BACKGROUND

 The institution of budget originated in the West.

 In the days of absolute monarchy, treasury was controlled by the king.
 The struggle for representative government in England began with the right to control
budget.
 ‘No budget without representation was the concern raised. The right to control
expenditure through appropriation was asserted.
 The executive was required to produce for the approval of the parliament every year a
complete plan of income and expenditure.
 The budget was document of future plans of government and that expenditure was done
to address public needs.
 There was no better way of asserting control than to require the government to submit a
comprehensive plan for the approval of the legislature showing how much money is
needed for any one year and how they propose to raise and spend it. This plan was
called ‘budget’.
The Budget as a Policy Tool;

The Budget as a Managerial Tool;

LINE ITEM BUDGETING
 Simplest form of budgeting, this approach links the inputs of the
system to the system.
 Typically appear in the form of accounting documents that
express minimal information regarding purpose or an explicit
object within the system.
 Most popular among local governments, given its relative
simplicity.
 Illustrates where public money will be spent item by item.
 The amount that will be spent is clearly defined to keep
spending under control.
 Simple tool for keeping tabs on where money goes, ensuring
that funds are spent appropriately.
 Personnel costs, office supplies, and the like are projected each
year and are lined up beneath one another.
Line Item Budgeting
 Expressed in terms of the kinds and quantities of
goods and services to be purchased
 Keep expenditure within the amounts approved for
each object
Line Item Budgeting
Strengths:
 Effective in ensuring financial control
 Adequate basis for allocating limited resources at a
time when Government activities were limited
Line Item Budgeting
Limitations:
 Rigid, unable to cope with
 rapidly changing priorities and circumstances
 creation of new government services
 Budget evaluation mechanism difficult without
mechanism to link “things to be bought” with “things
to be done”
Line Item Budgeting
Limitations:
 New budgets based on previous budget with
increments for price increases
 no evaluation of whether objectives are still met or cost-
effective
 PERFORMANCE BUDGETING
 Attempts to solve decision making problems based on a
programs ability to convert inputs to outputs and/or use
inputs to affect certain outcomes.
 Performance may be judged by a certain program's ability
to meet certain objectives that contribute to a more abstract
goal as calculated by that program's ability to use resources
(or inputs) efficiently—by linking inputs to outputs
 A decision making—or allocation of scarce resources—
problem is solved by determining which project maximizes
efficiency and efficacy.
 PERFORMANCE BUDGETING
 Commonly used by the government to show the
link between the funds provided to the public and
the outcome of these services.
 Allocation of funds and resources are based on
their potential results.
 Place priority on employees' commitment to
produce positive results, particularly in the public
sector.
 Reflects the input of resources and the output of
services for each unit of an organization.
PERFORMANCE BUDGETING
 Key elements:
 Pre-specification of outputs and performance targets
 Output-based funding allocations
 Granting financial and personnel management flexibility
 Ministries and departments operated as Autonomous
Agencies

11
PERFORMANCE BUDGETING
 Strengths:
 Budget based on outputs
 Emphasis on performance and results
 Greater autonomy and flexibility
 Greater accountability
 Departments more aware of outputs and cost of producing
outputs
 Puts decisions on deployment of resources in the hands of
people at operations

12
PERFORMANCE BUDGETING
 Shortcomings:
 No clear link to desired outcomes
 Lack of focus on processes
 Does not address need for sustained superior
performance and results
 With tighter fiscal position, need for greater emphasis on
inter-ministry allocations

13
PROGRAM BUDGETING
 Program Budgeting takes a normative approach
to budgeting in that decision making—allocating
resources—is determined by the funding of one
program instead of another based on what that
program offers.
Programme Budgeting
Strengths:
 Greater awareness of goals to be achieved
 More flexible than Line Item Budgeting
 gradually relaxed transfer of budgets between objects of
expenditures and between activities/programmes
Programme Budgeting
Limitations:
 With the expansion of existing programmes and the
introduction of new ones, there was no mechanism to
ensure that the overall expenditure would not outgrow
revenue collection.
PLANNING PROGRAMMING BUDGETING (PPB)

