Guidelines FLB Health Final 24-06-24

Facility-Level Budgeting and Expenditure
Management Guidelines
2024
(Primary and Secondary Healthcare Facilities)
Government of Khyber Pakhtunkhwa

Finance Department
FOREWORD
I am pleased to present the ‘Facility-Level Budgeting and Expenditure Management

Guidelines, 2024’. These guidelines provide a comprehensive framework to enhance
financial management practices within primary healthcare facilities across Khyber
Pakhtunkhwa. These guidelines have been developed to provide a structured approach,
guiding facility managers through the complexities of financial management. They will have
a positive impact by promoting efficient processes and improving the overall quality of
healthcare services.
These guidelines will play a pivotal role in providing clear directives for facility-level
budgeting and expenditure management. Covering various aspects, from the annual
healthcare facility needs assessment to budget releases, execution mechanisms, and oversight,
the guidelines are a comprehensive resource. The incorporation of progressive features, such
as an electronic application (e-App)/information technology (IT) solution, underscores our
commitment to modernising financial management practices. As we embark on the
implementation of these guidelines, I am confident that they will not only streamline financial
processes but also instil a culture of responsibility and transparency within our healthcare
facilities.
I extend my gratitude to all stakeholders who contributed to the collaborative development of
these guidelines. Their insights and expertise have been instrumental in shaping a document
that aligns with our vision for a transparent and effective healthcare financial system. The
Finance Department will continue to exploit this potential as we ensure dynamic and
continuous improvement of the guidelines in the future, drawing insights from lessons
learned during implementation and valuable feedback from stakeholders, especially the
dedicated facility managers. Your ongoing support is crucial in refining these practices and
strengthening the financial system for healthcare.
I anticipate that the ‘Facility-Level Budgeting and Expenditure Management Guidelines,
2024’ will prove to be an invaluable resource for facility managers, contributing significantly
to the improvement of financial practices within our healthcare system.
Amer Sultan Tareen

Secretary Finance Department
CONTENTS
FORWARD..............................................................................................................................2
LIST OF ABBREVIATIONS AND ACRONYMS.....................................................................1
SECTION 1: INTRODUCTION AND BACKGROUND.........................................................2
1.1 INTRODUCTION.........................................................................................................2
1.1.1 Background..................................................................................................................2
1.1.2 Objectives.....................................................................................................................2
1.1.3 Overview of the primary healthcare system in Khyber Pakhtunkhwa............................3
1.2 BUDGETARY RESOURCE ALLOCATIONS AND FUNDS FLOW AT THE
PRIMARY HEALTHCARE FACILITIES LEVEL.......................................................4
1.2.1 Budgetary resource allocations process.........................................................................4
1.2.2 Utilisation of various kinds of budgetary resources at the primary healthcare facilities
level..............................................................................................................................5
SECTION 2: ROLES AND RESPONSIBILITIES IN FACILITY-LEVEL BUDGETING AND
EXPENDITURE MANAGEMENT........................................................................................7
2.1 HEALTH SECRETARY / PRINCIPAL ACCOUNTING OFFICER.............................7
2.2 DIRECTOR GENERAL HEALTH SERVICES............................................................7
2.3 DHOs............................................................................................................................7
2.4 FACILITY MANAGERS AND PCMCS........................................................................8
SECTION 3: FACILITY-LEVEL BUDGET AND EXPENDITURE MANAGEMENT
GUIDELINES.....................................................................................................................10
3.1 BUDGET PREPARATION AT FACILITY LEVEL...................................................10
3.1.1 Annual healthcare facility needs assessment................................................................10
3.1.2 Facility-level budget-making process...........................................................................11
3.2 BUDGET RELEASES.................................................................................................12
3.3 BUDGET EXECUTION..............................................................................................13
3.3.1 Expenditures out of facility budgets.............................................................................13
3.3.2 Expenditures out of PCMC funds................................................................................14
3.4 BUDGET ADJUSTMENTS.........................................................................................14
3.5 EXCESSES AND SURRENDERS – REVISED BUDGET ESTIMATES.....................15
3.6 FINANCIAL REPORTING AND PROGRESS REVIEWS.........................................16
3.6.1 Financial statements....................................................................................................16
3.6.2 Budget execution review at facility level......................................................................16
3.6.3 Budget execution review at the district level................................................................16
i | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

3.6.4 Budget execution review at department level...............................................................17
3.7 OVERSIGHT, ACCOUNTABILITY, AND TRANSPARENCY..................................17
3.7.1 Regular monitoring and oversight...............................................................................17
3.7.2 Internal controls reviews.............................................................................................17
3.7.3 Transparency and public engagement.........................................................................18
3.8 E-APP/ IT SOLUTION FOR ENHANCED FINANCIAL MANAGEMENT................18
3.8.1 Establishment of an e-App/IT solution.........................................................................18
3.8.2 Using the e-App/IT solution.........................................................................................18
3.8.3 Integrated system for budget management..................................................................18
3.8.4 Distinct modules..........................................................................................................18
3.8.5 Manual process until implementation of e-App/IT solution..........................................18
3.9 PILOT TESTING AND ROLL-OUT IMPLEMENTATION.......................................19
3.9.1 Pilot phase...................................................................................................................19
3.9.2 Roll-out phase.............................................................................................................19
ANNEXURE 1: BUDGET FORMS.....................................................................................20
FORM – I (ANNUAL ACTION PLAN)...................................................................................20
FORM-II (ESTIMATES OF NON-SALARY CURRENT EXPENDITURE)...........................25
FORM-III (HR FORM)..........................................................................................................27
FORM-IV (REVISED ESTIMATES OF NON-SALARY CURRENT EXPENDITURE).........29
FORM-V (FACILITY-WISE MONTHLY FINANCIAL STATEMENT)................................31
FORM-VI (MONTHLY CONSOLIDATED FINANCIAL STATEMENT)..............................33
ANNEXURE 2 – ABSTRACT OF KHYBER PAKHTUNKHWA DELEGATION OF
FINANCIAL POWER RULES 2018...................................................................................38
ANNEXURE 3 – GLOSSARY OF KEY TERMS USED IN THESE GUIDELINES.............42
ii | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

LIST OF ABBREVIATIONS AND ACRONYMS
BHU Basic Health Unit

DGHS Director General Health Services
BPS Basic Pay Scale
CoA Chart of Accounts
DHO District Health Officer
e-App electronic application
FMC Financial Management Cell
IT Information technology
KPIs Key performance indicators
PAO Principal Accounting Officer
PCMC Primary Care Management Committee
RHC Rural Health Centre
1 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

