Procedure for release of funds to be changed: New PSDP projects
By Our Staff Reporter
ISLAMABAD, March 31: The federal government has decided to overhaul the procedure for release and expenditure of development budgets for quality and timely implementation of the Public Sector Development Programme (PSDP)
, Dawn has learnt.
A release committee, led by secretary planning and development, was constituted by the National Economic Council (NEC) a few days back to look into the steps and procedures that impede a faster flow of funds to the operational level, a senior finance ministry official told Dawn.
The committee was directed to submit a report to the prime minister's secretariat within a month so that a new modus operandi could be introduced for quality implementation of the development projects.
The report would cover procedures involving processing of demands for funds at the projects, relevant ministry and finance ministry levels; pay-out procedure prevalent at the level of Auditor General of Pakistan Revenue (AGPR), the federal treasury and the State Bank of Pakistan; financial management systems at the project level; re-definition of the role of finance and accounts sections of the ministries and the financial adviser's organization; and decentralization of accounts.
On certain complaints from the donors, particularly the Asian Development Bank, core project management units (CPMUs) will be set up in the case of foreign-funded projects at their inception by appointing project directors with staff and ancillary facilities at the time of fact-finding to avoid late start-ups and ensure systematic project implementation, the official said.
As a general policy, no project will be included in the PSDP without the receipt of PC-Is before May each year. During the current year, more than 130 projects were approved and included in the PSDP but funds allocated for more than 60 projects were diverted to other projects because their PC-Is have not yet been received by the Planning Commission.
Similarly, the official said, no approval would be given to a new project costing Rs100 million or more unless an independent project was included in the PC-1 estimates or proper justification had been given for not having the project director.
Also, all the ministries and divisions have been asked to set up their own planning and monitoring cells for project formulation, monitoring and evaluation. In case of block allocations, the ministries and divisions would also establish their separate project accounts.
As a general policy, no new project would be included in the PSDP during the current financial year, but exceptions would be considered in case of a very high priority projects.
Officials say the change came in the aftermath of a Planning Commission report which states that the implementation capacity at the federal, provincial and local levels to absorb releases and funding had collapsed over the past few years.
Most of the development problems faced during the current year were related to the allocation of PSDP funds without prior preparation and approval of PC-1s, non-appointment of independent project directors, lack of internal monitoring, late start-ups of projects and implementation of projects without maintaining project accounts.
More than 72 per cent of the PSDP projects costing Rs100 million and above had no independent project directors (IPDs) despite standing instructions for appointment of IPDs in such projects.
Similarly, an internal monitoring of the PSDP projects by the relevant ministries and divisions was undertaken in only 22 per cent of the projects.