 Performance budgeting emphasized work plans, but not in the context

of comprehensive, long range planning of all government policies and
activities.
 It did not concentrate on reconsideration of goals and determination of
policies, rather, on defining the work to be accomplished to carry out
existing agency objectives.
 Planning-programming-budgeting (PPB), an innovation of the 1960s,
was an attempt to integrate budgeting with overall planning for the
government as a whole, and to make the planning, execution and
evaluation of government policies as rational as possible.
 PPB has its roots in industry, where it was practiced by General Motors
as early as 1924.
ZERO-BASE BUDGETING
 Starts from a "zero base" and every function within
an organization is analyzed for its needs and costs.
 Budgets are then built around what is needed for
the upcoming period.
 All expenses must be justified for each new period.
 All departments must defend their programs and
consequently their level of funding each year.
 Department head must demonstrate how different
levels of funding would impact the delivery of a
given program’s services.
ZERO-BASE BUDGETING
 Zero-based budgeting is a response to an
incremental decision making process whereby the
budget of a given fiscal year (FY) is largely
decided upon by the existing budget of FY-1.
 In contrast to incrementalism, the allocation of
scarce resources—funding—is determined from a
zero-sum accounting method.
 In government, each function of a department's
section proposes certain objectives that relate to
some goal the section could achieve if
allocated x dollars.
DISSENSUS BUDGETING
 BUDGET TYPES (Line Item, Program)
Purpose?
Conditions for
  Central Question? Characterstics Central Actors Strengths Weaknesses
Success
Problem to be solved?

Accountants and Works well when

Not good for
Financial accountability central office time is short ,
dealing with
Is the money being Focus is on past, with budget managers Minimum amount of there is
Line questions of
spent according to last year as the "base" interested in staff time and considerable
Item/Object efficiency,
intention? Use of formulas, like balancing the expertise I needed to complexity,
Type/Inerame effectiveness,
Preventing "fair share" to balance budget. craete and track the multiple
ntalism future &/or
misappropriation of the budget Constituency budget stakeholders, and
neglected
funds. advocates in the high potenial for
concerns
legislature conflict

Provides clear
Program accountability Focus is on program linkage between Requires
Requires the
plans, goals and program activities considerable
Program resources necessary
Is the program achieving objectives. Program managers and budget investment of
Budgeting to develop program
its goals and objectives? & program analysis allocation resources
(PPBS) plans, goals and
Requires budgeting to a Links parts to High potential for
objectives
Program effectiveness plan. whole and conflicts
present to future
 BUDGET TYPES (Performance , ZBB)
Purpose?
  Central Question?Problem Characterstics Central Actors Conditions for Success Strengths Weaknesses
to be solved?

Requires considerable
Program efficiency/ Time-consuming
Measurements are resources to develop
effectiveness Provides and expensive
created for First line reliable measures.
Is the program cost- objective ways of High potential for
Performance workload activities, supervisors and Require time to
effective? Is the program documenting resistance because
Budgeting effeciency of street level develop confidence of
effective accomplishment of fear of measures
resource allocation bureaucrats those needed to create
Measures of what is being s being used to
and effectiveness performance
accomplished penalize
measures.

