Ministries told to surrender unspent funds

ISLAMABAD: The Ministry of Finance has directed all ministries, divisions, departments, and autonomous bodies to surrender, within 10 days, all savings and unspent allocations that are not expected to be utilised during the current fiscal year.

The instructions have been issued to ensure that revised estimates for FY2025-26 are finalised and budget estimates for the upcoming fiscal year (FY2026-27) are firmed up in a timely manner.

In a communication, the MoF directed all principal accounting officers (PAOs) to “surrender anticipated savings” under all four major expenditure heads to the Finance Division by May 10. They have also been instructed not only to issue ‘surrender orders’ but also to communicate the surrendered amounts to the Budget Section of the MoF by the same date for entry into the computer system.

These heads include: (i) running of the civil government — both employee-related expenditures (ERE) and non-ERE, (ii) grants, (iii) subsidies, and (iv) development funds under the Public Sector Development Programme (PSDP).

It may be noted that, under Section 12 of the PFM Act, 2019, all ministries and divisions are required to surrender savings to the Finance Division by May 31 each year.

The MoF said the deadline had been advanced by nearly a month on the directives of Parliament’s Public Accounts Committee (PAC) to improve fiscal prudence and ensure the timely surrender of savings so that funds can be made available where required.

The PSDP has already been cut by Rs173 billion (about 20 per cent of the budgeted allocation) to transfer funds to the Prime Minister’s fund for fuel subsidies following rising petroleum prices in the wake of the US-Israel war on Iran. The PSDP has already been facing challenging conditions, as federal entities spent less than half of their budget allocations on public welfare projects during the first three quarters of the current fiscal year.

There were, however, some exceptions, as about 70pc of allocations for ruling parliamentarians’ schemes were utilised in the first nine months. According to the Ministry of Planning and Development, total utilisation of PSDP funds amounted to Rs415bn during July-March, accounting for 41.5pc of the Rs1 trillion budget allocation. This was slightly better than 36.4pc during the same period last year, when PSDP expenditure stood at Rs400bn against an allocation of Rs1.1tr.

The government began bulk disbursements to parliamentarians’ schemes, codenamed the Sustainable Development Goals Achievement Programme (SAP), after the first five months of the fiscal year.

By the end of the nine-month period (July-March), the Planning Commission had authorised nearly 90pc (Rs57.23bn) of the revised annual allocation of Rs63.24bn, of which more than Rs44bn (70pc) had been spent. Notably, these funds were authorised and utilised within a short span of around four months, making it the fastest-executed programme.

As of March 31, 2026, ministries and divisions had sanctioned Rs589bn, against which Rs414.96bn (45.6pc of the total allocation) had been reported as expenditure. The annual PSDP allocation for FY2025-26 stands at Rs1tr.

Under the mechanism announced by the Ministry of Finance for the current fiscal year, the government is to release 15pc of the budgeted allocation in the first quarter, followed by 20pc in the second quarter, 25pc in the third quarter, and the remaining 40pc in the last quarter. This meant the government should have released about 60pc of allocations in first three quarters.

The Public Accounts Committee had directed the MoF to ensure earlier surrender of funds and to hold those seeking additional funds accountable.