finance department notifications-2003 (165-204)

Compendium of Instructions for Local Governments 165

No. IT(FD)3-4/2002GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 30th November, 2002

Subject: FINANCIAL OPERATIONS OF TEHSIL/TOWN MUNICIPAL ADMINISTRATIONS IN THE PUNJAB

Kindly refer to this department’s letter of even number dated 1st November, 2002, whereby the pre-audit and accounting functions of the Tehsil/ Town Municipal Administrations were temporarily entrusted to, the Punjab Local Fund Audit department through the existing set-ups of Resident Audit Schemes up to 30 th November, 2002. This interim arrangement was allowed to keep the financial operations of TMAs functional.

2. Since the issue regarding the postings of Tehsil / Town Accounts Officers is yet to be finalized, it has been decided to further extend the aforestated arrangement, as prescribed, up to 31 st , December, 2002.

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GOVERNMENT OF THE PUNJABFINANCE DEPARTMENT

Dated Lahore, the 10th December, 2002

NOTIFICATION

No. FD(FR)11.1/78. Vol-II. The Governor of the Punjab is pleased to make the following amendments in the Punjab Delegation of Financial Powers Rules, 1990 Second Schedule Part-II, Special Powers to Certain Departments and Officers under Irrigation and Power Department:-

AMENDMENT

Sr. No. Name of Powers To Whom Delegated Extent

1(ii)b Special repairs to residential buildings

(ii) Chief Engineers Upto Rs.1 lac in case of each building

(iii) Superintending Engineer

Upto Rs. 40,000/0 in case of each building

(iv) Executive Engineers

Upto Rs. 20,000/- in case of each building.

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166 Finance Department


Dated Lahore, the 10th December, 2002NOTIFICATION

No. FD (FR)-II-5/82(P). Governor of the Punjab is pleased to delegate powers of technical sanction to Tehsil Officers (I&S) BS-17 up to the value of Rs.5.00 lac (Rs. five lac only) instead of Rs.2.00 lac already allowed vide notification of even No. dated 2.7.2002.

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No. PS/AFS(M)/2001GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 1st January, 2003.

Subject: DDO POWERS FOR THE OFFICERS OF DISTRICT GOVERNMENT DEPARTMENTS

In continuation of this Department’s letter of even number, dated02-07-2002, I am directed to convey the sanction that the District Coordination Officers are authorized to confer the powers of DDOs to the Officers of District Governments up till 30-06-2003.

2. The department-wise/sector-wise list of officers authorized the DDO powers at district level may be sent to the Monitoring Wing of Finance Department for confirmation.

3. The DDO powers are subject to further condition that reconciliation of expenditure/receipt would be made with the DAOs on regular basis. In case of failure for reconciliation of monthly accounts the DDO powers could be reviewed.

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Dated Lahore, the 1st January, 2003.NOTIFICATION

No. SO (B&E-I) 7-1/2003. WHEREAS the Federal Cabinet, in its meeting held on November 6, 2002 has decided to handover accounting functions of Provincial Governments to the respective Governments w.e.f. July 1, 2006;

AND WHEREAS the President of Pakistan has approved creation of the post of Chief Financial Officer in each Administrative Division of the Federal Government and has also desired initiation of the same action by the Provincial Governments;


AND WHEREAS changes in administrative and financial setup due to promulgation of the Punjab Local Government Ordinance, 2001, and the planned implementation of the New Accounting Model necessitate skills development and up gradations;

AND WHEREAS preparatory work is necessary to successfully implement the forthcoming ADB-sponsored project “Enhancing capacity for resource management and institutional reforms in the Punjab” and the existing organizational capability is not adequate for the aforesaid functions;

NOW THEREFORE I, Salman Siddique, Secretary to Government of the Punjab, Finance Department, am pleased to constitute a Committee comprising the following: -

(i) The Additional Finance Secretary (Budget), ConvenerGovernment of the Punjab,Finance Department.

(ii) Provincial Director, MemberLocal Fund Audit Department

(iii) The Chief Inspector of Treasuries, MemberGovernment of the Punjab,Finance Department.

(iv) The Deputy Secretary (AB-I), MemberGovernment of the Punjab,Finance Department.

(v) Section Officer (PD), Member/Government of the Punjab, SecretaryFinance Department.

The Terms of Reference of the above Committee will be as follows:-

(a) To study existing organizational capability for maintenance of accounts, financial management and auditing of the Government of the Punjab, Local Governments and autonomous bodies;

(b) To prepare a time bound plan for capacity building (human, intellectual and physical) for accounting, financial management and auditing of the Government of the Punjab, Local Governments and autonomous bodies.

The Committee will submit its report within a period of two months of issuance of this Notification to the undersigned for further necessary action.

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No. IT (FD) 3-4/2002GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the January 01, 2003

Subject: FINANCIAL OPERATIONS OF TEHSIL / TOWN MUNICIPAL ADMINISTRATIONS IN THE PUNJAB

Kindly refer to this department’s letter of even number dated 30th November 2002, whereby the pre-audit and accounting functions of the Tehsil / Town Municipal Administrations were temporarily entrusted to, the Punjab Local Fund Audit department through the existing set-ups of Resident Audit Schemes upto 31st December, 2002. This interim arrangement was allowed to keep the financial operations of TMAs functional.

2. Since the issue regarding the postings of Tehsil / Town Accounts Officers is still under consideration, it has been decided to further extend the aforestated arrangement, as prescribed, upto 31st January, 2003.

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No. IT(FD)3-4/2000-V-IIIGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 17th January, 2003.

Subject: PUNJAB LOCAL GOVERNMENT ORDINANCE 2001- OPERATION OF TEHSIL / TOWN LOCAL FUND, AND UNION LOCAL FUND.

Dear Sir,

I am directed to refer to the subject cited above, and to state that under Section 107 of the Punjab Local Government Ordinance, 2001, there have been established a Tehsil Local Fund, a Town Local Fund and a Union Local Fund. Further under Section 108 ibid, read with instructions contained in para 2(ii)(a) of F.D’s letter No. IT(FD)3-4/2002, dated 15th July, 2002, and clarification issued vide letter of even number dated 12.8.2002, the Tehsil / Town Local Fund are maintained in the National Bank of Pakistan and the Bank of Punjab, while the Union Local Fund can be maintained in any commercial bank. Also, under Section 49 ibid, the Tehsil / Town Municipal Administrations and Union Administrations are BODY CORPORATE.

2. It has been meanwhile brought to the notice of the Finance Department that certain banks maintaining Tehsil / Town Local Funds have deducted Zakat out of these funds, although these Local Governments do not fall in the definition of “Sahib-e-Nisab” as contained in Section 2 (xxiii) of the Zakat and Usher Ordinance, 1980.


3. The matter has accordingly been examined in this department, and it is considered that the aforesaid step of such banks is unwarranted, and it has caused monetary loss to the Local Governments concerned. The matter is accordingly brought to your kind notice for issuing suitable directions to the National Bank of Pakistan and the Bank of Punjab for ensuring that no deductions on account of Zakat are made from the bank accounts of Local Governments maintaining Tehsil / Town Local Funds. Likewise, directions may also be issued to all commercial banks with regard to the maintenance of Union Local Funds. Meanwhile, the amounts deducted as above, need to be refunded to the respective TMAs / UAs.

----------No. FD.BO-V/DERA/2003



Subject: MODE OF PAYMENT FOR WATER SUPPLY SCHEMES UNDER DERA PROGRAMME EXECUTED BY THE TEHSIL OFFICERS

Kindly refer to your letter No.16(15)DERA/P&D/2002 (P) dated9-1-2003 on the subject cited above.

2. Finance Department agrees to declare the Executive District Officers (F&P), as Drawing & Disbursing Officers (DDOs) in respect of following districts of the Punjab, for the sub-projects relating to the schemes got executed from Irrigation Department by the District Governments (only to the extent of funds released to the District Governments) under Drought Emergency Recovery Assistance (DERA) Programme:

1. Rawalpindi 9. R.Y. Khan2. Attock 10. D.G. Khan3. Jhelum 11. Bahawalpur4. Gujrat 12. Bahawalnagar5. Chakwal 13. Khushab6. Mianwali 14. Rajanpur7. Bhakkar 15. Layyah8. Multan

3. The Executive District Officers (F&P) will exercise their powers in terms of the Standing Operating Procedure (SOP), notified by the Planning & Development Department/Controller General of Accounts.

----------No. IT(FD)3-4/2002-Vol-III (KC)


Dated Lahore, the 18th January, 2003


Subject: PAYMENT OF PENSION TO THE OFFICERS/OFFICIALS OF FOREST DEPARTMENT FROM DISTRICT GOVERNMENT

Kindly refer to your letter No. B&A/Pen/Distt:/1398, dated 17.12.2002, on the subject cited above, seeking clarification as to the finalization of pension cases, and issuance of pension payment orders in respect of the officers/officials of the Forest department working in the District Governments in the devolved set-ups.

2. The matter has accordingly been examined in this department, and it is to advise, that since a small percentage of officers/officials of the Forest department are working in the District Governments, and that their service records etc., are being maintained by the Forest department, the pension cases of such retiring civil servants shall be processed and finalized by the office of the Director (Budget and Accounts), Forest in the erstwhile prescribed manner on the basis of the last pay certificate/service statement issued to the office of the Director (Budget & Accounts), Forest by the A.G. Punjab/respective District Accounts Officer in the prescribed manner. The Pension Payment Orders shall be issued by the Accountant General, Punjab, Lahore.

