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GOVERNMENT OF PAKISTANFINANCE DIVISION(Budget Wing) No.F.2(1)-BR-II)/2007-909.                                                           Islamabad, June, 30, 2010 OFFICE MEMORANDUM Subject:    Revised Accounting Procedure for Revolving Fund Accounts (Foreign Currency Assignment Account). The undersigned is directed to refer to this Division’s O.M. No.F.2(1)-BR-II/2007-538, dated 28th April, 2010 on the subject cited above and to state that the following amendments/corrections may please made in the Revised Foreign Aid Assignment Accounts Procedure for donors share of financing circulated vide this Division’s O.M. referred above:- 2.                     Revised Accounting Procedure for Revolving Fund Accounts (Foreign Currency Assignment Account), after making the above amendments/corrections is enclosed herewith. It is also clarified that the Revolving Fund Accounts (Foreign Currency Assignment Account) is also applicable on the existing accounts. 3.                     Kindly acknowledge receipt, at the earliest. Deputy Secretary (BR-II) REVISED ACCOUNTING PROCEDURE FOR REVOLVING FUND ACCOUNTS (FOREIGN CURRENCY ASSIGNMENT ACCOUNT) Debit:        G01-Cheque Clearing Account – Foreign Aid Assignment Account. Credit:       F01-Central Government Account-I – (Non-Food). I) under the appropriate Debt or Grant head. The Chief Manager will, in turn, and at maximum by the next business day, authorize amount in Pak Rupee credit into the relevant Revolving Fund Account of the project. a.         In the books of FTO/AGPR: Debit: F01-Central Government Account-I(Non Food) Credit: E03301-Permanent Debt (Foreign) – Direct or Credit: C036-Foreign Grants (under relevant detailed head). 1.   In the Books of Federal Government: a.         In the books of AGPR: (i)         On receipt of funds from donor: Debit: F01-Central Government Account-I (Non-Food) Credit: E03301-Permanent Debt (Foreign)- Direct or Credit: C036-Foreign Grants (ii)       On transfer of funds to Provincial Government: Debit: Demand No. & Function – A08-Loans and Advances to Provinces (under the relevant detailed head of account) or Debit:    A052- Grants Domestic (under the relevant detailed head of account) Credit: F01-Central Government Account-I (Non-Food) 2.         In the Books of Provincial Government AG: Debit:  F01-Provincial Government Account-I(Non-Food) Credit: E03302-Permanent Debt (Foreign) – received from Federal Government or Credit: C036-Foreign Grants. 3.         On issue of payment/cheque following entry shall be made (Govt. Department only): Debit: Demand No. & Function Code- A-Expenditures (under the relevant detailed head of account). Credit: G01-Cheque Clearing Account – Foreign Aid Assignment Account. (XI)     All payments from the Revolving Fund Accounts shall be effected through NBP Cheques/Authorizations issued by at least two persons authorized to sign. The payments into the account in respect of donor funds shall be initiated through withdrawal applications signed by such persons as may be nominated by the project management with the approval of the administrative Ministry/Division/Department. Each project management shall submit, through its appropriate administrative Ministry/Division/ Department, its budget for the following year as required for all budgets that will be included in the ‘Schedule of Authorized Expenditure’ and such budgets shall be prepared and submitted with the information including Grant/Loan No. (Project ID), Project Name/Description, Fund Code, Cost Center, Sub-detailed Function, Detailed Object, consistent with the Government Chart of Accounts and within the Government’s budget calendar. (XII)    Each project shall prepare its own annual financial statements comprising expenditure from Revolving Fund Account and Direct Payments (showing in three separate columns for RF Account, GOP Assignment Account and Third Party payments) and submit the same to Donor/Lender as well as to external audit as required under the loan/credit/grant agreements. Nevertheless, the project accounts, being sub-accounts of receipts and expenditures under the consolidated fund of the