Priority & appropriateness Provides Places a high

of what is and should be opportunity for burden on
Depending on
done. Systemetic re- Requires considerable existing organizational
the primary locus
What should we be doing? examination of time and resources to assumptions and resources.
Zero Based of the authority,
Are we giving appropriate some portion of re-examine activities activities to be Is threatening,
Budgeting ZBB can be
priority to current current program from the ground up. re-examined usually creating
(ZBB) done at any and
programs/activities? activitiesfrom the Requires self-confident Provides resistance .
at alla levels of
Deciding weather to ground up. staff & managers opperuity to Difficult to achieve
organization
contnue doing what has reallocate comparability acros
been done in the past resources organization units.
Annual Budget Statement
 Every year the Federal Government prepares a budget statement which shows
estimated receipts and expenditure of the government. This is called ‘Annual
Budget Statement’
a) To meet expenditure described by the Constitution as expenditure charged
upon the Federal Consolidated Fund
b) The sums required to meet the other expenditure proposed to be made from
the Fund
 ‘Charged expenditure’: include the salary of President and expenditures relating
to his office, salary of Judges, chief election commissioner, Chairman and
deputy Chairman Senate, repayment of loans.
 Charged expenditure are put before the assembly and discussed but these are
not voted by the Assembly.
 By voting it means these do not required approval of Assembly.
Budget Preparation
 The major responsibility of preparation of Annual Budget rest with
Ministry of Finance.
 The ministries/departments/ autonomous bodies are asked by the
ministry of Finance in October every year to submit their estimates for
the budget of the following year.
 Each ministry/department and autonomous body submits its budget
estimates.
 It may be mentioned that the financial year begins 1st July and ends
30th June and the budget estimates are for this period.
 All budget estimates are prepared and finalized before 30th May as the
Budget is presented to the National Assembly by the Finance Minister in
the middle of June to be voted.
 Budget Preparation
 When the Ministry of Finance sends ‘Budget Call’ in October, separate estimates are
prepared for:
1. Receipts of the organization.
2. Non development expenditure to be incurred in financial year.
3. Development expenditure to be incurred in financial year.
 Following details have to be given by the government about receipts:
i. Main heads of revenue: i.e. what are the major sources of income?
ii. Capital Receipt: what are the major sources of capital income?
iii. Foreign aid: any income from foreign aid.
iv. Debt, deposits and remittances: whether these are any debt to be paid, deposits of
the organization or remittance from abroad.
4. Development expenditure: is the expenditure on new projects, equipment, etc.
5. Non development expenditure: it is the recurring expenditure which includes salaries of the
staff, payment of utilities, day-to-day expenditure in running of the organization, etc.
THE BUDGET DOCUMENTS
 BUDGET SPEECH OF THE FINANCE MINISTER
(Without Tax Proposals)
 BUDGET SPEECH OF THE FINANCE MINISTER
(With Tax Proposals)
 DETAILS OF DEMANDS FOR GRANTS AND APPROPRIATIONS
(Pink Book)
 DEMANDS FOR GRANTS AND APPROPRIATIONS
 BUDGET IN BRIEF
THE BUDGET DOCUMENTS

• ANNUAL BUDGET STATEMENT

• EXPLANATORY MEMORANDUM OF THE BUDGET

• SCHEDULE OF AUTHORISED EXPENDITURE

• SUPPLEMENTARY DEMANDS FOR GRANTS AND APPROPRIATIONS

• ESTIMATES OF FOREIGN ASSISTANCE

• BUDGET AT A GLANCE
 Budget Surplus
 Budget Surplus = Savings
 A company's or individual's income exceeds its
expenditures over a particular period of time.
 The amount by which government revenues exceed
government spending.
 A surplus is considered a sign that government is being
run efficiently.
 Used to pay off debt, save for the future, or to make a
desired purchase that has been delayed.
 Budget Deficit
 Budget Deficit = Shortfall
 A company’s or individual's liabilities exceeds its assets
over a particular period of time.
 The amount by which government spending exceeds
income in any one fiscal year.
 Financed by borrowing money and paying interest on the
borrowed funds.
 Program Spending
Discretionary Spending
Programs that are deem discretionary must have
funding approved each year.
 i.e. Defense, Education, and Housing