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No. SOX(G)9-11/2000GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT


Subject: RELEASE OF SALARIES TO NEWLY RECRUITED TEACHERS/ STAFF ON CONTRACT BASIS

Kindly refer to the subject noted above.

2. This department is in the process of finalizing resource allocation to the District Governments during the C.F.Y. with regard to the salaries of the contract employees recruited against the following posts:

(i) Elementary School Educators(ii) Senior Elementary School Educators(iii) Secondary School Educators

3. You are accordingly requested to provide information/data with regard to the number of appointments made in each category, beside stating the dates of issuance of appointment letter to each contract appointee to enable the Finance Department to compute the quantum of monthly cash transfer to the respective District Governments.

4. The desired information may kindly be provided latest by 31st January, 2003. Meanwhile, salaries to all contract employees may continue to be paid by the District Governments out of their available cash balance.


5. Similar data in respect of contract appointments made in the Health Sector during the CFY may also be forwarded to the Finance Department on a most urgent basis.

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No. FD(FR)11-2/89GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 1st February, 2003

Subject: CLARIFICATION ABOUT DISTRICT GOVERNMENT EXPENDITURE – RE-IMBURSEMENT OF MEDICAL CHARGES TO RETIRED GOVERNMENT EMPLOYEES.

Please refer to the above and the Controller’s General of Accounts, Islamabad letter circulated vide No. SO(TT) 26-l/86.Pt-III, dated 13.9.2002 on the same subject.

2. Controller General of Accounts, Government of Pakistan has already informed that District Government authorities can only sanction expenditure from District Account No. IV which has been established w.e.f. 1.2.2002.

3. References have been made and clarification sought on the issue of sanctioning expenditure by District Government’s officers for re-imbursement of medical charges of retired government employees.

4. District Governments can only sanction expenditure from District Account No. IV, since it is clarified that the expenditure for reimbursement of medical charges of retired government employees does not fall within the purview of Account No. IV. These expenditures are chargeable to grant No. 28-Pensions, which is a part of the Provincial Account No. I. Finance Deptt: has not authorized the District Governments to operate this grant. The entire expenditure on retired govt. employees including re-imbursement of medical charges is the responsibility of the Provincial Govt. There is also no provision in the Punjab Local Govt. Ordinance, 2001 which authorizes District Governments to manage expenditure of retired govt. employees.

5. Therefore, District Governments are advised not to sanction any expenditure which entails re-imbursement of medical charges to retired govt. employees and any such case should be sent to the concerned Provincial Administrative Departments for obtaining sanction. After sanction by the relevant Administrative Secretary, the expenditure would be debited to grant No. 28-Pensions from account No. 1 of the Provincial Government.

----------No. IT(FD) 3-4/2002


Dated Lahore, the 1st February, 2003



Kindly refer to this department’s letter of even number dated 1st January, 2003, whereby the pre-audit and accounting functions of the Tehsil / Town Municipal Administrations were temporarily entrusted to the Punjab Local Fund Audit department, through the existing set-ups of Resident Audit Schemes up to 31st January, 2003. This interim arrangement was allowed to keep the financial operations of TMAs functional.2. Since the issue regarding the postings of Tehsil / Town Accounts Officers is still under consideration, it has been decided to further extend the aforestated arrangement as prescribed, up to 28th February, 2003.

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No.FD.SR-II/1-53/83GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the February 20, 2003

Subject: ENCASHMENT OF LEAVE PREPARARTORY TO RETIREMENT

Sir,

I am directed to refer to this Department's Circular Letter No. FD.SR-III/1-53/83, dated 4.6.1984 on the subject cited above and to say that the Chief Minister Punjab has been pleased to amend the Clause "Pay" of above referred Circular, which should now be read as under:-

PAYPay for the purposes of encashment of L.P.R includes Basic Pay, Special Pay,

Technical Pay, Personal Pay and any other emoluments that may be specifically classed as "Pay" 'by the competent authority. A civil servant who opts for encashment of L.P.R may either draw leave pay for the period for which L.P.R is admissible subject to a maximum of 180 days in lump sum after retirement or on month-to-month basis during such period. The amount of leave pay may be determined at the rate of pay admissible at the time “Leave Pay” is drawn for actual period of such leave.

2. The above instructions may be brought to the notice of all concerned for strict compliance

----------No. IT(FD)3-4/2002-VIII-A


Dated Lahore, the 22nd February, 2003


Subject: PUNJAB LOCAL GOVERNMENT ORDINANCE, 2001-OPERATION OF TEHSIL / TOWN LOCAL FUND AND UNION LOCAL FUND.

Sir,

I am directed to refer to the subject cited above, and to state that under Section 107 of the Punjab Local Government Ordinance, 2001, a Tehsil Local Fund, a Town Local Fund and a Union Local Fund have been established. Further under Section 108 ibid, read with instructions contained in para 2(ii)(a) of F.D’s letter No. IT(FD)3-4/2002, dated 15th July, 2002, and clarification issued vide letter of even number dated 12.8.2002, the Tehsil / Town Local Fund are maintained in the National Bank of Pakistan and the Bank of Punjab, while the Union Local Fund can be maintained in any commercial bank. Also, under Section 49 ibid, the Tehsil/Town Municipal Administrations and Union Administrations are BODY CORPORATE.

2. It has been brought to the notice of the Finance Department that certain branches of National Bank of Pakistan and the Bank of Punjab have deducted Zakat out of Tehsil/Town Local Funds, although these Local Governments do not fall in the definition of “Sahib-e-Nisab” as contained in Section 2 (xxiii) of the Zakat and Usher Ordinance, 1980.

3. The aforestated action is unwarranted, causing monetary loss to the Local Governments concerned. The matter is accordingly brought to your kind notice for issuing necessary directions to the National Bank of Pakistan and the Bank of Punjab (and also the commercial banks maintaining Union Local Fund) so that no deductions on account of Zakat are made in future from the bank accounts of Local Governments maintaining Tehsil/Town and Union Local Funds. Further, the amounts deducted may be refunded to the respective TMAs/ UAs as the case may be.

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No. IT(FD)3-4/2002-Vol-IIIGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 22nd February, 2003

Subject: TRANSFER OF APPROVED BUDGETED AMOUNTS BETWEEN THE LOCAL GOVERNMENTS FOR VARIOUS PURPOSES

Kindly refer to the subject cited above.

2. A question has arisen as to whether a Local Government can allocate and transfer funds to another Local Government, within the local area, for carrying out a project, service or activity falling in the exclusive jurisdiction of the recipient Local Government under Sections 52 and 54 of the Punjab Local Government Ordinance, 2001.


3. In this regard your kind attention is invited to Section 109(2) of PLGO, 2001 which caters for the above eventuality by providing, that in case any tier of Local Government intends to finance a programme/scheme, not relating to its functions, out of its approved budget/ Annual Development Programme, it may enter into an agreement to undertake the scheme(s) with the other tier for the execution of a scheme/programme/function falling in the latter’s purview, and provide funds for the execution of the agreed scheme/programme etc. Of course, the performing tier would be required to render accounts to such tier of local government as is funding the said schemes etc.

-----------No. IT(FD)3-4/2002/Vol-III


Dated Lahore, the 1st March, 2003


Kindly refer to this department’s letter of even number dated 1 st February, 2003, whereby the pre-audit and accounting functions of the Tehsil/Town Municipal Administrations were temporarily entrusted to the Punjab Local Fund Audit department, through the existing set-ups of Resident Audit Schemes up to 28th February, 2003. This interim arrangement was allowed to keep the financial operations of TMAs functional.

2. Since the issue regarding the postings of Tehsil/Town Accounts Officers is still under consideration, it has been decided to further extend the aforestated arrangement as prescribed, up to 31 st March. 2003.

----------No. IT(FD)3-4/2002 Vol IV


Dated Lahore, the 15th March, 2003.

Subject: RECONCILIATION OF RECEIPTS/EXPENDITURES AND CASH BALANCES OF THE DISTRICT GOVERNMENTS.

Under Section 18(g) of the Punjab Local Government Ordinance, 2001 (as amended), the Zila Nazim is responsible for maintenance of administrative and financial discipline in the District Government. Sections 28(2) (e) and 29 (k) ibid, outline the functions and responsibilities of the District Coordination Officers (DCOs), and the Executive District Officers (EDOs) in the matter of financial discipline and accountability.

2. As you would be aware, regular reconciliation of expenditures and receipts is a precondition for sound fiscal and financial management. In this context the importance of monthly reconciliation of receipts/expenditures of each group of offices of the District Government with the District Accounts Officer/Accountant General, Punjab and daily


reconciliation of cash balance of the District Government with the DAO /A.G. (Pb), and the respective SBP/NBP branch cannot be overstated.

