My Ref : CF/40/30/63/A V2
Date: 18 August 2008
From : Financial Secretary
To :Accounting Officers and Supervising Officers of Ministries and Departments
In the context of the implementation of Programme-Based Budgeting with effect from 1 July 2008, Accounting Officers are being given greater flexibility in the management of the approved funds for their Sub-Programmes/ Programmes in order to help achieve outputs as targeted. Accordingly, the following instructions for Virement will apply with immediate effect -
In these financial instructions –
“maintenance” means any activity required to preserve, as nearly and as long as possible, the original condition of a non-financial asset or resource while compensating for normal wear and tear (Expenditure Class 22 060);
“MOFED” means the Ministry of Finance and Economic Development;
(a) means a reallocation of funds within a Ministry/Department -
(i) from an item of expenditure to another item of expenditure within a Sub-Programme or Programme; or
(ii) from an item of expenditure in respect of a Sub-Programme or Programme to another item of expenditure in respect of another Sub-Programme or Programme; and
(b) includes a reallocation of funds-
(i) from a Ministry/Department to another Ministry/Department in respect of items of expenditure relating to acquisition of assets (Expenditure Categories 31 and 32); and
(ii) from Programme 989 “Contingencies and Reserves”.
2. Authority of Accounting Officers/Supervising Officers on Virement
(1) Authority to effect Virement between expenditure items of a Sub-Programme/Programme rests with the Accounting Officer of that Sub-Programme/Programme, subject to paragraphs 3 and 4.
(2) Where, within a Ministry/Department –
(a) there is only one Accounting Officer to manage the Sub-Programmes/Programmes, the Accounting Officer is authorized to effect the Virements; or
(b) there is more than one Accounting Officer-
(i) Virement between items under the control of one particular Accounting Officer can only be authorized by that Accounting Officer;
(ii) Virement between items under the control of two or more Accounting Officers can only be authorized by the Accounting Officer whose budget is being reduced, subject to the approval of the Supervising Officer of that Ministry/Department.
(3) Where the Accounting Officer is not the Supervising Officer of the Ministry/Department, the Supervising Officer should endorse the application.
3. Virements by Ministry/Department
(1) Ministries/Departments are authorized to effect Virements without seeking the prior approval of MOFED, subject to the limitations at subparagraphs (2), (3) and (4).
(2) A Virement is permitted to a Sub-Programme/Programme provided that the cumulative re-allocations in a fiscal year do not exceed 5 % of the total appropriation for that Sub-Programme/Programme excluding the appropriation for Personal Emoluments (Expenditure Class 21110), Maintenance (Expenditure Class 22060), Entitlements (Expenditure incurred for the payment of benefits to all who meet the eligibility requirements established in law including Expenditure Category 27), Acquisition of Assets (Expenditure Categories 31 and 32) and Special Funds under the Finance & Audit Act.
(3) No Virement shall be made -
(a) from any item of expenditure to personal emoluments, except where the Virement is for -
(i) a shift of human resources from a Sub-Programme/Programme to another Sub-Programme/Programme;
(ii) reallocation from funds under Centralised Operations of Government in respect of salary adjustment or compensation; or
(iii) expenditure for the implementation of the Performance Management System (PMS);
(b) from an item of expenditure in respect of maintenance to any other item of expenditure;
(c) from an item of expenditure in respect of acquisition of assets to any other item of expenditure, except where the Virement is for maintenance;
(d) from items relating to Special Funds under the Finance &Audit Act to any other item; or
(e) from specific items of expenditure as may be indicated from time to time by MOFED by way of circular or other written instruction.
(4) Virement is permitted from an item of expenditure of acquisition of non-financial asset to another item of expenditure of acquisition of non-financial asset within a Sub-Programme/Programme to the extent that-
(a) it does not exceed 5% of the appropriation of the Sub-Programme/Programme in respect of such assets;
(b) it is in respect of an approved investment project included in the ‘Government Investment Projects’ document and is within the approved project value.
A list of Government Investment Projects is available on the website of the Ministry (http://www.gov.mu/portal/MOFSite).
4. Virement by Ministry/Department requiring prior approval of MOFED
(1) In the implementation of investment projects, the reallocation of funds from a Sub-Programme/Programme to another Sub-Programme/Programme within a Ministry/Department or from a Ministry/Department to another Ministry/Department is permitted provided that prior written approval for the reallocation is sought from MOFED.
(2) Where the Virement is in respect of cases indicated at paragraph 3(3) (a) (i-iii), (c) and 3(4) or is likely to exceed the 5 % limit referred to in paragraph 3 (2), prior written approval of the Virement should be sought from MOFED. Accordingly, the Accounting Officer is required to submit an Application Form ( Specimen Finance Form 1 -Annex I) together with a memorandum containing the following:
a) full justification of the circumstances that have led to the necessity for Virement;
b) the necessary documentary evidence; and
c) the likely impact on the outputs and performance indicators specified in the Programme-Based Budget Estimates.
5. Virement Warrant & Virement Advice
(1) Approval of any Virement under paragraph (3) or (4) by MOFED would be issued by MOFED to the Accountant General in the form of a Virement Warrant (Finance form 7-Annex II).
(2) On receipt of the Virement Warrant under subparagraph (1), the Accountant General will issue a Virement Advice to the Ministry/Department concerned by way of Finance Form 8 (Annex III).
6. Recording of Virement in the Treasury Accounting System (TAS)
(1) On receipt of a Virement Warrant from MOFED, the Accountant-General will make the necessary budget transfer in the Budget record of TAS.
(2) In respect of a Virement not requiring the approval of MOFED the necessary budget transfer will be effected by the Ministry/Department authorizing such Virement.
Copy to: Accountant-General
Director of Audit
Officer-in-Charge (Finance Section)>