rules 2020 and Financial Management and Powers of Principal Accounting Officers Regulations, 2021, the budget release strategy for Development Budget for the current financial year (CFY) 2022-23 is being issued for implementation with immediate effect and until further orders.

The Ministry of Planning, Development and Special Initiatives and the Principal Accounting Officers (PAOs) concerned while executing the development projects shall ensure implementation of the provisions contained under the Chapter III of the Public Finance Management Act, 2019.

Further, the Ministry of Planning, Development and Special Initiatives shall devise quarterly sector-wise/project-wise/division-wise strategy for the release of funds for the PSDP within the appropriations approved by the National Assembly and included in the schedule of authorized expenditure in terms of Article 83 of the Constitution of Pakistan. These documents will be shared with the Finance Division.

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Any proposal for change to the above-prescribed limits shall be considered by the Budget Wing, Finance Division on a case-to-case basis and shall require prior approval of the Finance Secretary.

All payments shall be made through the pre-audit system by all the accounting organizations and offices or through Assignment Account Procedure or any other procedure issued by the Finance Division. A Separate Assignment Account shall be opened for each project.

Further, no direct payment through the State Bank of Pakistan (SBP) shall be made by any office, except with the prior approval of the Finance Secretary as per Rules 3(2) and 3(3) of the Cash Management and Treasury Single Account Rules, 2020.Section 23 of the Public Finance Management Act, 2019 provides that no authority shall incur or commit any expenditure from the “Federal Consolidated Fund” until the same has been sanctioned by the National Assembly and the expenditure has been provided for the financial year through: (i) schedule of authorized expenditure in terms of Article 83 of the Constitution of Pakistan; (ii) supplementary grant or technical supplementary grant as per Article 84 of the constitution duly approved by the federal government, or (iii) re-appropriation as per section 2 (u) and 11 of the Public Finance Management Act, 2019. Adequate budgetary allocations on account of the foreign exchange component (Rupee Cover) shall be ensured by all relevant PAOs and conveyed to Economic Affairs Division and Finance Division.

The provisions of the Public Finance Management Act, 2019, the Financial Management and Powers of Principal Accounting Officers Regulations, 2021, and instructions issued by the Planning Commission shall be strictly adhered to by all the PAOs and the Accounting Offices.

According to the strategy, the instructions with regard to supplementary grants shall be issued by the Budget Wing, Finance Division, separately.

The Development Wing of the Finance Division shall coordinate and oversee the matters relating to the release of funds for the development budget and other ancillary matters.

There shall be no requirement of ways and means clearance from the Budget Wing of the Finance Division for the release of the development budget, it added.

Copyright Business Recorder, 2022