Entitlement Spending
Funding for entitlement programs are mandated by law.
 i.e. Social Security and Medicare
BUDGET 2016-17 {SALIAT FETURES}
 Total outlay of the budget is Rs. 4894.9 billion
 10% higher than the budget 2015-16
 Resources available estimated 4442 billion (2016-17)
 Resources available estimated 4168.3 billion (2015-16)
 Net revenue receipts estimated 2779.7 billion (2016-17)
 12.8% over the budget 2015-16
 Provincial share in taxes 2135.9 billion (2016-17)
 15.5% over the budget 2015-16
 Net Capital receipts estimated 453.6 billion (2016-17)
 Net Capital receipts 606.3 billion (2015-16)
BUDGET 2016-17 {SALIAT FETURES}
 External receipts estimated Rs. 819.6 billion (2016-17)
 Increase of 9.1% from budget 2015-2016
 Overall expenditure estimated 4894.9 billion (2016-17)
 Current expenditure : 3844 billion
 Development Expenditure : 1050.9 billion
 Share of current expenditure in budgetary outlay is 78.5%
 Expenditure on general public service is estimated 2707.2
billion (70.4% of current expenditure)
 Development expenditure outside PSDP 156.6 billion
THANK YOU
 RULES OF PROCEDURE AND CONDUCT OF
BUSINESS IN THE NATIONAL ASSEMBLY ON
FINANCIAL MATTERS (EXCERPTS FROM THE “RULES
OF PROCEDURE AND CONDUCT OF BUSINESS IN
THE NATIONAL ASSEMBLY – 1992”) 163.
BUDGET
• PRESENTATION OF THE BUDGET
• NO DISCUSSION ON THE DAY OF PRESENTATION
• STAGES OF DISCUSSION OF THE BUDGET
• ALLOTMENT OF DAYS
• GENERAL DISCUSSION ON THE BUDGET
• CUT MOTIONS
• CONDITIONS FOR ADMISSIBILITY OF CUT-MOTION
• SPEAKER TO DECIDE ADMISSIBILITY OF CUT MOTION
• NOTICE OF CUT-MOTIONS
• AMENDMENT TO CUT-MOTION
• VOTING ON DEMANDS FOR GRANTS
• SCHEDULE OF AUTHORIZED EXPENDITURE
• PROCEDURE FOR DEALING WITH SUPPLEMENTARY AND
EXCESS DEMANDS
 Financial Accountability Cycle

Funds
authorization

Line Departments
MOF/Legislature
AGP

Audit Report Execution

CGA
Financial
Reporting
 Budget—a Planning & Control Model
 To achieve objectives set by management, two basic
management functions are to be performed:
 Planning, and
 Controlling

 There can be no controlling without planning.

 Planning provides the foundation upon which the

control function operates.

 Effective planning is based on facts collected & analyzed.

Statutory Provisions & Terms Used in
Connection with Budgeting

 Article 78 to 88—Financial Procedures of the Federal

Government.

 118 to 127—For Provincial Governments

 LGO 2000—District Governments

 Consolidated Fund

 Vs

 Public Account
 Consolidated Fund
 Article 78/118, Consolidated Fund is:
 All revenues received by the
Federal/Provincial Government
 All loans raised/received, and
 All money received in repayment of any loan
Consolidated Fund & Public Account

 Public Account is:

 All other moneys received by or on behalf of
the Federal/Provincial government or received
or deposited with the Supreme/High Court or
any other court established under the
authority of the Federation/Province
 Charged Expenditure
 Remuneration payable to:
 the President & other expenditure relating to
his/her office.
 Judges of the Supreme Court
 The Chief Election Commissioner
 The Chairman & Dy. Chairman of the Senate
 The Speaker & Dy. Speaker
 The Auditor General
 Wafaqi Muhtasib
 Officers and servants of the Supreme Court,
Auditor General, CEC, Secretariats of the Senate &
NA.
 Debt Servicing Charges.
 Sums required to satisfy any judgment, decree
or award against Pakistan by any court or
tribunal
 Sums required for making loans to the
Provinces & and making grant-in-aid by an
Order of the President.
 Any other sums declared by the Constitution or
by Act of Parliament to be so charged.
 Preparation
Preparation
Policy
Policy
Formulation
Formulation
Authorization
Authorization

BUDGET
CYCLE
Review
Review

Reporting
Reporting
and
and Implementation
Implementation
Monitoring
Monitoring
 Budget—A Constitutional Requirement
Article: 80 & Article 120
 The Annual Budget Statement— according to the
constitutional requirements.
 To show separately ‘charged’ and ‘voted’ expenditures.
 To distinguish between ‘current’ and ‘development’
expenditures.
 Prescribed format; i.e. separate estimates for
 development and
 non-development expenditure.
The details to be provided by grant number and according to
the object and functional classification as per Chart of
Accounts.
 The Secretary of the department/division is the
“Principal Accounting Officer (PAO)”.