SECTION 1: INTRODUCTION AND
BACKGROUND
1.1 INTRODUCTION
1.1.1 Background
The Finance Department of the Government of Khyber Pakhtunkhwa has developed the
‘Policy for Facility-Level Budgeting and Expenditure Management’ for primary healthcare.
The aim of this policy is to ensure effective financial management and allocation of resources
to support the operational needs of each facility within the primary healthcare sector in
Khyber Pakhtunkhwa. In pursuit of this aim, the Finance Department has developed the
‘Facility-Level Budgeting and Expenditure Management Guidelines’ to support facility
managers to comply effectively with the provision of the policy. These guidelines are
intended for use by all primary healthcare facilities under the supervision of the District
Health Officers (DHOs)1.
1.1.2 Objectives
The purpose of these guidelines is to facilitate facility-level managers 2 to enhance financial
management practices at primary healthcare facilities, particularly regarding non-salary
components. These guidelines provide detailed instructions and templates to assist facility
managers in performing facility-level budgeting and expenditure management at the primary
healthcare level throughout Khyber Pakhtunkhwa. Specifically, the guidelines aim to achieve
the following objectives:
• Standardise the budget management process of healthcare facilities, including
budget preparation, allocation, budget virements, execution, and reporting.
• Provide detailed instructions, workflows, and unified templates to facilitate facility
managers to effectively comply with prevailing laws and standards governing
public financial management, in order to meet evolving healthcare needs.
• Establish measures to ensure accountability and oversight, ensuring transparent and
responsible financial practices and financial reporting at various levels.
1
Rural Health Centres (RHCs) and Category D hospitals are declared as Drawing and Disbursing Officers
(DDOs) under the policy. Therefore, RHCs and Category D hospitals are required to follow the guidelines
and instructions contained in the Budget Call Circular issued by the Finance Department when preparing
their budget estimates and to follow other regulations governing public financial management in the
province.
2
In these guidelines, the term ‘facility manager’ refers to the in-charge (e.g. medical officer or medical
superintendent) of the primary and secondary healthcare facility.
• Foster collaboration among stakeholders, including facility managers, Primary
Care Management Committees (PCMCs), DHOs, the Health Department, and the
Finance Department, for effective financial management.
1.1.3 Overview of the primary healthcare system in Khyber Pakhtunkhwa

The Khyber Pakhtunkhwa public healthcare delivery system functions as an integrated health
complex that is administratively managed at the district level. The government provides
healthcare through a three-tiered healthcare delivery system and community-based
interventions. The former includes Basic Health Units (BHUs), and Rural Health Centres
(RHCs), which form the core of the network of primary healthcare centres. In addition,
primary healthcare is also provided at tuberculosis (TB) control centres, and mother and child
health centres etc. Secondary care is provided by first and second referral facilities, which
provide acute, ambulatory, and inpatient care. These facilities include Tehsil Headquarter
Hospitals and District Headquarter Hospitals. This is supported by tertiary care, which is
mostly attached with teaching hospitals. Services are augmented through a range of public
health programmes throughout the healthcare delivery system and through population-level
interventions.
There are different types of primary healthcare-level facilities in rural areas and these are
commonly known as BHUs and RHCs, while in urban areas, comparable types of primary
healthcare facilities are civil dispensaries, mother and child health centres etc.
The following paragraphs provide a brief explanation of the different types of primary
healthcare facilities in the public sector:
a) BHUs/civil dispensaries
Dispensaries are the oldest type of a primary healthcare facility and are mainly found in
urban areas. After the Alma-Ata Declaration3, BHUs were established country-wide, mainly
in rural areas, to work as the first formal point of contact for accessing primary healthcare
services. Ideally, each Union Council or Ward (the lowest level administrative unit in Khyber
Pakhtunkhwa) should have one primary healthcare centre. These usually serve a population
of around 5,000 to 25,000. These health facilities offer basic primary healthcare services,
which include the provision of static and outreach services for maternal care and childcare,
immunisation, family planning, management of diarrhoea, pneumonia, control of
communicable diseases and management of common ailments, along with health education
activities. These facilities are also responsible for the provision of management and logistical
support to Lady Health Worders and other community-based service providers. These
facilities usually offer services eight hours a day for six days a week.
3
The Alma-Ata Declaration was adopted in September 1978 during the International Conference on
Primary Healthcare held in that city. The conference was organized by the World Health Organization
and the United Nations Children's Fund. The Alma-Ata Declaration emphasised the importance of
primary healthcare as the key to achieving the goal of ‘health for all’ by the year 2000. It highlighted
the need for comprehensive and accessible healthcare services, community involvement, and
addressing the social determinants of health.
Due to the increasing population and to ensure 24/7 delivery services, the concept of 24/7
BHUs emerged. In comparison to a BHU, a 24/7 BHU is envisaged as providing a wider
range of services, including round-the-clock delivery services. A 24/7 BHU is envisaged as
serving a catchment population of 25,000–40,000. It is important for 24/7 BHUs to offer a
wide range of services, and there is a need for a wide range of infrastructure, human
resources, equipment, and supplies to be ensured at the facility. Khyber Pakhtunkhwa has
recently decided to upgrade some BHUs to offer 24/7 services, especially for delivery care.
Maternal and child health centres and private clinics currently offer such services round the
clock.
b) RHCs
RHCs function around the clock and serve a catchment population of 40,000–60,000 or even
more. They provide a comprehensive range of primary healthcare services and basic indoor
facilities. The services envisaged to be provided RHCs include health education services,
general treatment services, basic emergency obstetric and newborn care services, emergency
services (such as management of injuries and accident), selected surgical services (such as
stitching, abscess drainage, circumcision etc.), and first aid services to stabilise patients in
emergency conditions and refer them to a higher level of care in the event of complications.
RHCs also provide clinical, logistical, and managerial support to BHUs, Lady Health
Workers, maternal and child health centres, and dispensaries that fall within their
geographical limits. RHCs provide medico-legal, basic surgical, dental and ambulance
services. RHCs are equipped with laboratory and X-ray facilities and a 20-bed inpatient
facility. Around five to eight BHUs are linked with each RHC for referral and other
administrative purposes.
c) Other primary healthcare facilities
In addition to the above, there are other primary healthcare facilities which provide similar or
specific health services. Mother and child health centres in Khyber Pakhtunkhwa provide a
range of services focused on promoting and ensuring the health and well-being of mothers
and children, including antenatal services, postnatal services, family planning services,
immunisation etc. Similarly, TB control centres provide a range of services aimed at
preventing, diagnosing, and treating tuberculosis, while leprosy centres provide a range of
services aimed at the prevention, diagnosis, treatment, and rehabilitation of individuals
affected by leprosy.
1.2 BUDGETARY RESOURCE ALLOCATIONS AND FUNDS FLOW AT THE

PRIMARY HEALTHCARE FACILITIES LEVEL
1.2.1 Budgetary resource allocations process

In Khyber Pakhtunkhwa, planning and budget preparation starts with the issuance of the
Budget Call Circular. The Budget Call Circular also contains guidelines for preparing budget
estimates, budget forms, and instructions for filling these forms, and a budget calendar which
shows the schedule of key activities in the budget preparation process. An important feature

of the Budget Call Circular is that it contains indicative departmental budgetary ceilings,
which guide the administrative departments in planning and preparing budget estimates for
their various programmes, service delivery facilities, administrative functions etc. These
budgetary ceilings are derived based on policy priorities of the government, available fiscal
space to fund the operations and for public sector investments (i.e. the development budget),
past trends, and specific requirements of the administrative departments.
Another key feature of the budget cycle at the provincial level is the preparation of a
Budgetary Strategy Paper. The Budget Strategy Paper contains projections of revenues for
the province, which includes both the federal receipts (through the National Finance
Commission, including tax assignments, straight transfers etc.) and provincial receipts
(including sales tax on services, property tax etc.). The Budget Strategy Paper also contains
estimated current and development expenditures for a medium term of three years.
The Health Department distributes the departmental budgetary ceilings to the cost centres. 4
This process is guided by several factors, such as policy priorities for the health sector, recent
developments, past trends, and the unique needs of health facilities. These budgetary ceilings
are communicated to the respective health institutions and administrative offices along with
the budget calendar and budget forms.
In respect of primary healthcare facilities, budgetary ceilings are communicated to respective
DHOs. The DHOs are responsible for preparing budgetary estimates in respect of the primary
healthcare facilities under their administrative control. This process is guided by a needs
assessment exercise at the facility level (conducted by the facility managers in collaboration
with the PCMCs), which informs the prioritisation and budget-making at the district level.
The needs assessment and budget preparation process are explained in detail in Section 3 of
these guidelines.
It is important to note that various funds flow directly or indirectly to the health facilities
where actual service delivery occurs. It is critical to ensure facility managers and PCMCs
understand the funds flow to their respective health facilities, so that a robust needs
assessment exercise can be carried out and a comprehensive Annual Action Plan prepared.
1.2.2 Utilisation of various kinds of budgetary resources at the primary healthcare

