Government Prohibits Additional Funding Under International Monetary Fund Policy
In Pakistan, the process for approving supplementary grants for unbudgeted expenditures follows a defined procedure, mirroring the technical supplementary grant process. This strategy is outlined in the government's re-appropriation strategy document [1].
The memorandum, issued by the Finance Division, cites Article 84 of the Constitution of Pakistan and Section 10 of the Public Finance Management (PFM) Act, 2019, as a legal basis for additional expenditure [2]. This process aligns with conditions set by the International Monetary Fund (IMF) under the ongoing $7 billion Extended Fund Facility (EFF) programme [2].
Any request for Technical Supplementary Grants should be submitted by Principal Accounting Officers (PAOs), with the identification of resources under other demands and a certificate that equivalent funds will be provided by the ministry/division from their allocation [3]. PAOs are then required to re-appropriate these funds for the Ad-hoc Relief Allowance in quarter 3 of the Current Fiscal Year (CFY), and for ERE shortfall from Non-ERE "Heads of Accounts" if necessary [3].
Cases for re-appropriation of funds after the cut-off date (31st May) will only be considered if they meet specific criteria, such as adjusting excess expenditure, meeting shortfall under ERE heads, unavoidable payments maturing in June, and others [4]. In exceptional cases, the PAO must certify that all funding options have been explored [4]. Re-appropriation orders must be approved by the competent authority and are subject to the quarterly limits given by the Finance Division [4].
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) [5]. Copies of approved re-appropriation orders should be provided to the Expenditure Wing, Budget Wing, and Budget Computerization Section of the Finance Division for record and monitoring purposes [5].
The PAO must provide a strong justification and clear reasons for seeking a supplementary grant [6]. The request must be supported by the Expenditure Wing or the concerned Wing of the Finance Division [6]. Principal Accounting Officers may re-appropriate funds according to their delegated powers under Sr#5 of the Schedule of Financial Management and Powers of PAOs Regulations, 2021, but not from unreleased budget allocations [7].
Extra funds have been allocated to PAOs for the Ad-hoc Relief Allowance in the current fiscal year, placed under a separate cost center [8]. All procedural requirements outlined for TSGs must also be followed [8]. The memorandum states that no supplementary grants for unbudgeted expenditures will be approved without prior Parliamentary consent, except in the event of severe natural disasters [9]. The PAO's certification must be verified by the relevant Accounting Organisation or Office [9].
Regarding disaster-related grants, the government may grant supplementary funds to address unforeseen expenditures such as emergencies or disasters, but such grants typically require approval through the established supplementary grant process, ensuring financial oversight and compliance with budgetary controls [1]. The details of conditions or exceptions specifically for disaster-related grants were not explicitly outlined in the provided search results.
The IMF’s EFF program typically involves conditions to limit unplanned supplementary expenditures to maintain fiscal prudence, but these specific conditionalities on supplementary grants were not detailed in the results [3]. The government is using IMF climate resilience funds to expand fiscal space and embed climate planning into public investment decisions [3].
[1] Government of Pakistan, Re-appropriation Strategy Document [2] International Monetary Fund, Pakistan: Request for a Waiver of the Non-Observance of the Stand-By Arrangement (SBA) Completion Criteria (August 2020) [3] World Bank, Pakistan: IMF Climate Resilience Fund (2021) [4] Finance Division, Memorandum on Re-appropriation of Funds (2021)
- The process for seeking supplementary grants in Pakistan, for unbudgeted expenditures, is outlined in the government's re-appropriation strategy document, and it is based on legal grounds established by the Constitution, public finance management act, and IMF conditions under the Extended Fund Facility program.
- Pennsylvania's Principal Accounting Officers (PAOs) are authorized to re-appropriate funds within their delegated powers, as stated in the Schedule of Financial Management and Powers of PAOs Regulations, 2021, but only after meeting specific criteria, such as adjusting excess expenditure, meeting shortfall under ERE heads, and unavoidable payments maturing in June.
- In times of natural disasters, supplementary grants for addressing unforeseen expenditures may be approved without prior Parliamentary consent, but they still require adherence to the established supplementary grant process to ensure financial oversight and comply with budgetary controls.