 At District level, DCO is the PAO.

 The PAO is responsible to:

 plan,
 manage,
 control and
 execute the budget relating to his ministry/division
(GFR ; Rule 88).
 REVISED ESTIMATES
The Revised Estimates are prepared by the Head of
Departments by obtaining the required information
from the concerned Drawing and Disbursing
Officers and Controlling Officers.

Revised Estimate =
First 04 months Actual Expenditure for the current
FY +
Last 08 months Actual Expenditure for the
Previous FY.
 RE-APPROPRIATION

 Ministries/Divisions/Departments have been

delegated full powers for re-appropriation except
Employees Related Expenses, Telephone, utilities
and rent.

 Re-appropriation from restricted heads is made

with the approval of Finance Division/Departments.
SURRENDER OF ANTICIPATED SAVINGS

The saving may be due to one or more or the following

causes, which may be surrendered to concerned Finance
Department before 30th April:-
1. Actual postponement of expenditure;
2. Real savings due to economy; and
3. Original over-estimation.
RELEASE OF DEVELOPMENT FUNDS

 At the commencement of financial year a Cash

Flow Plan based on the Work Plan of the project
is prepared by Division/ Departments
concerned.

 Releases are made for approved projects only

in accordance with the Cash Plan of the
projects.
Financial Management Overview
 Non Salary & development budgets are
released on quarterly basis according to the PFC
Award/formula.

 Salary Budget and OZT are released on monthly

basis as per expenditure flow and resource flow.
The Federal Consolidated Fund
 The Federal Consolidated Fund is a Fund of government that
contains all revenues received by the federal government, all loans
and all money received in return of repayment of loans .
 Article 78 of the Constitution of Pakistan explains the Federal
Consolidated Fund.
 The payment of money into the fund, the withdrawal of money, the
custody of other money etc. are regulated by the Act of Parliament.
 All expenditures that are to be incurred are incurred with the
approval of Parliament.
 The Annual Budget of the Federal government is to be presented
before parliament.
National Finance Commission (NFC)
 According to the Constitution of Pakistan (1973) Article 160 (1) , NFC is
constituted.
 The NFC is a temporary body that decides criteria on the basis of which
the taxes collected by the Federal Government are distributed between
Federation and Provinces and among provinces.
 Following are excerpts of the constitution:
“within six months of the commencing day and thereafter at intervals not
exceeding five years, the President shall constitute a National Finance
Commission consisting”: the Minister of Finance of the federal
Government, the Minister of Finance of Provincial Governments, and
such other persons as my be appointed by the President after
consultation with the Governors of the Provinces”.
 Article 160 (2) states following taxes to be part of “divisible pool”:
i) Taxes on income, including corporation tax, but not including taxes on income
consisting
of remuneration paid out of the Federal Consolidated Fund;
ii) Taxes on the sales and purchases of goods imported, exported, produced,
manufactured or consumed;
iii) Export duties on cotton, and such other export duties as may be specified by
the President;
iv) Such duties of excise as may be specified by the President; and
v) Such other taxes as may be specified by the President.
 The above taxes form the “Divisible Pool” i.e. “Pool” from which money is
shared between Federation and provinces.
Criteria of Vertical Resource Distribution
 From the Divisible Pool the resources are shared between
Federation and provinces.
 This is called Vertical resource distribution. It is distribution of
resources from the federal government to the provincial
governments from the divisible pool.
 It is based on three factors: defence, debt servicing and social
action program.
 The Federal Government using these criteria gives 37.55% to
the provinces and retains the rest with itself for running its
expenditure.
Criteria of Horizontal Resource Distribution

