Standard Operating Procedures Manual

SOPs No.FD(ERU)MTBF/1-20/2021
LOCAL FINANCE WING – FINANCE DEPARTMENT

Last updated 7th May, 2021

Owner: Local Finance Wing, Finance Department, Government of Sindh

Revision History

Amended By
Date Description / Ref to the Doc. Reviewed By
(Name / Designation)

7th May, 2021 Disclosure Safia Aamir Isran -do-

This Document contains 42 pages.

 Release Date:
Ver. No. 1.00 Standard Operating Procedures Manual
23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

Table of Contents
A. Introduction ................................................................................................................... 5
1. Purpose and objective of the SOPs manual ................................................................ 5
2. Safe custody ..................................................................... Error! Bookmark not defined.
3. Period of revalidation ................................................................................................... 5
3.1. Amendment request and approval................................................................................... 5
4. Version control .............................................................................................................. 7
4.1. Maintenance and review frequency ................................................................................ 7
5. Applicable rules and regulations ................................................................................. 7
6. How to read the process flow charts ........................................................................... 7
7. Authority & applicability of the SOPs manual .......................................................... 8
7.1. Authority ......................................................................................................................... 8
7.2. Effective date .................................................................................................................. 8
7.3. Compliance ..................................................................................................................... 8
B. Scope of standard operating procedures (SOPs) ....................................................... 9
1. Overall function and mandate of Local Finance Wing ............................................. 9
C. Definitions .................................................................................................................... 11
D. Organizational structure and job descriptions ........................................................ 12
1. Organizational chart................................................................................................... 12
2. Job descriptions of key personnel.............................................................................. 13
2.1. Additional Finance Secretary ........................................................................................ 13
2.2. Deputy Secretary ........................................................................................................... 14
2.3. Section Officer (LF – I) ................................................................................................ 15
2.4. Section Officer (LF – II) ............................................................................................... 16
E. Standard operating procedures (SOPs) .................................................................... 17
1. PFC Secretariat Management ................................................................................... 17
1.1. PFC secretariat management ......................................................................................... 17
2. Local Body Funds ....................................................................................................... 22
2.1. Review, scrutiny and approval of grant proposal from local bodies ............................ 22
2.2. Disbursement of funds to local bodies .......................................................................... 26
3. Response on Audit Report(s) ..................................................................................... 30
3.1. Response on audit observation and recommendation ................................................... 30

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 Release Date:
Ver. No. 1.00 Standard Operating Procedures Manual
23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

3.2. Implementation of audit recommendation .................................................................... 34

F. Annexure...................................................................................................................... 38
1. List of outputs / reports .............................................................................................. 38
2. Formats / contents of various forms / reports mentioned in the SOPs manual .... 39

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 Release Date:
Ver. No. 1.00 Standard Operating Procedures Manual
23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

List of abbreviations / acronyms

Abbreviations / Acronyms Description

AD Administrative Department

AFS Additional Finance Secretary

DC District Councils

DMC District Municipal Corporation

DS Deputy Secretary

FD Finance Department

FS Finance Secretary

FM Finance Minister

GoS Government of Sindh

HTP Housing and Town Planning

IT Information Technology

JD Job Description

KMC Karachi Metropolitan Corporation

LC Local Council

MC Municipal Corporation

OZT Octroi and Zila Tax

SFS Special Finance Secretary

SGA&CD Services General, Admin & Coordination Department

SOPs Standard Operating Procedures

TC Town Committee

TMA Tehsil Municipal Administration

TCS Tranzum Courier Services

UC Union Council

UMS Urgent Mail Services

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 Release Date:
Ver. No. 1.00 Standard Operating Procedures Manual
23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

A. Introduction
1. Purpose and objective of the SOPs manual
(1) Standard Operating Procedures (SOPs) manual describes the policies and procedures relating
to Local Finance Wing (LFW) of Finance Department (FD), Government of Sindh (GoS). The
SOPs manual is useful to:
(a) Employees who are responsible to understand and carry out their duties; and
(b) New employees who want to understand the policies and procedures.
(2) The objective of the SOPs manual is to promote uniformity and consistency in the LFW
functional activities by clearly defining responsibilities and authorities.
(3) The objective of this SOPs manual shall be met by ensuring the following:
(a) All personnel adopt and implement leading policies and procedures uniformly;
(b) Internal controls are in place to safeguard the assets of LFW; and
(c) Guidance and instructions are provided to the designated employees in LFW for
maintaining a system of controls over financial, operational, and compliance risks
inherent in respective operations.
(4) The SOPs manual has been prepared keeping in consideration the requirements common to all
activities. Its policies / procedures / templates may be augmented / updated (without altering
the overall framework) as per the requirements of a specific activity.

