Uplift, recurrent budget: MoF changes fund release strategy

ISLAMABAD: Ministry of Finance (MoF) has altered strategy for release of funds for development budget/ Public Sector Development Program (PSDP) and recurrent budget during the Current Fiscal Year (CFY 2023-24) without citing any reason.

However, Senate, National Assembly, Supreme Court of Pakistan, Shariat Court and Islamabad High Court have been exempted from the effects of the amendments in release of funds for recurrent budget.

According to an Office Memorandum (OM) of Finance Division’s Budget Wing issued on August 24, 2022, following amendments have been made for release of development budget: (i) the fund release strategy shall be applied on each Demand for Grant and Appropriation for development budget included in the Schedule of Authorized Expenditure for FY 2022-23. It shall not be applicable on individual project or cost centre or detailed object heads in a demand for grant and appropriation; (ii) funds shall be released and uploaded on AGPR’s server by Ministry of Planning, Development and Special Initiative(PD&SI) for each demand and grant and appropriation at the maximum level of l0% for quarter l, 20 per cent for quarter 2, 30 per cent for quarter 3 and 40 per cent for quarter 4 of the approved budget;(iii) the release of funds for each approved project in a demand for grant and appropriation shall be made by the Principal Accounting Officers (PAO) in each quarter with the approved limits.

The PAO shall ensure availability of sufficient funds for employees-related expenses for each project; and (iv) quarter-wise budget allocation and release will be uploaded on the MoF and AGPR servers by the Finance Division, with the stated release limits. No payment shall be made over and above the limits by any accounting organization/ office except with the prior written approval of the Finance Division.

On July 7, 2022, Finance Division had notified that funds for development budget shall be released by the Ministry of Planning, Development and Special Initiatives out of the PSDP allocation for CFY for the approved projects at the level of 20 per cent for quarter 1, 25 per cent for quarter 2, 30 per cent for quarter 3 and 25 per cent for quarter 4.

According to Finance Ministry, the amended strategy for release of funds of recurrent expenditure is as follows: (i) the funds release strategy shall be applied on each demand for grant and appropriation for recurrent budget included in the schedule of authorized expenditure for FCY 2022-23; (ii) funds shall be released by the Finance Division for each demand for grant and appropriations at the maximum level of 17 per cent for quarter 1, 23 per cent for quarter 2, 25 per cent for quarter 3 and 35 per cent for quarter 4 of the approved budget;(iii) PAO shall utilize funds within the released budget for making expenditures under the various heads of accounts including Employees Related Expenses (ERE), rent of office and residential buildings, commuted value of pension, encashment of LPR, PM Assistance Packages in each quarter, etc; (iv) quarter-wise budget allocation and release will be uploaded on the MoF and AGPR servers by the Finance Division within approved release limited. No payment shall be made over and above the limits by any accounting organization/office except with the prior written approval of the Finance Division.

Copyright Business Recorder, 2022