ISLAMABAD: The Finance Division (FD) has tightened the mechanism for re-appropriation and additional allocation of funds, restricting requests for supplementary grants and allowing relaxation of the May 31 cut-off date only in exceptional cases, including unavoidable June payments and salary-related shortfalls.
In a circular issued, the Budget Wing directed all Principal Accounting Officers (PAOs), heads of departments, organisations and subordinate offices to strictly follow the revised strategy for re-appropriation, Technical Supplementary Grants (TSGs) and Supplementary Grants during the current and coming financial years.
The Finance Division, invoking Article 84 of the Constitution and Section 10 of the Public Finance Management (PFM) Act, 2019, said that where funds authorised for a particular service prove insufficient, or expenditure is required for a new service not included in the Annual Budget Statement and Schedule of Authorised Expenditure, the prescribed procedures must be followed.
Under the new instructions, authorised officers may re-appropriate funds within their delegated financial powers. However, no re-appropriation will be allowed from the unreleased budget, the circular stated.
The Finance Division has also provided additional funds under separate cost centres in each Demand for Grants and Appropriations for payment of the Ad hoc Relief Allowance 2026. PAOs have been advised to re-appropriate these funds, in consultation with the Expenditure Wing, strictly for payment of the allowance during the third quarter of the current financial year.
Finance Division said that in case of a shortfall in Employees Related Expenditure (ERE), funds may be re-appropriated from Non-ERE heads on a priority basis.
It further clarified that even after re-appropriation, released funds must remain within the quarterly limits prescribed under the Finance Division’s strategy for release of funds.
The circular highlighted that a large number of requests for relaxation of the May 31 cut-off date for re-appropriation are received every June. Going forward, such requests will only be considered where orders have already been approved by the competent authority, and the case falls into specified categories.
These include adjustment of excess expenditure booked by Accounts Offices, meeting shortfalls under ERE heads, and unavoidable payments falling due in June. The Finance Division has simultaneously tightened the process for TSGs, directing that such requests may only be submitted by PAOs with identification of resources from other Demands and a certificate confirming equivalent surrender by the concerned PAO.
The Expenditure Wing will scrutinise TSG cases before referring them to the Budget Wing. The latter will assess each case against SAP-generated Budget Execution Reports, the Expenditure Wing’s recommendations and the available fiscal space before placing it before the Finance Secretary.
TSG proposals relating to the Public Sector Development Programme will have to be processed through the Ministry of Planning, Development and Special Initiatives after fulfilment of the prescribed requirements.
The circular further stated that funds approved through TSGs would be released only after taking into account the availability of funds and the applicable release strategy.
On Supplementary Grants, the Finance Division has adopted an even stricter approach, stating that no grant for additional unbudgeted expenditure beyond the level approved by Parliament will be considered, except in cases of severe natural disasters.
Where funding cannot be arranged through re-appropriation or TSG, the concerned PAO will have to provide valid justification and cogent reasons, along with the recommendation of the Expenditure Wing or relevant Finance Division wing.
The Finance Division said the same procedural requirements prescribed for TSGs would also apply to Supplementary Grants.
The instructions have been made applicable to the current and coming financial years, covering all PAOs, departments, organisations, subordinate offices and accounting organisations/offices.
Copyright Business Recorder, 2026
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