2. Disclosure
These Standard Operating Procedure are disclosed for information of line departments and general
public.

3. Period of revalidation
(1) The SOPs manual is a live document and will be updated on a periodic basis. It will be amended
as and when any changes occur that make it essential for its revision with the approval of
Additional Finance Secretary (LFW) and Finance Secretary.
(2) The review and updating of the SOPs manual shall be an on-going process to ensure continuous
alignment of Local Finance Wing objectives with strategies, functions and activities. The
responsibility for keeping the SOPs manual up-to-date remains with AFS (LFW). AFS (LFW)
shall initiate all revisions to the SOPs manual and ensure that the revised pages showing
authorized changes have been circulated to all recipients of the SOPs manual.

3.1. Amendment request and approval

(1) All requests for amendments to the final version of this SOPs manual shall be documented on
an Amendment Form specified for this purpose.
(2) The Request for Amendment shall be raised by Deputy Secretary (LFW) and shall contain the
following:
(a) Name of the person proposing the amendment;
(b) Type of amendment (addition / deletion / modification);

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23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

(c) Section of the SOPs manual;

(d) Description of the proposed amendment;
(e) Reason for the proposed amendment; and
(f) Date amendment proposed.
(3) The amendment form shall be submitted to the AFS (LFW) who shall review and comment on
any proposed changes.
(4) Once the AFS (LFW) provides his consent on the amendment, the amendment form shall be
forwarded to the Finance Secretary for final approval and incorporation of the respective
changes in the SOPs manual.
(5) Finance Department, through a notification, shall issue an amendment in SOPs manual.
Additional Finance Secretary (LFW) may approve the amendment in SOPs manual and Finance
Department may notify it as per pattern adopted for notifying rules by Finance Department.
(6) The amendment control log shall also be updated in respect of the changes.

a) Amendment control log

(1) A central repository of all amendments made shall be maintained in an amendment control log
by the Deputy Secretary (Admin & Accounts) and shall form part of this SOPs manual for the
reference of those who do not receive Amendment Form.
(2) The amendment control log shall contain the following:
(a) Date;
(b) Description / Reference to the SOPs manual;
(c) Amended by; and
(d) Reviewed by.

b) Amendment process

(i) Hard copy

(1) Any amendment to this SOPs manual shall warrant a reprinting of the affected chapter / section
and issuance to those users who are holding hard copies. This shall be due to the amendment
of the version number of the chapter which shall be changed by the AFS (LFW).
(2) On receiving the approved amendment form, the AFS (LFW) shall incorporate the changes in
the electronic copy of the SOPs manual and then make the necessary printouts.
(3) In the interest of economising, one may choose to reprint only the modified pages. This is
possible when a modification does not change the page number on which any subsequent sub-
headings can be found. In this case, the affected pages may physically be removed from the
existing copy of this SOPs manual and new pages inserted to replace them.
(4) Where a modification will change the page number on which a subsequent sub-heading can be
found, then the affected chapter shall physically be removed from the existing hardcopy of this
SOPs manual and the updated chapter shall be reprinted and inserted in this SOPs manual.

(ii) Electronic copy

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 Release Date:
Ver. No. 1.00 Standard Operating Procedures Manual
23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

(1) The original electronic file containing the respective chapter that needs amendment shall be
copied and saved with a new version number equivalent to the old version number plus one.
This shall be performed by the AFS (LFW), thus ensuring that the original file version remains
unchanged.
(2) The AFS (LFW) shall submit the amended version of the SOPs manual to the Deputy Secretary
(Admin & Accounts) to update the central repository / database of the SOPs and also inform
all users who have electronic copies of the SOPs manual to update themselves by obtaining the
amended version from the database.

