Drabu’s desk outlines spending protocols

Backed by legislation, slew of measures to enforce fiscal discipline

JAMMU: In line with the promise of making Budget 2018-19 one of the most significant the state of Jammu and Kashmir has ever seen, Finance Minister Haseeb Drabu’s efforts the work on which had started last year, reached another important stage on Tuesday when the Finance Department issued comprehensive guidelines to enforce fiscal discipline.
Aimed at making the wide-ranging public expenditure reforms as announced by Drabu while presenting Budget in the State Legislature, these guidelines were issued in line with making the State Government legally bound to expedite resource utilization.
Already enumerated elaborately in the Appropriation Bill-2018, the protocols issued by Drabu’s desk on Tuesday outlined a slew of measures to rein in the runaway tendencies in the System to do bunched up spends in the last quarter.
Following the legislative backing, these measures now have the force of law and, by implication, the attendant consequences while representing the first decisive step to reform the quality and efficiency of public expenditures and have been rolled out at two levels- Policy as well as Operational levels.
The official order in this regard issued today by Secretary Finance, Navin Kumar Choudhary, said that these enforceable measures on the operational level to ensure fiscal discipline are aimed at enforcing accepted standards of fiscal propriety, as envisaged in the J&K Finance Code.
“The passage of these measures in the State Legislature, as part of the Appropriation Act, is to ensure that conformity to these measures is treated by the Departments as a foregone conclusion. These measures, essentially, aim at drawing clear and visible redlines for the departments,” the order said adding that there is no better way for the departments to do this than by internalizing and institutionalizing the virtues of restraint, discipline and propriety in their operational systems and, accordingly, re- engineer their policy and operational paradigms.
While, as a characteristic feature, these measures have made Treasury Officers and Public Accounts Officer more accountable (covered in detail separately), there are many other checks that these guidelines put on the expenditure.
In a significant development, the procurement plans of the departments in the next fiscal have been limited by an outermost cap of 60 days.
“From conceiving the nature and quantity of public goods and services to be procured to preparing tenders/RFOs/Eols to finally awarding the contract, the departments shall compulsorily finish the whole process within 60 days,” it read.

“Any spill over in timeline shall be allowed only under the orders of the Cabinet based on some cogent reasons. In all other cases, deviation from the norms shall be automatically visited with the appropriate disciplinary actions,” it added.

The finance department also put a number of checks for spending under a number of heads.

“No new procurement shall be made by any Department under "Machinery and Equipment" head without building a robust inventory management system so as to have proper justification for procurement of new machinery.

“For this purpose, all Departments will make an ‘Asset Inventory’ and further procurements can be made only with the approval of Competent Authority with full justification given therein,” it said.

The funds under object head "Maintenance and Repairs" would be spent only after detailed expenditure and action plan distributed into different components is approved by the competent authority with the concurrence of Director Finance IFA & CAO of the Department as the case may be.

Funds under the object head "Uniforms" shall be released to the Departments on case to case basis after backed duly by the supply order and invoice.

Funds under "Stipend and Scholarship" shall be operationalized subject to the condition that each beneficiary is verified through biometric Aadhaar based system. The database shall mandatorily be compiled latest by 31st May 2018 and in the absence of the same no payment shall be made beyond June 2018.

Procurement by debit to object head "Instruments" above Rs50 lakhs now would need inbuilt clause in tenders for AMC for a minimum period of 5 years whereas any procurement under the head "Office Equipment and Machinery Appliances" will be made only after any inventory of such procurement made during last 10 years, their usage and conditions, requirement of further procurement as clearly brought out and approved by the Competent Authority.

Director Finance IFA & CAO in the Administrative Departments have been asked to build inventory of existing civil deposits. “All the civil deposits shall be recalled except in such cases where it is assured by the departments that they will use them in the next two months of making such deposits,” it added.

Orders for deputation of officers/officials on short term trainings/seminars/higher education refresher courses/ conferences etc outside the State shall be issued only after obtaining prior approval of the Finance Department.