government(s) will be subject to certification as part of the consolidated government financial statements by the Auditor General of Pakistan. (XIII)  After the internal agreements containing provision for the opening of Revolving Fund Accounts have been signed, the concerned Ministries/Divisions/Departments and the project implementing agencies will arrange immediate opening of the Assignment Accounts at a branch of the NBP and special instructions for operation of the Accounts, if any, shall be provided to all parties concerned. NBP will, however, open the account after obtaining necessary permission from Exchange Policy Department of SBP Karachi, and 7 will provide a monthly statement of accounts to the project management by the end of first week of the succeeding month. It shall be mandatory for the NBP, in all cases, to mention clearly the name and Account No. of the payee on the Monthly Bank Statement. NBP shall send copy of the Bank Statement on 5th of the following month to SBP which shall be returned by SBP to NBP duly verified by 10th of the month. Even ‘Nil’ balance shall also be reported by NBP to SBP. (XIV)  Withdrawal Applications will be prepared and submitted to donors by the project management, requesting the amount of initial deposits/subsequent funding to the Revolving Fund Account through the foreign currency account of SBP Karachi for further simultaneous credit to the Revolving Fund Account (a named sub-account of the Central Account-I) at the concerned branch of the NBP. The assigned identification number of the Revolving Fund Account will be indicated on the Withdrawal Applications. The person authorized to sign Withdrawal Applications and/or operate ‘Revolving Fund Accounts’ shall furnish copies of the Withdrawal Applications, simultaneously, to their respective Administrative Ministries /Divisions as well as to the Economic Affair Division, NBP Head Office, Karachi, relevant branch of NBP, SBP Finance Department, Karachi and concerned AG/AGPR office. (XV) The Finance Managers of the respective projects (or the persons so authorized) shall perform the role of DAO to the extent of authorization for payment within the available budgetary limits. He will also be responsible for the reconciliation with NBP, reporting of authorized ‘direct payments’ to the contractors/suppliers through the donors, and financial reporting. All payments, except for an authorized petty-cash to be notified in writing by the Project Director to the relevant NBP branch, shall be made directly to the recipients through crossed-cheques. Cash payments or funds transfers from Assignment Accounts to any DDO-account or any other account for the sake of onwards disbursements shall be strictly prohibited. The following entries will be made at the time of issue of payment/ cheque out of each Assignment Account: Debit:

GOVERNMENT OF PAKISTANFINANCE DIVISION(Budget Wing) F.No. 2(2)BR-II/2008-590                                                                  Islamabad, March 09, 2009 OFFICE MEMORANDUM Subject:    REVISED PROCEDURE FOR OPERATION OF LAPSABLE ASSIGNMENT ACCOUNTS FOR FEDERAL GOVERNMENT The undersigned is directed to refer Finance Division letter No. F. 2(2) BR-II/2008-551 dated 03rd March, 2009 on the above subject. 2.         In this regards the minutes of the meeting is enclosed for information and necessary action. Deputy Secretary (BR-II) MINUTES OF THE MEETING HELD ON 5TH MARCH, 2009 UNDER THE CHAIRMANSHIP OF THE ADVISER TO THE PRIME MINISTER ON FINANCE AND REVENUE Subject:          Revised Procedure for Operation of Lapsable Assignment Accounts of Federal Government. A meeting was held on 5th March, 2009 under the Chairmanship of Adviser to the Prime Minister on Finance and Revenue to discuss the issue relating to implementation of Lapsable Assignment Account procedure with reference to PWP-I & II. Ms. Hina Rabbani Khar, Minister of State for Finance was also present. The list of participants is attached at Annex-I. The following decisions were taken:- Stay updated for further details and clarifications regarding the above mentioned or any other notification, please do not hesitate to reach out to our Facebook Group.

