GOVERNMENT OF THE PUNJAB
LOCAL GOVERNMENT AND COMMUNITY DEVELOPMENT DEPARTMENT
February 07, 2017
| NOTIFICATION |
No. SOR(LG)38-14/2016
.- In exercise of the powers conferred section 144 of the Punjab Local Government Act 2013 (XVIII of 2013) and after previous publication, Governor of the Punjab is pleased to make the following rules:
1. Short title and commencement.- (1) These rules may be cited as the Punjab Union Councils (Budget) Rules 2017.
(2) They shall come into force at once.
2. Definition.- (1) In the rules, unless there is anything repugnant in the subject or context:
- “Accountant General” means Accountant General Punjab, Lahore;
- “Act” means the Punjab Local Government Act 2013 (XVIII of 2013);
- “actuals” means the actual figures of receipts or expenditure, duly reconciled, relating to a financial year;
- “Annual budget statement” means the statement of the estimated receipts in the local fund of the Union Council and the estimated expenditure for a financial year, required to be submitted to the House before the commencement of that year;
- “Annual development programme” means a document, submitted along with Annual budget statement, indicating the details of various development projects or schemes, allocation and the period of execution;
- “appropriation” means the amount provided in the budget estimates against a detailed or sub-detailed object or part of the amount placed at the disposal of a drawing and disbursing officer to meet expenditure on a specific purpose or on specific item;
- “budget” means a statement of estimated receipts and expenditure of the Union Council for a financial year;
- “capital expenditure” means the expenditure for:
- acquisition of capital assets;
- execution of original works; and
- advances and deposits.
(i) “capital receipts” means the receipts from the sources other than revenue and include:
- proceeds from disposal of capital assets;
- loans; and
- advances and deposits.
(j) “Chairman means the Chairman of the Union Council;
(k) “charged expenditure” means such expenditure as is specified in section 102 of the Act;
(l) “collecting officer” means the officer responsible for estimation and realization of receipts and income of the Union Council, creditable to the relevant major head, sub major head, minor head, or sub-minor head;
(m) “current budget” means the sum of approved estimates of cost of establishment and operating expenditure other than development works for a financial year;
(n) “current expenditure” means expenditure that is not development expenditure;
(o) “demand for grant” means a proposal made to the House on the recommendation of the Chairman for allocation of a certain sum out of the local fund in a financial year and made part of the Schedule of authorized expenditure;
(p) “development budget” means a sum of approved estimates of development expenditure for a financial year;
(q) “development expenditure” means any expenditure on the development projects or expenditure on new construction, new work or addition and alteration of an existing work or repairs to the newly purchased or previously abandoned buildings and works and included expenditure on human resource development;
(r) “excess and surrender” means a statement for demand of additional allocation to meet the expected expenditure or a statement made to return the amount not likely to be spent during the financial year;
(s) “financial year” means the period of one year commencing on 1st day of July and ending on 30th day of June (both days inclusive)
(t) “Forms” means the Forms prescribed in First Schedule;
(u) “grant” means the amount granted by the House in respect of a demand for grant as specified in the Schedule of authorized expenditure;
(v) “House” means the elected body of a Union Council;
(w) “object” means one of the elements of chart of accounts used to classify the nature of expenditure, salary, travel and transport;
(x) “principle accounting officer” means the Chairman of the Union Council responsible for the preparation of budget from formulation to utilization in the prescribed manner and is accountable to Public Accounts committee;
(y) “public account” means and included the receipts, amount, pension contribution, tax deductions and securities collected by the Union Council on behalf of the other parties or held in trust for a special purpose and not available for appropriation;
(z) “Public Accounts Committee” means a Public Accounts Committee of Provincial Assembly of the Punjab;
(aa) “re-appropriation” means the transfer of savings of one or more units of appropriation to meet excess expenditure anticipated under another unit;
(bb) “receipts” means the revenue collected by a Union Council against the estimates of receipts object of code;
(cc) “revenue receipts” means the receipts from tax and non- tax revenues.
Explanation.- the non-tax receipts include profit, dividends and fines realized by a Union Council;
(dd) “revised estimates” means the estimates of probable receipts or expenditure, for a financial year, framed in the course of that year in relation to the transactions already recorded;
(ee) “rules” means the Punjab Union Councils (Budget) rules 2017;
(ff) “Schedule” means a Schedule appended to these rules;
(gg) “Schedule of authorized expenditure” means the schedule prepared, after approval of Annual budget statement or supplementary budget statement for a financial year and authenticated by the Chairman;
(hh) “Schedule of new expenditure” means the expenditure on new activities or items pertaining to development and current budget estimates;
(ii) “supplementary budget statement” means the statement to be laid before the House for approval, showing the amount required for expenditure, during a financial year, over and above the expenditure already authorized for that year;
(jj) “supplementary grant” means the an amount provided in addition to the original grant or appropriation approved by the House;
(kk) “Union Secretary” means the Union Secretary (Community Development) of the Union Council; and
(ll) “voted expenditure” means the expenditure which is subject to vote of the House.
