Ministry of Planning, Development & Reforms (MoDP&R) has proposed the procedure to clear the pending liabilities of the closed development projects. The development projects approved by different forums are executed by Ministries/Divisions. As per existing guidelines, projects facing either over 15 percent cost overrun or change in scope or both are required to be placed before the approving forum.
Additionally, project authorities are responsible for clearing all project liabilities before its closure. However, in certain cases projects are closed without clearance of liabilities. After project completion, the PC-IV is required to be submitted to the Planning Commission for undertaking evaluation. In majority of the cases, however, PC-IV is not submitted by the executing agency.
Project closure has two categories i.e. PC-IV submitted after completion of project and PC-IV not submitted on project completion.
According to official documents, the Ministries/Divisions are approaching MoDP&R to allow payment of liabilities after project closure. These liabilities mostly relate to payment of salaries to project staff, outstanding bills etc.
Liabilities are cleared either on demand from project staff or under judicial orders. In the latter case, if the liabilities are not cleared, project authorities face contempt proceedings.
Such a situation is very complex because the project stands closed. No allocation is available for that project in the development grant of the Ministry concerned. Under project guidelines, liabilities of a project can neither be cleared from the allocation meant for some other projects or from the current budget.
The existing guidelines to solve the above situation are silent and there is a need to frame rules/guidelines to help project authorities, documents said and proposed that the Ministries may clear/pay audited pending liabilities of the closed projects from the head of contingency of their ongoing projects with the approval of DDWP.
If sufficient funds are not available to pay the liabilities, the ministry proposed that where PC-IV has been submitted to the Planning Commission, the project authorities would be required to prepare a new PC-I involving only the cost of outstanding liabilities, get the approval of competent forum and then pay the audit cleared liability(ies) by first seeking Technical Supplementary Grant/Re-appropriation after observing all formalities.
Where PC-IV has not been submitted, the PC-I of the project may be placed before the competent forum for approval to pay the audit cleared liabilities after seeking Technical Supplementary Grant/Re-appropriation and observing all formalities. In both cases, clearance of the liability(ies) would involve work already done. No other activities would be permissible in such projects.
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