Major changes in Pak govt financial management planned

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ISLAMABAD: The government has disbanded the Financial Advisers’ Organisation (FAO), giving the heads of federal ministries and divisions full autonomy to independently utilize development and non-development funds of all departments and projects under their control.

The decision has been made under a new law “Public Finance Management Act, 2019” passed by the parliament on the request of the finance ministry as part of its agreement with the International Monetary Fund, Dawn has reported.

“In pursuance of Section-28 of the Act, the office of Financial Advisers’ Organisation is disbanded/abolished” said a notification issued by the Ministry of Finance shortly before Eid holidays. It said the new law had been enacted to ‘strengthen management of public finance to improve and implement the fiscal policy for better macro-economic, financial and budgeting management.

As a result, the finance ministry has officially recalled about 20 financial advisers (FAs — grade 20 officers) from the federal ministries and about 42 deputy financial advisers (DFAs — grade 19 officers) from various divisions of the federal government for onward absorption in various government agencies through the Establishment Division.

Sources said PM’s Adviser on Institutional Reforms and Austerity Dr Ishrat Husain had also proposed getting rid of the posts of FAs and DFAs and had termed the FAO as a “road blocker”. His plan proposed replacing them with Chief Finance and Accounts Officers (CFAOs) or Chief Financial and Management Accountants (CFMAs) from the private sector to facilitate better utilisation of public funds.

Under the changed arrangements, the federal secretaries will not be required to approach the office of Accountant General of Pakistan Revenue (AGPR). The secretaries have now been given powers to have control over full year allocations. Within the current fiscal year, the government will create the positions of chief internal auditors (on the pattern of private sector) who will work under direct supervision of PAOs.