Finance Division shares strategy for release of funds for development budget for financial year 2024-25

Finance Division shares strategy for release of funds for development budget for financial year 2024-25

By: Communicators - Business Team (July 15, 2024)

The Finance Ministry has shared its strategy for the release of recurrent budget funds for the 2024-25 fiscal year. This strategy outlines a phased approach, with allocations as follows:

• 20% in Q1
• 25% in Q2
• 25% in Q3
• 30% in Q4

This structured release is in accordance with the provisions of the Public Finance Management Act, 2019, and Financial Management guidelines. The strategy aims to ensure systematic and efficient allocation of funds to various divisions, attached departments, subordinate offices, autonomous bodies, authorities, and commissions under the Demands for Grants and Appropriations for FY 2024-25. This approach is effective immediately and will remain in place until further notice. Break down of guidelines for quarterly expense allocations and specific financial disbursements are:

Quarterly Expense Allocations

1. Employees Related Expenses (ERE) and Pension Payments:

   • Q1: 25%
   • Q2: 25%
   • Q3: 25%
   • Q4: 25%

2. Non-Employees Related Expenditures:

   • Q1: 15%
   • Q2: 25%
   • Q3: 25%
   • Q4: 35%

Specific Financial Disbursements

1. Rent of Office and Residential Buildings, Commuted Value of Pension, Encashment of LPR, and PM Assistance Packages:
   • First half of the fiscal year: 45%
   • Second half of the fiscal year: 55%

Special Disbursements

• Subsidies, Grants, and Lending:
  • Released by the Finance Division to the Principal Accounting Officer (PAO) on a case-by-case basis.

These allocations ensure a structured and balanced distribution of funds throughout the fiscal year, allowing for consistent financial management. Guidelines for the financial management of specific funds will be done as:

1. Case-by-Case Consideration by Finance Division:

   • Any international or domestic contractual and obligatory payments that exceed the prescribed limits will be evaluated individually by the Finance Division.

2. Restrictions on Fund Re-appropriation:

   • Principal Accounting Officers (PAOs), Heads of Departments, or Heads of Subordinate Offices are not permitted to re-appropriate allocated funds from Employee Related Expenses (ERE) to any other head of account (Non-ERE) without obtaining prior approval from the Finance Division.

3. Provision of Additional Funds:

   • Additional funds have been allocated to PAOs to cover the Adhoc Relief Allowance for the fiscal year 2024-25. These funds are assigned under a separate cost center within each demand for grants, and the Finance Division will release 100 percent of these funds in the third quarter.

4. Guidance for Re-appropriation of Funds:

   • PAOs are advised to re-appropriate these additional funds specifically for the Adhoc Relief Allowance 2024. This should be done in consultation with the Expenditure Wing of the Finance Division and directed to the cost centers of Divisions, Attached Departments, or Subordinate Offices within their respective Demands for Grants.

This ensures a structured approach to fund management, maintaining transparency and adherence to budgetary guidelines.