3. Till such time that the Budget Rules of the District Governments are formally notified, such reconciliation shall be mutatis-mutandis done in accordance with the general principles enunciated in the Punjab Budget Manual, and the mechanism prescribed by the Controller General of Accounts in the “Guidelines for District Governments Accounts under Devolution Plan” notified vide No. 72-CGA/Distt-Govt/2001 dated 11.8.2001, and Finance Department’s letter No. W&M/1-31/2002-2003, dated 4.9.2002.4. The Fiscal Monitoring Committee, chaired by the Finance Minister, Punjab reviews the reconciliation status every month. You are, therefore, requested to forward consolidated reconciliation statements, separately for each aspect, (receipt, expenditure and cash balance), duly certified by the EDO(F&P), to the Finance Department and the A.G. (Punjab) on regular basis, not later then the first week of the month following the month to which the reconciliation relates. The statements should depict the percentage status of reconciliation of each group of offices for receipts/expenditures, and cash balance of the district government, as a whole.

----------No. IT(FD)3-4/2002-Vol-IV


Dated Lahore, the March 17, 2003

Subject: LOCAL GOVERNMENT FINANCE SYSTEM - PROCEDURE FOR EFFECTING DEDUCTIONS / RECOVERIES OF GP FUND / INCOME TAX/BENEVOLENT FUND / GROUP INSURANCE AND ADVANCES FROM CIVIL SERVANTS, POSTED IN TMAs.

Section 53 (4) of the Punjab Local Government Ordinance, 2001, provides for the appointment of officials of the decentralized offices, and civil servants from various provincial services in the Tehsil/Town Municipal Administrations (TMAs). Such officials are consequently borne on the schedules of establishment of the respective TMA, and draw their salaries from the respective tehsil / town local fund. The matter regarding the deduction / recoveries on account of Income Tax, General Provident Fund (GPF), Group Insurance, Benevolent Fund and recovery of advances / interest from the salaries of such employees have been under the consideration of the Finance department. The following procedure is accordingly prescribed:

(a) In the event of posting of such employees in a Tehsil / Town Municipal Administration, they shall deem to fall under the audit jurisdiction of the District Accounts Officer of the district in which such TMA is located. Consequently, the last pay certificate (LPC) issued by the Accountant General, Punjab / District Accounts Officers/Drawing and Disbursing Officer (in case of non-gazetted officials) in the prescribed manner, in respect of their last posting in a district, shall after recording the G.P. Fund Account


No. be sent/routed through the Accounts Office viz the A.G. (Pb)/DAO, (as the case be), in which the Tehsil/Town Municipal Administration is located, in relation to their current posting. The AG (Punjab)/DAO (as the case be) shall countersign the LPC, so presented, for onward transmission to the respective Tehsil/ Town Accounts Officer.

(b) Besides, the A.G. Punjab/DAO shall take the following steps in this regard:

(i) At the time of countersigning the LPC for onward transmission to the TMA concerned, the A.G. (Pb)/DAO shall allot a new G.P. Fund account number to such employees (both gazetted and non-gazetted), in the prescribed manner, and communicate it to the Tehsil/Town Accounts Officer concerned, under intimation to the respective Tehsil/Town Municipal Officer, and each officer/official concerned.

(ii) A separate audit register shall be opened for each TMA located in a district. Each register shall have pages for registering particulars of all gazetted officers as per the LPC, and for recording deductions on account of Income Tax, Group Insurance, Benevolent Fund, G.P. Fund and advances/interest etc., on monthly basis in form S-98 (Annex-I), as done in the case of gazetted officers on deputation.

(iii) Similarly, a TMA-wise register shall be maintained, setting apart, separate pages of each office/establishment for such non-gazetted employee posted in TMAs and for maintaining record, of aforementioned deductions on monthly basis as prescribed hereunder in para-4.

2. On receipt of countersigned LPC and the G.P. Fund Account number from the A.G.(Pb)/DAO, the Tehsil / Town Accounts Officer shall record the particulars of gazetted/non-gazetted employees in a register maintained for the disbursement of salaries from the Tehsil / Town Local Fund in the prescribed manner, on the same pattern, as done in the District Accounts Offices, meanwhile ensuring that the deductions on account of Income Tax, Group Insurance, Benevolent Fund, General Provident Fund and Advances/recovery of interest are made at source from the monthly bills of officers/establishment at the prescribed rates. The deduction so made shall be separately consolidated in a statement for each category (Annex-II). Such statements shall be prepared employee wise/department wise for the respective TMA.

3. After completion of the statements as aforestated, and reconciliation of the aggregate deductions with the monthly salary accounts, the Tehsil/Town Municipal Administration shall prepare separate cheques out of the Tehsil/ Town Local Funds, for an aggregate amount of each category of such deductions, and respectively deposit the same in the State Bank of Pakistan / National Bank of Pakistan, branch, as the case be, at the district headquarters in which the TMA is located, in the following heads of accounts not later than the first week of the following month to which such deductions relate:

(a) INCOME TAX (Central)-3000000 – Deposits & Reserves (not bearing interest).


- 3600000 –Other Deposits.- 3601031 –ncome Tax Deduction from salaries.

(b) GROUP INSURANCE (Provincial)- 3000000 –Deposits and Reserves (not bearing interest).- 3300000 –Reserve Funds.- 3316017 –Government Employees, Group Insurance Fund, working in

TMAs;

(c) BENEVOLENT FUND (Provincial)- 3000000 –Deposits & Reserves (not bearing interest).- 3300000 –Reserve Funds Government Employees Benevolent Fund.- 3315015 –Govt. Employees Benevolent Fund, working in TMAs.

(d) GENERAL PROVIDENT FUND (Provincial)-1000000 – Deferred Liabilities.-1500000 – State Provident Funds.-1503001 – General Provident Fund, Govt. Employees working in TMAs.

(e) Recoveries of Loans (Provincial)- 2000000 –Capital Receipt.- 2200000 –Recoveries of Loans & Advances.- 2250000 –From Government Servants.- 2251000 –*House Building Advance *as the case be-2251017 – Accountant General, Punjab.

4. A copy of the original credit challan, along with a certified statement showing details of such deductions, along with names/designations of such employees (Annex-II) shall be sent by the TMO, in duplicate, by registered post to the AG(Pb)/DAO concerned for record. The AG(Pb)/DAO/TO shall be required to post the aforesaid deductions in the prescribed manner, after an attested copy each of the challan, along with statement is respectively given to the GAD, the DA and the GP Fund sections for the said purpose. In case of non-gazetted employees, the statements and challan shall be pasted on the pages of the respective registers as referred to in paras 1 (ii & iii) above.

5. Such deductions shall also be respectively reflected in the monthly accounts, by the DAO/T.O, as reported by the State Bank of Pakistan / National Bank of Pakistan in the prescribed manner.

(a) PENSION CONTRIBUTIONSSince the pension liability of civil servants posted in TMAs shall be borne by the government, the TMA shall not be required to make any contributions to this effect.

(b) PENSION SANCTIONING AUTHORITYThe Pension Sanctioning Authority in respect of civil servants posted in TMAs shall remain the same as respectively prescribed for such category of officials, the sanction for encashment of LPR of civil servants posted in TMAs shall also be done by the same authority as done prior to their postings in the TMAs.


(c) LEAVE SANCTIONThe sanction of leave of civil servants posted in TMAs shall continue to be regulated under the Revised Leave Rules, 1981. The sanction of such leave shall be done by the respective authorities in the prescribed manner, as done had they not been so posted in TMAs. Such leave shall however, be subject to recommendation of the Tehsil Municipal Officer concerned in case of gazetted officers, and Tehsil Officer concerned in case of non-gazetted officials.

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Annex-II

MONTHLY STATEMENT OF DEDUCTION OF INCOME TAX/ GROUP INSURANCE/ BENEVOLENT FUND/ GENERAL PROVIDENT FUND/

ADVANCE FOR THE MONTH OF _____________ 2003

(Score out which is not applicable)

1Name of Tehsil/Town Municipal Administration---------------------------------------------------------------------------------------

2Name of Office / Establishment---------------------------------------------------------------------------------------

3STATEMENT OF GAZETTED / NON GAZETTED EMPLOYEES---------------------------------------------------------------------------------------

Sr. No.

Name of the Officer/Official

Nature of deduction

G.P. Fund A/C No. and Income Tax

No. (which ever is applicable)

Rate of Deduction (Monthly)

Remarks (if any)

1 2 3 4 5 6

Total:

Certified that the aggregate deduction of Rs. (Rupees ) have been effected from the salaries of the above listed employees and credited to respective head of account through cheque No. ____________ dated _______ drawn on the National Bank of Pakistan/Bank of Punjab __________ branch.

( Full Dated signature )Tehsil/Town Municipal Officer


----------No. IT(FD)3-4/2002-Vol-IV


Dated Lahore, the 18th March, 2003

Subject: RECONCILIATION OF RECEIPTS/EXPENDITURES AND CASH BALANCES OF THE DISTRICT GOVERNMENTS

Under Section 18(g) of the Punjab Local Government Ordinance, 2001 (as amended), the Zila Nazim is responsible for maintenance of administrative and financial discipline in the District Government. Sections 28(2) (e) and 29 (k) ibid, outline the functions and responsibilities of the District Coordination Officers (DCOs), and the Executive District Officers (EDOs) in the matter of financial discipline and accountability.

2. As you would be aware, regular reconciliation of expenditures and receipts is a precondition for sound fiscal and financial management. In this context the importance of monthly reconciliation of receipts/expenditures of each group of offices of the District Government with the District Accounts Officer/Accountant General, Punjab and daily reconciliation of cash balance of the District Government with the DAO /A.G. (Pb), and the respective SBP/NBP branch cannot be overstated.