GOVERNMENT OF PAKISTANFINANCE DIVISION(Expenditure Wing) F.No. 5(3)Exp.III/2009                                                                   Islamabad the, 10th April, 2010 OFFICE MEMORANDUM Subject:    MEASURES TO ENSURE FISCAL DISCIPLINE The undersigned is directed to say that with a view to improve financial discipline, and streamline the management of public accounts. it has been decided to restrict the validity of cheques upto three months or 30th June, whichever is earlier Accordingly, the cheque issued during a financial year shall be payable at any time within three months after the month of Issue. but not beyond the 30th June, If the currency of cheque expired, owing to its not being presented at the treasury or Bank within the specified period. it may be received back by the drawer who shall then destroy and issue a new cheque in lieu of it provided that the validity of the fresh cheque shall expire on the 301h June. Thus a cheque issued in one financial year shall not be valid from encashment in the next financial year Necessary amendments in the relevant Federal Treasury Rules have been effected and notified by the Finance Division vide Notification No. F 5(3)Exp.III/2009, dated 31st March. 2010, (Copy enclosed) 2          All Ministries/Divisions/Departments are requested to ensure observance of above mentioned financial discipline by strictly adhering to the following instructions.- i.          That the budgetary allocations placed at their disposal are expanded uniformly as Far as possible during the financial year. They should further ensure that all validly accrued liabilities are promptly cleared and are not postponed towards the end of financial year. ii.         All release of funds for development/non-development expenditure be completed by Ministries/Divisions, by 15th May Release of inevitable nature, if any after the said date, would only be made by the Finance Division, after ensuring that the funds are likely to be expended well before the close of the financial year. iii.        There should be no re-appropriation/supplementary grant after 15th May to ensure timely processing of claims by the Miniseries/Divisions/Departments, iv.        All Ministries/Divisions/Departments should submit and draw their claims form AG Office for all validly accrued liabilities on or before 10th June of that financial year. v.         In case of requirement of any additional information by the Accounts Officer (Accountant General’s Office/District Accounts Office/Agency Accounts Office), Accounts Office shall return the un-passed bill urgently and the concerned departments shall respond promptly and resubmit the bill/claim not later than 15th June. vi.        In order to adhere to the aforesaid schedule, all the concerned authorities shall ensure the issuance of sanctions, completion of code formalities and procurement of stores well in time. So that the claims can be presented for pre-audit to the respective Accounts Offices timely. vii.       All PLAs/Assignment Accounts holders should make necessary arrangements as detailed above to ensure encashment of their cheque well in time. All cheques drawn against PLAs/Assignment Accounts shall be cleared upto 30th June. viii       The PIFRA shall generate regular reports for information of all Principal Accounting Officers, apprising them of the latest funding position in respective heads. This would facilitate PAOs to take timely action for making good of the shortfall. 3.         All Ministries/Divisions are requested to communicate the above mentioned instructions to their attached Departments. Sub-ordinate offices, affiliated Autonomous, Semi Autonomous bodies and Corporations Section Officer (Exp III) Government of PakistanFinance Division(Expenditure Wing) Islamabad, the 31′i March, 2010 NOTIFICATION S.R.O. (1)2010.- In exercise of the powers conferred by Article 79 of the Constitution of the Islamic Republic of Pakistan, the President is pleased to direct that the following further amendments shall be made in the Treasury Rules of the Federal Government, namely:- In the aforesaid Rules,- “162. Cheques shall be payable at any time within three months after the month of issue but not beyond the 30th June. Thus a cheque bearing date any time in February is payable at any time up to 31st May. If the currency of the cheque should expire owing to its not being presented at the treasury or Bank within the period specified above, it may be received back by the drawer who should then destroy it and issue a new cheque in lieu of it provided that the validity of the fresh cheque shall expire on the 30th June, Thus a cheque issued in one financial year shall not be valid for encashment in the next financial year.”; “(2) Letter of credit issued in favour of post offices shall lapse at the close of the month for which they are issued. In all other eases, a letter of credit or assignment shall lapse at the close of the financial year in which it is issued,”; and (i) for sub rule (10) the following shall be substituted, namely:- “(10) Any amount remaining undrawn at the close of a financial year shall lapse”; and (ii) sub-rule (11) shall be omitted, [No. 5(3)Exp.III/2009] Deputy Secretary (Exp) Stay updated for further details and clarifications regarding the above mentioned or any other notification, please do not hesitate to reach out to our Facebook Group.

