Investor Presentaiton
Chapter X - Breaking the Mould: Inclusive Budgeting. Framework for Rolling Expenditure and the Rest
PART IV: Framework for Rolling Expenditure
In consonance with Public Financial Management Reforms Strategy, the Finance Department has conceived and implemented a Framework
for Rolling Expenditure (FRE) to get a better handle on the releases of Expenditure assignments. The Framework shall govern the execution
of Expenditure assignments budgeted for FY 2020-21. FRE has been structured with a view to enabling the Finance Department to better plan
and manage the upcoming Fiscal Year and execute the Annual Budget in a more predictable and responsive manner. It is aimed at providing
control over the forecast and visibility for the 12-months on rolling basis. Such fiscal controls are mandated owing to the challenges that
accompany the exigencies like COVID-19 pandemic, which force a diversion of significant resources off course, and the need remains to
ensure provision of other aspects of service delivery at the same time with only minimal disturbance. So, essentially, the FRE has evolved out
of the lessons learnt from the fiscal management of the COVID-19 pandemic in the Province, hence having very practical foundation, and
understanding of the need to prepare better for the future. FRE is meant to serve three key ends - resilience to Revenue and Expenditure
shocks, ensuring only unavoidable disruption to the most important aspects of routine service delivery and demand-driven model of releases
of Expenditure assignment. Following are the salient constituent features of this Framework; Figure 1 captures the essence of the same:
鳳
Rolling Framework of
Expenditure to see
Potential Headwinds
and Adjust Spending
Forecast for Defined
Time Horizon - FY and
Beyond for 12 Months
to Assess the size of
Throw-Forwards
Monthly Releases on
Non-Development side
For First Quarter of
FY, at least, Control
over Cashflows to
Mitigate the Impacts
of Revenue Shocks
Based on Input from
Key Departments
Demand-Driven Model
vs the Traditional
Supply-Driven
Frontloading/
Backloading the
Priority Heads/Sub-
Heads based on
Requirements
Framework for Rolling Expenditure. Finance Department. Govt. of Punjab
Legislative Measures
become a Possibility
with Increased
Visibility
Amendments to
Finance Bill during the
Financial Year
Participatory Course
Correction
More than Two
Statements of Excess
and Surrenders
Opportunity to the
Departments for
Intermediate Course
Correction
Resilience to Revenue
and Expenditure
Shocks
Real-time visibility for a defined time horizon - Fiscal Year and beyond for 12 months rolling. Envisages monthly releases on Non-
Development side. This carries the advantage of greater spending control in the beginning of the FY.
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Applicable on all Non-Development Expenditure heads excluding Pays and Allowances
"
"
Demand-driven vs. Supply-Driven release plan characterizes the FRE. The FRE model kicks into action at the beginning of the Fiscal
Year by taking input from the key Provincial Government Departments before the year commences. A Department-specific prioritized
list of heads/sub-heads and proportion of their expenditure assignments at various periods in the year provides main input into the
FRE. (This aspect has been elaborated later in this chapter)
These Department-specific requirements are stockpiled to provide a cumulative overall release plan spread over defined time horizon
(12 months) and divided across periods.
FRE model is structured in a way that it caters to emergent Expenditure requirements above and beyond what has been allocated
or budgeted for the specific period by the FRE model to meet any exigent requirement under a specific head. The remaining Budget
is rolled over to the remaining periods in the FRE time horizon. Similarly, the model provides insight into requirements for future
adjustments in case of releases lower than the budgeted amounts in a certain period.
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