Key Takeaways
- The Finance Division has tightened the mechanism for re-appropriation and additional allocation of funds.
- Requests for supplementary grants will only be considered in exceptional cases, including unavoidable June payments.
- PAOs are advised to re-appropriate funds strictly for payment of the Ad hoc Relief Allowance 2026.
The Finance Division (FD) has issued new guidelines to tighten the mechanism for re-appropriation and additional allocation of funds, according to a circular issued to all Principal Accounting Officers (PAOs) and heads of departments. The revised strategy aims to restrict requests for supplementary grants and relax the May 31 cut-off date only in exceptional cases.
Under the new instructions, authorised officers may re-appropriate funds within their delegated financial powers, but no re-appropriation will be allowed from the unreleased budget, the circular stated. The Finance Division has provided additional funds under separate cost centres in each Demand for Grants and Appropriations for the payment of the Ad hoc Relief Allowance 2026, which PAOs have been advised to re-appropriate strictly for payment during the third quarter of the current financial year.
In case of a shortfall in Employees Related Expenditure (ERE), funds may be re-appropriated from Non-ERE heads on a priority basis. However, even after re-appropriation, released funds must remain within the quarterly limits prescribed under the Finance Division’s strategy for release of funds. The circular highlighted that a large number of requests for relaxation of the May 31 cut-off date for re-appropriation are received every June. Going forward, such requests will only be considered where orders have already been approved by the competent authority, and the case falls into specified categories, including adjustment of excess expenditure booked by Accounts Offices, meeting shortfalls under ERE heads, and unavoidable payments falling due in June.
The Finance Division has simultaneously tightened the process for Technical Supplementary Grants (TSGs), directing that such requests may only be submitted by PAOs with identification of resources from other Demands and a certificate confirming equivalent surrender by the concerned PAO. The Expenditure Wing will scrutinise TSG cases before referring them to the Budget Wing. The latter will assess each case against SAP-generated Budget Execution Reports, the Expenditure Wing’s recommendations, and the available fiscal space before placing it before the Finance Secretary.
TSG proposals relating to the Public Sector Development Programme will have to be processed through the Ministry of Planning, Development and Special Initiatives after fulfilment of the prescribed requirements. The circular further stated that funds approved through TSGs would be released only after taking into account the availability of funds and the applicable release strategy.
The Finance Division has adopted a stringent approach to ensure that funds are allocated and re-appropriated in a manner that aligns with the prescribed procedures and available fiscal space. The new guidelines aim to streamline the process and prevent misuse of funds, thereby ensuring efficient and effective financial management.