D.O.No.F.4(1)-BR-II/2002-1408 Ministry of Finance Government of Pakistan Pak. Sectt. Block “Q” Islamabad the 1st September, 2008 Subject:-    Working Balance Limit And Investment Of Surplus Funds Belonging To Public Sector Enterprises And Local/Autonomous Bodies Under Federal Government. Kindly refer to the Finance Division’s O.M.No.F.4(1)/2002-BR.II, dated 2nd July, 2003 on the above subject (copy enclosed). Paras-3(e)and (7) of the said O.M read as follows: 3(e)The working balance limit of each organization should be determined with the approval of the administrative ministry in consultation with Finance Division. The account of this working balance may be maintained in a current or savings bank account. (7) The Principal Accounting Officer of the ministry concerned will be responsible for the implementation of the above instructions regarding the PSEs/Local/Autonomous bodies under his control. The Chief Executive of the PSEs/Local/Autonomous Body will be required to issue a certificate on annual basis that the above instructions are being followed in respect of the working balance and surplus funds of the organization. 2.         Implementation of the above instructions not only requires determining working balance limit and investment of surplus funds but it also requires a confirmation, on a regular basis, from the CEOs of the PSEs that they are in compliance with the instructions. It has, however, been observed that the above mentioned instructions are not being fully complied with. 3.         You are requested to kindly advise the Chief Executive Officers of the PSEs/Local/Autonomous Bodies under your administrative control to follow the instructions as indicated at Para-3(e) and (7) of the above referred Finance Division’s O.M., under intimation to Finance Division at the earliest, so that a compliance report, accordingly, is submitted to the Finance Minister. 4.         This issues with the approval of Finance Secretary. With regards, Yours sincerely, Muhammad Ayub Khan Tarin Stay updated for further details and clarifications regarding the above mentioned or any other notification, please do not hesitate to reach out to our Facebook Group.

Government of Pakistan Finance Division (Budget Wing) No.F.3(4)-DS(BR-II)/2008                                                                  Islamabad, the 06th October, 2008 OFFICE MEMORANDUM Subject:                REVISED PROCEDURE FOR OPERATION OF ASSIGNMENT ACCOUNTS OF FEDERAL GOVERNMENT. The undersigned is directed to say that in view of various accounting and payment problems inherent in the present system of Personal Ledger Accounts (PLAs), Government has decided to convert PLAs/Special Drawing Accounts (SDAs) into Assignment Account w.e.f. 01-10-2008. The Revised Assignment Account Procedure will ensure smooth follow of funds to the beneficiaries, withdrawal of funds on need basis and proper booking of the expenditure. Ministries/ Divisions/Departments are requested to follow the following instructions for implementation of the Revised Assignment Account Procedure. (i)                            Revised Procedure as issued by the office of the Controller General of Accounts (CGA) vide its letter No. AC-II/1-39/08-Vol-V/632, dated 24th September, 2008 would be implemented w.e.f. 01-10-2008. (ii)                           The existing Personal Ledger Accounts (PLAs)/Special Drawing Accounts (SDAs) would be replaced with the Assignment Account to be opened by Ministries, Divisions and Departments under F.T.R.170-B with effect from 1st October, 2008. (iii)                          All future budgetary releases w.e.f. 2nd quarter, 2008 onwards would be made in the Assignment Accounts of the Ministries, Divisions and Departments instead of PLAs/SDAs/Bank Accounts. (iv)                          Unspent cash balances, out of releases from Federal Consolidated Fund, lying either in PLAs/SDAs or in Commercial Banks shall be deposited back to Government Account, as provided under the FTR 170-B(10). 30% of such balances may be deposited back in the Government Account by 31-10-2008. Additional 30% may be deposited within three months (upto January 31, 2009) and the remaining balance i.e. 40% may be deposited in the next three months (upto April 30, 2009). (v)                           Ministries, Divisions and Departments will submit the case of conversion of existing PLAs/SDA into Assignment Accounts on Form-A (copy enclosed). A copy of the previous permission for the opening of PLA/SDA shall be enclosed with Form-A. Such cases would be forwarded to the Deputy Secretary (BR-II), Finance Division (Budget Wing) who shall be authorized to endorse the sanction letters for the opening of Assignment Accounts in replacement of the existing PLAs/SDAs. (vi)                          However, future requests for opening of new Assignment Accounts shall be forwarded to the Finance Division (Budget Wing) after the approval of the Principal Accounting Officer (PAO) of the Ministries/Divisions/Departments with full justification for not using the normal mode of payments through the pre-audit system of AGPR/DAO. (vii)                        The new Assignment Accounts would be opened in consultation with the Controller General of Accounts (CGA). (Muhammad Younas) Deputy Secretary (BR-II) Stay updated for further details and clarifications regarding the above mentioned or any other notification, please do not hesitate to reach out to our Facebook Group.