facilities level
The following are the various kinds of budgetary resources utilised at the primary healthcare
facilities level:
Current/operational budget: This is the biggest source of resource allocation to health
facilities. The routine operational requirements of health facilities are met from this budget.
The current/operational budget of a health facility comprises the salaries of its staff and non-
salary expenditures like medicines, supplies, and repair and maintenance expenditures for
buildings and equipment etc.
4
Usually health institutions like Medical Teaching Institutes and District Headquarter Hospitals, or
administrative offices like the Office of the DHO and the Office of the Director General Health
Services etc.
Grants to PCMCs: Grants are allocated each year to the PCMCs for their effective
functioning and to enable them to discharge their mandated roles.
Retention of hospital revenues by PCMCs: The Finance Act 2021 allows the PCMCs to
retain 90% of the revenue collected from services provided by respective health facilities.
10% of these revenues collected are deposited in the government exchequer.
Allocation to various health programmes: Various health programmes are operational at
the facility level, including the Expanded Programme for Immunization, mother neonatal and
child health etc. Though no funds directly flow to the health facilities, the services are
provided through the health worker staff in the respective health facilities. In addition, certain
equipment and supplies are made available to the health facilities to enable the provision of
the programmatic activities.
Development budget: The developmental works in respective primary healthcare facilities
are undertaken by the provincial and district authorities. In this case also, no funds directly
flow to the health facilities, but these facilities benefit in terms of new or improved
infrastructure or equipment etc.
Provisions through other initiatives: The primary healthcare facilities get medicines,
supplies, and equipment through other initiatives of the provincial government: for example,
emergency medicines provision to primary healthcare facilities etc.
The types and channels of resource allocations to primary healthcare facilities are depicted in
the figure below:
Figure 1: Resource allocations to primary healthcare facilities

SECTION 2: ROLES AND
RESPONSIBILITIES IN FACILITY-LEVEL
BUDGETING AND EXPENDITURE
MANAGEMENT
Various stakeholders at the provincial, district/Tehsil, and facility level play a crucial role in
ensuring the effective implementation of these guidelines.
2.1 HEALTH SECRETARY / PRINCIPAL ACCOUNTING OFFICER

The Health Secretary, being the Principal Accounting Officer (PAO), is primarily responsible
for health policy formulation, setting budget priorities, budget management, and internal
controls. The PAO is supported mainly by the Financial Management Cell in respect of the
financial management affairs of the Health Department. The PAO plays a crucial role in
setting overarching policies that guide the financial management and resource allocation
strategies to support the operational needs of primary healthcare facilities. Additionally, the
PAO oversees the alignment of budgetary allocations with the evolving healthcare needs and
ensures compliance with public financial management standards.
2.2 DIRECTOR GENERAL HEALTH SERVICES

The Director General Health Services (DGHS) is tasked with providing oversight of District
Health Offices and health facilities. The DGHS contributes to the effective implementation of
health policies, programmes, and operations at the district level. The DGHS works
collaboratively with DHOs to ensure that budgetary allocations are utilised efficiently,
aligning with the unique requirements of health facilities, and adhering to the provincial
guidelines.
2.3 DHOs
DHOs play a pivotal role in supervising and steering the implementation of health policies,
programmes, and operations at the district level. They receive budgetary ceilings from the
Health Department and communicate these to the respective District Health Offices.
Specifically, the DHOs are responsible for the following:
• Prioritising budgetary ceilings for the health facilities based on district-specific
health needs.
• Collaborating with facility managers and PCMCs to identify healthcare needs
accurately.

• Conducting needs assessments at the district level and developing or updating the
District Health Plan. Incorporating needs assessments of the health facilities in the
District Health Plan.
• Aligning district health priorities with provincial policies and guidelines.
• Providing guidance to health facilities on aligning services with broader health
policies.
• Translating district and health facilities’ specific needs into budgetary
requirements.
• Engaging in budget deliberations with the Finance Department to represent district-
level priorities.
• Ensuring that budget resources are utilised effectively to improve health outcomes.
• Conducting budget execution reviews to assess performance against district-level
health objectives and health facilities’ targets.
• Monitoring district-level performance indicators to evaluate the impact of budget
execution.
• Collaborating with health facilities to establish and maintain internal controls.
• Analysing lessons from budget execution to inform future district- and facility-
level planning.
• Sharing insights with higher authorities for adjustments to future policies and
budgets.
2.4 FACILITY MANAGERS AND PCMCs

Facility managers and PCMCs at the facility level are responsible for conducting annual
healthcare facility needs assessments and preparing Annual Action Plans based on prioritised
community needs. They play a crucial role in optimising the utilisation of available funds,
addressing healthcare facility needs, and ensuring alignment with the established guidelines.
The specific roles and responsibilities are as following:
• Conducting annual healthcare facility assessments to identify and prioritise needs.
• Advocating for health facility budget priorities at the district level.
• Aligning facility policies with district and provincial health guidelines.
• Developing an Annual Action Plan with input from the DHO office, considering all
funding sources.
• Providing budget input to the DHO office based on health facility needs.
• Participating in budget deliberations with the DHO office, presenting facility
requirements.
• Overseeing budget execution to improve health outcomes efficiently.

• Reviewing budget reports to ensure alignment with health facility needs and
targets.
• Monitoring performance indicators in regard to budget impact at the facility level.
• Ensuring transparent reporting and internal controls for effective budget execution.
• Analysing lessons learned from budget execution and providing feedback to the
DHOs.
• Reflecting on lessons learned for future budget planning.

SECTION 3: FACILITY-LEVEL BUDGET
AND EXPENDITURE MANAGEMENT
GUIDELINES
3.1 BUDGET PREPARATION AT FACILITY LEVEL
The following sections outline the step-by-step process for facility managers to prepare
facility-level budgets.
3.1.1 Annual healthcare facility needs assessment

The facility managers and the PCMCs are required to be mindful of the various resources and
funds flows available to them (as explained in Section 2.2) when undertaking the needs
assessment and preparing the Annual Action Plan for their respective facilities.
Consequently, during the needs assessment phase, facility managers and PCMCs must
exercise prudence in aligning their proposed action plans with the designated resource
allocations and anticipated fund flows. As part of the annual action planning process, facility
managers and PCMCs should optimise the utilisation of available funds. This involves
strategic planning to address healthcare facility needs, setting clear priorities, and proposing
budget allocations that adhere to the guidelines outlined here.
To determine and assess the needs of healthcare facilities and the required resources, facility
managers should conduct an annual need assessment of the healthcare facility by following
these steps:
Step 1: Convene a meeting of the PCMC
The facility manager should organise a meeting of the PCMC to carry out the annual
healthcare facility-level needs assessment. During this process, the PCMC should identify the
priority areas. In doing so, the PCMC should refer to the district- or provincial-level health
plan, whichever is relevant, to ensure alignment with district/provincial health priorities
established by the Health Department or by the DHOs.
Step 2: Needs assessment
The PCMC should undertake a needs assessment which will provide the basis for formulation
of the Annual Action Plan. When conducting the needs assessment, the PCMC should gather
facility-specific data through various methods. This may include interviews with key
informants, including one-on-one or group discussions with doctors, para-medical, and other
hospital staff, as well as community members and stakeholders who may offer deeper
insights. Additionally, the PCMC could undertake physical observations by visiting different
sections of the healthcare facility to assess conditions and identify maintenance or
improvement needs. Moreover, the use of relevant data and information involves reviewing