(2) An expression used but not defined in the rules shall have same meaning as is assigned to it under the Act.
3. Responsibilities of the Chairman.- The Chairman shall:
(a) provide vision for union-wise development, identify needs of the local area and evaluate and set development priorities of the Union Council;
(b) ensure that the needs of disadvantaged groups reflected in the budget priorities and gender issues are adequately addressed in the budget for ensuring gender mainstreaming;
(c) interact with stakeholders to assess their input and needs on overall development outlay and revenue potential of the local area;
Explanation.- The expression “stakeholders” includes the elected representatives, general public, women organizations, private sector or non-organizations and minority organizations.
(d) ensure timely completion of the development projects; and
(e) ensure that the budget estimates and revised budget estimates are laid before the House well before the commencement of the next financial year.
4. Responsibilities of the principal accounting officer.- The principal accounting officer shall:
(a) incur expenditure as per budget allocations;
(b) ensure that each development project is feasible, sustainable and in line with the priorities set by the Union Council;
(c) review progress of execution of the projects for their timely completion;
(d) ensure that budget estimates are submitted before the House well before the commencement of the next financial year;
(e) prepare a report on the planning and implementation of the development plans for presentation before the House in the budget session;
(f) ensure that a new tax proposal or proposal for increase, reduction, suspension, abolition or exemption of any tax is reasonable and in accordance with law; and
(g) monitor and ensure the utilization of the budget of the Union Council on specific object or in accordance with the approved budget and the rules.
5. Responsibilities of the Union Secretary.- The Secretary of the Union Council shall:
- prepare estimates of receipt and expenditure and submit, on time, the estimates to the Chairman;
- maintain accounts of the Union Council;
- pre-audit of all payments from the local fund of the Union Council;
- incur expenditure strictly within the allocations;
- maintain budget control register, evaluating the expenditure under each object and preparing proposal for re-appropriation or supplementary grant and revised estimates, as the case may be;
- prepare the excess and surrender statement; and
- prepare the statement of liabilities, if any, at the beginning of each financial year and include the liabilities by carrying them forward in the liability statement of the next financial year.
6. Budget Structure.- (1) The Annual budget statement shall consist of two parts:
(a) estimates of receipt and expenditure; and
(b) explanatory memorandum.
(2) The estimates of receipts shall include:
(a) capital receipts;
(b) revenue receipts including:
(i) share in the Provincial Finance Commission Award;
(ii) balance amount available in the local fund;
(iii) own source revenue receipts for the next financial year; and
(iv) grants from the Government.
(3) The estimates of expenditure shall include:
(a) current expenditure;
(b) development expenditure (both capital and revenue);
(c) Schedule of new expenditure.
(4) The budget of the Union Council shall indicate the charged expenditure separately as specified in section 102 of the Act.
(5) The conditional grants from the Government or other local governments shall be shown separately.
(6) The budget shall be prepared on Chart of accounts (CoA) issued by Auditor General of Pakistan.
7. Public Account.- The estimates of credits and disbursement relating to Public Account shall be prepared on receipt of actual figures.
8. Instructions for the Union Secretary.- (1) The Union Secretary shall prepare the estimates of the receipts in Forms BDR-1 to BDR-4.
(2) The Union Secretary, while preparing the estimates of the receipts, shall observe the following principles:
(a) diligently and accurately prepare the estimates of receipts;
(b) the receipts shall cover all sources including fiscal transfers from the Government;
Note-1: No fresh receipts on account of any tax fee, rate or charge shall be included in the receipt estimates until such levy is vetted by the Government, approved by the House and duly notified in the official Gazette;
Note-2: No share of Provincial Finance Commission Award, grant and contribution shall be included in the estimates of receipts until a definite communication is received in this regard;
Note-3: No expected income or grant shall be added from anywhere except the prescribed sources of income:
(c) in relation to the revised estimates, the Union Secretary shall take into consideration the actual receipts during the first nine months of the financial year and actual figures of the corresponding four months of the previous financial year; and
(d) all material reasons, facts and circumstances relied in adopting figures for the revised estimates for the current financial year and Annual budget estimates for the next financial year shall be recorded clearly.
