Assan Assignment Account AAA Procedure – Federal 26.10.2020

Assan Assignment Account AAA Procedure – Federal 26.10.2020

OFFICE MEMORANDUM

Subject: AAA Procedure

Kindly refer to Finance Division letter no.F.2(2)BI/2008/2020-1081 dated 20-10- 2020 on the subject cited above.

2. The Finance Division has approved the “ASSAN ASSIGNMENT ACCOUNT PROCEDURE (LOCAL CURRENCY)”.

3. The procedure is enclosed for information and necessary action, please.

    ASAAN ASSIGNMENT ACCOUNT PROCEDURE (LOCAL CURRENCY), 2020

All Special Drawing Accounts (SDAs), Personal Ledger Accounts (PLAs), and Revolving Fund Accounts (Local Currency) were abolished vide CGA office letter No.AC-II/1-39/08-Vol-V/632 dated 24th September, 2008 and Finance Division O.M. No. 3(4) DS (BR-II)/2008 dated 6th October, 2008. At present, in the light of provisions of the Public Finance Management Act 2019 and Cash Management and Treasury Single Account Rules 2020, the Assignment Accounts shall be part of Treasury Single Account, as well as Federal Consolidated Fund at Federal Government level.

2. As far as provincial governments are concerned, the Assignment Accounts shall be a part of respective provincial governments’ consolidated funds at provincial levels. The following procedure shall be followed for opening and operation of the Assignment Account, for Development Projects and Non Development Expenditure in the Federal and Provincial Governments:

1. General Instructions:

i: Assignment Accounts shall be part of the Consolidated Fund of respective Governments. The unspent balance at the close of the financial year shall be surrendered by respective offices as per government instruction, otherwise it shall be treated as a lapsed amount. 

ii: Assignment Accounts shall be opened in designated Branches of National Bank of Pakistan (list attached) in the jurisdiction of the Accounting Offices in which the user Organization / or office / or project is located or the amount has been budgeted. 

iii: User Organizations already submitting their claims for Development and Non- Development Expenditure to Accounting Offices for pre-audit shall not be allowed Assignment Accounts, under any circumstances.

iv: The officers of BS-17 or above on payroll of user organizations concerned shall be nominated by the PAO as signatories. A signatory on current / acting charge of BS-17 or equivalent may operate the account till he/she holds current charge of BS-17 and shall no more operate the account on the completion of period of current charge.

v: Any officer or person attached with a project or unit as honorary officers or board members or on attachment drawing salary from another project or unit shall not become a signatory. However, in cases, where a project, or unit does not have any officer of BS-17 or above on its payroll, the PAO may allow signatories from controlling offices, or entities Board of Directors, till such officers are appointed.

vi: In case of entities, where signatories are pre-decided by designation under departmental rules or codes, or SoPs, or the PAO decides the signatory by Designation, the approval (while converting to AAAP 2020, for the first time for one or more branches, or divisions, or geographical stations) can be obtained in a collective manner. In the event of transfer, or retirement, or suspension, or due to any other reason, if an officer who happens to be a signatory, is replaced by any other officer, or the charge of the position is given on acting, current or look after basis, signatory may be changed with the approval of the head of unit, division or department at that station, i.e., obtaining the approval of Head of Department / or entity or PAO shall not be required till the appointment/posting of officer on regular basis. But if the positions remain vacant (i.e., charge is not given to any officer), the second signatory shall be decided with the approval of PAO.

vii: A third signatory may also be approved by the PAO to operate the account during the leave or if a signatory is away or on tours.

viii:The Bank shall comply with Government Policy Instructions and SBP regulatory requirements including Know your Customer (KYC) in case of Assignment Account (like that of FATF / AML) and shall ask for requisite documents and ensure biometric verification. The signatories shall comply with these requirements.

ix:The ASAAN Assignment Account Procedure, 2020 (AAAP 2020) shall be applicable to all the existing Assignment Accounts for all future banking.

x:For any clarification of the ASAAN Assignment Account Procedure 2020, the PAOS shall refer the matter to Budget Wing, Finance Division (through the Administrative Secretary) for the decisions.

xi: In case a project is reflected in Federal PSDP but it is executed by the Provincial Government as provided in PC-I, the PAO at Federal level may approve the opening of assignment account or Sub-Assignment Account of such projects or programs and approve signatories whose Names/Designations are recommended by Secretary of Provincial Government Department concerned.

xii: Budget shall be proposed and approved in the heads of account as per requirements of projects/unit and shall be booked accordingly.

xiii: Opening of Assignment Account is not needed for funds allocated as ‘one-time seed money.

xiv: Assignment Account shall be closed by the PAO upon closing of project, program, or if the expenditure is shifted to pre-audit system of Accounting Offices

xv: Cash withdrawal or transfer of funds to any bank account is not allowed except employees related deductions like pension contribution, provident fund and GP Fund, etc. These deductions shall be made as per Rules / Policy Guidelines / Procedure of the relevant offices. Payment shall be made only through crossed cheque to contractors, vendors, suppliers, employees, etc.