Outpatient Department (OPD) data, stock records, laboratory records, and other pertinent
statistics to identify trends and potential requirements, such as additional hospital staff or
staff professional development needs.
Step 3: Prioritise needs
The PCMC should analyse the collected data, prioritise healthcare facility needs, and
calculate the funds required for financing these needs. They should classify and categorise
needs, along with the fund’s requirement, into short-term and long-term priorities based on
urgency and the availability of resources. While prioritising needs, the budgetary ceilings
communicated by the DHO Office shall also be considered.
Step 4: Resources estimation
Determine the overall resources required for implementing the Annual Action Plan (see Step
6). This includes the facility-level budget, allocations to PCMCs or hospitals revenues, and
any other source like grants or transfers through a provincial programme or through a
developmental scheme.
Step 5: Stakeholder feedback
After prioritising needs, the PCMC should share this information with doctors, para-medical
and other hospital staff, and the community to encourage feedback and gather additional
input. This will ensure there is a comprehensive understanding of the healthcare facility's
needs and that these are prioritised accordingly.
Step 6: Develop Annual Action Plan
The PCMCs are responsible for developing an Annual Action Plan (Service Delivery Plan)
using Form-I, which outlines specific steps to address the identified needs of their respective
health facilities. This plan includes timelines and designates responsible offices for each
action item. The Annual Action Plan will be updated for any change in budgetary allocations
for the respective facility after the approved budgets are communicated by the DHO office.
The final Annual Action Plan will be shared with the DHO office for their reference during
budget management.
The PCMCs must adhere to the non-wage budgetary norms established by the Finance
Department in consultation with Health Department when formulating budget estimates and
developing the Annual Action Plan.
3.1.2 Facility-level budget-making process

The budget preparation process at the facility level involves several essential steps. To assist
this process and to inculcate a performance orientation in budgeting, the DGHS should define
and provide a list of key performance indicators (KPIs) for each type of facility. The DHOs
and facility managers should adhere to the following steps in preparing the facility-level
budget:
Step 1: KPI targets and indicative budget ceilings for health facilities

The DHOs should assign targets against KPIs for each facility, which should be derived from
the District Health Plan. The DHOs, will allocate non-salary budgets as per the specified
norms communicated by the Finance Department and DGHS 5, along with the KPIs and
targets, to individual facilities, as received from the Financial Management Cell (FMC). The
DHOs will inform facility managers about the indicative non-salary budgets, along with KPIs
and targets for their respective facilities.
Step 2: Budget working
Facility managers, in collaboration with the PCMC, will create non-salary budget estimates
for their facility using Form-II. When preparing budget estimates, they should adhere to the
non-salary budget ceilings communicated by the DHO Office. When compiling budget
estimates, the following must be considered: the assessed healthcare facility needs, the
Annual Action Plan, and the targets against KPIs intimated by the DHO Office. The PCMC
will endorse the compiled budget estimates, which will then be submitted to the DHO using
Form-II, along with the Annual Action Plan. If the budget exceeds the allocated ceilings,
facility managers must provide a rationale for the excess.
To support the DHOs in preparing salary budgets, facility managers should also submit the
healthcare facility's human resource statement using Form-III when submitting non-salary
budget estimates to the DHOs.
Step 3: Review and finalisation
The DHOs will finalise their budget estimates, consolidate them and compile facility-wise
and category-wise budgets and will present these to the Principal Accounting Officer,
through the Regional Director General and DGHS, along with comprehensive justifications
for any potential excess over ceilings.
Step 4: Budget deliberations
The FMC, in collaboration with DHOs, will hold discussions to conclude budget estimates.
DHOs may invite facility managers and district-level monitoring officers of the Independent
Monitoring Unit, if needed, to address queries. This will ensure budgets align with facility-
level requirements and needs.
3.2 BUDGET RELEASES

The following steps should be undertaken to release budgets:6
Step 1: Budget release requests by DHOs
The DHOs prepare budget release requests based on the approved budget estimates.
Step 2: Endorsement of budget release requests by the FMC
5
TBD
6
The steps outlined below pertain specifically to facility budgets and do not apply to funds earmarked for
the PCMCs, which are managed in accordance with the existing procedures currently in practice.
FMC will review and endorse the budget release requests based on approved. DHOs are
responsible for collaborating with the FMC to ensure timely budget releases. The FMC will
collectively present consolidated facility level budget release requests to the Finance
Department.
Step 3: Sanction for funds release
FMC will obtain financial sanction from the PAO for releasing funds. This step applies
specifically to non-salary expenses, such as utilities, medicines and drugs, repairs, and other
regular non-salary budget heads.
3.3 BUDGET EXECUTION

This section details the essential steps and responsibilities involved in overseeing the budget
execution after funds have been released to the respective cost centres.
3.3.1 Expenditures out of facility budgets

DHOs will serve as the Drawing and Disbursing Officers for all primary healthcare facilities
(other than RHCs) and will exercise these powers under the Khyber Pakhtunkhwa Delegation
of Financial Power Rules 2018 (see abstract of these Rules at Annex-1). They will be
responsible for overseeing the timely and efficient utilisation of funds according to the
updated Annual Action Plans submitted by the respective facility managers.
To optimise budget utilisation, DHOs will consolidate the Annual Action Plans of the health
facilities and create a comprehensive Annual Action Plan. This comprehensive plan will
serve as a guiding document for budget management decisions throughout the budget
execution and review process. DHOs will maintain meticulous financial records to facilitate
the alignment of expenditures with the requirements outlined by facility managers.
The following mechanism is to be followed for budget execution:
Step1: Demand for expenditures:
• Facility managers, with PCMCs, request expenditures based on approved

allocations, considering past spending, available balance, and plan requirements.
• Clear details – including type, quantity, quality, delivery, and budget constraints –
should be provided.
• Requests for expenditures are for items with available budget.
Step2: Review and approval:
• DHOs review and approve expenditure demands, considering overall budget and
updated plans.
• They establish a system for making timely expenditure requests from all facilities
to improve spending efficiency while meeting needs.
Step3: Accounting and bookkeeping:

• DHOs record transactions and maintain accounts to track facility-level spending.
• Records verify that expenditures align with facility managers’ requests, ensuring
budget transactions meet expressed needs.
3.3.2 Expenditures out of PCMC funds

Expenditures out of PCMC funds are made in the manner set out in the guidelines for this
purpose published by the Health Department.
3.4 BUDGET ADJUSTMENTS