4. Version control
(1) The version of the SOPs manual is mentioned at the top of each page. All the revised pages will
show the version number in accordance with number of revisions made as illustrated below as
this will help maintain record of all changes made in the SOPs manual subsequently.
(2) Version number consists of two parts – the number before the decimal point denotes the version
number of the entire SOPs manual (Version No. 1.00) while the number after the decimal point
represents revision of sections and pages only (Version No. 1.00).
(3) Any minor amendment shall be issued as revision and only affected pages shall be replaced.
Version number(s) is in continuous increments of .00 (Version No. 1.01, 1.02 and so on).
Sequential control is maintained through revision history and amendment control log.
(4) A new version shall be issued in circumstances where cumulative revisions exceed
approximately 15% - 20% of pages of procedural sections.
(5) The revision number after decimal is reset to “00” with issuance of each new version (e.g.
Version No. 2.00, 3.00 and so on).

4.1. Maintenance and review frequency

(1) The SOPs manual should be reviewed and approved at regular intervals (at least once in 02
years) to reflect changes in the activities of the wing.

5. Applicable rules and regulations

(1) The following references were used for the preparation of the SOPs manual, and any
amendments thereto should be considered for future updates to the SOPs manual:
(a) Sindh Local Government Act 2013.

6. How to read the process flow charts

(1) The footnote references have been included for any information extracted from the documents
of Finance Department, Government of Sindh and made part of this SOPs manual.
(2) The flow charts have been prepared at a procedural level. There is a separate flow chart for each
sub-process within following processes of Local Finance Wing:
(a) PFC Secretariat Management;
(b) Local Body Funds; and
(c) Response on Audit Report(s).

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Ver. No. 1.00 Standard Operating Procedures Manual
23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

(3) In the process flow charts, the following symbols have been used to denote certain types of
procedures as stated below:

Symbol Use

<Process Name>
This is a functional band and represents the designation of each person that is
<Function>

involved in the process.

This symbol is a decision box and is used where there is more than one possible
series of procedures to follow.

This symbol denotes an SOPs manual procedure.

The arrow represents the chronological progression of procedures and connects each
procedure to the next one.

This symbol denotes the start and finish events of each sub-process.

7. Authority & applicability of the SOPs manual

7.1. Authority

(1) This SOPs manual is issued to ensure a common approach across the Local Finance Wing in
Finance Department. It does so in accordance with the laws, regulations, policies and
procedures and guidelines listed in Section 05 above.

7.2. Effective date

(1) The effective date for application of this SOPs manual is the date of approval of the SOPs
manual by the authorities.

7.3. Compliance

(1) Compliance with this SOPs manual is mandatory for all the activities under this unit.
(2) In the event any policy or procedure in this SOPs manual conflicts with the requirements of
other manuals or rules / regulations, the rules and regulations notified by Government of Sindh
will prevail.

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 Release Date:
Ver. No. 1.00 Standard Operating Procedures Manual
23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

B. Scope of standard operating procedures (SOPs)

(1) The Standard Operating Procedures Manual (the SOPs manual) sets out the standard operating
procedures adopted by Finance Department for regular activities of Local Finance Wing. This
SOPs manual has been approved by the Finance Secretary.
(2) Where the employees of Local Finance Wing - Finance Department consider that they are
unable, for any reason, to comply with the policies and procedures defined in this SOPs manual,
they should refer the matter to the Finance Secretary. However, general queries and clarification
matters regarding this SOPs manual should be addressed to the Deputy Secretary.
(3) This SOPs manual provides a source of instruction and guidance to all employees of Local
Finance Wing - Finance Department for the application of standard operating procedures for
functional activities. The scope of this SOPs manual is based on the approved TORs / Rules of
Business for Local Finance Wing vide notification no. ____________________dated
____________________.

1. Overall function and mandate of Local Finance Wing1

(1) The Local Finance Wing of Finance Department is responsible for administration of financial
matters pertaining to Local Government including Local Councils of rural and urban areas
across Sindh province. The Local Finance Wing proposes share distribution (non-development)
criteria for Provincial Finance Commission (PFC) award to Local Councils (LCs). The funds
are released to LCs by the Local Finance Wing of the Government of Sindh as per PFC Award
after reviewing grant requests from LCs and making recommendations for their approval.
(2) Local Finance Wing administers the financial matters pertaining to Local Councils (LCs) of
rural and urban areas across Sindh province and as per the Sindh Local Government Act 2013.
The following Local Councils exist in the province:
(a) Karachi Metropolitan Corporation (KMC);
(b) Municipal Corporations - Hyderabad, Larkana and Sukkur;
(c) District Municipal Corporations (DMC) - Karachi East, South, West, Central, Malir and
Korangi;
(d) Municipal Committees (MC);
(e) Town Committees (TC);
(f) Union Committees / Union Councils (UC); and
(g) District Councils (DC).
(3) Local Finance Wing is headed by Special Finance Secretary (SFS) of Budget & Expenditure
(B&E) Wing, has an Additional Finance Secretary (AFS), a Deputy Secretary (DS) and two
Section Officers (SO). The LFW performs the following major tasks in respect of LCs:

