Lapse of Deposit Work – Reauthorization -21.01.2021
OFFICE MEMORANDUM
Subject: Lapse of Deposit Work
Will the Section Officer (B&E). Government of the Punjab, Livestock and Dairy Development Department, kindly refer to his letter No XI-22-SO(B&E) L&DD/2014, dated 24.12.2020 on the subject cited above
- I am directed to state that the term ‘Reauthorization’ is not defined in the Budget Manual. The funds are allocated in the Annual Budget for one Financial Year in terms of Article 120 of the Constitution of Pakistan and even if the said funds are transferred into Commercial Accounts/PLA or Deposit Work, these stand lapsed
- Foregoing in view, I am further directed that Administrative Department may approach the Competent Forum for approval of the Supplementary Grant for the lapsed funds with observance of rules/regulations/policy in a prescribed manner.
This letter deals with an inquiry from the Section Officer (Budget & Expenditure), Government of Punjab, regarding a previous letter (No XI-22-SO(B&E) L&DD/2014, dated 24.12.2020) concerning a financial term and its implications for the Livestock and Dairy Development Department. The term “Reauthorization” was mentioned, and the response is focused on why it is not relevant or recognized in the Government’s financial system.
Main Issue: ‘Reauthorization’ Is Undefined
The key point raised in this letter is that “Reauthorization” does not exist as a concept in the Government of Punjab’s Budget Manual. This means that the term has no legal or procedural standing when dealing with the provincial budget or financial matters. The letter points out that the government follows strict financial rules based on the Constitution of Pakistan, specifically Article 120.
Budget Allocation Is Only for One Year
The funds that the government allocates each year are strictly for use within that financial year. This allocation process follows Article 120 of the Constitution, which outlines that all funds for various departments and projects are sanctioned for a specific year and must be utilized during that period.
Lapse of Unused Funds
If, for some reason, the department is unable to use the funds during the financial year, the funds are considered “lapsed.” This also applies if the funds are transferred into special accounts such as Commercial Accounts, PLA (Personal Ledger Accounts), or for specific Deposit Works. Even though the money is moved into these accounts, it does not mean it can be carried over into the next financial year. The funds automatically lapse if they remain unspent by the end of the financial year.
What Needs to Be Done Next
When the funds lapse, the department cannot simply request a “Reauthorization” because there is no such provision in the budget rules. Instead, the letter advises that the department must formally apply for a Supplementary Grant. A Supplementary Grant is essentially a new allocation of funds after the budget has already been approved.
To secure this grant, the department needs to approach the “Competent Forum,” which is the appropriate decision-making body, and make a case for why the additional funds are needed. The department must follow all relevant financial rules, regulations, and policies when making this request. The letter emphasizes that this process must be done in the correct manner, and all the necessary steps must be followed.
Conclusion
In summary, the letter explains that “Reauthorization” does not exist within the Budget Manual, and funds that remain unspent at the end of a financial year lapse. To access more funds, the department must apply for a Supplementary Grant following the proper rules. Therefore, they are directed to follow the official procedure for requesting these additional funds.
This clarification aims to ensure that budgetary rules are strictly adhered to. Failure to follow these steps may result in delays in acquiring the necessary funds.
