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
Section 5 of the Finance and Audit Act has been amended to replace the Contingencies Fund by a Provision for Contingencies in the annual estimates of expenditure to meet urgent and unforeseen expenditure. The provision is made under Programme 989: Contingencies & Reserves which is under the control of Ministry of Finance & Economic Development (MOFED). A consolidated version of the Finance and Audit Act is available on the website of the Ministry (http://www.gov.mu/portal/site/MOFSite).
2. The Provision for Contingencies will not be used to compensate Ministries/Departments for unplanned expenditure or for inadequate planning, cost estimation and management. The fact that expenditure was planned but could not be accommodated within the provision approved at Budget time will not be deemed to be a sufficient condition for approval of an application.
3. An Accounting Officer seeking funds from the Provision for Contingencies & Reserves to meet the proposed expenditure must submit an application, on Finance Form 1(a)-Annex I supported by a memorandum indicating,
(a) whether the expenditure would be incurred –
(i) for a new service; or
(ii) for an existing service resulting in an excess of the sum provided for that service; or
(iii) to meet expenses in case of natural disasters or other emergencies requiring exceptional expenditure or as a result of unexpected demands in respect of non-discretionary items;
(b) the reasons for which the proposed additional expenditure in respect of paragraph (a) (i) or (ii) –
(i) could not have been forecasted;
(ii) cannot without injury to the public service be postponed; and
(iii) cannot be offset by savings from other items of expenditure;
(c) the likely impact on the outputs and performance indicators specified in the Programme-Based Budget Estimates in case:
(i) the application is approved; and
(ii) the application is not approved.
4. Where the Accounting Officer is not the Supervising Officer of the Ministry/Department, the Supervising Officer should endorse the application.
5. Where expenditure is required to be incurred for a new service, provision should normally be made in the PBB estimates for the following fiscal year. Applications for additional funds from Contingencies and Reserves for the purpose of incurring expenditure in the current fiscal year will only be entertained if
(a) approval of Cabinet has been obtained ; and
(b) the financial clearance of MOFED had been sought prior to seeking cabinet approval.
6. The Accounting Officer may be required to justify the application before the Estimates Committee of MOFED.
7. Virement (Contingencies) Warrant & Virement (Contingencies) Advice
(a) Approval of any Virement from Provision for Contingencies would be issued by MOFED to the Accountant General in the form of a Virement (Contingencies) Warrant (Finance form 7 (a)-Annex II).
(b) On receipt of the Virement (Contingencies) Warrant under subparagraph (a), the Accountant General will issue a Virement (Contingencies) Advice to the Ministry/Department concerned by way of Finance Form 8 (a)-Annex III and will make the necessary budget transfer in the Budget record of Treasury Accounting System (TAS).
Copy to: Accountant-General
Director of Audit
Officer-in-Charge (Finance Section)