Financial Discipline in Administrative Department dt 01.08.2024
Subject : FINANCIAL DISCIPLINE IN ADMINISTRATIVE DEPARTMENTS, ATTACHED DEPARTMENTS, AUTONOMOUS BODIES/AUTHORITIES, PUBLIC SECTOR COMPANIES
In continuation of Notification No. FD(DS-COORD) 11-1/20 18 dated August 20, 2018, 1 am directed to convey the following for observance and strict compliance:
(i) Relevant laws of the subject organizations provide formulation of Rules and Regulations, as the case may be, to regulate their functions. These are mandatory provisions but are routinely not being adhered to. For instance, if an Act states “…subject to this Act and the Rules, the Authority may, by notification, frame regulations. it is mandatory for the said organization to notify “Rules” with the approval of the Government prior to framing “Regulations” approved by the Authority under the Rules in discharge of its functions. Anything contained in such Regulations cannot be contrary to, or in conflict with the existing financial management policies of the Government or provisions of the Punjab Financial Rules.
(ii)
Rule 9 of the Punjab Treasury Rules mandates prior approval of the Finance Department for opening Commercial Bank Accounts; all subject entities must adhere to this provision of the Punjab Treasury Rules. Operations of all such accounts are subject to the policies, terms and conditions as notified by Finance Department from time to time under the provisions of Punjab Public Financial Management Act, 2022 and Rules framed thereunder.
All entities are further directed to ensure strict compliance with the Policy Guidelines on Treatment of Profits
issued by Finance Department vide Letter No. FD(W&M) 1-1/70(Vol-XV)/2021/98 dated 01st February, 2024. (iV)
Financial propriety is not being exercised by various entities incurring expenditure from their Funds. All revenues raised by subject entities are essentially “Revenues of the Government of Punjab” and fall under the definition of “Public Money” and as such, are bound by laws and rules governing Public Financial Management in the Province
All cases for creation / upgradation of posts, increases in salaries / allowances / employee benefits, or purchase
of vehicles, whether from own funds or otherwise, must be referred to the Finance Department for advice and concurrence.
(vi) Authorities / Governing Bodies / Boards of various subject entities must refrain from approving / sanctioning any expenditure relating to perks / privileges of members of the Boards / Authorities / Governing Bodies or approving any regulations to this effect, being a case of conflict of interest. Matters regarding perks / privileges of members of Boards I Authorities / Governing Bodies are to be submitted to !he Government for approval.
CONCLUSION:
Financial discipline is essential for the efficient management of public funds in government entities, including administrative departments, attached departments, autonomous bodies, and public sector companies. It ensures transparency, accountability, and the proper utilization of resources, preventing mismanagement and corruption.
In administrative and attached departments, financial discipline helps ensure that funds are allocated and spent according to budgetary guidelines, promoting efficient service delivery. It also ensures compliance with financial rules and regulations, avoiding overspending and wastage of public resources.
Autonomous bodies and authorities, despite their operational independence, are responsible for adhering to financial guidelines, as they often manage significant projects. Financial discipline ensures that their activities align with their mandates and that funds are used for their intended purposes.
Public sector companies, including state-owned enterprises, are crucial to economic development. Financial discipline in these entities involves maintaining proper governance, financial management, and risk control to ensure profitability and avoid the need for government bailouts.
In conclusion, maintaining financial discipline in these organizations fosters responsible governance, prevents resource wastage, and enhances public trust. It leads to better service delivery and helps achieve broader economic and development goals. It leads to better service delivery and helps achieve broader economic and development goals, supporting long-term financial sustainability.
