The federal government has introduced stricter rules for government departments seeking additional funds or moving money from one budget head to another. The Finance Division has revised the procedure for reappropriation, Technical Supplementary Grants, and Supplementary Grants to improve control over public spending.
The new instructions are expected to make government departments more careful when asking for extra funds during the financial year. Under the revised system, departments will have to first check whether their existing budget can meet their needs before asking for additional money.
The Finance Division has also placed limits on requests made after the May 31 deadline. Such requests will only be considered in certain situations, including unavoidable payments due in June and shortages in funds needed for employee-related expenses.
The instructions have been issued for the current and coming financial years and will apply to principal accounting officers, departments, organizations, subordinate offices and accounting offices.
New Rules for Moving Funds
One of the main changes concerns the reappropriation of funds. Reappropriation means moving money from one approved budget head to another when a department needs funds for a different purpose.
Under the new instructions, authorized officers can continue to move funds within the financial powers given to them. However, they cannot reappropriate money from budget allocations that have not yet been released.
This means a department cannot simply show an unreleased amount in its budget and use it as a source for another expense. The funds must be available under the rules before they can be shifted.
The Finance Division has linked these instructions to Article 84 of the Constitution and Section 10 of the Public Finance Management Act, 2019. These legal provisions provide the framework for managing government expenditure and supplementary spending.
The move is important because government departments often face changes in spending needs during the year. A department may have extra money under one head while facing a shortage under another. The new rules allow some flexibility, but they also make it clear that such transfers must remain within approved financial powers.
Special Funds for Ad Hoc Relief Allowance
The Finance Division has also provided additional funds through separate cost centers for the payment of the Ad hoc Relief Allowance 2026.
Principal accounting officers can reappropriate these funds, but only for the purpose of paying the allowance. They must also consult the Expenditure Wing before making such changes.
The permission applies to the third quarter of the current financial year. In simple words, money provided for the relief allowance cannot be freely moved to unrelated expenses.
This restriction is designed to ensure that funds released for a specific purpose are actually used for that purpose. It also gives the Finance Division greater control over how additional funds are used by government offices.
Rules for Employee-Related Expenses
The revised instructions also deal with situations where departments do not have enough money to cover employee-related expenses.
If a department faces a shortage under an employee-related budget head, it can move funds from non-employee-related expenditure on a priority basis.
This can help departments meet important salary and other employee-related obligations without immediately asking the government for a fresh supplementary grant.
However, there is another important condition. The funds released to departments must remain within the quarterly limits set under the Finance Division’s fund release strategy.
Therefore, departments will not have unlimited freedom to move money even when they have a genuine shortage. The transfer must follow the financial limits already established by the Finance Division.
May 31 Deadline Will Be Strict
Another major part of the revised procedure is the May 31 deadline.
Government departments are normally expected to submit their requests within the prescribed time. The Finance Division has now made it clear that requests to relax the May 31 deadline will only be considered in specific cases.
These cases include the adjustment of excess expenditure recorded by Accounts Offices, shortages in employee-related expenditure, and unavoidable payments that become due in June.
However, such requests will not be accepted simply because a department failed to plan its spending properly. The cases must meet the conditions set by the Finance Division.
The relevant expenditure must also be based on orders that were already approved by the competent authority.
This means departments will need to provide a clear reason if they want an exception after the deadline. The new approach is aimed at reducing last-minute requests and improving budget planning.
Tighter Process for Technical Supplementary Grants
The Finance Division has also changed the process for Technical Supplementary Grants.
Under the revised procedure, Principal Accounting Officers must identify resources from other demands before seeking a Technical Supplementary Grant.
They will also have to provide a certificate confirming that an equivalent amount will be surrendered by the concerned officer.
This requirement makes it necessary for departments to first look within their existing budget before seeking additional funds. If resources can be arranged by reducing another allocation, the department is expected to take that route.
The request will then be examined by the Expenditure Wing. After scrutiny, it will be sent to the Budget Wing for further assessment.
This additional checking process means that requests for Technical Supplementary Grants will face more review before any decision is made.
Supplementary Grants Face Even More Restrictions
The rules are stricter for ordinary Supplementary Grants.