 Horizontal resource distribution is distribution of the

37.55% amongst the provinces.
 The criteria used are ‘Population’.
 The use of these criteria is debatable.
 There is general lack of agreement on these criteria
Multiple Criteria
 Since the criteria used in horizontal distribution is population. Balochistan,
NWFP and Sindh disagree to the criteria. Because according to them Punjab
has largest population.
 Punjab maximum advantage from these criteria. Accordingly it is suggested that
multiple criteria should be used.
 The multiple criteria are:
- Population
- Distance of per capita income
- Area
- Index of infrastructure
- Tax effort
 Countries that have federal structure use multiple criteria.
Salient Features of 7th NFC Award 2010
 1. Size of Divisible Pool:
As a consequence size of Divisible Pool enhanced by Rs. 68 billion.
Share of Provinces was approximately Rs.39 billion.
Collection charges decreased from 5.2% to 1%.
 2. Vertical Distribution
-Provincial share increased from 48.75% to 56% in the first year.
-The provincial share would increased to 57.5% after the first year.
 3. Horizontal Distribution
-Multiple criterion have been set for distribution of share among the Provinces.
1. Population               82%
2. Poverty              10.30%
3. Revenue               5.00%
4. IPD (Inverse Population Density)     2.70%
Salient Features of 7th NFC Award 2010
 4. Province Wise Weightages
1. Punjab                  51.74 %
2. Sindh                       24.55 % ,
3. Khayber Pakhtonkhwa   14.62 %
4. Balochistan               9.09 %

 5. GST on Services
- Federal Government recognized that the Sales Tax on Services
is a Provincial subject. NFC decided that it might be collected by
Provinces if so desired
- Provinces will gain Rs. 30 billion as a result of this decision.
 Salient Features of 7th NFC Award 2010
 6. Gas Development Surcharge
- On account of GDS - Balochistan     28.7 percent,
- KP         3.0 percent, - Punjab     7.8 percent
- Sindh     60.4 percent.
- Loss of royalty to Balochistan is about Rs 2 billion which will be compensated through
generating additional revenue of Rs 1.8 billion under the revised formula. (10 %)
 7. Relief Measures for KP and Balochistan
- KP  NFC recognized the role of KP as front line province against War on Terror
- Federal Government to bear all expenditure
- 1 % of net proceeds of Divisible Pool ear-marked for KP
- Balochistan ,As the most under-developed province of Pakistan and having peculiar
geographic and economic characteristics, Balochistan needed special attention of
NFC. In the horizontal distribution, its provincial pool has been increased to 9.09%
(approximately twice the 2009-10 Divisible Pool transfers). Moreover, Federal
Government has promised to cover any short fall due to lower federal revenues.
Resources—Federal level

i tu y
or

s
T

re
at
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nd
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pe
n- ts ht

Ex
Re Ta ig
v. x t ra ers— ,
S sf
a n lt i es l
Tr oya yde
R t H ts
Loans Ne rofi
P
Resources
Resources
ties
== Divisible
Divisible
yal
Ro
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Pool
l
Re pi ta

Hy ts
l
de
ip
Ca

its
ce

of
Pr
Divisible Pool

As per
As per NFC
NFC Award
Award

Provincial Shares
Provincial Shares
Share of Provinces out of Divisible Pool
Percentage share of Provinces out of divisible pool is as follows:

 Financial Year % Share

 2006-07 41.50
 2007-08 42.50
 2008-09 43.75
 2009-10 45.00
 2010-11 & onward 46.25
Ratio of Provincial Resources coming
from Federal Government = 90%
Ne
tH
Pr yd ry
Ro of e a t o
on ya it l b li g
itu re
o n d
Pe G ltie p e
t ro a s s Ex
le &
um
Loans Province
Province
1/6th of
Sales tax Resources
Resources
== Provincial
Provincial
in ce
rov from Divisible Pool
Pool
P re
a Divisible
Sh NFC
R t o rn m
ei n
en ve
ec w
s
pt
Go
 PROVINCIAL OBLIGATORY EXPENDITURE

 Debt Servicing including payment of the

principle amount of loans
 Pension
 Subsidy on Wheat
 Contribution to G.P. Fund and Pension Fund
 Charged expenditure of the Governor House
Provincial Assembly and High Court
PROVINCIAL FINANCE COMMISSION