This section provides instructions for the budget adjustment process, which allows for the
reallocation of funds when necessary to efficiently execute the budget and prioritise
healthcare facility needs. Both facility managers and DHOs play a role in this process. To
ensure the efficient allocation of funds and prioritise the healthcare facility's top needs,
facility managers and DHOs will routinely assess the funds status, including in-year budget
execution reviews.
a. Re-appropriations within a facility-level budget
If the facility manager identifies a need to reallocate funds from one budget head to another
within the facility-level budget, the following procedure must be followed:
Step 1: Approval of the PCMCs
• The facility manager will seek the approval of the PCMCs for the re-
appropriations. This shall be supplemented through proper justifications in written
form through the PCMC resolution.
• The details of the re-appropriation (i.e. the source and target budget head), along
with the approval of the PCMC, with proper justification, must be forwarded to the
DHO.
Step2: Approval of the re-appropriation
• The DHO is authorised to re-appropriate funds within non-salary budget heads of a

cost centre provided there are requests from the respective PCMCs.
b. Re-appropriations between facility-level budgets
If the DHO identifies the need to reallocate funds from one facility-level budget to another,
the following procedure will be followed:
Step 1: Informing respective facilities
• The concerned facilities will be informed about the re-appropriations, including

justifications. A calculation of the remaining balance in the respective budget head
and the anticipated expenditures in the remaining period of the fiscal year will be
carried out.
Step 2: Concurrence by the respective PCMCs
• The respective facility managers will convene a meeting with PCMCs to deliberate
on the proposed re-appropriations and their implications for the targets outlined in
the Annual Action Plan.
• The decisions made by the PCMCs, whether in agreement or otherwise, will be
documented in a declaration signed by the PCMCs and communicated to the DHO.
Step 3:Approvals
• If the PCMCs agree to the proposed re-appropriation, the DHO will submit the
case to Regional Director General for approval. In case a facility does not lie
within the jurisdiction of single Regional Director General, the case will be
forwarded to DGHS for approval.
Note: Appropriate amendments will be done in Khyber Pakhtunkhwa Delegation of
Financial Power Rules 2018.
The following key controls must be adhered to:
i) Purpose-driven re-appropriations: Re-appropriations should only be made when it

is clear that the funds allocated to a particular budget head will not be fully utilised or
when there is potential for savings.
ii) No intentional diversion: Re-appropriations should not be used as a means to
temporarily move funds from one head to another with the intention of later restoring
the diverted allocation to the original head.
iii) PCMC agreement: Re-appropriations can only be carried out after the PCMC has
expressed its approval in writing.
iv) Unreleased budgets excluded: Re-appropriations cannot be made from budgets that
have not been released.
v) First six months restriction: Re-appropriations are not allowed during the first six
months of the financial year.
3.5 EXCESSES AND SURRENDERS – REVISED BUDGET ESTIMATES

Facility managers are advised to consider key factors during the preparation of revised
budgets, including:
• comparing actual expenditures with the budget from the previous year;
• assessing year-on-year expenditure increases;
• analysing spending patterns; and
• detailed justifications for any variations that may arise.
Further specific steps and detailed instructions for the budget revision exercise are outlined in
the relevant proforma (Form-IV).

3.6 FINANCIAL REPORTING AND PROGRESS REVIEWS
This section provides instructions on financial reporting and progress and performance
management in the context of budget execution reviews at various levels, including facilities,
districts, and the departmental level, to ensure that budgets are executed promptly and
effectively. These reviews should be conducted assess progress and performance and allow
for timely corrective actions when necessary.
3.6.1 Financial statements

The DHOs must prepare a facility-wise monthly financial statement using Form-V and share
the same with respective facility managers within five days after the end of each month.
Appropriate justifications must be provided in cases where any specific demand of the
facility for expenditures is not met.
Health facilities will also prepare financial statements for PCMC funds as set out in the
guidelines notified by the Health Department. Furthermore, health facilities will prepare
monthly consolidated financial statements by aggregating expenditures incurred at the DHO
office (from the financial statements shared by the DHO office) and the expenditures made
from PCMC funds using Form-VI. The facility managers will submit consolidated monthly
financial statements to the DHO office within 10 days after the end of each month for review
and record.
3.6.2 Budget execution review at facility level

The facility managers are responsible for reviewing their facility’s budget and expenditures
on monthly basis during regular meetings with the PCMCs. This review should cover the
following:
i) Evaluate effectiveness: Assess the effectiveness of actions taken to address the needs
identified and prioritised during the annual healthcare facility needs assessment.
Assess the progress towards achieving the KPIs and evaluate the appropriateness of
budget spent towards achieving the targets. Review the actual expenditures trend and
compare realised performance with the planned performance.
ii) Analyse deviations: Analyse the reasons for any deviations from the planned budget.
iii) Identify potential budget savings or additional requirements: Identify areas for
potential saving (surrender) or additional budget requirements (excess) and take
corrective actions.
The review should encompass all funding sources as detailed in the Annual Action Plan. The
report should include details of budget allocation, releases (or revenues on account of PCMC
funds), expenditures, remaining balances, and suggested corrective measures.
3.6.3 Budget execution review at the district level

The DHOs will conduct monthly reviews of the consolidated expenditures statements of all
facilities. In these reviews, they will identify opportunities to improve budget execution at the
facility level and communicate their feedback to the facility managers. After these reviews,
DHOs will consolidate and submit a comprehensive report on budget execution to the FMC
within 20 days of each calendar month.
3.6.4 Budget execution review at department level

The FMC, in collaboration with the DGHS, will review the budget and spending of all
healthcare facilities quarterly within thirty days after the close of the respective quarter.
Using reports from DHOs, the review will evaluate budget execution, expenses, and progress
against departmental KPIs using the output-based budget methodology and sectoral targets
from the Health Policy/Strategic Plan. The review will pinpoint areas for improvement and
provide feedback to DHOs for prompt corrective actions. These reviews will guide budget
adjustments at facility, district, and provincial levels and help the Health Department assess
policies and make timely corrections.
3.7 OVERSIGHT, ACCOUNTABILITY, AND TRANSPARENCY

This section provides instructions for oversight, accountability, and transparency in the
budget management process to ensure financial propriety.
3.7.1 Regular monitoring and oversight

DHOs have a crucial role in overseeing healthcare facility functions and financial progress.
They will support facility managers to comply with the requirements of these guidelines.
3.7.2 Internal controls reviews

a. Evaluating internal controls
The internal audit cells within both the Health Department and Finance Departments have the
responsibility for evaluating the effectiveness and adequacy of the internal controls in place.
The Internal Audit Cell is responsible for assessing healthcare facilities’ compliance with
these guidelines to ensure that internal controls are in place and functioning.
The Internal Audit Cell will select a representative sample of health facilities to be included
in the Health Department’s annual internal audit plan. The Internal Audit Cell will use a risk-
based approach to select the sample, aiming to provide assurance regarding internal controls
and compliance with these guidelines.
Once the internal audit is concluded, the Internal Audit Cell will present the findings to the
Secretary Health Department and make recommendations for necessary actions to further
enhance internal controls at the facility level.
b. Facility managers’ support to internal control review
The facility manager will provide the internal audit teams with unrestricted access to
personnel, healthcare facilities, PCMC members, and financial records.

