Ahead of SC Hearing, Govt ‘Clarifies’ No Entity Can Spend Unapproved Funds

Mon Apr 03 2023
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ISLAMABAD: Amid the Supreme Court’s (SC) questions over fiscal constraints in holding elections for the two provincial assemblies of Punjab and Khyber-Pakhtunkhwa, the Ministry of Finance has clarified that “no authority” could make or incur or commit any expenditure or create a liability against the Federal Consolidated Fund or Public Account of the federation unless it was properly authorised in the budget following a fiscal and parliamentary process, local media reported on Monday.

The three-member bench of the apex court led by Chief Justice of Pakistan Umar Ata Bandial has called the secretary Election Commission of Pakistan (ECP) and federal secretaries of the finance division to appear on Monday (today) to personally respond to the questions as to how much funds were available in the federal consolidated account. They would also need to explain to the court why about Rs20 billion could not be spared for the elections in Khyber-Pakhtunkhwa and Punjab, originally scheduled for April 30, as announced by President Dr. Arif Alvi.

A detailed notification issued by the budget wing of the ministry of finance has reminded all the authorities, offices, institutions, organisations, entities and commissions about the requirements of the Public Finance Management Act enforced by the Pakistan Tehreek-e-Insaf government in 2019 with the support of the World Bank and under the International Monetary Fund programme. The notification from the finance ministry comes as the federal government is supposedly required to explain to the Supreme Court today why Rs20bn can’t be spared for the elections.

Ahead of SC Hearing Govt Clarifies No Entity Can Spend Unapproved Funds 1

“Under Section 23 of the Act, no authority shall incur or commit any expenditure or enter into any liability involving expenditure from the Federal Consolidated Fund and Public Account of the Federation until the same has been sanctioned by a duly-empowered competent authority and the expenditure has been provided for the financial year through Sche­dule of Authorised Expen­di­ture; or Supplementary Grant and Technical Supplementary Grant; or Re-Appropriation,” the ministry said. “Moreover, no authority shall transfer public money for investment or deposit from government accounts, including the assignment accounts, to other bank accounts without prior approval from the federal government,” said the finance ministry notification.

Explaining the same, the finance division clarified how funds are allocated, authorised and disbursed for funding in a lengthy process and how funds could be transferred, reappropriated for utilisation and surrendered for efficient management of public money.

The notification further said that the Rules of Business, 1973 have mandated the finance division to manage the finances of the federal government and financial matters affecting the country as a whole which had been guiding all the principal accounting officers and other persons about the prudent, disciplined and efficient management of the available resources while spending public money over the past year.

The government has directed all the principal accounting officers accounting offices and other authorised officers not to approve any expenditure without availability of funds through the budgetary mechanism. The government has directed all the ministries, divisions, attached departments and subordinate offices, organisations, commissions, autonomous bodies, entities, authorities and corporations of the federal government to strictly comply with the budget execution strategy.

The order recalled that the financial procedure of the federal government had been laid down in Articles 78-84 of the country’s Constitution and broadly prescribed that no expenditure from the Federal Consolidated Fund shall be made unless it is duly authorised by the National Assembly and specified in the Schedule of Authorised Expenditure, so authenticated by the PM.

The finance division has asked all the principal accounting officers, commissions, authorities, heads of autonomous bodies, organisations, entities, audit and accounts offices of the civil and military administration, corporations and the State Bank of Pakistan (SBP) to “strictly implement the provisions of the Constitution, law, rules, procedures, regulations, guidelines, strategies and instructions” and there should “not be any deviation, non-compliance by any authority or office for whatever reason and circumstances”.

SC hearing today

The SC is resuming the hearing in the case pertaining to delay in the elections for the Punjab and Khyber-Pakhtunkhwa assemblies today after a break of two days.

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