xvi: Security Deposit / Retention Money may be deposited in a designated Bank Account in case of perpetual organizations like National Highway Authority but in case projects/programs or operational units or corporations, in a dedicated Bank Account opened with the approval of the Finance Division or in Public Account. The account shall be used for deposit of retention money only and no utilization shall be made out of the account, except payment of retention money / security deposit. Such account shall immediately be closed on expiry of contract or completion of project under intimation to Finance Division. In case retention money is forfeited or not claimed within a stipulated period, the same may be deposited along with interest, if any, in the Federal / Provincial Government account as the case may be.

xvii:The PAOS may allow one Imprest Money up to Rs 100,000 (One hundred thousand) or less based on the needs. The Finance Division shall be consulted for approval for requirement of any higher amount of Imprest Money.

2. Responsibilities of Principal Accounting Officers (PAOs):

i: The Principal Accounting Officers (PAOs) shall approve the opening, closing and change of signatories of the Assignment Account. They shall not delegate these powers to any officer (The Additional Secretary In-charge of Ministry/Division or any officer holding the charge of a PAO shall be deemed as the PAO).

ii: The following Pre-conditions shall be met for opening of Assignment Accounts by the PAO his office:

• In case of a development project, the project should have administrative approval. The Project Director shall be in place and it should have the Cost Centre / ID No. and allocation of budget.
• In case of current budget expenditure, it should have the Cost Centre / ID No. and allocation of budget.
• There shall be a separate assignment account for every development project, Sub-account(s) may be allowed on a need basis.
• The PAO shall ensure that signatories are approved as per provisions of AAAP 2020.
• As required under Section 23 of the PFM Act 2019, the PAO shall submit a certificate to the Finance Division on half yearly basis that public money has not been transferred from Assignment Account to any other bank account.

 iii) The copies of following documents are mandatory / required for submission of request to PAO:

• Gazette Notification for designation of PAO other than Secretary/Additional Secretary Incharge of Ministry/Division.
• Administrative approval in case of Development Projects. (b) Valid CNIC and Office Card of signatories. (c) Specimen signature. (d) In case of entities like corporations, companies, autonomous entities under a Division, the specimen signature shall be verified by an officer of (BPS-17 or above), a Section Officer, Deputy Secretary, etc but not the SPS or PS at the administrative Division.

iv: The opening of Assignment Account or change of signatories shall be intimated by the PAO office to all the concerned offices including Budget Wing, Finance Division, PD&SI Division, CGA and Accounting Offices concerned.

v:  The Ministry /Division /Department will issue a sanction letter (as per prescribed procedure) for placement of amount as ceiling in Assignment Account as per Form-C. 

vi: Under the PAO, the officers processing, sanctioning and controlling the budget, payment, or any matter related to assignment account shall observe and enforce financial propriety and follow all the rules and procedure as applicable to such matters.

vii: The drawing authorities shall be responsible for reconciliation of expenditure with Accounts Offices on a monthly basis. They shall maintain a proper account of all expenditure.

viii: The PAO and his subordinate officers shall ensure the proper booking, reporting and reconciliation of expenditure.

3. Responsibilities of National Bank of Pakistan (NBP)

i: On receipt of request from user organization i.e., Ministry/Division/Department, duly approved by the PAOS for the opening of Assignment Account on Form-A, the manager of the designated branch of the NBP shall open the account or sub-account. The letter of Assignment Account shall specify the following detail:

• Title of Account.
•  The Bank branch where it shall be opened. 
• Authorized cheque signatories and specimen signatures. 
•  Any other condition for operation of the account as required by the bank. 

The NBP may ask / add any other requirement as per Government Policy or SBP regulatory requirements.

ii: Availability of funds, as authorized by Accounting offices (AGPR/AG/DAO) concerned, will be checked before each payment by National Bank of Pakistan (NBP).

iii: The Bank shall entertain the cheque(s) that are accompanied with a scroll mentioning Demand No., Cost Centre and Object Code, and both endorsed by Accounting Offices for payment. The cheques not endorsed by the Accounting Offices shall not be entertained by the Bank.

iv: After payment, the NBP Branch maintaining an assignment account or sub-account may claim reimbursement from the SBP. The SBP shall reimburse as per existing practice and shall issue a debit voucher containing necessary accounting detail (Demand No. Cost Centre and object classification) to the respective Accounting Offices.

v: The bank will accept crossed cheques and no cash withdrawal and transfer of funds to other bank account will be made except as provided in clause 1.

vi: The dormant Assignment Accounts or sub-accounts which have no transactions for the last three years will be closed by the NBP under intimation to the PAO and Accounting Offices concerned.

vii: The NBP shall automate the assignment account through their core business application and provide complete information including list of assignment accounts or sub-accounts on monthly basis to Accounting Office concerned and Budget Wing, Finance Division. No payment will be made manually after 31.12.2020 except with the approval of Finance Division

