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ISLAMABAD: The Federal Government has reportedly decided to appoint Chief Finance and Accounts Officers (CFAOs) in each Ministry to look after their financial affairs, well-informed sources told Business Recorder.

Under Article 79 of Constitution of Pakistan, the matters relating to public finances of the Federal Government are being managed through enactment of Rules, Regulations, Orders and Instructions/ Guidance issued by Finance Division. System of financial control and budgeting 2006 was issued by Finance Division for the Ministries/Division/Departments while Ministry of Defence also issued revised system of financial management for Defence Services in 1981 and Financial Regulations in 1986.

Subsequently, the Federal Government enacted the Public Finance Management (PFM) Act 2019 with the key objectives of efficient budget management, fiscal discipline, expenditure control, cash management, etc.

One of the important features of the PFM Act was to disband Financial Advisor’s Organization (FAO) and establish Offices of the CFAO and CIA. The Act also emphasizes the delegation of financial powers to the Principal Accounting Officers (PAOs). Finance Division would frame rules, regulations and guidelines for implementation of the PFM Act. All the existing instruments contrary to the provisions of the Act and rules made thereunder shall have no legal effect. Section 27 of the PFM Act provides that Finance division shall approve regulations for delegation of financial powers based on the principles of balancing financial authority of PAOs with responsibility, financial propriety, enhanced public service delivery and delegation of financial powers to subordinate officials.

Accordingly, Finance Division had examined the existing systems in Ministries/Division/Departments including Defence services and after detailed consultation with all the stakeholders, had prepared a scheme for delegation of financial powers to the PAOs which was submitted for information.

Finance Division further noted that Section 28 of the PFM Act, 2019 stated that there shall be a Chief Finance and Accounts Officer (CFAO) positioned in Ministries/Divisions to assist the PAO in financial management. Furthermore, Federal Government shall prescribe the procedures, role and functions of the office of the CFAO, in consultation with Finance Division, Auditor General of Pakistan and Controller General of Accounts. Accordingly, Finance Division after extensive a consultations and views/comments from the relevant Organizations prepared final draft on the procedures, role and functions of the office of the CFAO.

It was also apprised that Section 29 of the PFM Act 2019 also stipulates position of Chief Internal Auditor (CIA) who shall work under direct supervision of the PAO and whose appointment, role and responsibilities may be prescribed under Civil Servant Act 1973, in consultation with the Auditor General of Pakistan. Accordingly, Finance Division after consultations and soliciting views/comments from the concerned entities, finalized a draft on the appointment, role and responsibilities for the office of the CIA.

Finance Division requested for approval of the procedures, role and functions of the office of the CFAO in terms of Section 28(2) of the PFM Act 2019.

During the ensuing discussion, the meeting observed that introduction of CFAO and CIA streams would be a good initiative bringing more efficiency, transparency and financial discipline in incurring expenditure. The Chairman CCIR appreciated the idea with remarks that the PAO needed to be empowered to the maximum in financial matters, which will not only increase efficiency reducing processing time but also more responsibility with financial independence.

It was also pointed out that the system of allocation of annual budget may be simplified with an objective to empower the PAO for re-appropriations within the allocated budget. It was also suggested that in order to provide maximum assistance to the PAO, each Ministry/Division could have separate CFAOs.

After a detailed discussion, the Cabinet Committee on Institutional Reforms (CCIR) approved the proposal with the following aspects; (i) allotment of only one demand for recurring expenditure and one for development expenditure to each Ministry/Division/Department instead of various demands for allocation of annual budget and; (ii) each Ministry/Division to have separate Chief Finance and Accounts. In case of non-availability of BS-20 officers, senior officers of Pakistan Audit & Accounts Service (PAAS) in BS-19, in own Pay Scale, may also be considered for posting as CFAO.

Copyright Business Recorder, 2021


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