LOCAL GOVERNMENT ORDINANCE – 2001

Chapter XII-A of the Local Government Ordinance,

2001, provides for composition of PFC and its
functions, duties and powers. Originally PFC was
constituted in 2002 then, reconstituted in 2006 in
accordance with Section 120-B of the Ordinance.
 Provincial Divisible Pool

40% to
40% to Provincial
Provincial
Government
Government

60% to
60% to Districts
Districts

Basis of 60%
60% 20% 20%
Lack of
Distribution Population
Population Backwardness infrastructure
 FORMULA FOR RESOURCE DISTRIBUTION TO DISTRICTS

District Pop Backws Infr Lag Total %

60% 20% 20%
Abbottabad 2.98 0.56 0.94 4.47
Bannu 2.29 0.86 0.73 3.88
Battagram 1.03 0.97 0.52 2.52
Buner 1.72 0.81 0.65 3.17
Charsadda 3.46 0.78 0.94 5.18
Chitral 1.08 0.69 0.58 2.35
D.I.Khan 2.88 0.85 0.94 4.67
Hango 1.06 0.72 0.57 2.34
Haripur 2.34 0.55 0.77 3.66
Karak 1.45 0.78 0.63 2.86
Kohat 1.90 0.58 0.78 3.26
Kohistan 1.61 1.97 0.66 4.23
Lakki 1.66 0.94 0.68 3.27
Lower Dir 2.44 0.79 0.70 3.93
Malakand 1.54 0.62 0.56 2.72
Mansehra 3.90 0.70 1.06 5.65
Mardan 4.93 0.67 1.23 6.84
Nowshera 2.95 0.66 0.90 4.52
Peshawar 6.83 0.68 2.10 9.60
Shangla 1.48 1.26 0.63 3.37
Swabi 3.48 0.70 0.99 5.18
Swat 4.25 0.78 1.23 6.22
Tank 0.82 0.95 0.50 2.27
Upper Dir 1.96 1.16 0.70 3.81
Total 60.00 20.00 20.00 100.00
 Budget Document
 Huge document

 Input from various departments/divisions/ministries

 Input forms—for Permanent Budget, SNE,

Supplementary, Excess/surrender, Receipts……

 BM06, BM10, BM2

Also Called Budget Calendar
DEVELOPMENT & NON-DEVELOPMENT
 Development Budget
 Creating material assets
 Designing to keep intact, enlarge and improve the
physical resources
 Improve knowledge, skill and productivity of the
people
 Encourage efficiency in the use of available resources
 Development Budget—ADP
 Developments schemes; Approved by:
 Officers as per Delegation of powers
 Departmental Sub-committee
 Provincial/District Development Working Party
 Central Development working Party
 Executive Committee of the National Economic
Council
Also called Current Budget
SNE/NIS (Fresh & Continued)
 Budget Preparation
Authorization
Authentication
& Then
Release
Through the same channel as Preparation

FD release budget to Deptts/Divisions

Exercise for Budget Preparation
 FUND CODE—On the top
 N C 2 1 006
N= NWFP
C= Consolidated Fund
2= Revenue (only two sources; Capital (1),
Revenue (2)
1= Current Expenditure (voted)
006= Grant Number
 ENTITY CODE--DDO
 Two Alpha
 Four Numeric

Example:
MD 6002—DCO Malakand
MD 6011—Dy. District Officer Primary Male, Batkhela

Called Cost Center

Function Element Ten Major Functions
 01 General Public Service
 02 Defense Affairs & Services
 03 Public Order & Safety Affairs
 04 Economic Affairs
 05 Environment Protection
 06 Housing & Community Amenities
 07 Health
 08 Recreational, Cultural & Religion
 09 Education Affairs & Services
 10 Social Protection
 Major and Minor Functions

Directly
Directly related
related to
to IMF
IMF public
public sector
sector reporting
reporting
requirements
requirements inin the
the publication
publication

