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ISLAMABAD: The Finance Ministry has reviewed the procedure pertaining to supplementary grants, and conveyed to the ministries and divisions that the Federal Cabinet, the National Assembly especially and the Public Accounts Committee have directed to discourage supplementary grants unless extremely critical.

The Finance Division has conveyed to the ministries and divisions with regard to allocation of additional budget through supplementary grants in the fiscal year 2020-2021 Public Finance Management Act, 2019, and the General Financial Rules provide that if in respect of any financial year, it is found that the amount authorised to be expended for a particular service is insufficient, the federal government would have the power to authorize expenditure from the Federal Consolidated Fund, whether the expenditure is charged by the Constitution upon that fund or not, and would lay it before the National Assembly, Supplementary Budget Statement.

The General Financial Rules (GFRs) also provide the procedure for supplementary grants.

The Divisions/Departments before initiating the case for additional budget required that the Principal Accounting Officer (PAO) will resort to finance an unforeseen emergency appropriation from allocated budget within grant under detailed heads, and meet the requirement through re-appropriation or refer the case to Expenditure Wing of the Finance Division for re-appropriation under restricted heads and no token supplementary grant would be granted.

Token grants would be required, in case an expenditure on any new service or new item during financial year is met through re-appropriation of funds as government is averse, on general principles to admitting demands of supplementary grants.

The federal cabinet, the National Assembly especially, the Public Accounts Committee have directed to discourage supplementary grants unless extremely critical, and if additional funds are required, the Division/Department concerned would provide matching funds through surrender order for technical supplementary grant.

All applications submitted by the PAOs for regular supplementary grants (SG) or technical supplementary grants (TSG) shall be accompanied by a full explanation of the reason in writing.

The ministries and division have been informed that in case a supplementary grant (SG/TSG) is required for expenditure pertaining to Public Sector Development Programme (PSDP), the recommendations of the Planning, Development and Special Initiatives Division would be required before submission of the case to expenditure wing; all proposals for SG/TSG shall be routed through expenditure wing of the Finance Division.

The expenditure wing would review the position of the grant as a whole with reference to verified actual as on that date and that of the previous year.

After due diligence and having been satisfied, the Expenditure Wing may forward the case to Budget Wing of the Finance Division with full justification and recommendations.

The Budget Wing would provide endorsement, duly signed by the Finance Secretary (as per existing practice) to the concerned Division/Department for submission of case to the ECC of the Cabinet for approval and after approval the Divisions/Departments concerned shall send the authenticated schedule for entry in SAP system to Budget Wing.

The Division/Department concerned would provide complete details of the approved SG/TSG cases, and coordinate with the Budget Wing of the Finance Division for soliciting approval of the National Assembly in terms of Article 84(a) of the Constitution.

Copyright Business Recorder, 2020