ISLAMABAD: The federal government has announced stringent financial rules for all government entities, including ministries, divisions, departments, and agencies, to tighten control over cash through “sweeping arrangements” allowing the finance ministry to take over idle public funds in bank accounts.

The major change introduced through the “Cash Management and Treasury Single Account Rules 2024” came with the support of international lenders, particularly the International Monetary Fund (IMF) and the Asian Development Bank, to contain fiscal deficit through consolidation of public funds lying unutilized in various accounts.

The government had promised the IMF a couple of months ago to make swift progress on the treasury single account to refine forecasting and cash management tools. Under the sweeping arrangements, funds lying in bank accounts are swept out and made part of non-food account No.1 at the close of each banking day, and swept back to bank accounts at the start of banking hours.

To ensure timely availability of funds for settling authorised expenditures, the Budget Wing and Debt Management Office of Finance Division shall project an estimate of cash buffer requirement on regular basis and the Finance Division would be empowered to utilise surplus funds to retire public debt in coordination with the State Bank of Pakistan.

On the fifth day of each month, the accountant general of Pakistan Revenues shall provide revenue and expenditure data to the secretaries of all divisions for review. Additionally, at the end of each quarter, the secretaries will be obligated to submit a three-month forecast of revenue and expenditure to the Finance Division by the 20th of the following month.

The Debt Management Office will prepare quarterly projections of debt servicing, and the Finance Division will prepare monthly cash forecast reports based on data provided by divisions and the Debt Management Office.

Government offices and public entities will open, maintain, and operate bank accounts only in accordance with the new rules. Requests for opening of a bank account shall be submitted to the Finance Division along with any legal provision or government approval or clear justification for opening a bank account.

The existing accounts would be jointly reviewed by the Finance Division and division concerned, and those accounts which are found non-essential for functioning shall be closed and balance funds shall be transferred to the Federal Consolidated Fund or the Public Accounts.

The State Bank of Pakistan (SBP) shall provide a quarterly report to Finance Division of all bank accounts and balances therein operated and maintained by the government offices and public entities.

The government offices and public entities would be required to provide on quarterly basis a complete list of bank accounts to Finance Division that would cover information relating to balances, purpose, signatories, and the legal instrument or approval for operating these accounts. On the basis of information provided by the SBP, government offices and public entities, Finance Division shall maintain an inventory of these bank accounts.

Published in Dawn, April 30th, 2024