3. Till such time that the Budget Rules of the District Governments are formally notified, such reconciliation shall be mutatis-mutandis done in accordance with the general principles enunciated in the Punjab Budget Manual, and the mechanism prescribed by the Controller General of Accounts in the “Guidelines for District Governments Accounts under Devolution Plan” notified vide No. 72-CGA/Distt-Govt/2001 dated 11-09-2001 and Finance Department’s letter No. W&M/1-31/2002-2003, dated 4.9.2002.

4. The Fiscal Monitoring Committee, chaired by the Finance Minister, Punjab reviews the reconciliation status every month. You are, therefore, requested to forward consolidated reconciliation statements, separately for each aspect, (receipt, expenditure and cash balance), duly certified by the EDO(F&P), to the Finance Department and the A.G. (Punjab) on regular basis, not later than the first week of the month following the month to which the reconciliation relates. The statements should depict the percentage status of reconciliation of each group of offices for receipts/expenditures, are cash balance of the district government, as a whole.

----------No. FD(FR)11-5/85


Dated Lahore, the 31st March, 2003

Subject: DELEGATION OF PWOERS REGARDING ACCEPTANCE OF TENDERS


Finance Department advises that any delegation of Financial Powers by District Governments to a committee or to any officer not so authorized under Punjab Delegation of Financial Rules is unlawful and ultra vires.

2. It is further advised that Financial Powers delegated by Punjab Government to the functionaries including officers of the Local Governments cannot be further delegated / amended.

3. This may kindly be brought to the notice of all concerned.----------

No. IT(FD)3-4/2002 GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 1st April, 2003


Kindly refer to this department’s letter of even number dated 1st March, 2003, whereby the pre-audit and accounting functions of the Tehsil / Town Municipal Administrations were temporarily entrusted to the Punjab Local Fund Audit department, through the existing set-ups of Resident Audit Schemes up to 31st March, 2003. This interim arrangement was allowed to keep the financial operations of TMAs functional.

2. Since the issue regarding the postings of Tehsil / Town Accounts Officers is still under consideration, it has been decided to further extend the aforestated arrangement as prescribed up to 30 th April, 2003.

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No. IT(FD) 3-2/2003GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 7th April, 2003

Subject: TAMEER-E-PUNJAB PROGRAMME, 2003 – FINANCIAL PROCEDURE.


2. The Planning and Development Department has issued detailed guidelines pertaining to the scope, execution, funding and monitoring of various schemes under the programme:


3. The success of the programme critically hinges on proper utilization of funds provided under the programme. The financial, accounting and reporting procedure as prescribed hereunder, will serve to facilitate the implementation of the programme:

(i) The funds for the Tameer-e-Punjab Programme have been provided in a distinct stream under Provincial Account No. 1. Under no circumstances shall these funds be amalgamated with Account No. IV of the District Governments;

(ii) The funds for the programme shall be released as a block district-wise, by the Finance Department on the advice of the Planning & Development for credit to the joint Personal Ledger Account (PLA) of the District Coordination Officer and Executive District Officer (F&P) of the respective District Government. This department has sanctioned lapsable PLA’s vide No. SO(TT)6-2/2000.Pt-IV, dated 24.03.2003;

(iii) The funds creditable to the PLA shall be debited to Grant No. 36 (Provincials):

Major Function-50000-Economic ServicesMinor Function-56000-Rural DevelopmentDetailed Function-56600-Tameer-e-Punjab Programme

Major Object 60000-Transfer PaymentsMinor Object 64000-GovernmentDetailed Object 64900-Other

(iv) The Administrative Approval and Technical Sanction for the schemes shall be accorded by the respective competent authorities, as already provided in the guidelines of the P&D Department;

(v) The existing accounting procedures shall be respectively applicable for execution of schemes by the District Governments and Tehsil/Municipal Administrations;

(vi) The payments in connection with the execution of the scheme shall made on the submission of a claim, in the prescribed manner, respectively by the D.O(R&B)/T.O.(I&S), as the case be, to the District Accounts Officer (DAO) for pre-audit of each claim by the concerned executing officer/agency at the time of submission of claim(s);

(vii) The DAO shall pre-audit the claims in the prescribed manner under the relevant existing rules, and pass orders for payment of such claim(s);

(viii) The amount of claim(s) as authorized by the DAO, shall then be forwarded to the DCO/EDO (F&P) for issuing a PLA Cheque in the name of contractor etc. All prescribed deductions like security/income tax, shall be ensured at the time of making each payment;

(ix) The DAO shall maintain accounts under the relevant rules, in the existing manner, for each scheme as above done for works relating to Works &


Services department of District Governments and offices of Tehsil officer (infrastructure & Services) of the TMAs.

(x) The DCO/EDO (F&P), shall also maintain scheme-wise accounts for each payment made out of PLA;

(xi) The DAO and the offices of EDO (W&S) and T.O. (I&S) shall respectively submit accounts to the Accountant General, Punjab, Director General, Local Government & Rural Development, with a copy to the ADLG of the District Government concerned.

(xii) All expenditure shall be auditable by the Auditor General of Pakistan.----------


Dated Lahore, the 9th April, 2004NOTIFICATION

No. FD(FR) 11-5/82. In exercise of the powers conferred on him under Article 119 of the Constitution of Islamic Republic of Pakistan, 1973, the Governor of the Punjab is pleased to make following amendment in the Second Schedule Part-II, Special Powers to Certain Departments and Officers (Delegation of Financial Power Rules, 1990) for the Population Welfare Department:-

Sr. No. Name of Power To whom delegated Extent

1. Purchase of Medicines Divisional Director Up to Rs. 1.00 million

----------No. FD(M-I) III-2/2001



Subject: SEGREGATION OF AUDIT PARAS.

Kindly refer to this department’s letter of even number dated 11 th December, 2002 and subsequent reminder dated 19-12-2002 and 29-01-2003 on the subject noted above.

2. In order to monitor the progress, the outstanding list of audit paras has to be segregated into two portions viz-a-viz the provincial function audit paras and the district government audit paras.

3. The requisite information may be supplied to this department on top priority basis for discussion in the Quarterly Review Meeting, which would be held in near future under the chairmanship of Addl. Chief Secretary, Punjab.

----------


No. Exp. (GEN)11-6/89-IIIGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT


Subject: NON PAYMENT OF ADVERTISEMENT DUES BY THE ADMINISTRATIVE DEPARTMENTS/ATTACHED DEPARTMENTS/ DISTRICT GOVERNMENTS IN THE PUNJAB

It has been observed by the Government that various departments and District Governments owe significant amounts in outstanding advertisement dues to newspapers and other publications. As such the following instructions/ observations may kindly be noted:

(i) PROVINCIAL GOVERNMENT ORGANIZATION:Government organizations are required to route their advertisements to newspapers/periodicals through Director General Public Relation (DGPR) according to their budgetary provisions. Any expenditure over and above the budgetary provision is violative of financial discipline. As such while forwarding a demand for advertisements to the DGPR, the departments should certify that budgetary provision exists to meet the cost of advertisement. In absence of such certification the DGPR may refuse to place the advertisement in the newspapers/periodicals etc. Regarding outstanding dues, the DGPR may forward a list of provincial government defaulters to the Finance Department, which would consider making payment on behalf of the concerned departments, and adjust the amount out of the budget of these organizations in the current year or in the next financial year.

(ii) DEFUNCT LOCAL COUNCILSFor liabilities pending from the pre-devolution period i.e., before August 14th, 2001, in accordance with the Provincial Local Government Ordinance, 2001, Local Governments being the successor-in-interest of defunct municipalities, town committees etc., inherit the assets as well as the liabilities of these defunct bodies. In such cases of non-recovery the DGPR may refer the list of such liabilities (local government wise) to the Finance Department for payments and subsequent adjustment in the monthly resource transfer of the concerned local governments.

(iii) DEVOLVED OFFICES OF PROVINCIAL GOVERNMENTThe liabilities of pre-devolution i.e., before August 14th, 2001 will be cleared by the Provincial Government. As such the Director General Public Relations may intimate date and department wise details for provision of requisite funds.

----------GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT


Dated Lahore, the 24th April, 2003NOTIFICATION

No. FD (FR) Vl-9/2000. In exercise of the Powers conferred on him under Article 119 of the Constitution of Islamic Republic of Pakistan, 1973, the Governor of the Punjab, is pleased to notify the enhancement of the Powers delegated to the Officers of the City District Government Lahore, as below with immediate effect:-

OFFICER FINANCIAL POWER(i) DCO City District Govt. Lahore Administrative Secretary(ii) EDO City District Govt. Lahore Category-1 Officer

----------

No. FD (M-I) III-2/2001.P-IGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT


Subject: SETTLEMENT OF AUDIT PARAS.

Please refer to your letter No. DGA/SAP/Pb/2901 dated 17-03-2003, on the subject noted above.

2. In partial modification of this department’s letter of even No. dated 22-02-2003 on the subject, it is hereby clarified that the paras of PHED framed by the D.G. SAP Audit for the period from 14th August, 2001 to 30-06-2002 would be discussed by the committee comprising the following:-

(i) Tehsil Municipal Officer (In chair)(ii) Tehsil Officer (Infrastructure and Service) (Member)(iii) Representative of the D.G Audit Works/D.G.