3.7.3 Transparency and public engagement
The Health Department will routinely publish budget execution review reports on its official
website for public consumption. These reports will highlight budget progress at health facility
level. Additionally, the Health Department may seek to improve its official website to enable
citizens to provide feedback on budget execution progress at the facility level .
3.8 E-APP/ IT SOLUTION FOR ENHANCED FINANCIAL MANAGEMENT
3.8.1 Establishment of an e-App/IT solution

To support facility managers in implementing these guidelines, the Finance Department will
deploy a dedicated electronic application (e-App) or information technology (IT) software. IT
e-App / software will offer access points to each facility, including primary and secondary
healthcare facilities, as well as the DHOs, the Health Sector Reforms Unit, the FMC, and the
Independent Monitoring Unit. Access will be granted via unique user IDs and passwords.
3.8.2 Using the e-App/IT solution

The e-App/IT solution will connect health facilities and their corresponding budget codes in
the Financial Accounting and Budgeting System (FABS). It will empower facility managers
to create and submit annual budget estimates, as well as conducting real-time reporting.
3.8.3 Integrated system for budget management

The IT e-App/software will seamlessly integrate approved budget norms, detailed object
codes, and their descriptions based on the Controller General of Accounts (CGA) Chart of
Accounts (CoA). It will perform automatic calculations and provide consolidated budget and
expenditure data by healthcare category for primary and secondary healthcare facilities.
3.8.4 Distinct modules

The e-App/IT solution will feature distinct modules for keeping in view the processes defined
in these guidelines.
3.8.5 Manual process until implementation of e-App/IT solution

Until the introduction of the e-App/IT system, DHOs and facility managers will carry out
budgeting and expenditure management responsibilities by applying the manual processes
and forms outlined in these guidelines.

3.9 PILOT TESTING AND ROLL-OUT IMPLEMENTATION
3.9.1 Pilot phase

In recognition of the dynamic nature of healthcare management and the need for effective
implementation, these guidelines will undergo a pilot testing phase. The pilot phase will be
characterised by the following elements:
 The Finance Department, in collaboration with Health Department, will select a
district for the initial pilot testing phase. The district will be chosen based on factors
such as geographic representation, diversity in healthcare needs, and administrative
feasibility. The pilot testing phase will span a predetermined period, allowing for a
comprehensive assessment of the guidelines' applicability, effectiveness, and potential
challenges.
 The pilot testing phase will adopt an adaptive learning approach, encouraging facility
managers, DHOs, and other stakeholders to actively participate in refining the
guidelines based on real-world experiences and challenges encountered during the
pilot.
 Facility managers, PCMCs, DHOs, and other relevant stakeholders will be
encouraged to provide feedback on their experiences with the guidelines. This
feedback will be systematically collected and analysed for continuous improvement.
 Following the completion of the pilot testing phase, a thorough review of the
guidelines will be conducted.
 The guidelines will be revised and enhanced based on the lessons learned, feedback
received, and the evolving needs of the healthcare sector in Khyber Pakhtunkhwa.
3.9.2 Roll-out phase

Upon the successful completion of the review and update process, the guidelines will be
rolled out to the rest of the districts in Khyber Pakhtunkhwa. To ensure successful roll-out,
the following process will be applied:
 Comprehensive training programmes will be organised to familiarise stakeholders
with the updated guidelines. This includes facility managers, PCMCs, DHOs, and
relevant staff members.
 The roll-out will occur gradually across different districts, allowing for a smooth
transition and adaptation of the updated guidelines.
 Ongoing monitoring and support mechanisms will be established to address any
challenges that may arise during the implementation phase. This includes periodic
reviews and capacity-building interventions.
 A continuous feedback loop will be maintained to capture insights from the phased
roll-out, enabling further adjustments and improvements as needed.

ANNEXURE 1: BUDGET FORMS
FORM – I (ANNUAL ACTION PLAN)
1. Healthcare facility type:
2. Healthcare facility name:
3. Cost centre code and description:
Section A: Key performance indicators and targets
Sr.# Key performance indicator Unit of measurement Target for the Year
1 2 3 4
Section B: Resource projections for Annual Action Plan and annual budget

Sr.# Funding source Amount (PKR)
1 2 3
i. Current budget ceiling (non-salary) Xxx
ii. PCMC revenues Xxx
iii. Funds from other sources Xxx
4. Total Xxx

Section C: Annual Action Plan (amount in PKR)
Procurement / purchase Repair and civil works Operations and other Grand total
1 2 3 4 5 6 7 8 9 10 11
Repair and Other
R&M of R&M of Wages /
Others maintenance civil
Month furniture machinery remuneration of Solar and
Medicine Equipment (stationery, (R&M) of work Others Total
and and contract staff electrification
stores etc.) buildings and
fixtures equipment hired by PCMC
structures
Jul - - - - - - - - - - -
Aug - - - - - - - - - - -
Sep - - - - - - - - - - -
Oct - - - - - - - - - - -
Nov - - - - - - - - - - -
Dec - - - - - - - - - - -
Jan - - - - - - - - - - -
Feb - - - - - - - - - - -
Mar - - - - - - - - - - -
Apr - - - - - - - - - - -
May - - - - - - - - - - -
Jun - - - - - - - - - - -
Total - - - - - - - - - - -
Instructions on filling out this form:

This form is designed to develop Annual Action Plan for the respective health facility.
Specific instructions:
Row no.1 – Enter the type of the health facility (like BHU, civil dispensary, etc.).
Row no. 2 – Enter the name of the health facility for which the Annual Action Plan has been prepared.
Row no.3 – Enter the cost centre name and description (provided by DHO office).

Instructions for filling Section A: Key performance indicators and targets
Serial.# 1: Self-explanatory
Serial # 2: Enter the description of the key performance indicator communicated by the DHO office.
Serial # 3: Enter the unit of measurement against each key performance indicator as communicated by the DHO office.
Serial # 4: Enter the target against each key performance indicator as communicated by the DHO office.
Serial # ii: This refers to the projected revenues of the facility from OPD and other operations (i.e. the own-source revenues). Enter 90% of the projected
total own-source revenues in column 3 (as 10% of the own-source revenues is deposited in the government exchequer).
Instructions for filling Section B: Resource projections for Annual Action Plan and annual budget
Serial # i: This refers to the non-salary budget ceilings for the facility communicated by the DHO office. Enter the value of non-salary budget ceilings
amount in column 3.
Serial # ii: This refers to the projected revenues of the facility from OPD and other operations (i.e. the own-source revenues). Enter 90% of the projected
total own-source revenues in column 3 (as 10% of the own-source revenues is deposited in the government exchequer).
Serial # iii: This refers to any other source from which funding is expected: for instance, transfers from Director General Health Services, developmental
schemes, or philanthropic contribution by non-government organisation or individuals etc. Enter a separate row for each funding source of this kind.
Enter the value of the projected amount for each funding source in column 3.
Calculate the value of total projected revenues in column 3 against serial # 4 in column 2.
Instructions for filling Section C: Annual Action Plan
Serial # 1: Insert the budget/planned amount for the purchase of medicine in the cell for each respective month.
Serial # 2: Insert the budget/planned amount for the purchase of equipment in the cell for each respective month.
Serial # 3: Insert the budget/planned amount for the purchase of other items (like stationery, stores etc.) in the cell for each respective month.
Serial # 4: Insert the budget/planned amount for repair and maintenance of building and structures in the cell for each respective month.
Serial # 5: Insert the budget/planned amount for repair and maintenance of fixtures and fittings in the cell for each respective month.
Serial # 6: Insert the budget/planned amount for repair and maintenance of machinery and equipment in the cell for each respective month.

Serial # 7: Insert the budget/planned amount for repair and maintenance of other civil work (additional rooms and latrines etc) in the cell of each
respective month.
Serial # 8: Insert the budget/planned amount for wages and remuneration in the cell for each respective month.
Serial # 9: Insert the budget/planned amount for solar/electrification in the cell for each respective month.
Serial #10: Insert the budget/planned amount for other details in the cell for each respective month.
Serial #11: Insert the total of all the heads.