1
Internal Audit Plan – Government of Sindh
1
Sindh Local Government Act 2013

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23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

(a) Propose share distribution criteria for Provincial Finance Commission (PFC) Award to
LCs.
(b) Release funds to LCs as per PFC Award.
(c) Review grant requests from LCs and make recommendations for their approval.
(4) Key function of Local Finance Wing
(a) The major processes (activities / functions) of Local Finance Wing are provided below:

Major processes
Sub-processes / Sub-functions
(activities / functions)

1. PFC Secretariat Management 1.1. PFC secretariat management.

2. Local Body Funds 2.1. Review, scrutiny and approval of grant proposals from
local bodies; and
2.2. Disbursement of funds to local bodies.

3. Response on Audit Report(s) 3.1. Response on audit observation and recommendation;

and
3.2. Implementation of audit recommendation

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23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

C. Definitions

Term Definition

Audit Copy Audit Copy is a document which is prepared by the Local Government
Department being concerned Administrative Department of LCs against
issued release order by FD for authentication.

Direct Through State Bank Monthly OZT Share and Regular grant per month is released directly
of Pakistan (Release order) through State Bank of Pakistan in the Sindh Bank Accounts of LCs.

Disposal at Secretary Release order issued in the name of Secretary Local Government is
Local Government known as Disposal at Secretary Local Government. This is in the case
(Release Order) of one time / special grant.

Grant Request / Proposal A grant request / proposal is a document submitted to Local Finance
Wing by the Local Councils through proper channel i.e. Local
Government Department for request of excess funds in order to provide
financial support to meet their non-development expenditures.

Octroi Zila Tax (OZT) Octroi Zila tax is the amount transferred to District Government by the
Federal Government through Provincial Government for smooth
functioning of the Local Councils.

Provincial Finance Provincial Finance Commission is an apex body at provincial level

Commission (PFC) headed by Finance Minister (CM) and it has the mandate to determine
the amount to be transferred by the provincial government to the local
councils in the wake of functional assignments entrusted to them and to
make its equitable and objective distribution among the various tiers of
the Local Councils.

Regular Grant Regular Grant is provided on the genuine need basis to Local Councils
proposed by the Local Government and approved by CM.

Special Grant Special Grant is not part of the regular grant and is specially approved by
the Chief Minister in order to meet excess expenditure as per need.

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23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

D. Organizational structure and job descriptions

1. Organizational chart
(1) As per the notification no. ____________________dated ____________________, the
organogram of the Local Finance Wing (LFW) in Finance Department is as follows:

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Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

2. Job descriptions of key personnel

2.1. Additional Finance Secretary

Department Finance Department

Unit / Wing Local Finance Wing

Location Karachi

Type Permanent

Job Title Additional Finance Secretary

Responsible to Special Finance Secretary (B&E)

Responsible for Deputy Secretary

Job Description (1) Review and provide comments on release of Octroi and Zila Tax (OZT)
funds as per the defined budget approved by Government of Sindh of OZT
shares to District Councils, KMC, DMCs, Union Councils / Committees,
Municipal Corporations, District Municipal Corporation; Municipal
Committees and Town Committees;
(2) Review and Provide comments on the grant proposal after reviewing the
assessment of Deputy Secretary for availability of the budget for
respective grant proposal;
(3) Review and comment on the deduction of audit fees from the Local
Council share from the OZT shares;
(4) Review and recommend the release order of grant proposal and
authentication of audit copy received from Local Government Department
being concerned Administrative Department of Local Councils;
(5) Review and provide comment on the electricity deduction plans in the
shape of instalments from the OZT shares of Local Councils;
(6) Review the audit report, discuss the findings with the auditor and assign
the Deputy Secretary to prepare management responses on audit report;
(7) Assign Deputy Secretary for implementing audit recommendations and
preparing updated status;
(8) Finalize / Draft comments on summaries / notes for approval / signature
of Finance Secretary;
(9) Coordinate with Local Councils through concerned Administrative
Department regarding various financial matters; and
(10) Perform any other tasks assigned by SFS (B&E) / FS.