SAP Audit (Member)----------


Dated Lahore, the April 26, 2003ORDER

No. PA/DS(AB-I)DSP/2003. All District Coordination Officers in their respective districts and Tehsil Municipal Officers in their respective Tehsils are hereby nominated as “focal persons” for their respective District Governments and TMAs for ADB funded Technical Assistance Loan1 “Local Government Performance Enhancement” under Decentralization Support Programme with immediate effect.

----------


No. IT(FD) 3-4/2002 Vol-IVGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 1st May, 2003


Kindly refer to this department’s letter of even number dated 1 st April, 2003, whereby the pre-audit and accounting functions of the Tehsil / Town Municipal Administrations were temporarily entrusted to the Punjab Local Fund Audit department, through the existing set-ups of Resident Audit Schemes up to 30th April, 2003. This interim arrangement was allowed to keep the financial operations of TMAs functional.

2. Since the issue regarding the postings of Tehsil/Town Accounts Officers is still under consideration, it has been decided to further extend the aforestated arrangement as prescribed, up to 31 st May, 2003.

----------

No. IT(FD)3-4/2002 Vol-IVGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 2nd May, 2003


Kindly refer to this Department’s letter of even number dated 1st April 2003, whereby the pre-audit and accounting functions of the Tehsil / Town Municipal Administrations were temporarily entrusted to the Punjab Local Fund Audit Department, through the existing set-ups of Resident Schemes up to 30th April, 2003. This interim arrangement was allowed to keep the financial operations of TMAs functional.

2. Since the issue regarding the postings of Tehsil / Town Accounts Officers is still under considerations, it has been decided to further extend the afore-stated arrangement as prescribed, up to 31 st May, 2003 .

----------

No. W&M (FD)-1-1/70-Vol-VGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the May 19, 2003


Subject: MAINTENANCE OF BANK ACCOUNTS BY AUTONOMOUS BODIES.

In pursuance of the policy contained in the Government of Pakistan, Finance Division policy letter No. F.4(l)/2000-BR.II dated 12.11.2002 and in partial modification of the instructions issued by the Finance Department vide para 4(b) of letter No. IT(FD)3-l/94 dated 07.04.1994 regarding keeping of working balance and surplus funds in Nationalized Scheduled Banks etc., it has been decided to allow Autonomous Bodies, to keep working balance equal to 8% of their annual current budget, with any public or private bank subject to the following requirements:

(a) For the sake of the safety and security of deposits, the bank/financial institution taking a deposit should have a minimum “A” rating (long-term) as appearing on the website of the State Bank of Pakistan. This “A” rating refers to the rating scale used by Pakistan Credit Rating Agency and JCR-VIS Credit Rating Company for banks incorporated in Pakistan and Moody’s, Fitch Corporate, and Standard & Poors for foreign banks operating in Pakistan. Rating scale of other agencies acceptable to the State Bank should be equivalent to the rating of the above-mentioned companies. Information and clarification on this matter may be obtained from Banking Policy Department of the State Bank of Pakistan;

(b) The process of selection of bank(s) should be transparent. Therefore, prior to placing deposits with a bank under this new policy, and in case the total working balances exceed Rs. 10 million, the selection of the bank(s) as well as the terms of deposits will be approved by the concerned Board of Directors/Governing Body on the basis of competitive bids from at least three independent banks.

(c) The risk associated with keeping deposits should be diversified. Therefore, in cases where total working balances of an enterprise exceed Rs.10 million, not more than 50% of such balances shall be kept with one bank; and

(d) In case the rating of the deposit taking bank drops below “A”, the concerned autonomous body will shift new deposits within a period of one month and old deposits with a period of two months to a bank(s) with at least “A” rating, observing the general guidelines given in this policy.

2. All autonomous bodies in the Punjab will obtain prior guidance from the Finance Department before embarking on physical deposits of their authorized working balance up to the prescribed limit with any public or private bank, under the new policy.

3. The surplus funds over and above the working balances must be kept in the manner already prescribed by the government.

----------

No. IT(FD)3-4/2002. Vol-lVGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT


Dated Lahore, the 22nd May, 2003

Subject: LOCAL GOVERNMENT FINANCE SYSTEM - PROCEDURE FOR EFFECTING DEDUCTIONS / RECOVERIES OF G.P. FUND / INCOME TAX / B.F. / GROUP INSURANCE AND ADVANCES FROM CIVIL SERVANTS POSTED IN TMAs.

Kindly refer to this department’s letter of even number dated 17 th March, 2003, on the above noted subject.

2. Certain TMAs have raised questions (i) as to the authority for sanctioning G.P. Fund advances / final payments in respect of civil servants posted in the Tehsil / Town Municipal Administration and (ii) the fate of G.P. Fund balances of such employees pertaining to the periods prior to their present postings.

3. The issues have accordingly been examined in this department and are clarified as under:-

(i) Grant of G.P. Fund advance and final payments to civil servants posted in Tehsil / Town Municipal Administration shall be done by the respective Tehsil / Town Officers under whom the concerned civil servants are working in the TMA; Likewise, advances / final payments in case of Tehsil / Town Officers in a TMA shall be sanctioned by the Tehsil / Town Municipal Officers;

(ii) As regard the previous G.P. Fund balances of such employees, it is stated that since the G.P. Fund accumulations of these employees are to be credited into the respective G.P. Fund accounts maintained by the concerned District Accounts Officer/Accountant General, Punjab, the previous G.P. Fund balances shall be consolidated by the DAO of the district in relation to their last posting in the TMA.

4. You are, advised to proceed in the matter accordingly.----------


FINANCE DEPARTMENT

Dated Lahore, the 30th May, 2003

Subject: IMPLEMENTATION OF TAMEER-E-PUNJAB PROGRAMME

Kindly refer to the subject cited above. The Provincial Steering Committee in its meeting held on 17.4.2003 has decided that logistic support is to be provided to Assistant Directors, Local Governments for prompt coordination and implementation of the programme.


2. In this regard, funds for the Tameer-e-Punjab Programme for general seats have already been released by the Finance Department, wherefrom 2% of funds are to be earmarked for the following purposes.

(i) Purchase of (34) new vehicle (Potohar Jeep) @ one vehicle for each district.

(ii) Provisions of computer, fax, photocopier and stationery etc. one each for each district.

3. It is requested that necessary steps may kindly be taken for implementing the above requirements, after observing all prescribed codal formalities.

----------

No. IT(FD)3-4/2002 Vol IVGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 31st May, 2003.


Kindly refer to this department’s letter of even number dated 1st April 2003, whereby the pre-audit and accounting functions of the Tehsil / Town Municipal Administrations were temporarily entrusted to the Punjab Local Fund Audit department, through the existing set-ups of Resident Audit Schemes up to 30 th April, 2003. This interim arrangement was allowed to keep the financial operations of TMAs functional.

2. Since the issue regarding the postings of Tehsil / Town Accounts Officers is still under consideration, it has been decided to further extend the aforestated arrangement as prescribed, up to 31st May 2003.

----------

No. IT(FD)3-4/2002-Vol-IVGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 2nd June, 2003

Subject: GUIDANCE REGARDING DEDUCTION OF GP FUND/B. FUND, GROUP INSURANCE ETC. FROM THE OF THE EMPLOYEES OF THE DEFUNCT ZILA COUNCIL/ MUNICIPAL COMMITTEE

Kindly refer to your letter No. TM.1/H-3-4/2002-03/1851 dated 12-03-2003 on the above noted subject.

2. In this regard it is to inform to you that the views expressed in para 2 of your letter


under reference, are hereby confirmed.

3. You are requested to proceed in the matter accordingly.----------

OFFICE OF THE ACCOUNTANT GENERALPUNJAB, LAHORE

No. TM.1/H-3-4/2002-03/1851 Dated 12-03-2003

Subject: GUIDANCE REGARDING DEDUCTION OF G.P FUND/B.FUND, GROUP INSURANCE ETC. FROM THE PAY OF THE EMPLOYEES OF THE DEFUNCT ZILA COUNCIL/ MUNICIPAL COMMITTEE

With reference to the subject cited above.

2. This office is in receipt of references from different quarters that the employees of the defunct Zila Council/Municipal Committees now in the TMAs are the members of the G.P. Fund/Welfare Fund etc. This office is of the views that the above said employees are not Government servant and can not become the members of the G.P. Fund, Welfare fund etc. until/unless they are especially permitted by the authority.

3. In this regard it is requested that the views of this office mentioned in para-2 above may kindly be confirmed or otherwise necessary instruction may kindly be issued in this connection.

----------

No. IT(FD) 3-4/2002 Vol-IVGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 2nd June, 2003


Kindly refer to this department’s letter of even number dated 2nd May, 2003, whereby the pre-audit and accounting functions of the Tehsil / Town Municipal Administrations were temporarily entrusted to the Punjab Local Fund Audit department, through the existing set-ups of Resident Audit Schemes up to 31st May, 2003. This interim arrangement was allowed to keep the financial operations of TMAs functional.

