As the 2024-2025 federal budget approaches finalization, Pakistan’s Ministry of Finance has given all ministries, departments, divisions and autonomous bodies until May 15 to release unspent funds that are not expected to be spent by the end of the year. instructed to submit it. This year he will end on June 30, 2024.
according to dawn The report cited a provision in the Public Finance Management Act 2019 (PFMA) stating that companies funded by public funds must return surplus funds by May 31 of each year to close the books for the financial year. It says it has to be done. The return of this funding will form the basis for the approval and allocation of funding for the next fiscal year.
However, the federal government’s Accounting Policies and Procedures Manual (APPM) requires that unused funds, or funds expected to remain unused, be returned by May 15 of each year. As a result, the Treasury Secretary has directed other ministries to strictly adhere to the APPM to ensure clarity.
As a result, the deadline for the return of unspent funds has been moved up to May 15, taking into account future negotiations with the International Monetary Fund (IMF) for the 24th relief program. The allocation of both development and non-development expenditure for the next fiscal year will be determined based on the actual expenditure of the current fiscal year, the report added.
The Ministry of Finance has issued an order directing all principal accounting officers to issue cancellation orders by May 15 and communicate them to the Director of Budget Information. This concerns data entry into SAP, a central budget software system. This Directive encompasses all ministries, departments, their attached departments, subordinate departments, and autonomous bodies required by Article 12 of the PFMA.
In accordance with the Financial Regulations and PFMA 2019, funds allocated in the original approved budget but not utilized within the financial year must be returned to the Ministry of Finance, which oversees federal finances.
Article 12 of the PFMA 2019 provides that all ministries, departments, their attached departments, subdivisions, and autonomous bodies must return to the Department of Finance the estimated savings in their subsidy or quota accounts by May 31 of each year. It stipulates that it must not be
In cases of special urgency, the Finance Division has the authority to extend the deadline until the end of the fiscal year. Additionally, the finance department must confirm acceptance of such termination before the end of the financial year. If warranted, an equivalent amount must be included in the following year’s budget.
Under the APPM, any entity that spends funds on behalf of another entity must have appropriate budgetary controls. The spending entity must ensure that the allocated funds are not exceeded, are utilized for the intended purpose, and that any anticipated savings are promptly returned to the spending entity. Entities must notify approved grants and approve disbursements by designated authorities within the disbursing entity.
Section 3.3.12.6 of the APPM requires all such entities to deliver anticipated savings to the government as soon as they are anticipated, but not later than May 15 of each year.
“Savings from funds provided after May 15 must be returned no later than June 30,” it says, requiring principal accounting officers to collect all potential or actual savings. It instructs the government to strictly control expenditures.
Under these rules, deferred spending cannot be “set aside for possible future surpluses,” deferred spending cannot be reallocated to new spending items, and deferred spending cannot simply be Expenditures should not be made solely because funds are available within a particular grant. “Subsidy funds that cannot be used appropriately must be abandoned.”
Early last year, as required under PFMA 2019, the government immediately released surplus funds kept for working capital and investment to all ministries, departments and four states, Azad Kashmir and Gilgit-Baltistan. and forced the funds to be deposited with a single government agency. Federation financial accounts.
Article 78 of the Constitution provides that all funds received by or on behalf of the Federal Government shall be deposited as part of the Federal Consolidated Fund (FCF) or the Public Accounts of the Federation (PAF). Although the cash balances of FCF and PAF are maintained in the Central Account No. 1 (Non-Food) of the State Bank of Pakistan, Article 79 regulates by law the storage of funds from the central account and the disbursement of funds to the central account. is required to do so. of parliament.
The Financial Management Act (PFMA) was passed by Parliament in 2019 at the request of lending institutions and currently governs all matters related to FCF and PAF. The operations of the FCF and PAF are required to fall under the Department of Finance under the overall supervision of the federal government.
Furthermore, Article 23(2) of the same law states that “no authority shall transfer public funds for investment or deposit from a government account, including a transfer account, to any other bank account without the prior approval of the Federal Government.” It stipulates that.
In addition, section 45 of the Act provides overriding effect over all other laws and laws inconsistent with this Act, and includes regulation 4(4) of the Cash Management and Treasury Single Account Regulations 2020. ) provides that no authority may transfer public funds. Violation of subsection (2) of section 23.
Based on opinions from agents
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