Govt implements new financial controls to manage public funds

The federal government has introduced new financial regulations for all governmental bodies, including ministries and agencies, to enhance control over public funds. 

These regulations, part of the “Cash Management and Treasury Single Account Rules 2024,” were developed with the guidance of international financial organizations such as the International Monetary Fund (IMF) and the Asian Development Bank.

As per news reports, the goal is to reduce the fiscal deficit by consolidating unutilised funds across various accounts.

Under these rules, unused funds in bank accounts will be transferred daily to a central non-food account at the end of each banking day and returned the following morning. This process is intended to improve the management and forecasting of cash flows.

The Budget Wing and Debt Management Office of the Finance Division will regularly estimate necessary cash buffers to ensure funds are available for authorised expenses. 

Moreover, the Finance Division can use any surplus to reduce public debt, in coordination with the State Bank of Pakistan (SBP).

Each month, the accountant general of Pakistan Revenues will provide revenue and expense data to division secretaries, who must then submit a quarterly financial forecast to the Finance Division by the 20th of the subsequent month. 

The Debt Management Office is tasked with creating quarterly debt service projections, and the Finance Division will generate monthly cash forecasts.

Government entities must adhere to these new rules for opening and operating bank accounts. Requests to open accounts need to include legal justifications or government approvals. 

Existing accounts will be evaluated, and any deemed unnecessary will be closed, with their balances transferred to the Federal Consolidated Fund or Public Accounts.

The SBP will provide quarterly updates to the Finance Division on all government-operated bank accounts and balances. 

Government offices and entities are required to submit quarterly lists of their bank accounts, detailing balances, purposes, signatories, and legal authorizations. 

The Finance Division will maintain an inventory of these accounts based on the data from the SBP and government entities.