The official order further notified the reforms at the policy level, which include that Revenue and Capital budgets shall be released by the Finance Department and the Planning, Development and Monitoring Department to all the Administrative Departments within two weeks of the passage of the Appropriation Act. It may be mentioned that government has already released half of the budget for next financial year 11 days after the passage of appropriation bill, well within the deadline of two weeks.

The Administrative Departments, as earlier announced, would release the funds so received to the subordinate offices within four weeks of their receipt, falling which these funds shall be deemed to have been transferred to the intended DDOs on the dates they ought to have been released by the Administrative Departments/Controlling Officers.

While expenditure monitoring across all departments will be done on real time basis through BEAMS/PFMS, the government has also instructed Planning, Development and Monitoring Department to mandatorily upload department-wise 'Name of the Schemes/Works/Projects', forming part of the Capex, for the fiscal 2018-19, along with the respective allocations on its website, besides appropriately classifying all capital allocations to be made in the next fiscal, failing which the relevant Capex release would be deemed as invalid and not open to being operationalized.

“Only such works shall be authorized for execution, as have prior administrative approval, technical sanction and appropriate financial back up,” it read.

Regarding current fiscal’s expenditure, it was reiterated that money will be spent only on the approved items of the expenditure and strictly for the purpose they have been released.

“There shall be no re-appropriation of funds except where the departments have spent at least 55 per cent of funds received ending December, 2017. However, where their spending levels are below 55 per cent, the remaining unspent balance of 70% of funds shall lapse to the Government,” it read, adding that upon lapse, State Share of the CSSs and the expenditure to be incurred on utility shifting, land compensation etc. under PMDP projects will be the first charge.

“There shall be, henceforth, no engagement of casual workers, need based workers etc. by any department. The Planning, Development and Monitoring Department shall under invariably condition all developmental/capex releases to the departments to the unconditional vouchsafing by the latter that they shall refrain from making fresh engagements,” it read.


No exit route for money-handling hands
While reforms at both Policy and Operational level have made it to the guidelines issued for a prudent public spending, what the elaborative order underlined was making the money-handling hands in the departments- Treasury Officers, and Pay and Accounts Officer- more accountable. There was no shying away from this fact either as the Drabu’s desk made it clear, mincing no words.
“There is an element of personal liability, both for Treasury Officers and PAOs, built in the expenditure reforms protocol and if they breach redlines set up for them, they may note that any violation, even unintended, will have costs, particularly, as no allowance has been made for any breach in these protocols, be it intended or unintended or circumstantial,” the order read.
A number of protocols/measures, the compliance of which will be monitored by the Budget Division in the Finance Department on an ongoing basis, making these officers more accountable are as given under:


No bypassing BEAMS
According to the order, no payments shall be made by any Treasury Officer/PAO from the 1st April 2018, under any expenditure head, if the releases for the same has not been made and further received by the spending and bill passing officers via BEAMS.
“Treasury Officers/PAOs shall be personally liable for making payments on the funds released and received bypassing the BEAMS application,” it said.
To ensure less than 30% spending in Q4
Expenditure during the last quarter, the order said, shall be restricted to not more than 30 percent of the Revised Estimates. Treasury Officers/PAOs shall have an added responsibility to ensure that the departments are held to this expenditure ceiling.
Drawing Casual Labours’ swages from new head
From next fiscal 2018-19, treasury officers/PAOs would ensure that no wages are drawn from maintenance/outsourcing/ any other head except under the newly introduced head "Wages (Outsourcing)" under which funds for disbursement of all kinds of casual labours shall be released by Finance Department on case to case basis.
Ensuring no new Engagements
With each bill, Treasury Officer/PAO would ensure that the concerned DDO of the intending Department appends certificate indicating therein that no new engagement has been made or any sort of wages paid or intended to be paid to new engagements under any circumstances.
No engaging transport Services sans contract
Transportation for the purpose of "Durbar Move", carrying of food grains for public distribution and for any major requirement of transport facility, the Departments must enter into a contract for at least two years with reputed transport/logistic company through transparent bidding system.