ISLAMABAD: To tighten control over cash through “sweeping arrangements” that allow the finance ministry to take over idle public funds in bank accounts, the federal government has announced strict financial rules for all government entities, including ministries, divisions, departments, and agencies.
With the backing of international lenders, especially the Asian Development Bank and the International Monetary Fund (IMF), a significant modification known as the “Cash Management and Treasury Single Account Rules 2024” was implemented with the goal of containing the fiscal deficit by consolidating public funds that were sitting idle in different accounts.
A few months prior, the government gave the IMF assurances that it would move quickly to improve forecasting and cash management capabilities through the Treasury Single Account. Funds in bank accounts are swept out and placed into non-food account No. 1 at the end of each banking day, and they are swept back into bank accounts at the beginning of banking hours, according to the sweeping arrangements.
The Budget Wing and Debt Management Office of the Finance Division shall project an estimate of the cash buffer requirement on a regular basis in order to ensure timely availability of funds for settling authorized expenditures. The Finance Division will also be authorized to use surplus funds to retire public debt in collaboration with the State Bank of Pakistan.
The accountant general of Pakistan Revenues will send revenue and expenditure information for evaluation to all division secretaries on the fifth day of every month. Furthermore, by the 20th of the subsequent month, the secretaries will be required to provide the Finance Division with a three-month projection of income and expenses at the conclusion of every quarter.
Based on information provided by divisions and the Debt Management Office, the Finance Division will provide monthly cash forecast reports and the Debt Management Office will prepare quarterly predictions of debt servicing.
Bank accounts will only be opened, kept, and run by government offices and public bodies in compliance with the new regulations. Requests for opening a bank account must be made to the Finance Division, including with any applicable laws, official approval, and a convincing case for the account’s opening.
The Finance Division and the relevant division would jointly assess the current accounts; those that are determined to be not necessary for continued operation would be closed, and any remaining monies would be sent to either the Federal Consolidated Fund or the Public Accounts.
Every quarter, the Finance Division will receive a report from the State Bank of Pakistan (SBP) detailing all bank accounts and balances that are managed and controlled by public agencies and businesses.
The Finance Division would need to receive a detailed list of all bank accounts from government offices and public entities on a quarterly basis. This list would include details about the signatories, balances, purpose, and legal framework or authorization used to operate the accounts. The Finance Division will keep a list of these bank accounts based on data from the SBP, public offices, and government agencies.