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Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

2.2. Deputy Secretary

Department Finance Department

Unit / Wing Local Finance Wing

Location Karachi

Type Permanent

Job Title Deputy Secretary

Responsible to Additional Finance Secretary

Responsible for Section Officer(s)

Job Description (1) Review and provide comments on release of Octroi and Zila Tax (OZT)
funds as per the defined budget approved by Government of Sindh of
OZT shares to District Councils, KMC, DMCs, Union Councils /
Committees, Municipal Corporations, District Municipal Corporation;
Municipal Committees and Town Committees;
(2) Review and provide comments on the grant proposal summary after
assessing the same for availability of the budget for respective grant
proposal;
(3) Review and provide comments on the deduction of audit fees from the
OZT share of Local Council;
(4) Review and recommend the release order of grant proposal and
authentication of audit copy received from Local Government
Department being concerned Administrative Department of Local
Councils;
(5) Review and provide comments on electricity deduction plans in the
shape of instalments from the OZT shares of Local Councils;
(6) Prepare management responses on audit report and submits it to the
AFS;
(7) Responsible for implementing audit recommendations and preparing
the updated status for implemented recommendations;
(8) To attend Public Accounts Committee meetings; and
(9) Perform any other tasks assigned by the AFS.

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Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

2.3. Section Officer (LF – I)

Department Finance Department

Unit / Wing Local Finance Wing

Location Karachi

Type Permanent

Job Title Section Officer (LF-I)

Responsible to Deputy Secretary

Responsible for Not Applicable

Job Description (1) Prepare release orders as per the defined budget approved by the
Government of Sindh of OZT shares to KMC, District Councils, and
Union Councils / Committees;
(2) Responsible for examining the grant proposal summary, perform
analysis and provide recommendation on reasonability of the proposal;
(3) Responsible for preparation of release order of the grant proposal and
authentication of the audit copy received from Local Government
Department being concerned Administrative Department of Local
Councils;
(4) Responsible for arranging data that is requested by PFC committee
such as population, geographical data, financial data etc. as per
instructions from Finance Secretary; and
(5) Perform any other task assigned by the DS.

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Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

2.4. Section Officer (LF – II)

Department Finance Department

Unit / Wing Local Finance Wing

Location Karachi

Type Permanent

Job Title Section Officer (LF-II)

Responsible to Deputy Secretary

Responsible for Not Applicable

Job Description (1) Prepare release orders as per the defined budget approved by the
Government of Sindh relating to OZT Municipal Corporations,
Municipal Committees, KMC, DMCs, District, and Town Committees;
(2) Make deductions of audit fees from the local council share from the
OZT shares;
(3) Deal with electricity deduction plans in the shape of instalments from
the OZT shares of Local` Councils;
(4) Responsible for examining the grant proposal summary, perform
analysis and provide suggestion on reasonability of the proposal;
(5) Responsible for the preparation of release order of the grant and
authentication of the audit copy received from Local Government
Department being concerned Administrative Department of Local
Councils; and
(6) Perform any other task assigned by the DS.

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23 December 2020
Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

E. Standard operating procedures (SOPs)

1. PFC Secretariat Management
1.1. PFC secretariat management

a) Introduction2

(1) Provincial Finance Commission is an apex body at the provincial level, headed by the Finance
Minister, and it has the mandate to determine the amount to be transferred by the provincial
government to the Local Councils in the wake of functional assignments entrusted to them and
to make its equitable and objective distribution among the various tiers of the Local Councils.
(2) The composition of PFC is defined under the Sindh Local Government Act, 2013. The
composition is as follows:
(a) Minister for Finance who shall be the Chairperson;
(b) Minister for Local Government who shall be the Co-Chairperson;
(c) Two members of the Provincial Assembly of the Sindh, each nominated by the Leader
of the House and the Leader of the Opposition;
(d) Secretary to the Government of Sindh, Finance Department;
(e) Secretary to the Government of Sindh, Planning and Development Department;
(f) Secretary to Government of Sindh, Local Government;
(g) A Mayor of a Metropolitan Corporation;
(h) A Mayor of a Corporation to be nominated by Government;
(i) A Chairman of a District Council to be nominated by Government;
(j) A Chairman of a Municipal Committee to be nominated by Government; and
(k) Two professional members from the private sector to be nominated by Government on
such terms and conditions as may be prescribed.
(3) Under the Sindh Local Government Act 2013, PFC performs the following actions:
(a) Determines obligatory and priority expenditures of Local Councils and formulation of
divisible pool for distribution of resources;
(b) Recommend criteria and formula for vertical distribution of resources between Provincial
Government and Local Councils i.e. determination of provincial retained and allocable
amount;
(c) Approve fiscal distribution criteria / formula and mechanism for horizontal distribution
between LCs of the allocable amount;
(d) Correcting inter-regional disparities by means of equalization grants from Provincial
Government to economically weaker LCs subject to availability of resources;
(e) Any other matters relating to finance referred to the commission by CM; and

2
Internal Audit Manual, Finance Department– Government of Sindh
2
Sindh Local Government Act, 2013

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(f) Furnish its recommendations to the CM for his consideration and approval.