The Finance Division has said that requests for additional unbudgeted expenditure beyond the amount approved by Parliament will not normally be considered.
There is, however, an exception for severe natural disasters.
This means government departments cannot routinely ask for additional money simply because their spending requirements have increased beyond the approved budget.
If a department says it needs more funds, it will first have to examine whether the money can be arranged through reappropriation or a Technical Supplementary Grant.
Only when these options are not available can the department move forward with a request for additional funds.
In such cases, the concerned officer will have to provide proper justification. The request will also require recommendations from the relevant wing of the Finance Division.
The process therefore puts greater responsibility on departments to explain why additional funds are necessary and why the requirement could not be managed through the existing budget.
Greater Focus on Budget Discipline
The revised instructions come as the government continues to focus on better management of public finances.
Supplementary grants are used when the government needs to spend money beyond the amount originally approved in the budget. Such funds can be important when unexpected needs arise, but frequent requests can also make budget planning more difficult.
The new rules do not completely stop supplementary grants. Instead, they create stronger conditions for requesting and approving them.
Departments will have to use available resources more carefully and follow the required procedures before seeking additional allocations.
The changes also place more responsibility on Principal Accounting Officers. These officers will have to review their financial requirements and make sure that requests are properly supported.
Why the New Rules Matter
Government budgets are prepared before the start of a financial year. However, actual spending can change because of new requirements, emergencies, salary-related costs and other developments.
For this reason, there is a need for some flexibility in government financial management.
At the same time, uncontrolled requests for extra money can put pressure on the budget. If departments repeatedly spend more than their approved allocations, the government may have difficulty keeping overall expenditure within its financial plans.
The revised rules attempt to balance these two needs.
Departments will still have options when they face genuine financial shortages. They can use reappropriation within their approved powers, seek a Technical Supplementary Grant where allowed, or request additional funds when there is a valid reason.
But each option now comes with clearer conditions.
Departments Must Plan More Carefully
The new instructions are likely to encourage departments to improve their budget planning from the beginning of the financial year.
Officials will need to look more carefully at expected expenses before allocating funds. They will also need to monitor spending throughout the year instead of waiting until the final months to identify shortages.
The May 31 deadline is particularly important in this regard. Since late requests will only be accepted in limited circumstances, departments will have less room to delay their financial planning.
This could also encourage departments to identify possible shortages earlier and make adjustments while there is still enough time to follow the normal procedure.
Role of the Finance Division
The Finance Division will have a stronger role in reviewing requests under the new system.
The Expenditure Wing will examine Technical Supplementary Grant requests before they reach the Budget Wing. This additional review can help determine whether a department has already used its available resources properly and whether the request meets the required conditions.
For Supplementary Grants, departments will also need to provide proper justification when they cannot arrange funds through other available options.
This means approval will depend not only on the amount being requested but also on the reason for the request and the steps already taken by the department.
Rules Apply to Current and Future Years
The Finance Division has made it clear that the revised procedures will apply during the current financial year as well as coming financial years.
The instructions cover a wide range of government offices. These include Principal Accounting Officers, federal departments, organizations, subordinate offices and accounting offices.
As a result, the changes are not limited to one ministry or one type of government spending.
All concerned offices will have to follow the revised procedures when moving funds or seeking additional allocations.
A More Controlled Approach to Government Spending
The latest instructions show a stronger focus on controlling additional government expenditure.
Under the new framework, departments cannot freely use unreleased budget allocations for reappropriation. Requests after the May 31 deadline will only be considered in specified situations. Technical Supplementary Grants will require proof that an equal amount can be surrendered, while requests for Supplementary Grants will face strict limits.
At the same time, the government has kept some flexibility for important needs. Employee-related shortages can be addressed through reappropriation from non-employee expenditure, while unavoidable June payments and severe natural disasters can qualify for special consideration under the stated conditions.
Overall, the revised procedure puts greater responsibility on government departments to manage their approved budgets carefully. Officials will need to justify requests for extra money, follow deadlines and explore available budget resources before seeking additional funds.
The Finance Division’s latest instructions are therefore aimed at making the process of government spending more controlled and organized. By requiring more checks before extra funds are approved, the government intends to keep departments within their financial limits while allowing exceptions for genuine and unavoidable needs.
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