2. Since the issue regarding the postings of Tehsil/Town Accounts Officers is still under consideration, it has been decided to further extend the aforestated arrangement as prescribed, up to 30th June, 2003,

----------


No. IT(FD)3-1/95-Vol-IIIGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the June 07, 2003

Subject: OBSERVANCE OF FINANCIAL DISCIPLINE IN THE PROVINCIAL GOVERNMENT, SPECIALLY DURING THE MONTH OF JUNE.

Kindly refer to the standing instructions contained in this department’s circular letter No. IT(FD)3-1/95-Vol-ll, dated 8th May, 2001 on the above cited subject, prescribing various stipulations (cut-off dates) in the matter of (i) utilization of budget (ii) contracts (iii) submission of claims to the Accountant General, Punjab/District Accounts Officer/ Treasury Officers and (iv) payments through government cheques.

2. In order to facilitate maximum discharge of liabilities by government entities, it has been decided to relax and extend the stipulations (dates only) as prescribed in the circular letter of 8th May, 2001 upto 28th June 2003.

3. However, the provision regarding observance of normal office/banking hours as contained in para 2(e) of the circular letter under reference shall remain enforced, as before, for provincial payments only.

4. The policy instructions/relaxations, as above, shall only be applicable in the context of Provincial Account No.1 (Non-Food) and Account No-ll (Food), and shall not apply to the financial operations of the district governments through District Fund Account No.IV, which may continue upto 30th June 2003, if not, otherwise restricted by the respective district government.

5. These relaxations shall only apply to the financial year 2002-2003.----------

No. FD(L)2-6/2002-03GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 17th June, 2003

Subject: RECOVERIES OF LOANS AND ADVANCES GRANTED TO CIVIL SERVANTS POSTED IN LOCAL GOVERNMENTS.


2. With the establishment of the new local government system, under the Punjab Local Government Ordinance, 2001, a number of employees of Punjab Government were transferred and posted in local governments. The loans and advances granted to such civil servants, prior to their postings, as above, were debitable to Provincial Government


Account No. 1. Consequently, all recoveries from them for the principal amounts or interest thereof were creditable to the Provincial Consolidated Fund in Account No. 1, during the financial years, 2001-2002 & 2002-2003 in terms of their loan agreements.

3. However, it has been reported that such recoveries on account of principals/interests have been credited irregularly to District Fund Account No. IV of the District Governments. The matter has accordingly been examined in the Finance Department, and it is to clarify that all loans and advance granted to civil servants from Account No. 1 shall be recovered, and be creditable to Punjab Account No. l (N.F.) only.

4. Cases, where such recoveries have been credited to District Fund Account No. IV of District Governments, or the Local Funds of Tehsil Municipal Administrations/Union Administrations, may be immediately reviewed, and such resource re-credited to the Provincial Account No. 1 in the prescribed manner, under intimation to this department.

----------

No. IT (FD) 3-11/95GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT


Subject: CONVERSION OF PLA OF SUGAR CANE-CESS DEVELOPMENT FUNDS INTO NON-LAPSABLE ONE.

Kindly refer to your letter No. 1133 /Sugar Cess /DDC, dated 13,06,2003, on the above noted subject.

2. The matter has been examined in the Finance Department. Given the nature and origin of the funds pertaining to sugar cane-cess development; and the purpose of their utilization, it has been decided that the funds in the PLAs of District Coordination Officers shall be NON-LAPSEABLE.

3. All other conditions relating to operation of PLA shall, however, remain applicable.

----------No. IT(FD)3-2/2003 (KC)



Subject: TAMEER-E-PUNJAB PROGRAMME. 2002-2003 – FINANCIAL PROCEDURE.

Kindly refer to your No. ADLG/03/1291-92, dated 20.06.2003, on the above noted subject.


2. In this regard it is clarified, that since the Tehsil Municipal Administrations are yet to be brought on the National Accounting System, upfront payments to them out of TPP 2002-2003 is not advisable. Therefore, the procedure prescribed by the Finance Department for making payments against works, after pre-audit by the District Accounts Officer, would continue to remain in force.

----------

OFFICE OF THE DISTRICT COORDINATION OFFICER, SIALKOTPh:0432-269624, 268590

Fax: 0432-262751

No.ADLG/03/1291-92 Dated: 26-06-2003.

Subject: TAMEER-E-PUNJAB PROGRAMME 2002-2003 FINANCIAL PROCEDURE.


It is submitted that with reference to Item (General) (v) of guidelines issued for the implementation of Tameer-e-Punjab Programme vide Planning & Development Department’s letter No.9(224)RO (RD)P&D/2003, dated 18-02-2003, some of the MPAs have desired that the development funds of their constituency may be transferred to respective Tehsil Municipal Administrations. However, the District Accounts Officer, Sialkot has made an observation that the funds of TPP cannot be transferred upfront in the account of TMA’s or District Government. He has invited attention to the prescribed procedure laid down vide Item (vi) of Finance Department instructions contained in their letter No. IT(FD)3-2/2003, dated 07-04-2003 wherein the payments in connection with the execution of the schemes under TPP shall made on the submission of a claim, in the prescribed manner, respectively by the D.O.(R&B)/ T.O.(I&S), as the case may be, to the District Accounts Officer for pre-audit of each claim by the concerned executing officer/agency at the time of submission of claim (s). Thus in case the funds are transferred to TMAs as per instructions of P&D Department, it will not be possible to comply with the procedure laid down by the Finance Department because the TMAs operate a separate account and financial procedure which is different from the one laid down for TPP.

In view of the above, it is requested that this office may kindly be advised whether the relevant funds of TPP may be transferred to TMAs or not.

----------


FINANCE DEPARTMENT



Subject: TAMEER-E-PUNJAB PROGRAMME, 2003 – FINANCIAL PROCEDURE

Kindly refer to this department’s letter of even number dated 7.4.2003, on the subject cited above.

2. Certain District Governments have approached this department for the conversion of the Personal Ledger Accounts, jointly sanctioned in the name of DCOs & EDO (F&P), for operation of the funds of the programme as non-lapsable.

3. It is clarified, that the unspent balance in the PLAs, as on 30th June, 2003, shall lapse. However, funds to the extent of lapsed amounts may be provided afresh m the prescribed manner in the financial year 2003-2004.

----------

No. PS/AFS(M)/2001GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 2nd July, 2003

Subject: DDO POWERS FOR THE OFFICERS OF DISTRICT GOVERNMENT DEPARTMENTS

In continuation of this department letter of even number, dated01-01-2003, I am directed to convey the sanction that the District Coordination Officers are authorized to confer the powers of DDOs to the officers of District Government up till 31-12-2003 .

2. The department-wise /sector-wise list of officers authorized the DDO powers at district level may be sent to the Monitoring Wing of Finance Department for confirmation.

3. The DDO powers are subject to further condition that reconciliation of expenditure/receipts would be made with the DAOs on regular basis. In case of failure for reconciliation of monthly accounts the DDO powers would be reviewed.

----------

No. IT(FD)3-4/2002 Vol IVGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 8th July, 2003.



Kindly refer to this department’s letter of even number dated 02nd June 2003, whereby the pre-audit and accounting functions of the Tehsil / Town Municipal Administrations were temporarily entrusted to the Punjab Local Fund Audit department, through the existing set-ups of Resident Audit Schemes up to 30 th June, 2003. This interim arrangement was allowed to keep the financial operations of TMAs functional.

2. Since the issue regarding the postings of Tehsil / Town Accounts Officers is still under consideration, it has been decided on the advice of LG & RD Department to further extend the aforestated arrangement as prescribed, till further orders as the accounting function of TMAs is yet to be switch over to the National Accounting System.

----------

No.IT(FD)3-4/2002 Vol-IVGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 9th July, 2003

Subject: FINANCIAL OPERATIONS OF TEHSIL / MUNICIPAL ADMINISTRATIONS IN THE PUNJAB

Reference above cited subject.

2. Under Section 114(2)(C) of the Punjab Local Government Ordinance, 2001, the Tehsil Accounts Officer or Town Accounts Officer shall perform the pre-audit or all payments from the Local Funds of the Tehsil/Town Municipal Administrations (TMA).

3. The postings of Tehsil/Town Accounts Officer had remained under consideration, but due to non-availability of suitable officers, the pre-audit and accounting functions of the Tehsil/Town Municipal Administrations were temporarily entrusted to the Punjab Local Fund Audit Department, through the existing Resident Audit Schemes. Such arrangement was prescribed on month to month basis till 30th June 2003.

4. As the matter regarding posting of regular Tehsil/Town Accounts Officers has still not been finalized, it has been decided on the recommendations of the LG &RD Department to entrust the pre-audit of all payments from the Tehsil/ Town Local Fund to the Punjab Local Fund Audit Department, through the existing Resident Audit Schemes. However, the maintenance of account and disbursement of payments shall continue to be done by the Tehsil Officers (Finance), already posted in TMAs.

5. These Instructions shall take enact from 1st July 2003 and apply till further orders.----------



Dated Lahore, the 24th July, 2003NOTIFICATION

No. FD/AFS(M)DPO/2002. In exercise of the Powers conferred on him under Article 119 of the Constitution of Islamic Republic of Pakistan, 1973, the Governor of the Punjab is pleased to notify the following financial power for strengthening the office of the Inspector General of Police, Punjab / Police Department with immediate effect:-

(i) The financial powers relating to Police Department / I.G. Punjab under'2nd Schedule - Powers Common to All Departments of the Punjab Delegation of Financial Powers Rules, 1990 Would simultaneously be exercised by the Administrative Department and I.G. Police, Punjab.

