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BALOCHISTAN LOCAL GOVERNMENT (AMENDMENT) ORDINANCE, 2002 BALOCHISTAN LOCAL GOVERNMENT (AMENDMENT) ORDINANCE, 2002 ORDINANCE XII OF 2002 An Ordinance further to amend the Balochistan Local Government Ordinance, 2002 [Gazette of Balochistan, Extraordinary, 5th August, 2002] No Legis: 1-122/Law/2001-VII, dated 5-8-2002.--The following Ordinance made by the Governor of Balochistan on 2nd August, 2002, is hereby published for general information: 15. Substitution of Chapter XII of Ordinance XVIII of 2001.---In the said Ordinance, for Chapter XII, the following shall be substituted:- CHAPTER XII LOCAL GOVERNMENT FINANCE 107. Establishment of Funds and Public Accounts.---(1) There shall be established a District Funds, A Tehsil Fund, a Town Fund and a Union Fund as the .case may be for each respective. Local Government. (2) All revenues received by a Local Government shall form part of the respective Local Government Fund including: (a) monies transferred by another Local Government under this Ordinance; (b) grants made to or monies received by a Local Government from the Government or other sources; (c) the proceeds of taxes or charges levied by a Local Government under this Ordinance; (d) rents and profits payable or accruing to a Local Government from immovable property vested in or controlled or managed by it; (e) proceeds or any other profits howsoever know or called from bank accounts, investment or commercial enterprises of a Local Government; (f) gifts, grants or contribution to a Local Government by individuals or institutions; (g) income accruing from markets or fair regulated by a Local Government; (h) fines paid with respect to offences under this Ordinance or by laws or under any other law for the time being in force in which provisions is made for the fines to be credited to the Funds established under this Ordinance; (i) proceeds from other sources of income which are placed at he disposal of a Local Government under directions of the Government; and (j) all monies transferred to a Local Government by the Government. (3) All other moneys including-* (a) receipts accruing from trusts administered or managed by a Local Government. (b) refundable deposits received by a Local Government; and (c) deferred liabilities; shall be credited to the public Account of the. respective Local Government. 108. Custody of Funds.---(1) Monies credited to a Local Funds or a public account shall be kept in the State Bank, government treasury, a post office or a bank in such manner as shall be specified by the Government from come time and shall be operated through the Accounts Officer/Treasury Officer specified under section 114 of the concerned Local Government. 109. Application of Funds.---(1) The monies credited to a Fund shall be expended by Local Government in accordance with the annual budget and supplementary Budget approved by its Council. (2) A local government may transfer approved budgeted amounts to any Local Government. Village Council or Neighbourhood Council or Citizen Community Board, within its local area, for expenditure for carrying out a project service or activity transferred to, or managed by, the recipient local government, Village Neighbourhood Council or Council or Citizen Community Board. (3) No Local Government shall transfer monies to higher level of government except by way of repayment of debts contracted before the coming into force of this Ordinance. (4) The application of a fund of Local Government shall be provided by a council be subject to budgetary constrains by ratio to be prescribed for development works and expenditure on establishment. (5) Expenditure from a Fund of a Local Government on new posts or filling of existing vacant posts or total establishment expenditure as the case may be in a financial year shall not increase more than ten percent. in total from the actual establishment expenditures of the previous years. Provided that this subsection shall not apply to a general salary increase on the existing schedule of establishment prescribed by Government. (6) The development budget shall be prioritised in accordance with the bottom up planning system as laid down in, section 119: Provided that not less than twenty five percent. of the development Budget shall be set apart for utilization in accordance with the provisions section 119. (7) Where a new Local Government is to take over during a financial year as a result of fresh elections, the outgoing Local Government shall not spend funds or make commitments for any expenditure, under any demand for Grant or Appropriation, in excess of eight percent. per men sum of the budgeted funds for the remainder of its term in the office in that financial year. (8) In every budget a provision shall be made for payment of performance incentive bonuses. 110. Charged Expenditure.---The following expenditure shall be treated as charged expenditure:- (a) in relation to District Fund: (i) the budget of the Zila Council, (ii) any sum to satisfy any judgment, decree of award against a Local Government by any Court or Tribunal, (iii) all sums to be paid in connection with the administration of the functions of the Zila Mohtasib; and (iv) interest payment. (b) in relation to Tehsil or Town or Union Fund; (i) the budget of the Tehsil or Town Council or as the case may be the Union Council, (ii) any sum to satisfy any judgment, decree or award against local Government by any Court or Tribunal, and (iii) interest payments. 