9. Revenue-based review.- (1)To ascertain the revenue potential, the Union Council shall conduct a review of revenue source on tax base and the required information shall be prepared in Form BDR-3.
(2) The estimates of receipts, before submitting to the House, shall be incorporated in the budget documents and submitted to Chairman for finalization.
11. Estimates of current expenditure.- (1) The estimates of current expenditure shall be prepared by the Union Secretary in accordance with the rules.
(2) The current budget estimates shall be prepared in Forms BDC-1 to BDC-6.
12. Instructions for preparation of estimates of current expenditure.- To prepare the estimates of current expenditure, the following principles shall be observed:
(a) the estimates of expenditure shall be prepared diligently and accurately;
(b) in relation to revised estimates, the Union Secretary shall take into consideration the actual expenditure during the first eight months of the financial year and include actual figures of the corresponding four months of the previous financial year;
(c) all material reasons, facts and circumstances relied in adopting figures for the revised estimates for the current financial year and Annual budget estimates for the next financial year shall be recorded clearly;
(d) provision for any foreseeable expenditure shall be included therein;
(e) each provision shall be restricted to the absolute minimum necessary sum;
(f) the estimates for each financial year shall provide only such expenditure as is likely to be actually incurred;
(g) in case the Union Council or the Government specifies minimum ratio for development and non-development expenditure or for any other object or expenditure, the prescribed constraint shall be observed;
(h) in case the Union Council or the Government specifies percentage of expenditure on establishment cost or operating cost, the estimate of current expenditure shall not exceed the percentage so fixed;
(j) adequate provisions shall be made for all items of the charged expenditure;
(k) no provision shall be made for the post which is not included in the schedule of establishment;
(l) the budget may include provision for honoraria and allowances, prescribed, by the Government, for the Chairman, Vice Chairman or members of the Union Council;
(m) the calculation salaries of the officials shall be made as per emoluments of the sanctioned posts;
(n) the allowances of the employees shall be calculated as per their entitlement; and
(o) no post shall be included in the schedule of establishment until it is sanctioned and notified by the Government.
13. Submission of estimates of expenditure.- (1) The Union Secretary, after completion of the estimates of current expenditure, shall forward to the Chairman for finalization.
(2) The current expenditure shall include the new expenditure and development expenditure and liabilities.
14. Conditional grants.- All conditional grants shall be budgeted and utilized in accordance with the conditions of the grant.
15. New Expenditure.- (1) The new expenditure shall include the recurring costs of development projects completed during the outgoing current financial year and expenditure relating to new activities and the expenditure shall mainly pertain to personnel and purchase of durable goods.
(2) The new expenditure shall be provided with the budget documents as a statement of new expenditure.
16. New current expenditure proposals.- (1) The Union Secretary shall, for the next financial year, send all proposals involving new current expenditure along with the estimates in Forms BDC-1 to BDC-6.
(2) An explanatory note justifying the new proposals shall be added in From BDC-7.
(3) The details of the recurring expenditure of the development projects to be completed during the financial year shall also be communicated by the Union Secretary.
17. Instructions for preparation of Schedule of new expenditure.- (1) The Union Secretary, while preparing any proposal for the new or current expenditure, shall ensure that:
(a) the proposal specifies:
(i) the number of personnel required;
(ii) the rates of remuneration (pay and allowances) of each personnel;
(iii) the duration of employment of the proposed personnel; and
(iv) the posts are sanctioned in the schedule of establishments.
(b) all relevant revenue implications are described, quantified and included in the estimates of receipts; and
(c) the details of expenditure as “Purchase of Durable Goods” have been specified.
(2) The Union Secretary shall forward the estimates of new expenditure separately to the Chairman along with the current budget.
18. Annual Development Programme.- (1) The Annual development programme shall be the compilation of ongoing development projects and new development projects approved by the House for execution during the next financial year.
Explanation.- The development projects on which no expenditure has been incurred previously shall be “new development schemes or projects” and the development projects on which the expenditure has already been incurred shall be termed as “ongoing development schemes or projects”
(2) The Annual development programme shall indicate schemes or projects by geographic location or site.
19. New development projects.- (1) The new development projects shall be prepared in Form BDD-4.
(2) The new development project shall be processed as under;
(a) identification of the development project;
(b) project outline;
(c) feasibility report on the basis of detailed development project proposals;
(d) rough cost estimates and administrative approval;
(e) technical sanction of detailed estimates; and
(f) approval by the House.
