The federal government has revised procedure for operation of Assignment Accounts with discontinuation of special drawing accounts (SDAs), personal ledger accounts (PLAs) and revolving fund accounts (RFA) in local currency by the federal and provincial governments to ensure uniformity in fiscal operation.
As per revised procedure for federal and provincial governments applicable from July 1, 2018, the Assignment Accounts will only be opened with the approval of Ministry of Finance for the federal government and respective finance departments for the provincial governments and these will be part of the Consolidated Fund.
Under expenditure control, the authorities using the assignment accounts will be responsible for enforcing financial order and strict economy at every step and for observance of all relevant financial rules and regulations and must ensure that not only the total expenditure is kept within the limits of the authorised appropriation but also that the funds allocated to spending units are expended in the public interest and upon objects for which the money was provided.
The authorities should put in place a monitoring mechanism to know not only of what has actually been spent from an appropriation but also what commitments and liabilities have been and will be incurred against it.
They must be in a position to assume before the government and the Public Accounts Committee for necessary codal responsibilities for departmental expenditures and to explain or justify any instance of excess or financial irregularity that may be brought to notice as a result of audit scrutiny.
The practice of allocating one line budget will also be discontinued and the withdrawing entities would be responsible for preparation and submission of detailed budget estimates to the Ministry of Finance through ministries/divisions for budgeting.
Under General Policy, the Ministry of Finance will consider request for assignment accounts on case to case basis, these will be part of Consolidated Fund and unspent allocations and budget grant would be surrendered in time, and Assignment Accounts are opened, both for development and non-development budgets as per laid down procedure and in case of development budget, a separate assignment account would be opened for each project.
The assignment account will not be used for collection and deposit of receipts and an account opened for a specific project, activity or entity will not be used for any other purpose and availability of funds as authorised by concerned authorities will be ensured before each payment by the NBP. Under recording of expenditure, the cheque issuing authorities would ensure compliance with all relevant rules and regulations and the AGPR/AG/DAO will, at the time of endorsement of the schedule, see that sufficient budget in the relevant head of account is available and information including that of payees is sufficient for the purpose of accounting.
On making endorsement on cheque, AGPR/Department Account Office (DAO) will issue a schedule of cheques to NBP and DDO duly signed by the authorised officer for verification of payment by the Bank/reconciliation by DDO. The NBP head Office, Karachi will issue necessary instructions to their branches that no payment will be made against any Assignment Account cheque unless it is endorsed and the schedule thereof is provided by AGPR/DAO to them.
The AGPR/DAO will endorse only those cheques, which are drawn in the name of contractor/ supplier/vendor/salaried individuals only in lieu of their payments on account of purchases, supplies, salaries etc. Moreover, the AGPR will not endorse any cheque, under any circumstances, which is drawn in the name of project-authorities or drawer/payer for lump sum transfer of funds from Federal Consolidated Fund to their commercial bank accounts or deposit into any chest.
The revised procedures for operation also included budgeting and reconciliation and establishment of sub-assignment accounts etc.