LAHORE, June 4: The 59 public-sector universities in the country are facing ‘financial crunch’ following the federal finance ministry’s refusal to release the Higher Education Commission’s fourth quarterly installment of development and recurring grant of over Rs8 billion for 2007-08.

The HEC provides grants and funds to all these institutions for various projects and payment of salaries to their employees. The universities, it is learnt, have been rendered virtually cash-strapped.

According to a source in the HEC, work on more than 300 HEC-funded projects of various public universities has come to a halt following the move. He told Dawn on Wednesday that the fourth quarterly installment was due in April, but not a single rupee had been released on account of the grant so far.

The public-sector varsities, he said, had no funds now even to pay salaries to their staff that would aggravate the situation.

He further said the matter had been brought to the knowledge of all provincial governors -- the chancellors of public varsities of their respective provinces. “Prime Minister Yusuf Raza Gilani also has been requested to intervene and get the grant released at the earliest,” he added.

The finance ministry in a letter to the HEC says: “It expects the HEC to understand that the finance division is obliged to exercise and observe due diligence before allowing any fresh release of fund. The HEC would appreciate that exercise of due diligence, being the fundamental principle of sound financial management, can’t be dispersed with under any circumstances.

“In this context, one of the requirements, which is to be observed before allowing any fresh release of funds, is to obtain a clear picture of actual utilisation of funds released earlier,” the letter read, adding: “The HEC would, therefore, be well advised to facilitate this division in this regard by providing the following information as early as possible; opening balances in the bank accounts of all the universities/establishments under the HEC as on April 1, 2008.

“The statement of actual expenditure incurred up to third quarter of current financial year by each of the universities/other establishments of the HEC duly certified by their finance officers. It is pointed out that mere disbursement of funds by the HEC to the varsities does not reflect true picture of expenditure incurred by these establishments,” according to the notice.

It also demanded: “Details of the revenue generated by universities and other establishments other than grants received by them from the HEC. Funds required for meeting the essential expenditure such as salaries and other establishment charges of universities/other establishments of the HEC for the fourth quarter. Any other relevant information which would facilitate the finance division to assess the HEC expenditure requirement of essential nature for the fourth quarter of current financial year.”

The finance ministry further said it hoped that the HEC would accept it in a ‘positive way’ and furnish the finance division with the requisite information at the earliest to enable it to finalise the issue of release of funds to the HEC for the fourth quarter of this year.