AP GO.84 Guidelines on Approved Budget Distribution to Implementing Agencies

Guidelines on Approved Budget Distribution: Instructions and Guidelines on Measures to Rationalise the Financial Management System, Yearly Budget System to Aided Institutions, Guidelines on Approved Budget Distribution to District and Implementing Agencies

Government of Andhra Pradesh, Finance Department, Budget 2015-16 – Measures to Rationalise the Financial Management System – Distribution of approved Budget to the Districts and the implementing Agencies – Instructions and Guidelines -Regarding.

Reference:

  1. GO.Ms.No.35 Fin(BG.I) Dept, dated 02.04.2015
  2. Memo No. 4928-A/335/A1/BG.I/2015, dated:June 08, 2015

ORDER:

  1. As informed in the reference second read above, the Finance Department has initiated certain measures to ensure that the approved Budget for the current financial year is made available to the department without any impediments duly dispensing with the cumbersome procedures.
  2. Accordingly, all Head of Departments (HoDs) and the Secretariat Departments were requested to distribute the approved budget for 2015-16 to the district offices and the field implementing agencies duly apportioning the amount available for the remaining three quarters of the current financial year after deducting the amount already released in the first quarter.
  3. While doing this, the HODs were requested to take into account the seasonal, geographic, district-specific and project-specific circumstances and other relevant factors and prioritize the allocations to the Subordinate Controlling Officers (SCOs) and the Drawing and Disbursing Officers (DDOs) based on the actual requirement of funds for each of the remaining three quarters.
  4. The Departments have been given the freedom to seek funds according to the actual requirement for each quarter based on the implementation work plan, however, within the approved budgetary provision for the 2015-16 financial year.
  5. The purpose of this exercise is to dispense with the current process of quarterly Budget Releases and make available the budgeted amount to the department based on their requirement for the remaining three quarters, however subject to the drawal being limited to the amount allocated for each quarter.
  6. The need for Administrative Order (AO) by the administrative department will also be dispensed with, barring the general guidelines for effective implementation, management, and monitoring. This would enable the department to prepare and implement the work plan for all programmes approved by the Government during the remaining three quarters of the current financial year with the confidence of receiving the required financing, instead of initiating the planning process and obtaining administrative order on a quarterly basis after receiving the budget release order, etc.
  7. The main objective is to increase implementation effectiveness and have a longer-term program execution horizon, action plan and above all fund availability.
  8. In this direction, it is essential to allocate the approved budget (BE for 2015-16) for the remaining three quarters amongst all unit offices under the control of the department. Accordingly, an application has been provided in the portals of the Director of Treasuries and Accounts and Director of Works Accounts.
  9. The Head of the Department (HOD) shall distribute the budget for all Heads of Accounts (HOA) operated by them in the following manner:
    i) The HOD shall log in to the DTA / DWA portal with the User Name and Password that they normally use for budget authorization purposes. Thereafter they shall propose budget distribution up to the sub-detailed Head of Account for every quarter.
    ii) Once the Head of Account is entered, the total budget provision for the year 2015-16, amount already authorised and the balance available for distribution for remaining quarters will be displayed in the portal.
    iii) The default mode for the system on the Treasury portal is to distribute the remaining budget equally amongst three quarters. Such an allocation is tentative. Therefore, the HOD must review carefully with reference to the actual requirement based on the work plan and propose allocation to each quarter and make the necessary revision in the allocation. In the case of the DWA system, there is no such indication and allocation can be made directly after deducting the expenditure.
    iv) It is reiterated that the budget distribution should not to be a simplistic arithmetic exercise, but based on the realistic requirement of funds for financing the program implementation plan.
    v) Once quarterly allocations are determined, the same shall be apportioned to the Subordinate Controlling Officers (SCOs) displayed on the screen.
    vi) The HOD shall distribute the available budget to all SCOs under his / her control for all three quarters.
    vii) The HODs who traditionally distribute the budget to the Drawing and Disbursement Officers (DDOs) directly, shall distribute the budget amongst all DDOs for all three quarters and not limit to SCOs.
    viii) The distribution of budget shall be done for all three quarters for all budget lines, including all Plan, Non-Plan, Capital and Revenue Heads.
    ix) The HODs must complete the apportionment of budget amongst the SCOs (and DDOs, where it is done directly by HODs) for all three-quarters latest by 5 PM on July 05, 2015.
  10. The HOD must ensure through direct and strict instructions that all Subordinate Controlling Officers (SCOs) in turn apportion the amount allocated to them by the HOD, for the three quarters based on the work plan, using the existing DTA / DWA portal, to all DDOs under their control on or before 5:00 PM on July 10, 2015. The District Collectors are instructed to monitor this process closely and ensure its completion ahead of the deadline indicated above. The entire budget must be apportioned without keeping any reserve fund at any operational level.
  11. The Finance Department will hold consultations with the departments between July 10 and 16, to review and agree on the allocation proposed by the HOD. Once the budget distribution for three quarters to the DDOs is accepted, the Finance Department will issue Budget Operations Orders for three quarters at a time that would enable every department to operate the budget for the three quarters without any further restrictions. However, the drawal for each quarter will be limited to the amount indicated by the department.
  12. Upon successful data input and completion of the review and approval process by the Finance Department, the HOD would have the authority to reallocate funds from one unit office to another (SCO to SCO / DDO to DDO) based on the requirement and performance during the quarter. This, however, can be done only after the completion of each quarter.
  13. The departments are requested to note that as far the Centrally Assisted Schemes are concerned, they shall be guided by the DO letter of Principal Finance Secretary dated June 08, 2015(Enclosed) and the latest instructions of Government of India. They are also requested to study the budget book carefully and adhere to the allocations approved therein.
  14. They shall note that no additionality will be considered until the fourth quarter, unless in cases of emergency or explicitly mandated by the Government. The departments are also informed that the apportionment of the budget for three quarters for every SCO and DDO should be accompanied by a detailed Work Plan and Budget (WPB) for each of these units for the remaining nine months.
  15. The HOD and the Secretary concerned are requested to monitor the expenditure monthly for all major programme heads and take remedial action against those performing suboptimally. All HODs and the Secretaries will be provided access to expenditure data for monitoring in real-time. Considering the extremely tight fiscal situation, the budget allocated for a quarter, if not utilised, may not be available in the next quarter. Hence, Heads of Departments are required to be realistic in preparing their action plan and distributing their budget.
  16. The Secretaries of the Departments / HODs / District Collectors are requested to ensure implementation of the above instructions within the stipulated time frame. The Head of the Departments shall take the active initiative in the distribution of the budget to the districts / SCOs / DDO units for effective implementation of this system from July 2015.
  17. The Director of Treasuries and Accounts and Director of Works Accounts shall monitor the process of Budget distribution at State level whereas the District Treasury officers monitor the process at District level and the Sub Treasury Officers/Pay and Accounts Officers/Assistant Pay and Accounts Officers (Works) monitor the process at the DDO level.
  18. All are informed that the budget for the second quarter for the controlled heads of accounts will be authorised after the remaining budget is apportioned to all SCOs and DDOs for the three-quarters latest by 5 PM on July 10, 2015; budget released in the first quarter is fully utilised, and the Budget Operations Order for the entire year is obtained from the Finance Department.
  19. Further clarifications or information may be obtained from the Deputy Finance Secretary (Budget), Director of Treasuries and Accounts, Director of Works Accounts and the District Treasury Officers.

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