4. Responsibilities of Accounting Offices (AGPR/AGS/DAOS)

i: On receipt of the sanction letter for placement of amount in Assignment Account or Sub-Account, the Accounting Offices will authorize the Manager NBP for the ceiling as per Form-D.

ii: As per Federal Treasury Rule (FTR) 170-B, the authorization letter for placement of fund will be issued directly to the NBP by the Accounting Offices concerned by endorsing the copies to all the concerned. The cheque book of Assignment Account will also be supplied upon requisition by authorized signatories to them or to a person (Government employee) authorized by the signatories.

iii: The Accounting Offices shall endorse the cheque in the name of beneficiary or a Manager, NBP/Commercial Bank along with a scroll having necessary details attached for payment of pay, allowance pension, etc. The exception is for sub-assignment accounts, where the endorsement is not required.

iv: The cheque in the name of Manager NBP/Commercial Bank for transfer of funds to establish a Letter of Credit (LC) shall be endorsed by the Accounting Offices.

v: The DDOs dealing with assignment accounts or sub-account shall prepare three copies of scroll mentioning their name, CNIC, Bank Account No, amount, Demand No. and Object Codes. The Accounting Offices shall endorse all the three, and enclose cheque, retain one copy of scroll as record which will also serve as basis for recording of expenditure, second copy shall be endorsed to the bank and third copy will be returned to DDOs for record.

5. Establishment and Responsibilities Pertaining to Sub-Assignment Account(s):

i: The Sub-Assignment Account(s) shall be established / opened by the PAO in accordance with the following procedure:

ii: Sub-Assignment Account(s) may be allowed by the PAO at designated branche(s) of the NBP if expenditure from one cost center is incurred at more than one location.

iii: Sub-Assignment Account(s) shall be a part of main assignment account and all sub- Assignment Account(s) shall be tagged with CIF (Customer Information Folio) of the main Assignment Account by the NBP through IT system.

iv: Requirements and procedure of opening, authorization, and documentation for sub- Assignment Account shall be same as for the Assignment Account.

v: The Ministry/Division/Department will communicate the sanction to Accounting Offices for placement of amounts as ceiling with clear-cut bifurcation of each Sub-Assignment Account as an Annexure to Form-C. On receipt of the said sanction, the Accounting Offices will authorize ceiling in Form-D along with the ceiling, detail of each Sub-Assignment Account to the Manager, NBP maintaining the main Assignment Account. Payments from sub- assignment accounts shall be recorded by Accounting Offices at the place where the main Assignment Account is maintained. (The user organization shall distribute the budget according to its needs at various places and convey it to Accounting Offices who will endorse it to NBP maintaining the main assignment account). The Manager NBP maintaining the main Assignment Account will intimate ceiling to NBP branches where sub-assignment account is maintained for each Sub-Assignment Accounts as per break-up provided by the Accounting Office concerned.

vi:  Payment will be made by the said NBP branch immediately after necessary verification of authorized ceiling for the Sub-Assignment Account and details of authorized signatories etc.

vii: After payment, the NBP branch dealing with Sub-Assignment Account will inform the NBP Branch maintaining the main Assignment Account which will claim reimbursement from the SBP. The SBP shall reimburse as per existing practice and shall issue a debit voucher containing necessary accounting detail (Demand No. Cost Centre and object classification) to the respective Accounting Offices.

viii: For the Federal Government Offices, located at Islamabad, the NBP main branch Islamabad and for other locations, the respective NBP main branch will be the focal branch where main assignment accounts will be opened and maintained by the project authorities/entities. Any intimation / correspondence with regard to opening of sub-assignment account, change of signatories, budget ceilings etc. will be communicated to the Chief Manager, NBP main branch of respective location. Further action will be ensured by the respective NBP Main Branch. Provincial Governments may have their own arrangements with NBP main branches at respective provincial headquarters.

ix: Payment from Sub-Assignment Account shall not require endorsement by Accounting Offices but photocopies of cheque(s) and schedule / scroll shall be submitted to the office maintaining main assignment account for the booking of expenditure in Accounting Offices concerned as soon as the cheques are issued.

6. Exception:

The procedure prescribed for Revolving Fund Account (Foreign Currency Assignment Account) as amended vide Finance Division No.F.2 (1)/BR-II/2007-949 dated 02-08-2013 shall be followed for Foreign Currency Assignment Account.

Note: For the purpose of AAAP 2020, the expressions used and their meaning are as under:

• User Organizations: Ministry, Division, Department, Project, Program, Unit, Entity, etc. 
• Accounting Office: Accountant General Pakistan Revenue, Provincial Accountant Generals, including Sub Offices of AGPR, Accountant General, AJK and Accountant General, GB and District Accounts Offices.
• PAO: Principal Accounting Officer (PAO of any Department, Entity, Unit, etc.) as notified by Cabinet Division