ISLAMABAD: Amid Sup­reme Court’s questions over fiscal constraints in holding elections for two provincial assemblies, the Ministry of Finance has notified 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 through a fiscal and parliamentary process.

A three-member bench of the Supreme Court led by Chief Justice Umar Ata Bandial has called federal secretaries of the finance division and the Elec­tion Commission to appear on Monday to personally res­pond to questions as to how much funds were available in the federal consolidated account.

They would also need to explain why about Rs20 billion could not be spared for elections in Punjab and Khyber Pakhtunkhwa on April 30, as announced by President Alvi.

In a detailed notification, the budget wing of the finance ministry has reminded all the authorities, offices, organisations, institutions, commissions and entities about the requirements of the Public Finance Management Act enforced by the PTI government in 2019 under the International Monetary Fund programme and with the support of the World Bank.

Order from finance ministry comes as govt set to explain to SC today why Rs20bn can’t be spared for polls

“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 moneys for investment or deposit from government accounts, including the assignment accounts, to other bank accounts without prior approval from the federal government,” it said.

This could apparently address special arrangements like over 190 million pounds received from the UK’s National Crime Agency about which the authorities in the finance ministry and the State Bank of Pakistan have always denied having received in public accounts.

Explaining full backing to the instructions from relevant articles of the Constitution, acts of parliament and rules of business and procedures, the finance division has made it clear how funds are allocated, authorised and disbursed for funding in lengthy process and how funds could be transferred, reappropriated for utilisation and surrender for efficient management of public money.

It said that Rules of Business 1973 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 efficient, prudent, disciplined management of the available resources while spending public money over the past year.

Such instructions were issued at the time of allocating funds through indicative budget ceilings in May last year, funds release strategy in July and August 2022 and then in January this year, and the subsequent commitment control guidelines in February.

Therefore, in order to maintain financial propriety, the finance division ordered that “all expenditures should be based on well-defined plans and should remain within the allocated and released budget”.

It directed all principal accounting officers and other authorised officers and accounting offices not to approve any expenditure without the availability of funds through the budgetary mechanism.

All the ministries, divisions, attached departments and subordinate offices, autonomous bodies, organisations, commissions, authorities, entities and corporations of the federal government had been strictly directed to comply with the budget execution strategy.

The order recalled that the financial procedure of the federal government had been laid down in Articles 78 to 84 of the 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 prime minister.

Furthermore, the federal government shall have power to authorise additional expenditures (supplementary grants) during a financial year from the Federal Consolidated Fund, whether the expenditure is charged by the Constitution upon that fund or not.

The Public Finance Management Act 2019, enacted under Article 79 of the Constitution, vested the custody and operation of Federal Consolidated Fund and Public Account of the Federation in the finance division and provided delegation of financial powers to principal accounting officers and other persons with the responsibility for financial propriety, the order said. Under this, the first charge on the allocated budget is to meet the employee-related expenditures.

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

Published in Dawn, April 3rd, 2023