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b) Process flow

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Notes

1.1: Section Officer prepares summary for formation of Provincial Finance Commission. The
summary is submitted to Finance Secretary for review and then submitted to Chief Minister (CM)
through the Chief Secretary. CM finalizes the name of the members and forwards the same to
Services General, Admin & Coordination Department (SGA&CD) for notification.
1.4: After receiving notification from SGA&CD regarding the PFC notified by the Chief Minister,
SO initiates internal working on preparation of relevant data required by the PFC technical member
such as current distribution share, detail of councils, etc. and submits it to the technical member.
1.7: Technical member of the committee prepares draft proposal based on the data provided by the
SO. The proposal is internally discussed with the Finance Secretary before submission to the PFC.
1.9: Section Officer arranges meeting of PFC to discuss the draft proposal.
1.12: After finalization of PFC proposal in PFC meeting, a notification is issued and communicated
by the concerned SO to all concerned departments, including the IT cell for recording purposes.

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7th May, 2021

c) List of outputs / reports

S. Responsible to
Output / Report Frequency End User(s)
No. initiate

Administrative
Notification of PFC As and when Departments; and
1. Section Officer
Proposal required
IT Cell

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7th May, 2021

2. Local Body Funds

2.1. Review, scrutiny and approval of grant proposal from local bodies

a) Introduction3

(1) Local Councils of Sindh may also submit special grant request / proposal to the Local Finance
Wing through the Local Government Department being concerned Administrative Department
of Local Councils for additional funds required to meet expenditures of the Local Councils. In
addition to existing regular grant, Special grant may be requested in the following cases:
(a) Weak financial position of Local Council;
(b) In case of an emergency situation (natural disaster).
(2) Section Officer of Local Finance Wing receives and reviews the grant request from respective
Local Council through Local Government Department. After reviewing, the same is forwarded
to the Finance Secretary along with summary through DS, AFS and SFS (B&E). After review
of Finance Secretary, summary is submitted to the honorable Chief Minister of Sindh through
the Chief Secretary for approval. After obtaining CM’s approval on funds grant summary, the
Local Finance Wing prepares the funds release order and forwards the same at the disposal of
Secretary Local Government Department being concerned Administrative Department of
Local Councils for further proceedings.

3
Internal Audit Manual, Finance Department – Government of Sindh

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b) Process flow

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7th May, 2021

Notes

1.1: Section Officer reviews the grant proposal received from Local Councils. Review of proposal
includes examining the reasonability of the grant requested based on the allocated budget to such
Local Council, preparing analysis on grant requested and regular amount releases to such local
council and providing suggestions which may include recommending reasonable amount, rejection
of proposal, etc. Proposal along with the note sheet is sent to FS for approval through DS, AFS, SFS
(B&E) who reviews and provides recommendation on such proposal.
1.7: The grant proposal summary is then submitted to Chief Minister through the Chief Secretary for
final approval.
1.13: After receiving the approved summary from CM, Section Officer prepares the release order and
submits it to the Local Government Department being concerned Administrative Department of
Local Councils for further disbursement to Local Councils.
1.14: Section Officer receives the audit copy from Local Government Department being concerned
Administrative Department for the authentication of release order, Concerned SO prepares the noting
on such audit copy and obtains the authentication from SFS (B&E) with the approval of FS on such
release order and sent back to the Local Government Department.