FORM-II (ESTIMATES OF NON-SALARY CURRENT EXPENDITURE)
3. Indicative budget ceiling (non-salary) for the next financial year:
4. Proposed budget estimates (non-salary) for the next financial year:
5. Difference (ceiling (minus) proposed budget estimate):
6. Justification of difference, if any:
Detailed Actual expenditure Budget estimate Proposed budget estimates Remarks
Detailed description
object code LFY7 CFY8 NFY9
A B C D E F
Instructions for filling out this form:
7
LFY stands for last financial year.
8
CFY stands for current financial year.
9
NFY stands for next financial year.
This form is designed to develop budget estimates at the facility level.
Row no. 1 – Please enter the name of the health facility for which the budget is being prepared.
Row no. 2 – Please enter the cost centre name and description.
Row no. 3 – Please enter the budget ceiling/limit communicated to the healthcare facility by the DHO concerned.
Row no. 4 – Please sum the figures listed in column F of the table to determine the total proposed budget estimate for the upcoming financial year.
Row no. 5 – Calculate this figure by subtracting the amount in row 2 from the amount in row 3.
Row no. 6 – Provide a detailed justification for the difference, i.e. any excess or deficit of the proposed budget relative to the ceilings communicated by the
DHO office. This justification should be referred to when making decisions regarding finalisation of the budget for the respective health facility.
Column A – Input the detailed object code for the expenditure head, following the Chart of Accounts (CoA) applicable for the budget (e.g., A03201, etc.).
Column B – Provide a detailed description of the expenditure head as per the CoA under which the budget is required (e.g. Postage and telegraph for
A03201, etc.).
Column C – Fill in the actual expenditure/utilisation for the preceding fiscal year, as per the reconciled statement.
Column D – Enter the budget estimates for the current fiscal year, as communicated by the DHO and reflected in the e-App.
Column E – Input the proposed budget estimates for each expenditure head for the upcoming financial year.
Column F – If necessary, provide remarks or justification for the proposed budget estimates, explaining the basis for the estimation.

FORM-III (HR FORM)
Number of posts Actualisation Variation in designation Variation in BPS in

Basic pay
Designation month of vacant in sanctioned strength if sanctioned strength if
scale (BPS)
Sanctioned Filled Vacant post any any
A B C D E=C-D F G H

This form is designed for the creation of an Annual Human Resources Plan at the facility level. These plans at the facility level will be incorporated into
the Drawing and Disbursing Officer’s Human Resources/Statement of New Expenditure (SNE) requisition proforma.
Row no. 2 – Please enter the cost centre name and description.
Column A – Indicate the job designation for the position required in the healthcare facility: for example, Medical Officer.
Column B – Specify the basic pay scale (BPS) associated with the required position: for example, BPS-17 for Medical Officer.
Column C – Enter the current sanctioned posts for this position for the healthcare facility.

Column D – Enter the number of posts filled out of the total sanctioned posts in the healthcare facility.
Column E – Record the number of vacant posts in the healthcare facility.
Column F – Insert the month in which the actualisation of the vacant position will be materialised. This is particularly for a case where a staff member is
retiring during the next financial year.
Column G – Indicate if there is any deviation in the designation in the sanctioned strength: for example, if Medical Technician (EPI) is used instead of
Medical Technical (Multi-purpose)
Column H – Indicate if there is any deviation in the BPS in regard to the sanctioned strength: for example, if BPS 17 is reflected against a Senior Medical
Officer in BPS 18.

FORM-IV (REVISED ESTIMATES OF NON-SALARY CURRENT EXPENDITURE)
2. Cost centre code and description (if any):
Anticipated
expenditure Total
Actual for Revised
Detailed Actual Budget for Expenditures Surrenders Excess
Detailed first five estimates Remarks
object expenditure estimate remaining for the CFY (G-D) (D-G)
description months (G-H+I)
code seven (E+F)
months
LFY10 CFY11 CFY CFY CFY CFY CFY CFY
A B C D E F G H I J K

This form is designed to develop revised budget estimates at the facility level.
10
LFY: Stands for last financial year.
11
CFY: Stands for current financial year.
Row no. 2 – Please enter the cost centre code and description for this health facility, if any. The DHO will provide the cost centre code and description for
the health facilities in the district.
Column A – Input the detailed object code for the expenditure category, following the Chart of Accounts (CoA) applicable for the budget (e.g. A03201,
etc.).
Column B – Provide a detailed description of the expenditure category as per the CoA under which the budget is required (e.g. Postage and Telegraph for
A03201, etc.).
Column C – Fill in the actual expenditure/utilisation for the preceding fiscal year, as per the reconciled statement.
Column D – Enter the budget estimates for the current fiscal year, as per the budget book or as communicated by the DHO and reflected in the e-App.
Column E – Record the actual expenditures for the first five months. This figure should be taken from the reconciled monthly statements.
Column F – Insert the anticipated expenditures for the remaining seven months of the current financial year. The amounts entered in this column must
correspond to the updated action plan and procurement plan of the health facility.
Column G – Insert the total anticipated expenditure by adding column E and column F.
Column H – Insert, against the corresponding object head only, where the budget estimate for the current financial year is higher than the anticipated
expenditure in column G, i.e. column G – column D.
Column I – Insert, against the corresponding object head only, where the budget estimate for the current financial year is less than the anticipated
expenditure in column G, i.e. column D – column G.
Column J – Compute the revised estimate for each head by adding excess demand or subtracting the surrendered amount.

FORM-V (FACILITY-WISE MONTHLY FINANCIAL STATEMENT)
For the month of [insert name of the reporting month], [insert financial year]
(To be filled in by DHO office)
Expenditure
Budget
Detailed Expenditure demand reference Cumulative
Detailed estimate for Releases till the
object during the expenditure till x Balance Remarks
description FY 20xx x month
code reporting month (by the facility month
managers)
A B C D E F G H=C-G I

This form is designed to develop a facility-wise monthly financial statement.
Row no. 2 – Please enter the cost centre code and description for this health facility.

Column A – Input the detailed object code for the expenditure category, following the Chart of Accounts (CoA) applicable for the budget (e.g., A03201,
etc.).
A03201, etc.).
Column C – Enter the budget estimates for the current fiscal year as per the budget book.
Column D – Enter the cumulative releases till the end of the reporting month.
Column E – Enter the actual expenditures incurred during the reporting month.
Column F – Enter the reference of the demand by the facility for incurring the reported expenditure.
Column G – Enter the cumulative expenditure till the end of the reporting month.
Column H – Insert the balance amount against the respective object head, i.e. column C – column G.
Column I – Record explanatory remarks, if any.