111. Budget Preparation.---(1) The annual budget for each Local Government, shall contain estimate of: (a) grants-in-aid from the Government; (b) Amounts available in the respective Fund; (c) receipts for the next year; and (d) expenditure to be incurred for the next year. (2) To enable the budget preparation by Local Government; the Government shall, sufficiently before the beginning of each financial year notify the provisional shares, which may be credited to the Fund respective Local Government from the Provincial Allocable amount. (3) The Auditor-General shall prescribe the chart of classification and accounts, to be followed by Local Government from time to time. (4) Each District Government, Tehsil (Town) Municipal Administration and Union Administration shall re-appropriate budgetary provision in accordance with the re-appropriation powers delegated to them by the respective Council: Provided that at the end of a financial year a full statement of all re- appropriation made shall be submitted to the Council. (5) No demand for a grant shall be made except on the recommendations of the Local Government. (6) Conditional grants from the Provincial retained amount will bi shown separately, in the budget and will be governed by conditions agreed therein. (7) Before the commencement of a financial year each Local Government shah, for its Fund, prepare in the prescribed manner, budget for he year, in conformity with the provisions of section 119. 112. Approval of budget.---(1) Following the presentation of the Provincial budget but, before the commencement of the next financial year, each Nazim shall, present the budget for approval by the respective council before the beginning of such financial year; Provided that the charged expenditure may be discussed but shall not be voted upon by the Councils. (2) When a Local Government assumes office for the first time, it may within ten weeks, present to the concerned Council a budget for the remaining part of the financial year for approval. (3) The budget of Local Government shall, on presentation before the Council, be referred to the Finance Committee of the Council for detailed scrutiny and recommendation to the Council. (4) The budget of a Local Government shall be approved by simple majority of the total membership of the respective Council. (5) No other business shall be taken up by a Council during the Budget sessions. (6) In case a budget is not approved by a Council before the commencement of the financial year to which it relates, the concerned Local Government shall spend money under various heads on pro rata basis in accordance with the budgetary provisions of the preceding financial year for a period not exceeding thirty days. In case the budget is not passed within the extended period the budget shall be prepared, approved and authenticated by the Local Government Commission for the full year. (7) At any time before the expiry of the financial year to which a budget relates, a revised budget for the year shall be prepared by a Local, Government and approved by its Council. (8) A budget shall not be approved if; (a) the sums required to meet expenditures exceed the estimated receipts; and (b) the constraints specified in section 119 have not been complied with. (9) The Nazim shall authenticate by his signature a Schedule specifying the,-- (a) grants made or deemed to .have been made by the District, Cehsil, Town or Union Council, and (b) the several sums required to meet the expenditure charged upon the District, Tehsil, Town or Union Fund. (10) The Schedule so authenticated shall be laid before the Council, but shall not be open to discussion or vote thereon. (11) The Schedule so authenticated shall be communicated to the respective Accounts Office as specified in section 114 of this Ordinance. 113. Honoraria and allowances.--Each Local Government shall make budgetary provisions for honoraria and allowances of the Nazims and Naib Nazims and members of the Council concerned. 114. Accounts.--(1) The accounts of the receipts and expenditure of Local Government shall be kept in such form and in accordance with such principles and methods as the Auditor-General of Pakistan may, with the approval of the President, prescribe. The following procedure shall be followed unless changed by the Government through a notification: (a) the District Accounts Officer (or a Treasury , Officer where a DAO does not exist) shall maintain the accounts of each District Government. (b) the Tehsil or Town Accounts Officer and Union Accountant shall maintain the accounts of the Tehsil or Town Municipal Administration or the Union Administration as the case may be; (c) the District Accounts Officer, Tehsil or Town Accounts Officer and the Union Accountant/Secretary shall perform pre-audit of all payment from the Funds of the District, Tehsil or Town and Union, as the case may be, before approving the disbursements