(ii) All cases regarding allocation of any supplementary grant or funds for the office of the IGP Punjab, other than the normal/allocated budget, would be routed through the Home Department.

----------No. IT (FD) 3-4/2002-Vol-IV


Dated Lahore, the 27th August, 2003

Subject: RETIRING AUTHORITY EMPLOYEES OF EX-LOCAL FUND ACCOUNT ATTACHED WITH EDUCATION/HEALTH DEPARTMENT

Please refer to your letter No. 10/G-Lines/DO(A)/2002, dated May 2003, on the above noted subject.

2. The issue cited in the subject has been examined in this department, and it has been decided in consultation with the LG&RD/LFA departments that the employees charged against the erstwhile local funds, adjusted in the District Government have not been brought in the purview of the Punjab Civil Servants Act, 1974, and the rules operative there under, including the Punjab Pension Rules and the Punjab (Civil Service) Delegation of Powers Rules, 1983.

3. As such, the employees of the Education/Health Sector of erstwhile urban local councils, adjusted in District Government have been given special placement and dispensation with regard to sanction of pension and payment vide Notification No. SO-IV(LG)1-10/2002, dated 23.10.2002. Therefore, the sanction of pension payments to the said categories of employees shall be regulated in accordance with the Notification referred to above.

----------


No. IT(FD) 3-1/93 (Misc) Vol-VGOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 28th August, 2003

Subject: REVALUATION OF WORKS AND SERVICES DEPARTMENTS CHEQUES ISSUED BY DISTRICT OFFICERS (B&R) OF DISTRICT/CITY DISTRICT GOVERNMENTS AND TEHSIL/TOWN OFFICERS (I&S) OF TEHSIL / TOWN MUNICIPAL ADMINISTRATIONS.


2. It has been brought to the notice of the Finance Department that certain contractors executing Public Works for the District /City District Governments and Tehsil / Town Municipal Administrations have failed to draw payments through Works and Services Departments cheque(s) issued in their favour by the offices of the Accountant General, Punjab / District Accounts Officers or the Tehsil Officer(Finance)/Tehsil Accounts Officers respectively on or before 30-06-2003, during the financial year 2002-2003, in discharge of their validly accrued liabilities. This position has essentially emerged due to belated issuance of cheque(s) by the respective authorities.

3. In order to alleviate the aforestated problem, it has been decided to allow revalidation of all cheque(s) of Works and Services departments issued by the AG (Pb)/DAOs for the City District/District Governments and the T.O (Finance)/TAO for the Tehsil /Town Municipal Administrations, on or before 30-06-2003, during the financial year 2002-2003, which (i) though validly authorized for payment by the DAO/TO or the TO (Finance)/TAO, as the case be, could not be encashed by the payees through bank clearance or (ii) the cheques could not be issued by the AG(Pb)/DAO or the T.O(F)/TAO, in the prescribed manner.

4. The revalidations in case of City District Government/District Governments shall be done by the A.G.(Punjab)/DAO respectively, on the submission of a formal request by the D.O (B&R) of City District/District Government concerned, along with the original un-cashed cheque(s). Accordingly, a new cheque(s) shall be issued, in the prescribed manner, by the AG (Punjab)/DAO, as the case may be, in lieu of the un-drawn/un-cashed cheque(s) issued on or before 30-06-2003, after due scrutiny of the record relating to the original claim. The amount of cheque(s) in case of City/District Government shall be debitable to the District Fund, Account No. IV against the respective budgets of the City District Government/District Governments for the financial year 2002-2003.

5. The revalidation of cheque(s) in case of Tehsil/Town Municipal Administrations shall be done by the respective Tehsil Officer (Finance)/Tehsil/ Town Accounts Officers (TAO) on the submission of a formal request by the respective TOs (l&S), along with the original un-cashed/un-drawn cheque(s) issued on or before 30-06-2003, during the financial year 2002-2003. Accordingly, new cheque(s) shall be issued, in the prescribed manner, by the TO(Finance)/TAO in lieu of the under drawn / un-cashed cheque(s)


issued on or before 30-06-2003, after due scrutiny of the relevant record relating to the original claim. The amount(s) of the cheque(s) shall be debitable to the respective Tehsil/Town Local Fund against the respective budgets for financial year 2002-2003.

6. The revalidations as above shall be further subject to the following conditions:

(a) that the cheques, under reference were validly issued by the AG(Pb)/DAO/TO for the City District / District Government, and TO(Finance)/TAO for TMAs respectively on or before 30th June, 2003, in discharge of valid accrued liabilities;

(b) that the amount of each cheque, after it’s issuance, had been debited to the respective budgetary allotment of the scheme/work of the District/City District Government or the Tehsil /Town Municipal Administration, as the case be, for the financial year 2002-2003;

(c) that the expenditure corresponding to amount of each cheque had been entered and booked in the respective cash book maintained by the AG(Pb)/DAO or the TO(I&S) as the case be, in the respective date, falling on or before 30-06-2003 and that the cash book was closed on 30-06-2003, and duly verified thereafter by an authorized representative of the Director General Audit (Works), Lahore, as prescribed;

(d) that the serial number of the respective cheque (including the last cheque) preceded the number of the last cheque issued by the AG(Pb)/DAO or the TO(Finance)/TAO of the City District/City District Government or the Tehsil/Town Municipal Administration, as the case be, on or before 30-06-2003 and communicated to the Director General Audit (Works), Lahore, on 30-06-2003 telegraphically in the prescribed manner;

NOTE: (i) The above policy shall only be applicable to Cheques of the Works and services department issued by the District /City District Governments or the Tehsil /Town Municipal Administrations, pertaining to financial year, 2002-2003.

(ii) The re-issuance of cheques in the aforesaid manner would not be admissible in case of “self & special-cheques” issued on or before 30-06-2003.

(iii) The revalidation shall not be applicable in case of payment of arrears of electricity dues to WAPDA as stipulated in FD’s policy instructions No. SO (PD)/1-1/94-95, dated 20th July, 1998.

7. The policy regarding revalidation of PWD cheques of the Provincial Works Departments has been issued separately.

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Dated Lahore, the 8th September, 2003


NOTIFICATION

No. IT(FD)3-4/2002. Vol-IV. The competent authority has approved the following policy parameters to regulate the incidences of one-time grants-in-aid to local governments from Provincial Account No.I.

(i) To the extent possible, resources shall be transferred to the local governments in accordance with Provincial Finance Commission Award.

(ii) Where it is deemed necessary and appropriate to intervene in the financial affairs of the local government, the same may be done under the following parameters:

(a) A grant in aid in respect of development or current budget shall be made on a one-time basis.

(b) Any expenditure in excess of the grant-in aid shall be met by the local government concerned from its own resources.

(iii) Funds exclusively earmarked for specific purposes shall not be re-appropriated by the local government concerned to other heads of accounts.

(iv) Any surplus funds left with the local government concerned after completion of schemes undertaken through these grants in aid shall be adjusted towards their monthly assignments by the Finance Department.

(v) Grants in aid to local governments for development purposes shall remain outside the provincial ADP and shall be met from the current budget of the Province. These would, however, be accounted for in the development accounts of the concerned local government, for reporting purposes.

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No. FD(FR)11-2/88GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT


Subject: CLARIFICATION ABOUT DISTRICT GOVERNMENT EXPENDITURE – REIMBURSEMENT OF MEDICAL CHARGES TO RETIRED GOVERNMENT EMPLOYEES

Kindly refer to this Department’s letter of even number dated 1st February, 2003 on the subject noted above.

2. In view of the difficulties and hardship to the retired civil servants in obtaining sanctions for re-imbursement of medical charges etc., the matter has been reviewed in consultation with the Controller General of Accounts, Islamabad. It has been determined, that the functionaries of the District Governments can exercise financial authority and operate Provincial Account No. I, if so directed by the Government under Sections 33


and 130 of the Punjab Local Government Ordinance, 2001. Suitable clarification has accordingly been circulated vide F.D’s letter No. SO(TT)26-1/86-Pt-IV dated 09-08-2003.

3. In pursuance of the aforestated developments it has accordingly been decided as follows:

(a) Finance Department’s instructions No. FD(FR)II-2/89 dated 1st February, 2003 shall stand withdrawn with immediate effect.

(b) The designated functionaries of District Government are authorized in terms of Sections 33 & 130 of Punjab Local Government Ordinance, 2001 to sanction medical reimbursement cases of retired civil servants of the Provincial Government from Account No. I. to the extent of the delegation of powers already conferred vide F.D’s letter No. FD(FR)11-2/89 dated 01-09-2001. Such expenditure will be debitable to Grant No. 28 - Pensions- 66200- Re-imbursement of Medical Charges to Pensioners.

(c) The respective functionaries of the District Government are also authorized to sanction pension cases of retiring civil servants as “Pension Sanctioning Authorities” as per delegations given under The Punjab Civil Services Delegation of Powers Rules, 1983 in the prescribed manner. They are also authorized to grant G.P. Fund advances to civil servants in the prescribed manner as per The Punjab Provident Fund Rules, 1978.