20. Funding for Annual development programme.- The main source of funding of the new development projects shall be:
(a) total receipts of the Union Council (both from own source revenue and share of Provincial Finance Commission Award) less current expenditure, ongoing expenditure of development project and other liabilities;
(b) financial assistance received by way of development grants from other local governments; and
(c) development grants received from the Government for any other source.
21. Presentation of the Budget.- (1) The Chairman, before commencement of the next financial year, shall present the budget for consideration and approval of the House.
(2) The budget documents shall include:
(a) budget speech of the Chairman:
(b) Annual budget statement;
(c) estimates of receipts including revised estimates;
(d) demands for grants (current expenditure) including revised estimates;
(e) demands for grants (development expenditure);
(f) Schedule of new expenditure;
(g) Annual development programme;
(h) supplementary budget statement for the current financial year;
Note: The estimates shall be submitted in the Forms appended to the rules.
(3) The Budget Speech of the Chairman shall include the main features of the budget.
(4) The Annual budget statement shall include the details of receipts and expenditure.
(5) The following shall be included in the Annual budget statement:
(a) financial abstract;
(b) details of receipts;
(c) details of current expenditure; and
(d) development expenditure.
(6) The estimates of receipts shall be prepared and consolidated in Forms BDR-1 to BDR-5.
(7) The demand for grants of current expenditure shall include the estimates of total current expenditure and shall be prepared in Forms BDC-1 to BDC-2.
(8) The Schedule of new expenditure shall include:
(a) provision of separate estimates of the new expenditure relating to the current budget;
(b) the schedules and explanatory notes relating to the “statement of new expenditure” are provided in Forms BDC-1 to BDC-7; and
(c) such other Forms as the Union Councils may devise for providing additional budgetary information.
(9) The demands for grants and appropriation for development shall include the estimates of ongoing and new development projects and the details shall be provided in Forms BDD-1 to BDD-3.
23. Approval of Budget: (1) The House shall approve the budget estimates subject to:
(a) scrutiny of receipts;
(b) scrutiny of expenditure; and
(c) examination of new proposals, if any, for taxation.
(2) A demand for grant shall only be made on the recommendations of the Chairman.
(3) A budget shall not be approved by the House if:
(a) the estimates of charged expenditure are not provided;
(b) the estimated sums required to meet the estimated expenditure including previous liabilities and commitment’s exceed the estimated receipts and there is a likelihood of incurring debt;
(c) lump sum provision are make in the budget without explanations of details; and
(d) the budget goes below the budgetary constraints, if any such yardsticks and constraints are determined by the Government by notification in the official Gazette.
(4) The House may discuss the charged expenditure but shall not vote on such expenditure.
(5) The budget may include provision for honoraria and allowances, prescribed by the Government, for the Chairman, Vice Chairman or members of Union Council.
(6) The budget of the Union council shall, subject to quorum, be approved by a simple majority and the House shall not take up any other business during the budget session.
(7) The Government or an officer authorized by the Government may review the approved budget of the Union Council and if it is found contrary to the budget rules, may require the Union Council to rectify it.
(8) In case a budget is not approved by the Union Council before the commencement of the financial year to which it relates:
(a) the Union Council shall spend amount under various objects, on pro-rata basis in accordance with the budgetary provisions of preceding financial year for a period not exceeding thirty days; and
(b) in such case, the Union Council shall not spend funds or make commitments for any expenditure, under any demand for grant or appropriation, in excess of eight percent of the amount budgeted in the preceding year within that period of thirty days.
(9) In case, the Union Council fails to approve the budget within the extended period, the Government or an officer authorized by the Government shall prepare, approve and authenticate the budget for full financial year.
24. Schedule of authorized expenditure.- (1) The Union Secretary, after approval of the budget by the House, shall:
(a) prepare the Schedule of authorized expenditure in the shape of Annual budget statement indicating:
(i) the grants made or deemed to have been made by the House;
(ii) the sums required to meet the expenditure charged upon the local fund; and
(b) submit the Schedule of authorized expenditure to the Chairman for authentication.
(2) The authenticated Schedule of authorized expenditure shall be laid before the House but shall not be open to discussion or vote.
(3) The Schedule of authorized expenditure shall lapse at the end of the financial year to which it relates.
25. Revised Budget.- (1) A Union Council may, if necessary, revise surrender statement.
(2) The revised budget estimates shall be based on excess and surrender statement.
(3) The revised budget shall be presented in the House for approval in the same form and such manner as are prescribed for the Annual budget statement.
