By Rules of the Cash Management and Treasury Single Account Rules, 2020, the Finance Division has instructed the State Bank of Pakistan (SBP) to only make direct payments to ministries and divisions with the prior approval of the Finance Secretary.
The Finance division instructed SBP not to make direct payments to any offices without the prior approval of the Finance Secretary by Rules 3(2) and 3(3) of the Cash Management and Treasury Single Account Rules, 2020, in its office memo regarding the strategy for the release of funds for the development budget for the financial year 2023–24.
By the Public Finance Management Act of 2019, Rule 3(9) of the Cash Management and Treasury Single Account Rules of 2020, and the Financial Management and Powers of Principal Accounting Officers Regulations of 2021, the funds release strategy for the Development Budget for the Current Financial Year (CFY) 2023–24 is being issued for implementation with immediate effect and until further orders.
The Planning, Development, and Special Initiatives (PD&SI) Division shall release the money for the Development Budget from the PSDP allocation for the CFY at a rate of 15% for the first quarter, 20% for the second, 25% for the third, and 40% for the fourth.
In comparison to the money that was ceded for the SDGs for FY 2022-23, 15% of the PSDP allocation for FY 2023–24—or Rs 131 billion—was released in Q1 (domestic) of that fiscal year. For the remaining PSDP plans in Q1 of FY 2023–24, monies totaling Rs. 69.74 billion were made available, including Rs. 20.26 billion released for approved SDG plans for FY 2023–24.
During Q1 of FY 2023–24, additional funds totaling Rs. 11.5 billion are to be released for foreign exchange components. The Public Finance Management Act of 2019’s Chapter III’s provisions must be followed when carrying out development projects, according to the PD&SI Division and the PAOs involved.
The following directives have been sent to all relevant Ministries, Divisions, Departments, and Organisations by the Finance Division:
- The PD&SI Division must develop quarterly sector-specific, project-specific, and division-specific strategies for the release of funds for PSDP within the appropriations approved by the National Assembly and listed in the Schedule of Authorised Expenditure.
- Any proposal for a revision to the restrictions outlined at (i) above shall be evaluated on a case-by-case basis by the Budget Wing, Finance Division, and shall require prior permission from the Finance Secretary;
- The PAO shall, within the aforementioned parameters, release monies for approved projects in a Demand for Grant and Appropriation each quarter.
The PAO is responsible for making sure there are enough funds available for each project’s Employees’ Related Expenses.
- The Ministry of Planning, Development, and Special Initiatives must give its prior approval before PAOs, Heads of Attached Departments, Heads of Subordinate Offices, or Project Directors can reallocate money from ERE to Non-ERE heads of account;
- All pertinent PAOs shall guarantee adequate budgetary allocations for the Foreign Exchange Component (Rupee Cover) and communicate these allocations to the Economic Affairs Division and Finance Division;
- The External Finance Wing of the Finance Division must first approve funds for foreign exchange payments.
The External Finance Wing must take foreign exchange availability into account when evaluating requests for such money;
- No authority may commit to or incur any expenditure from the “Federal Consolidated Fund” until the National Assembly has approved it and the expenditure has been planned for the financial year, according to section 23 of the Public Finance Management Act, 2019. (a) a list of authorized expenditures by Article 83 of the Pakistani Constitution; (b) a supplementary grant or technical supplementary grant by Article 84 of the constitution duly approved by the Federal Government; or (c) a re-appropriation by Section 2(u) and 11 of the Public Finance Management Act, 2019;
- All payments must be made using the pre-audit system by all accounting organizations and offices, or by using the Assignment Account Procedure or another procedure made available by the Finance Division.
All PAOs and Accounting Offices must conform completely to the terms of the Public Finance Management Act 2019, the Financial Management and Powers of Principal Accounting Officers Regulations 2021, and any directives given by the Planning Commission.
The Budget Wing of the Finance Division shall separately give directives about Supplementary Grants.
The Budget Wing of the Finance Division’s approval of the ways and means shall not be necessary to release the development budget.
Within the previously mentioned release constraints, the Finance Division will upload quarterly budget allocation and release data to the AGPR servers. Any accounting organization or office is not permitted to make a payment that exceeds the set limitations without first receiving the Finance Division’s prior written authorization.
The Finance Division’s Development Wing is responsible for coordinating and directing all activities related to allocating funds for the development budget and related expenses.
Since the PD&SI Division receives the Development Budget, PAOs may contact that Division with any questions regarding authorization or the allocation of monies among the approved projects or schemes.