PESHAWAR, May 28: The Khyber Pakhtunkhwa government’s decision to use deputy commissioners as the ‘principal accounting officers’ in districts after the abolition of the Local Government Ordinance, 2001, is without solid legal grounds, officials say.

The appointment of deputy commissioners as the principal accounting officers is legally questionable and prone to objections by the Auditor General of Pakistan at the time of audit of the district-based entities’ accounts, officials told Dawn on Tuesday.

“Despite the provincial finance department’s repeated reservations vis-à-vis deputy commissioners’ status as principal accounting officers, the higher authorities have decided to maintain the situation until June 30, 2013, leaving legal questions unanswered,” an official privy to the matter said.

The controversy emerged after the abolition of the Local Government Ordinance, 2001 on December 31, 2012. As a result, the office of the district coordination officer became redundant with the province reverting to the deputy commissioner-led, district-based administrative set-up.

Under the Local Government Ordinance, 2001, the district coordination officers were the principal accounting officers being the administrative head of district governments.

However, the Khyber Pakhtunkhwa Local Government Act, 2012, which took effect on January 1, 2013, does not confer the role of principal accounting officer to deputy commissioners. Consequently, deputy commissioners, officials said, were not legally competent to function as principal accounting officers.

“The government has notified deputy commissioners as principal accounting officers under an executive order by the local government department,” said a local government official.

Another termed it against the lawful authority as, according to him, the move needed to be covered through an act of the provincial assembly, which was not there.

An official of the finance department said the deputy commissioners’ appointment as the principal accounting officers was covered under the new local government act.

In this regard, the government, said official sources, had used a ‘blanket’ clause of the DCs as principal accounting officers open to question new local government act through which it had assumed authority to remove legal complications, if occurred any.

Section 227, titled as ‘continuation of functions of certain authorities and officers,’ of the Local Government Act, 2012, says that “ notwithstanding anything contained in this Act, all authorities and all officers who immediately before the enforcement of this Act were exercising functions of Local Governments under the Khyber Pakhtunkhwa Local Government Ordinance, 2001 (Khyber Pakhtunkhwa Ordinance No. XIV of 2001), shall continue to exercise their respective functions till the Local Councils are constituted under this Act; provided that Government may withdraw all or any of the functions from such authorities or officers as it may deem necessary.

Officials skeptical about the government’s decision held a different view.

They said dispersal of funds from the provincial government’s ‘Account-IV’ (through which district governments were released funds every month under the previous local government system) was not maintainable, deputy commissioners’ appointment as principal accounting officers was against the law, and the government needed to make budgetary adjustments in January after the new local government system got effect.

The provincial government, said a financial manager concerned, had created ‘Account-IV’ in 2001 to ensure smooth functioning of local governments and the district based devolved departments that came into being in line with the Local Government Ordinance, 2001.

The provincial government, he added, diverted funds from its Account-I to district governments’ account-IV in quick successions every month under a policy to ensure district governments fulfilled their expenditure requirements unhindered, paying salaries and pension to their existing and ex-employees on time and making payments to contractors hired to run district-based development schemes.

“In his capacity as the principal accounting officer, the district coordination officer,” said the finance department official “was responsible to ensure financial discipline in all the 13-devolved departments.”

While the previous provincial government, said a planning and development department official, reverted to the local government system of 1979 as a result of the provincial bureaucracy’s bids to restore the lucrative office of deputy commissioner, it missed out to fully restore the old administrative system. Under the old system, administrative heads and secretaries of the provincial government’s line departments were used to be principal accounting officers.

All the line departments, said the sources, were used to get yearly budgetary allocations prior to the enforcement of the Local Government Ordinance, 2001 and administrative secretaries of education, health, agriculture, and other line departments were responsible to maintain financial discipline in their department concerned.

“After devolving 13 departments to the districts, the rules were changed and district coordination officers became the principal accounting officers in their respective districts,” said the official. What the provincial bureaucracy, added the official, missed out was that it restored the old local government system without reverting back to the system in which administrative heads of the line departments were the principal accounting officers.

“The government,” said a finance department official “left it unattended, taking the stand that the situation would be rectified (with the commencement of the new financial year on July 1, 2013) once the six month transition period is over (on June 30, 2013).”

The bureaucracy, said the official, skipped to rectify the situation because it would have required a massive exercise to alter budgetary allocations for the January-June period of the outgoing financial year.

The provincial budget for the current financial year was presented at a time when the Local Government Ordinance, 2001 was in force and under it district governments were allocated separate budgetary allocations.

The restoration of the local government system of 1979, from January 1, 2013, necessitated a complete overhaul of the provincial budget, distributing funds from the line departments after the centralisation of authority with the winding up of the devolved departments.

“It meant to present a new budget for the remaining six months of the outgoing financial year, which the bureaucracy avoided, preferring to continue with the legal vacuum in place,” said an official.Intikhab Amir