PTBP Web Desk
the Finance Division has issued directives to all Principal Accounting Officers (PAOs) to provide detailed explanations regarding the mishandling of budget allocations for the fiscal year 2023-24. This action follows a meeting of the Departmental Accounts Committee (DAC) held on November 12, 2024, where the Certification Audit of the Appropriation Accounts was discussed. The audit pinpointed several discrepancies including non-surrender of funds, excess expenditure, and unjustified demands for budget allocations.
Under the Public Finance Management (PFM) Act, 2019, Section 12 mandates that all PAOs are to surrender any anticipated savings back to the Finance Division by May 31 each year. However, during the fiscal year 2023-24, many PAOs failed to comply with this directive, leading to unutilized funds remaining within their departments. This not only represents a lapse in financial discipline but also deprives other sectors of potential reallocation of these funds where they might be critically needed.
Another critical issue raised in the audit was the excess expenditure beyond the budgetary provisions. According to Section 23 of the PFM Act, 2019, no authority should incur or commit any expenditure from the Federal Consolidated Fund without proper sanction and budgetary provision. The audit revealed instances where expenditures exceeded the sanctioned limits, which raises questions about oversight and financial accountability within these departments.
The Finance Division also highlighted the unjustified demand for budget by some PAOs, where requests for additional funding were not adequately justified or aligned with actual needs or projections. This practice not only distorts the fiscal planning but also leads to an inefficient allocation of resources which could otherwise be optimized for better financial health of the federal government.
The Finance Division has reminded all PAOs of their legal obligations under the PFM Act, 2019, emphasizing the importance of adherence to Sections 12 and 23 for maintaining a transparent and accountable fiscal management system. The communication stressed that these sections are not mere guidelines but binding legal requirements that ensure the integrity of public finance management.
In response, PAOs are now required to appear before the Public Accounts Committee (PAC) where they must explain the reasons behind these fiscal anomalies. This process is crucial not only for accountability but also for learning from past fiscal mismanagement to prevent future occurrences.
This initiative by the Finance Division underscores a broader commitment to fiscal responsibility, transparency, and efficiency in public finance. It aims to foster a culture where budget allocations are not just numbers on a sheet but are reflective of real-world needs and priorities. Moreover, this move is likely to encourage better planning, forecasting, and utilization of funds, ensuring that public money is spent wisely and in accordance with legal frameworks.
