ISLAMABAD: The caretaker government has tightened the fiscal policy, banning supplementary grants except in case of severe natural calamities and setting strict conditions for diverting funds to other objectives until an elected government takes charge.

“No Supplementary Grants for any additional unbudgeted spending over the parliamentary appro­ved level in FY24 [current fiscal year] will be appr­oved in order to remain within the approved budgetary allocation, at least until the formation of a new government after the elections (except if needed to respond to a severe natural disaster),” the Ministry of Finance told all ministries, divisions and associated departments and entities in a memorandum.

It said cases for supplementary grants, even in severe natural disasters, would be considered where no funds could be made available through reappropriation. In that case, the technical supplementary grants would be taken up once the principal accounting officer leading the entity concerned provides a certificate that all avenues had been exhausted and this would need to be verified by the relevant accounting organisation.

Such supplementary grants would also be considered if the principal accounting officer provides valid justification and cogent reasons for demanding the grant and the finance ministry’s expenditure wing supports these justifications and certifications.

Caretakers set strict conditions for technical grants until elected govt takes over

Regarding the technical supplementary grants, the memorandum said that only principal accounting officers would submit requests for the provision of funds with the identification of resources under other demands and certificates regarding equivalent surrender from the heads from where the funds are to be surrendered.

The expenditure wing will examine cases in detail and submit recommendations for consideration by the budget wing, which will then process the cases in the light of system applications and products in a data process report along with fiscal space available for the approval of funds for diversion.

The finance secretary would then process such requests for approval of the cabinet and its Economic Coordination Committee (ECC).

Once the federal cabinet approves funds for technical supplementary grants, the principal accounting officer will submit a schedule for the grants duly endorsed by the expenditure wing along with copies of the approved summary and decision of the ECC, ratification of the cabinet and surrender order to the director budget computerisation for entry in the SAP system and subsequent releases by the finance ministry keeping in view the availability of funds and in line with release strategy.

All entities and ministries have been told that if the amount authorised for a particular service for the current financial year is insufficient or that a need has arisen for expenditure upon some new service not included in the approved budget documents, the principal accounting officers would have to follow a tight mechanism for the reappropriation of funds.

It said the principal accounting officers had been provided additional funds to meet the funding requirements of this year’s ad hoc relief allowance announced in the budget for the current fiscal year under a separate cost centre in each grant demand.

The officers have been asked to reappropriate funds in consultation with the finance ministry only for ad hoc relief allowance to cost centres of divisions, attached departments and subordinate offices within respective demands for grants no later than Aug 31.

Within the various heads of account under employee-related expenditure (ERE), the reappropriation of funds would be allowed within an appro­ved demand for grant and appropriation from one head of account to another, provided that no reappropriation will be made from employee-related expenditure head to any other head of account (non-ERE).

In case of a shortfall in employee-related expense allocation during the current fiscal year, the reappropriation of funds from non-ERE heads of account would be made on a priority basis and reappropriation orders duly approved by the relevant officer shall be provided to the accounting organisations for entry into SAP system.

Published in Dawn, August 28th, 2023