Sindh Finance Minister Syed Sardar Ahmed made it clear to the MPAs that all development funds lapse after the closure of a financial year.
He stated this while replying to questions during question hours on Thursday. Speaker Syed Muzaffar Hussain Shah was in the chair.
Thursday's proceedings remained peaceful despite some provocative remarks that were not appreciated by the treasury members.
To a question from Mohammad Ayaz Soomro, Sardar Ahmed gave legal position, saying that budgets of the provincial and federal governments were prepared in accordance with Article 120 of the Constitution.
THE CONSTITUTION CLEARLY SAYS:
(i) The provincial government shall, in respect of every financial year, cause to be laid before the provincial assembly an estimate of the estimated receipt and expenditure of the provincial government for the year.
(ii) The annual budget statement shall show separately (a) the sums required to meet expenditure described by the Constitution as expenditure charged upon the Provincial Consolidated Fund: and (b) The same required meeting other expenditure proposed to be made from the Provincial Consolidated Fund, and shall distinguish expenditure on revenue account from other expenditure.
He said that Rule 334 of Sindh Financial Rules provides "A sanction for any fresh charge which has not been acted on for a year must be held to have lapsed, unless it is specifically renewed with necessary provision in the budget estimates."
Sardar Ahmed said that Rule 95 of the Sindh Budget Manual in this regard says: "An appropriation is intended to cover all the charges, including the liabilities, if any, of past years to be paid or adjusted in the accounts of the year. Any unspent balance lapses, and is not available for utilisation in the following year, unless a specific provision for lapses is made in the budget of that year."
The minister said the constitution savings/unspent amount is surrendered by the administrative department in term of para (128) of Budget Manual, which is reproduced as under:
"128 Surrenders of savings: as the Budget estimates are framed long before the period which inevitable that in some cases they will not accurately correspond with the actual expenditure during the year to which they relate. The heads of department should, therefore, take immediate steps to surrender sums, which will probably remain unspent at the end of the year."
Sardar Ahmed said the existing procedure was in accordance with existing rules. The lapse of funds for development schemes does not impact their approved cost and allocation are revised on past year's expenditure basis.