ISLAMABAD: The Finance Division has issued a clear directive stating that no supplementary grants will be allowed for unbudgeted expenditures unless in the case of severe natural disasters — in line with Pakistan’s commitments to the International Monetary Fund (IMF).
In an official memorandum, the ministry clarified that all supplementary funding requests outside the approved budget will be rejected under normal circumstances, as per conditions set by the ongoing $7 billion Extended Fund Facility (EFF) with the IMF.
The memo outlines that supplementary grants will only be considered as a last resort, when all alternative funding avenues have been exhausted. This includes re-appropriations and Technical Supplementary Grants (TSGs).
Even in such exceptional scenarios, stringent requirements must be met. The Principal Accounting Officer (PAO) must:
Certify that all funding options have been explored
Justify the request with detailed reasoning
Secure verification from the concerned Accounting Organisation
Get support from the Expenditure Wing or relevant wing of the Finance Division
Comply with all TSG procedural requirements
The directive draws on Article 84 of the Constitution and Section 10 of the Public Finance Management (PFM) Act, 2019, which allow for supplementary expenditure when current funds fall short or when new services are introduced outside the Annual Budget Statement (ABS).
In terms of re-appropriation, Authorised Officers may shift budget allocations under delegated financial powers, as per updated PAO Regulations 2021. However, re-appropriation cannot be made from unreleased funds.
PAOs have already been allocated additional funds for the Ad-hoc Relief Allowance announced in the current fiscal year. These funds, placed under a dedicated cost centre, must be re-appropriated only for relief allowance in Q3, and only with the Finance Division’s Expenditure Wing consultation.
If there is a shortfall in the Employees Related Expenses (ERE) head during the year, PAOs may prioritize re-appropriation from non-ERE heads, provided such orders are approved and shared with the accounting offices for SAP system entry.
Importantly, released funds must remain within the quarterly limits defined in the Strategy for Release of Funds.
The Finance Division also noted a recurring issue: each June, it receives large volumes of requests to extend the 31st May cut-off for re-appropriations. It has now ruled that only re-appropriation orders meeting strict criteria — such as unavoidable payments due in June or to cover ERE shortfalls — will be entertained after that deadline.
Regarding TSGs, only PAOs can submit such requests. These must be backed by identification of equivalent funds from other demands and a certificate of internal adjustment.