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7th May, 2021

c) List of outputs / reports

Responsible to
S. No. Output / Report Frequency End User(s)
initiate

Release Order
1. (Through State Section Officer As and when required Local Council
Bank of Pakistan)4

4
Refer to “section F annexure 2 b” for release order (through state bank of Pakistan) format

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7th May, 2021

2.2. Disbursement of funds to local bodies

a) Introduction

(1) Local Finance Wing releases monthly OZT share to the local bodies. The monthly OZT share
of each council is fixed and is determined on the basis of criteria proposed by the Provincial
Finance Commission and approval accorded by the honorable Chief Minister Sindh. Before the
issuance of monthly release order by 5th of every month, Section Officer add up comments
with draft release order which are channeled through the determined hierarchal order and once
the approval is provided, the release order is issued.
(2) The monthly OZT share and regular grant is released through State Bank of Pakistan which
then further disburses into Sindh Bank account of concerned Local Council. Special grant
approved by the Chief Minister is released at the disposal of Secretary Local Government being
concerned Administrative Department of Local Councils.

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7th May, 2021

b) Process flow

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Notes

1.1: Section Officer prepares the draft release order based on the monthly Octroi and Zila Tax (OZT)
share file, which is specified in the Provincial Financial Commission notification, after making all
the necessary deductions (such as audit fees, electricity deductions, etc.) as per the direction of the
Finance Minister. Concerned Section Officer obtains approval on the draft order from Finance
Secretary through Deputy Secretary, Additional Finance Secretary and Special Finance Secretary
(B&E) for their remarks on the draft release order.
1.15: After obtaining approval from Finance Secretary, approved order is placed and released through
two channels:
(i) Through Secretary Local Government; Special / One Time grant is placed and released to Local
Councils through at the disposal of the Secretary Local Government, Concerned SO issues the release
order at the disposal of Secretary Local Government for further proceedings; and
(ii) Directly Through State Bank of Pakistan; Regular grant is placed and released to Local
Councils directly through the State Bank of Pakistan, Concerned SO issues the release order directly
through the State Bank for further proceedings.

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Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

c) List of outputs / reports

Responsible to
S. No. Output / Report Frequency End User(s)
initiate

Local Finance
1. Monthly OZT Share5 Monthly Local Finance Wing
Wing

Release Order
Local Finance
2. (Through State Bank Monthly Local Council
Wing
of Pakistan)6

Release Order
Local Finance Monthly / One
3. (Disposal of Secretary Local Council
Wing Time
Local Government)7

5
Refer to “section F annexure 2 a” for a monthly OZT share file format
6
Refer to “section F annexure 2 b” for a release order (through state bank of Pakistan) format
7
Refer to “section F annexure 2 b” for a release order (at the disposal of secretary local government) format

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7th May, 2021

3. Response on Audit Report(s)

3.1. Response on audit observation and recommendation

a) Introduction

(1) Once the audit (internal audit, external audit, third party validation and other special
assignment) of Local Finance Wing is completed, including the field work, Additional Finance
Secretary receives the audit report for management comments and tentative implementation
date for recommendation.
(2) Additional Financial Secretary assigns task to Deputy Secretary for compliance of observations
reported and to ensure follow up is made for each unresolved observation. Comments are
prepared and implementation date is ascertained after internal discussions.

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7th May, 2021

b) Process flow

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Notes

1.1: Additional Finance Secretary receives the audit report of Local Finance Wing from auditor(s).
The audit may include internal audit, external audit, third party validation and any other special
assignment.
1.4: Deputy Secretary prepares the management response. The management comments include the
comments / response and targeted date of implementation of audit recommendations against each
observation.
1.6: Additional Finance Secretary submits the audit responses to respective auditor(s) with copy to
Finance Secretary.
1.8: In case of any disagreement / query, AFS may discuss the same with the auditor.

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Revision Date:
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7th May, 2021

c) List of outputs / reports

Responsible to
S. No. Output / Report Frequency End User(s)
initiate

Management Additional Finance

1. As and when required Auditor(s)
Responses Secretary

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7th May, 2021

3.2. Implementation of audit recommendation

a) Introduction

(1) Once all the identified audit observations and recommendation during the audit are finalized, a
final audit report is received by the Additional Finance Secretary. The Additional Finance
Secretary assigns the Deputy Secretary to act upon the audit recommendations and implement
those applicable to Local Finance Wing before the follow-up audit is conducted on audit
recommendations by the Auditors.
(2) The nature, frequency and timing of follow-up is dependent on many factors, including the type
of audit report issued and the relationship which exists between auditor and management.
Management may be asked to provide written responses to each reported audit issue along with
time frames. There can also be a requirement that certain categories of findings must be
resolved within a certain time frame.