4. Further necessary action may please be taken accordingly.----------

No. DSP/PA/PPD/24/2003DECNETRALIZATION SUPPORT PROGRAMMEPROVINCIAL PROGRAMME SUPPORT OFFICE

FINANCE DEPARTMENTGOVERNMENT OF THE PUNJAB


Subject: DECENTRALIZATION SUPPORT PROGRAMME – AN UPDATE

This is in continuation of our earlier correspondence on the subject.

We are pleased to inform you that the Annual Work Plan, Phase-I for the year 2003-04 has been approved by the National Programme Steering Committee in its meeting held on 5th August, 2003. A one-page copy is appended for your information and record. We would like to point out that in the first phase only those projects have been taken up that relate to areas that are cross cutting across various Districts and Tehsils of Punjab. The emphasis is on taking up projects in the first phase that are of overwhelming importance to majority of the District Govts./TMAs and have far reaching impact on service delivery. In the Second phase, we would be able to take up projects that would be of specific interests to various District Govt./TMAs.


2. The approval of the Annual Work Plan marks the beginning of a process of implementation. The following steps will now be undertaken:

(a) The Provincial Program Support Office will prepare the Terms of Reference (TOR) for the services required to implement the IP. This will be completed by 30th September, 2003. Once these TOR are firmed up, we will share them with the District Governments and TMA’s who submitted the IP’s to obtain their input.

(b) An advertisement will be placed in the national newspapers, inviting Expressions of Interest (EOI) and bids from the service providers. Once these bids and EOI are received, the Provincial Program Support office will evaluate them and the contract awarded on laid down criteria. This will be completed by 15th October, 2003.

(c) When the Contract is awarded, the Local Governments from where the IPs originated, will be informed simultaneously so that they can prepare in the manner required to implement the IP.

(d) During implementation, we will be in close coordination with the local governments so as to monitor the activity and also to ensure that the IP design and objectives are being fulfilled.

3. Furthermore, in the National Programme Steering Committee’s Meeting held on 5/8/2003 with the view to recognize the efforts of focal persons, the issue of payment of honorarium to the focal persons was decided. The excerpts of the meeting are reproduced below for your kind information:

After comprehensive deliberations, the following criteria were approved:

(a) For submission of satisfactory Investment Proposals (IPs) to PSOs an honorarium of Rs.3000/- per focal person will be eligible.

(b) For each IP that was converted into a Technical Investment Project (TIP) and included in the approved AWP, an honorarium of Rs.7,000/- will be eligible per focal person.

(c) Top 20% of (Focal Persons) DCOs / EDOs who provide effective leadership and support in implementation of TIP and DSP. Rs. 50,000/- year, as honoraria, will be eligible subject to the condition that the officer should be in position for at least 6 months of AWP implementation.

(d) Top 20% of TMOs who provide effective leadership and support to the implementation of TIP and DSP. Rs. 40,000/- year, as honoraria, will be eligible subject to the condition that the officer should be in position for at least 6 months of AWP implementation.

(e) The formal approval to the payment of honoraria to the selected provincial Focal Persons would be accorded by PPSC and expenditures will be met from provincial resources.


4. I would also like to take this opportunity to remind you that the second phase of the IP development will begin from 1st September, 2003 and end by 30th November, 2003. We expect all the Focal Persons for the Program (DCOs/EDO F&P at District Level and TMO’s at TMA level) to hold at least 5 dialogue sessions and come up with at least 10 IP’s, submitting them by 30th November to this office.

In a very short time we would be undertaking an effort to establish contact with the elected political representatives in the District Governments and Tehsil Municipal Administrations to elicit support for Decentralization Support Programme. Therefore, we would be visiting you very soon. In the meantime, feel free to contact me or any one of my staff on the phone number 042-9211090 & email: [email protected].

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No. FD.SR.1/9-3/86GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the November 01, 2003

Subject: GRANT OF SCIENCE AND TECHNOLOGY ALLOWANCE TO PH.D DEGREE HOLDERS

Sir,

I am directed to refer to this Department’s circular letter of even number dated 09-08-2002 on the above noted subject and to state that the Competent Authority has been pleased to decide that henceforth the benefit of Special Science & Technology Allowance mentioned therein shall also be extended to those faculty members who hold Ph.D. degree in Social Sciences as well.

2. In pursuance of the above decision, the conditions prescribed in sub paras (a), (b) & (c) of para 1 of the circular letter referred to above shall stand superseded.

3. These orders shall come into force with effect from the date of issue of this circular letter.

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FINANCE DEPARTMENT

Dated Lahore, the November 03, 2003

Subject: GUIDELINES FOR DRAWING PAYMENTS FROM PERSONAL LEDGER ACCOUNTS (PLAs).


I am directed to refer to the subject cited above, and to state, that it has come to the notice of the Finance Department that the persons to whom Personal Ledger Accounts cheques are issued by various Departments/ Autonomous Bodies/Local Governments etc., face problems in drawing payments, through their bank accounts, due to lack of understanding about the correct procedure.

2. I am to state, that in order to facilitate early payments, the following guidelines are prescribed. It is requested that while handing over PLA cheques a payee, he may be advised to proceed as follows;-

(a) The payee should sign the cheque on its reverse.

(b) The PLA cheque may then be deposited by the payee in his bank account, with a pay-in-slip. The payee’s bank shall be required to draw the amount from the PLA maintained in the respective District Accounts Office/Treasury Office, Lahore, as the case may be, for credit to the payee’s account. This action requires (i) prior authorization of the PLA cheque by the concerned District Accounts Officer / Treasury officer, Lahore, as the case be and (ii) realization of the amount from the respective State Bank of Pakistan / National Bank of Pakistan, located in the district in which the PLA is operated.

(c) The payee’s bank shall proceed by affixing the following stamps on the reverse of the cheque, for sending it to its main branch located in the district in which the PLA is operated.

(1) Payees Signature Verified.(2) Received Payments.(3) Disbursement Guaranteed.(4) Payees Account will be credited on realization.

(d) The main branch of the payee’s bank shall send the cheque to the concerned DAO / TO, Lahore, as the case may be, after affixing the following additional stamp on the reverse of the cheque; “Our Branch’s Endorsement Confirmed”

(e) The main branch of bank in the respective district shall collect the PLA cheque, duly authorized by the respective DAO / TO, Lahore and send it to the local SBP / NBP of the concerned district undertaking governmental transaction, for realization and collection of the proceeds of the cheque, for transfer credit to payee’s account, in the prescribed manner.

(f) The above procedure shall be equally applicable to payees located at Lahore, or any other city.

----------No. IT(FD)3-4/2002-Vol-IV


Dated Lahore, the December 03, 2003


Subject: LOCAL GOVERNMENT FINANCE SYSTEM-PROCEDURE FOR EFFECTING DEDUCTIONS / RECOVERIES OF G.P. FUND / INCOME TAX / BF / GROUP INSURANCE AND ADVANCES FROM CIVIL SERVANTS POSTED IN TMAs

In continuation of this department’s letters of even number, dated 17.03.2003 and 22.05.2003 on the above noted subject, it is further clarified that the Authority for the grant of sanction to GPF advances, and or GP Fund final payments in respect of personal cases of Tehsil / Town Municipal Officers, shall be the respective Administrative Department of the officer concerned.

2. Such cases may kindly be processed accordingly.----------

No. FD(FR)11-5/82 (P-III)GOVERNMENT OF THE PUNJAB

FINANCE DEPARTMENT

Dated Lahore, the 12th December, 2003

Subject: TECHNICAL SANCTION

Kindly refer to your letter No.4035-EDO (W&S), dated 2.9.2003 and 4778-EDO (W&S), dated 14.10.2003, on the subject noted above.

2. The matter has been examined in the Finance Department. It is accordingly clarified that Finance Department’s Notification No. FD(FR)11-5/82, dated28.3.2002, pertains to powers of technical sanction for ordinary/special repair of buildings and Roads only as given under Rule 2 of the said notification.

3. It is further clarified that City District Government may exercise the powers for the repair of vehicles and heavy machinery as spelled out in Rule-1 (11) Part-II Special Powers to certain Departments and Officers (Communication & Works Department) of Delegation of Financial Powers Rules, 1990.

----------No. IT(FD)3-4/2002. Vol-VII


Dated Lahore the 17th December, 2003.

Subject: REQUEST FOR ADDITIONAL GRANTS BY LOCAL GOVERNMENTS.

Kindly refer to this department’s notification of even number dated 8 th September, 2003, outlining the policy parameters for regulating incidence of one-time grant-in-aid to local governments from Provincial Account No.1.


2. Notwithstanding the said guidelines, the local governments are coming up with huge demands for providing additional funds, especially for development schemes. Such requests are generally made through the Governor/Chief Minister, and received in this department as directives. Consequently, the Finance Department, despite resource constraints, is hard pressed to create fiscal space to meet such additional demands.

3. The matter was accordingly brought to the notice of the Chief Minister, proposing that the provincial government may not encourage extra-budgetary allocations to the local governments, which otherwise too are a disincentive for them to improve their own resources, through improved user-charges etc. The Chief Minister has kindly agreed with this proposal.

4. It is, therefore, to request, that all local governments may be suitable informed, that the provincial government will not be in a position to fund their development projects beyond the Provincial Finance Commission’s Award, unless specific projects are picked up by the Provincial Government, as a matter of policy.

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finance department notifications-2003 (165-204)

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