Finance ministry orders surrender of unspent funds within 10 days

The Ministry of Finance has directed all ministries, divisions, departments and autonomous bodies to surrender unspent funds within 10 days to finalise revised estimates for FY2025-26 and prepare the upcoming budget, Dawn reported. 

In a communication, the Finance Division instructed principal accounting officers to submit anticipated savings under all major expenditure heads by May 10 and report the amounts to the Budget Section for system entry.

The Public Accounts Committee has also directed the Finance Ministry to ensure early surrender of funds and hold departments accountable for seeking additional allocations.

The directive covers four categories of spending: running of the civil government, including employee-related and non-employee expenditures, grants, subsidies and development funds under the Public Sector Development Programme.

Officials said the deadline has been advanced from May 31 under Section 12 of the Public Finance Management Act, 2019, following directions from the Public Accounts Committee to improve fiscal management and ensure timely reallocation of resources.

The move comes as the PSDP allocation for the current fiscal year has already been reduced by Rs173 billion to finance fuel subsidies amid rising petroleum prices linked to the US-Israel conflict with Iran.

Data shows that federal entities have spent less than half of their development allocations during the first nine months of the fiscal year. Total PSDP utilisation stood at Rs415 billion during July-March, representing 41.5% of the Rs1 trillion allocation, compared to 36.4% utilisation in the same period last year.

As of March 31, ministries and divisions had authorised Rs589 billion, with actual expenditure reported at Rs414.96 billion.

In contrast, spending under parliamentarians’ schemes remained higher, with about 70% of allocations utilised within nine months. Under the Sustainable Development Goals Achievement Programme, Rs57.23 billion was authorised out of a revised allocation of Rs63.24 billion, with more than Rs44 billion spent.

The Finance Ministry’s release schedule for the current fiscal year allows 15% of funds in the first quarter, 20% in the second, 25% in the third and the remaining 40% in the final quarter.