of monies. The pre-audit shall be conducted in accordance with the pre-audit checks prescribed by Auditor -General of Pakistan from time to time. (2) The District Accounts Officer shall consolidate the district accounts with the compiled accounts of the Tehsil, Town Account Office and Union Accounts Office. (3) A statement of Monthly and Annual Accounts and such other necessary statements shall be placed at a conspicuous place by the Local Government concerned for public inspection. (4) The respective Accounts Committees of the Councils shall hold public hearings in which: (a) objections to statement of accounts referred to in subsection (3 ) above may be heard and, if required, appropriate action may be taken; (b) internal and external Audit Reports will be discussed for appropriate action. 115. Audit of the District Government.---(1) The Auditor-General of Pakistan shall on the basis of such audit as he may consider appropriate or necessary to certify the accounts prepared by the District Accounts Officer T.O. for each financial year in the prescribed manner, submit the certified accounts with such notes comments or recommendations, as he may consider necessary, to the Competent Authority for placement before the Public Accounts Committee of the Province:--- (2) The Auditor-General shall.-- (a) audit the expenditure of the District Government to ascertain whether the monies shown in the accounts having been disbursed where legally available for and applicable to, the service or purpose to which they have been applied or charged and whether or charged and whether the expenditure conforms to the authority which governs it; (b) audit all transactions of the District Government relating to Public Accounts; (c) audit all trading, manufacturing profit and loss accounts of a District Government; and to satisfy himself that all such receipts which are payable into the Fund have been property and correctly deposited and rules and procedures relating to such receipts have been fully observed. (3) The Auditor-General shall have the authority to- (a) audit all report on the accounts of stores and stock kept in any office of District Government; (b) inspect any office of accounts, under the control of a District Government including treasuries, and such offices responsible for the keeping of initial or subsidiary accounts; (c) require that any accounts, books, papers and others documents which deal with or form the basis of, or otherwise relevant to the transactions to which his duties in respect of audit extend, shall be sent to such place as he may direct for his inspection; and (d) enquire or make such observations as he may consider necessary, and to call for such information as he may require for such information as he may require for the purpose of the audit. (4) The office incharge of any office or department shall afford all facilities and provide record for audit inspection and possible with requests for information in as completed a form as possible and with all reasonable expedition. (5) Upon the request of the Zila Nazim concerned the Auditor-General shall cause a special audit of account of the District Government and forward his report to the Zila Nazim who shall submit the same to the Zazim who shall submit the same to the Local Government; commission necessary action. (6) The Auditor-General or any officer appointed by him, for conducting an audit of District Government, shall have access to all the hooks and documents pertaining to the accounts and may also examine and public servant or premises of the District Government concerned. 115-A. Audit of Tehsil Municipal Administration Town Municipal Administration and Union Administration. ---(1) The audit of the Tehsil Municipal Administration, Town Municipal Administration and Union Administration shall be conducted by the Provincial Local Fund Audit Department in the prescribed manner. (2) The report of certified accounts with such notes, comments or recommendations, as may be considered necessary, may be submitted to tile Tehsil Nazim, Town Nazim or, as the case may be Union Nazim, who shall cause the same to be submitted to the Tehsil Council, Town Council or as the case may be, Union Council which shall refer it to its Account, Committee for examination. 115-B. Internal Audit.---(1) Nazim of each District Government and Tehsil Municipal Administration may appoint an Internal Auditor. (2) Internal audit shall be an independent, objective assurance consulting activity designed to add value and improve the operations of Local Government, and shall help the Local Government to accomplish the objective by bringing a systemic and disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes: (3) The Internal Auditor shall serve as Principal support persons to respective Nazim of District Government or, Tehsil Municipal Administration or, Town Municipal Administration by providing information to him and members of the respective Council on Local Government performance. 116. Taxes to be levied.