No supplementary grants under IMF policy

ISLAMABAD: The Finance Division has categorically stated that no supplementary grants for unbudgeted spending beyond the limits approved by Parliament will be entertained — except for in the case of severe natural disasters.

The Ministry of Finance issued an official memorandum to this effect, aligning with conditions set by the International Monetary Fund (IMF) under the ongoing $7 billion Extended Fund Facility (EFF) program.

According to the directive, supplementary grants will only be considered when all other funding avenues have been exhausted and no resources are available through re-appropriation or Technical Supplementary Grants (TSGs). In such exceptional cases, the following conditions must be met: The Principal Accounting Officer (PAO) must certify that all funding options have been explored, a claim which must be verified by the relevant Accounting Organisation or Office.

The PAO must provide strong justification and clear reasons for seeking a supplementary grant.

The request must be supported by the Expenditure Wing or the concerned Wing of the Finance Division.

All procedural requirements outlined for TSGs must also be followed.

The memorandum cites Article 84 of the Constitution of Pakistan and Section 10 of the Public Finance Management (PFM) Act, 2019, which provide a legal basis for additional expenditure where existing funds fall short or where new services require funding not included in the Annual Budget Statement (ABS).

Regarding re-appropriation, Authorised Officers may shift funds in accordance with their delegated financial powers under Sr#5 of the Schedule of Financial Management and Powers of PAOs Regulations, 2021, as updated by the Finance Division. However, re-appropriation is not permitted from unreleased budget allocations.

Additionally, Principal Accounting Officers have been allocated extra funds to meet the costs of the Ad-hoc Relief Allowance announced in the current fiscal year. These funds have been placed under a separate cost centre within each Demand for Grants and Appropriations.

The PAOs are, hereby, advised to re-appropriate these funds, in consultation with Expenditure Wing, Finance Division, only for the purpose of Ad-hoc Relief Allowance in quarter 3 of CFY; In case of shortfall in Employees Related Expenses (ERE) allocation during the FY, re-appropriation of funds from Non-ERE “Heads of Accounts” may be made on priority basis; Re-appropriation orders duly approved by the competent authority shall be provided to the Accounting Organizations/Offices for entry into SAP system.

However, released funds shall remain within the prescribed quarterly limits given by the Finance Division in the Strategy for Release of Funds of CFY; It has been observed that a large number of cases for relaxation of cut-off date for re-appropriation of funds i.e. 31st May, under Section 11 of PFM Act 2019, are received in Finance Division during June every year.

It has been decided that the re-appropriation orders shall only be considered, which duly approved by competent authority and following nature: For adjustment of excess expenditure booked in accounts offices; To meet shortfall under ERE heads of accounts; Unavoidable payments which mature in June; vi. Copies of the approved Re-appropriation Order shall be provided to the Expenditure Wing and Budget Wing (Budget Computerization Section) Finance Division for record and monitoring purposes.

Technical Supplementary Grants: Any request for provision of funds through TSG shall only be submitted by PA0s, with identification of resources under other demand(s) and certificate that equivalent funds will be provided by ministry/division from their allocation.