““A
A Manual
Manual on
on Government
Government Financial
Financial
Statistics”
Statistics”
 Major Minor Detailed Sub-Detailed
09 Education Aff. & 091 Pre-Primary &
Services Primary Edu.
Aff. & Serv
092 Sec. Edu. Aff.
& Serv.
093 Tert. Ed. Aff. & 0931 Tert. Ed. 093101 Gen.
Univer./Colle
Ser. Aff. & Ser. ges/Institutes

093102 Professional/
Tech./Univ.
Colleges/
intit.
093103 Admn.

094 Edu. Serv. Not

Definable by Level

095 Subsidiary
Services to Edu

096 Admn.

097 Ed. Aff. Not

elsewhere
classified
Objects: A: Expenditure
 Major Heads:
 A01—Employee Related Expenses
 A02—Project Pre-investment Analysis
 A03—Operating Expenses
 A04—Employee Retirement Benefits
 A05—Grants, Subsidies Right of loans
 A09—Physical Assets
 A13—Repair & Maintenance
 A14—Suspense & Clearing
 A01 Employee Related Expenses
 A011 Pay
 A01101 Basic Pay of Officers
 A01102 Personal Pay of Officers
 A01103 Special Pay of Officers
 A01151 Basic Pay of Other Staff

 A012 Allowances
 A01201 Senior Post Allowance
 A01202 House Rent Allowance
 A01203 Conveyance Allowance

 A02 Project Pre-investment Analysis

 A03 Operating Expenses
 A14 Suspense & Clearing
 A01 Employee Related Expenses
 A011-1 Pay
 A01101 Basic Pay of Officers
 A01102 Personal Pay of Officers
 A01103 Special Pay of Officers

 A011-2
 A01151 Basic Pay of Other Staff

 A012-1 Regular Allowances

 A01201 Senior Post Allowance
 A01202 House Rent Allowance
 A01203 Conveyance Allowance
 A012-2 other Allowance

 A03 Operating Expenses

 A14 Suspense & Clearing
 A03 Operating Expenses
 A031 Fees
 A032 Communication
 A033 Utilities
 A03301 Gas
 A03302 Water
 A03303 Electricity
 A03304 Hot & Cold
Weather Charges
 A034 Occupancy Costs
 A09 Physical Assets
 A091 Purchase of Physical Assets
 A09101 Land & Buildings
 A09104 Buildings & Structures-others
 A09170 others
 A09105 Transport
 A09106 Plant & Machinery
 A09107 Furniture & Fixtures
 A09108 Livestock
 A09109 Diplomatic cars
 A09170 Others
 A092 Computer Equipment
 A093 Commodity Purchases
 A094 Other Stores and Stock
 Exercise for Budget Preparation
 05 exercises—
 One question common—To determine share of District
Malakand in the provincial divisible pool according to the
Provincial Finance Commission formula.
 Four groups are required to prepare Budget Estimates for the
Year 2009-10 after allowing prescribed increases on the
Revised Estimates for the Year 2008-09.
 One group is required to prepare Summary of the Budget for
the Year 2009-10 after allowing prescribed increases on
various objects in respect of District Malakand.
•Budget Execution--Monitoring,

Supplementary grant,

Reappropriation,

Excesses/surrenders
Supplementary Grant
 If available within the grant, and if already funds were
allocated in a certain head, reappropriation can be made
where required. If not available, funds arranged by FD will be
part of the supplementary grant.
 If funds are available within the grant, but no funds were
allocated in the ABS, token grant will form part of the
supplementary grant, remaining managed from within the
grant through re-appropriation.
 Supplementary budget is presented to the assembly after
annual budget of the next year, for authorization like ABS
Excess/surrender budget
 No timing.
 When re-appropriation account is prepared, and is
discussed by the PAC, and if they feel the excesses
are justified, they order preparation of excess budget
which is again submitted to the assembly for
authorization.
Revised Budget
 Used for preparation of budget for the upcoming
budget.
 Used as a yardstick for preparation of next year
Estimates which are based on:
 Reconciled 08 months actual expenditures of the current
year + 04 months expenditure of previous year gives the
Revised Estimates, which is then compared with the
actual allocation and saving is surrendered, or additional
grant is demanded.