---(1) A Council may levy takes, cesses, fees mates rents, tolls, charges, surcharges and levies specified in the, Second Schedule and as prescribed by notification in the Official Gazette. (2) No tax shall be levied without previous publication of the tax: proposal and after inviting and hearing public objections. (3) The Council may levy a tax, increase, reduce, suspend, abolish vary or exempt the same. 117. Rating areas and property tax:-- per cent.-(1) On commencement of this Ordinance, every Tehsil and Town shall be rating areas within the meaning of the Blochistan Urban Immovable Property Tax Act, 1958 (V of 1958). (2) The Tehsil Council or Town Council shall, determine the rate of property tax in an area within the Tehsil or, as the case may be, Town and communicate such rates to the respective Executive District Officer (Revenue) for collection by the Excise and Taxation Department: Provided that in the areas within a Tehsil or Town where rate has not been determined, the rate shall remain as zero: Provided further that the District Government shall retain ten percent. of the proceeds as collection charges. (3) Unless varied under subsection (2) above, the existing rates in the areas within a Tehsil and Town shall remain in force. Explanation.-- For the purpose of this section the 'rate' shall mean the tax leviable under the Balochistan Urban Immovable Property Tax Act, 1958 (V of 1958). 118. Collection of Taxes.---(1) All taxes, levied under this Ordinance shall be assessed, regulated and collected as prescribed. (2) Failure to pay .any tax and other money claimable under this Ordinance shall. be an offence and the arrears shall be recovered as arrears of land revenue. 119. Bottom up Planning and the Ownership Incentive System.---(1) Before the beginning of the financial year the respective Local Government shall lay down and announce the classification of development schemes to be undertakers exclusively under the provision of this section. (2) A Local Government may grant to the Citizen Community Boards within its local areas, up to eighty percent. of any approved development scheme in' the manner prescribed: Provided that a scheme shall be deemed to be an approved scheme if: (a) the prescribed departmental procedure for estimating the cost of the scheme has been followed; (b) the, estimating officer certifies that the scheme meets the requirements laid down by law; (c) the Citizen Community Board has deposited its share, of the cost 4 the development scheme with concerned Local Government and; (d) the complete departmental estimates and the proof of deposit of the Citizen Community Board's contribution are attached. (3) The grant referred to in subsection (2) above shall be spent from the reserved 25 % of the annual development budget as provided in subsection 6 of the section 109. (4) A cut-off date for submission of all scheme proposed by the Citizen Community Boards shall be announced by the Local Government concerned before the presentation of its budget. (5) The respective Local Government shall authorize an officer to dray up a statement specifying the schemes submitted pursuant to subsection (4) above by classification including the total amount of contribution for a particular classification of schemes. (6) A second statement shall determine contributions for a particulars classification of scheme as a ratio of the total contributions for all schemes submitted with a particular Local Government for that year and the statement shall be used determine amounts of allocations for a classification of schemes from the budget reserved for the purpose. (7) A third statement shall be drawn up which shall identify the numbers of schemes submitted in a particular classification, beginning with the scheme containing the highest contribution by the Citizens Community Board in a classification until all the schemes in the classification are selected or the funds allocated for that particular classification in the amount determined in subsection (6) above are exhausted. (8) The 25 % funds for Citizen Community Boards under in subsection (6) of section 109 shall be communicated to the authorized officer under subsection (5) above by the Executive District Officer (Finance and Planning) for a District Government and the Tehsil or Town Officer (Finance) for a Tehsil or Town Municipal Administration, as the case may be and a Union Secretary (in charge finance) for a Union Administration. (9) The Authorized Officer under subsection (5), after identifying the schemes shall communicate them to the concerned budget officer of the respective Local Government for approval by the Council. (10) The statement referred to in subsection (7) above shall be approved by a simple majority of the members of the- respective Council, in a budget session to be held by the respective Council. (11) The schemes approved by the respective Councils shall be carried out as prescribed. (12) Subject to subsection (10) above, the respective Accounts Officer of the respective Local Government shall release funds as prescribed according to the schedule of expenditure as passed by the Council concerned tinder subsection (10) above. 120. Local Government not to incur Debts.---(1) No Local Government shall incur any debt. (2) No monies of the Local Government shall be invested in securities other than those floated by the Federal Government or Provincial Government.