26. Responsibilities of the Chairman.- (1) The Chairman shall:
(a) incur expenditure against the funds allotted;
(b) ensure incurrence of expenditure:
(i) against a validly accrued claim;
(ii) with the sanction of authority competent to sanction it;
(iii) charged against the appropriation under relevant Object; and
(iv) in the most transparent manner;
(c) ensure expenditure management; viz.-
(i) control expenditure from the grants placed at his disposal;
(ii) expend allocations in conformity with the Schedule of authorized expenditure;
(i) effectively utilize the budget appropriations; and
(ii) review the trend of excessive expenditure, if any, and take necessary measures to meet the excessive requirements either through re-appropriations or supplementary grant or both;
(d) only spend from the grant or grants placed at his disposal;
(e) discharge commitments that have been made but not paid for against such grant or grants;
(f) expenditure that is likely to be incurred during the remaining period of the financial year;
(g) develop effective means to implement the budget as approved by the House; and
(h) ensure that authorized budget allocation is expended in conformity with the Schedule of authorized expenditure.
(2) The Chairman shall recommend necessary reduction in case of lower than expected receipts in respect of any one or more heads of expenditure.
(3) The recommended reduction shall be placed before the House for approval.
(4) In case, the receipts exceed the estimates or additional grants, a revised budget shall be presented to the House prior to utilization of additional funds.
27. Monthly reports of expenditure.- The principle accounting officer shall consolidate the monthly reports of expenditure and shall submit an annual report to the House.
28. Statement of excess and surrender.- (1) The statement of excess and surrender shall be prepared on the basis of actual expenditure incurred during the first eight months of the financial year and last four months of the previous financial year for estimating the expected expenditure for the remaining four months of the financial year.
(2) The statement of excess and surrender shall form the basis for:
(a) preparing the revised estimates;
(b) formulating the demands for additional funds through supplementary grant, if required;
(c) preparing next financial year’s budget estimates; and
(d) for determining the estimated closing balance of the local fund as on 30th June.
(3) The Union Secretary shall consolidate the statements of excess and surrender and submit with his recommendations to the Chairman for including it in the revised budget for approval of the House.
(4) The revised budget statement shall be presented and approved by the House in such form and manner as is prescribed for the Annual budget statement.
29. Expenditure beyond the Schedule of authorized expenditure.- In the event of unavoidable and unforeseen circumstances arising during a financial year that require incurring expenditure in excess of the allocations or some expenditure not contemplated in the Schedule of authorized expenditure is inevitable, the funds for such expenditure may be obtained through re-appropriation or supplementary grant or both.
30. Re-appropriation.- The Chairman shall re-appropriate in accordance with the re-appropriation powers delegated to him by the House.
31. Procedure for re-appropriation.- (1) A request for re-appropriations shall be prepared by the Union Secretary.
(2) In case the re-appropriation is beyond the limit set by the House, it shall require approval of the House.
32. Supplementary grant.- (1) In case, the Union Secretary considers that the need for additional funds has arisen for which no re-appropriation is available, he shall submit a proposal for supplementary grant.
(2) The proposal shall be accompanied by an explanatory note justifying the supplementary grant.
33. Supplementary budget statement.- The supplementary budget statement shall be presented and approved by the House in such form and manner as is prescribed for the Annual budget statement.
34. Receipt Management.- (1) The primary obligation of the Union Secretary shall be to ensure that all the revenue due, is claimed, realized and credited immediately to the local fund and to record entries under proper receipt heads.
(2) The Union Secretary shall be responsible to submit weekly income report, with shortfall, if any, to the Chairman.
(3) The Chairman Union Council shall monitor, control and supervise the recovery of all revenue and take corrective measures.
(4) All records shall be made according to the prescribed rates and schedule of recovery.
35. Fiscal Transfers from Government.- The share of the Union Council from Provincial Allocable Amount through fiscal transfers and the Government grants, if any, shall form part of, and credited to, the local fund.
36. Transfer of Funds.- (1) The share of each Union Council from Provincial Allocable Amount shall be transferred in accordance with the Award notified by the Government on the recommendation of Punjab Finance Commission.
(2) The Government shall, well before the commencement of each financial year, notify the provisional share of Award for each Union Council.
(3) The Government shall communicate the final estimates of each Union Council share in the month of June each year.
37. Monthly transfer of the share.- The Government shall transfer the share of the Union Council on monthly basis.
38. Interpretation of Rules.- The Government shall pass appropriate orders to remove any ambiguity or inconsistency arising from the interpretation of the rules and the decision of the Government shall be final.
39. Repeal.- The Punjab Union Administration (Budget) Rules, 2003 is hereby replaced.
SECRETARY
GOVERNMENT OF THE PUNJAB
LG & CD DEPARTMENT
