FD Announces Strategy for Efficient Development Budget Fund Release

According to the Finance Department, development budget funds are approved by the Planning, Development and Special Initiatives (PD&SI) Department from the PSDP allocation for the current fiscal year for approved projects at the rate of 15% in the first quarter, 20% in the second quarter, 25% in the second and third quarters and 40% in the fourth quarter.

During the implementation of development projects, the PD&SI Department and the concerned Chief Accountants (PAOs) shall ensure the implementation of the provisions of the Public Financial Management Act, 2019. The Planning Department shall formulate sector-wise, project-wise and department-wise strategies for releasing funds to public sector development programs on a quarterly basis within the approved fund allocation.

Proposals to vary the prescribed limits are considered on a case-by-case basis by the Budget Division of the Ministry of Finance and require prior approval of the Secretary of Finance.

PAOs should ensure availability of sufficient funds for Employee Related Expenses (ERE) for each project. PAOs, concerned department heads, subordinate office heads or project directors should not remit funds from ERE to non-ERE account heads without prior approval of PD&SI department.

All concerned PAOs shall ensure adequate budgetary allocation for foreign exchange portion (rupee cover) and remit funds to Ministry of Economic Affairs and Ministry of Finance. Funds for foreign exchange payments require prior approval from external departments of Finance department.

All payments should be made through pre-audit system of all accounting offices or allocation account process or any other process issued by Finance department. A separate allocation account will be opened for each project. No direct payment should be made through the State Bank of Pakistan (SBP) from any office without prior approval of the Minister of Finance under the Fund Management and Treasury Single Account Rules, 2024.

The instructions with regard to Supplementary Grants, Technical Supplementary Grants and Re-appropriations are issued separately by the Budget Division of the Ministry of Finance. No approval from the Budget Division of the Ministry of Finance is required for the release of the Development Budget. No payment beyond the limit shall be made by the Accounts Division without prior written approval from the Ministry of Finance.

The Development Division of the Ministry of Finance coordinates and monitors matters relating to the release of funds in the Development Budget and other incidental matters. The PAO may refer to the PD&SI Division for any queries regarding the approval and distribution of funds to approved projects/programs.