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7th May, 2021

b) Process flow

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Notes

1.3: Deputy Secretary implements the audit recommendations as per the targeted date of
implementation agreed.
1.4: Deputy Secretary prepares the implementation status of audit recommendations. The status
includes:
• Recommendation implemented;
• Recommendation not implemented; and
• Targeted date for not implemented recommendations.
1.8: Additional Finance Secretary responds to the follow up letter received from auditor(s). The
response prepared by the Deputy Secretary includes the status of implementation of auditor’s
recommendation and sufficient and appropriate evidences against the actions taken on audit
recommendations with copy to Finance Secretary.

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Revision Date:
Rev. No. 2.00 Local Finance Wing – Finance Department
7th May, 2021

c) List of outputs / reports

S. No. Output / Report Responsible to initiate Frequency End User(s)

Implementation
As and when
1. Status of Audit Deputy Secretary Auditor(s)
required
Observations

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F. Annexure
1. List of outputs / reports

S. Output / Responsible Reference

Frequency End User(s) Source
No. Report to initiate in SOPs

Administrative
As and Departments;
Notification of Section PFC No defined
1. when and
PFC Proposal Officer Proposal format
required
IT Cell

Monthly OZT Section PFC Annexure 2

2. Monthly LFW
Share Officer Share (a)

Release Order
Section PFC Annexure 2
3. (Through State Monthly Local Council
Officer Share (b)
Bank)

Release Order
(Disposal of Section Monthly / PFC Annexure 2
4. Local Council
Secretary Local Officer One Time Share (c)
Government)

Additional As and
Management Audit No defined
5. Finance when Auditor(s)
Responses Report format
Secretary required

Implementation As and
Deputy Audit No defined
6. Status of Audit when Auditor(s)
Secretary Report format
Observations required

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Revision Date:
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7th May, 2021

2. Formats / contents of various forms / reports mentioned in the SOPs

manual
a) Monthly Octroi and Zila Tax (OZT) Share

Through Special Messenger

T.C.S / U.M.S.

The Accountant General Sindh,

Karachi.
SUBJECT: Release of Funds in Favor of District Council Karachi, Municipal Corporations,
District Municipal Corporations and Municipal / Town Committees on Account
Of O.Z.T Share for the Month of .

I am directed to convey the sanction of Government of Sindh to release of funds

amounting to Rs. ____(Rupees ________(Only) for the month of ________.
On account of Octroi and Zila Tax, to the following Local Councils in Sindh, as per share shown
against each Council.

Name of Local Council in Funds to be

S. No Sindh Bank Accounts
Sindh Released
1 2 3 4
I District
1
2
3

Section Officer (LF-II)

For Secretary to Govt. of
Sindh
A copy is forwarded to the Director, BSC (Bank), State Bank of Pakistan, Karachi with a
request to kindly credit the amount of Rs. ________(Rupees ________Only) as mentioned against
District Council Karachi / DMCs / Municipal / Town Committees Local Fund account numbers of each
Council being maintained in the Sindh Bank Ltd. through contra debit to Provincial Government
Account No. I
Section Officer (LF-II)
For Secretary to Govt. of
Sindh

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7th May, 2021

b) Release Order (through State Bank of Pakistan) format

Monthly Regular Grant Being Released to Local Councils in Sindh (Through State Bank of
Pakistan)

S. No Name of Local Council

1 2

II

III

IV

VI

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c) Release Order (Disposal of Secretary Local Government) format

At the Disposal of Secretary Local Government Department

Subject: Release of Funds in Respect of ________on Account Of Payment Of Salaries of The Staff
of Sanitation of ________ Department of DMC South & East, Karachi, for the Month of
____________.

1. The Secretary to Government of Sindh, Local Government & HTP Department, Karachi,
may kindly refer to the subject noted above.
2. Finance Department agrees to release of funds amounting to Rs. ________(Rupees
________only) for the month of ________in favor of ________ for payment of salaries to the
employees borrowed from DMC South and East, Karachi, who are working under ________.
The above amount is placed at the disposal of Secretary to Government of Sindh, Local
Government & HTP Department, Karachi, for disbursement to ________, Karachi, subject to
completion of all necessary codal formalities.
3. The expenditure involved has been sanctioned against budgetary allocation 2020-21 under the head
of account “TMAs (Tehsils, Towns and Unions) Grants to Local Bodies in Sindh________- Local
Bodies”.
4. Audit copy of financial sanction, duly signed by the Administrative Secretary / Principal
Accounting Officer, may kindly be sent to the undersigned for necessary authentication.

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