FORM-VI (MONTHLY CONSOLIDATED FINANCIAL STATEMENT)
For the month of [insert name of the reporting month], [insert financial year]
(To be filled in by the facility manager)
Section A: Receipts of PCMC fund
Receipts during the Consolidated Progress (actual

Funding source of [insert the name of receipt till [insert receipt as % of
Sr.# Budget estimate Remarks
PCMC fund the reporting the name of the budget
month] reporting month] estimates)
A B C D E F G
4. Total

Section B: Consolidated expenditure statement
Expenditure out of PCMC fund Expenditure on account of current budget (by DHO office)
Consolidated
expenditure
Detailed Cumulative Cumulative till the end of
Detailed Expenditure Progress Expenditure Progress
object expenditure till expenditure till [insert the Remarks
description Budget during (actual during (actual
code the end of the end of name of the
estimate [insert the expenditure Budget [insert the expenditure reporting
[insert the [insert the
for FY name of the as % of estimate name of the as % of month]
name of the name of the
20xx reporting budget reporting budget
reporting reporting
month] estimate) month] estimate)
month] month]
A B C D E F G H I J K=E+I L

Section C: Progress against key performance indicators and targets
Sr.# Key performance indicators Target for the year Actual progress till completion of Remarks and explanations
the reporting month
A B C D E

This form is designed to help facility managers to develop the consolidated monthly financial statement.
Row no.1 – Please enter the name of the health facility for which this statement is being prepared.
Row no.2 – Please enter the cost centre code and description for this health facility.
Section A: Receipts of PCMC fund
Column A – Insert the serial number. Add as many serial numbers as there are funding sources for the PCMC fund.
Column B – Insert the funding sources of the PCMC, like own-source revenue.
Column C – Enter the budget estimate for the respective funding source of the PCMC fund from the Annual Action Plan.
Column D – Enter the amount received or generated for the respective funding source during the reporting month.
Column E – Enter the total amount of the receipts for the respective funding source from the start of the financial year till the end of the reporting month.
Column F – Calculate actual receipts as a percentage of the budget estimate for the same funding source by dividing actual receipts by budget estimates
multiplied by 100.
Column H – Insert explanatory remarks, if any.

Section B: Consolidated expenditure statement
Column A – Input the detailed object code for the expenditure category, following the Chart of Accounts (CoA) applicable for the budget (e.g. A03201,
etc.).
A03201, etc.).
Column C – Enter the amount of the budget estimate for the respective object code pertaining to the PCMC fund.
Column D – Enter the amount of expenditures incurred during the reporting month for the respective object code pertaining to the PCMC fund
Column E – Enter cumulative expenditure till the end of the reporting month for the respective object code pertaining to the PCMC fund.
Column F – Calculate cumulative expenditure as a percentage of the budget estimate for the respective object code pertaining to the PCMC fund by
dividing cumulative expenditures by budget estimates multiplied by 100.
Column G – Enter the amount of budget estimate for the respective object code pertaining to the current budget.
Column H – Enter the amount of expenditures incurred during the reporting month for the respective object code pertaining to the current budget.
Column I – Enter cumulative expenditure till the end of the reporting month for the respective object code pertaining to the current budget.
Column J – Calculate cumulative expenditure as a percentage of the budget estimate for the respective object code pertaining to the current budget by
dividing cumulative expenditures by budget estimates multiplied by 100.
Column K – Calculate consolidated expenditures till the end of the reporting month by adding cumulative expenditures out of the PCMC fund (i.e. column
E) and cumulative expenditure on account of current budget (i.e. column I).
Section C: Progress against key performance indicators and targets

Column A – Entre serial number.
Column B – Enter the key performance indicator statements communicated by the DHO office.
Column C – Enter the annual target against the key performance indicator communicated by the DHO office.

Column D – Enter the progress made against the key performance indicator and target achieved till the completion of the reporting month.
Column E – Provide remarks and an explanation to elaborate on the progress achieved and narrate reasons for deviations, if any.

ANNEXURE 2 – ABSTRACT OF KHYBER
PAKHTUNKHWA DELEGATION OF
FINANCIAL POWER RULES 2018
Under these rules, the powers assigned to the Administrative Department are exercised by
the Secretary Health Department, who is also the Principal Accounting Officer, whereas at
the district level the categories of officers under these rules can be defined as follows:
Sn.# Designation Officer category
1. Medical Superintendent of Provincial Category I Officer

Secondary Healthcare Hospitals, Women
and Children’s Hospitals, and Specialised
Hospitals
2. District Health Officer Category II Officer
3. Head of Rural Health Centre Category II Officer (if in BPS 19)
Or
Category III Officer (in in BPS 18)
Powers to sanction expenditures against budget provisions are given in the table below:
Officers Officers Officers Officers in

Administrative Category-IV
S# Nature of power in in in
department Category I Category II Category III
(i) Project pre- investment Full powers Full powers -- -- --
analysis
Specific condition(s):
1. Include feasibility studies, research, surveys, and exploratory operations.
(ii) Operating expenses
(a) Fuel and power Full powers -- -- -- --
1. Include high-speed diesel oil – operational and non-operational; furnace oil – operational and non-
operational; electric traction.
2. Subject to specified departmental admissibility and prescribed conditions.
(b) Fees Full powers Full powers Up to PKR Up to Up to PKR
100,000 PKR. 50,000 20,000
each case each case each case
1. Include bank fees; legal fees; licence fees; membership fees.
(c) Communication Full powers Full powers Full powers Full powers Full powers
1. Include postage and telegraph; telephone and trunk calls; telex, tele-printer and fax; electronic
communication; courier and pilot service; photography charges.
2. Subject to observance of prescribed ceilings, where applicable.

(d) Utilities Full powers Full powers Full powers Full powers Full powers
1. Include gas; water; electricity; hot and cold weather charges; POL for generator.
2. Subject to observance of prescribed ceilings, where applicable.
(e) Occupancy costs Full powers Full powers Up to Up to --

PKR 50,000 PKR 25,000
at a time at a time
1. Include charges; rent for office building; rent other than for building; royalties; rates and taxes; rent of
machinery and equipment; insurance; security; rent of hall for council meetings; sewerage/waste charges.
2. Rent of office building is subject to the explicit conditions that:
a. the accommodation is according to the scale prescribed by the government;
b. either the rent does not exceed the rent assessed by the Excise and Taxation Department for the
purpose of Urban Immovable Property Tax or the rent to be paid is made the basis of property tax;
c. assessment made by the Communication & Works Department; and
d. no objection certificate from the Communication & Works Department for non-availability of office
accommodation.
3. Rent of land is subject to the rent reasonability certificate given by an officer of the Revenue Department
exercising the powers of the Collector under the KP Land Revenue (Amendment) Act, 2014.
(f) Operating leases Full powers -- -- -- --
1. Include machinery and equipment; buildings; motor vehicles; computers; medical machinery and technical
equipment.
(g) Motor vehicles Full powers Full powers -- -- --
1. Include insurance; registration.
(h) Consultancy and Full powers -- -- -- --
contractual work
1. Include computer; management; government departments.
(i) Travel and Full powers Full powers Up to Up to Up to

transportation PKR 50,000 PKR 25,000 PKR 15,000
at a time at a time at a time
1. Include training – domestic/international; travelling allowance; transportation of goods; POL charges,
aeroplanes, helicopters, staff cars, motorcycles; conveyance charges; CNG charges; tour expenditure state
conveyance and motor cars; railway concession voucher.
2. Subject to admissibility under the rules and observance of prescribed ceilings, where applicable.
(j) General – printing and Full powers Full powers Full powers Full powers Full powers
publication
1. Include stationery; printing and publication; conferences/ seminars/ workshops/ symposia; newspapers,
periodicals and books; advertising and publicity; contribution and subscription; essay writing and copyrights;
exhibitions, fairs and other national celebrations.
2. Printing and publication at private press to be certified by government press.
(k) General – cost of other Full powers Full powers Full powers -- --
stores

1. Includes hire of vehicles; uniforms and protective clothing; purchase of drugs and medicines; expenditure
on confiscated goods; cost of other stores; ordnance store; free textbooks.
2. Subject to admissibility under the rules and observance of prescribed conditions.
(l) General – secret service Full powers -- -- -- --
1. Include secret service expenditure.
(m) General – Other services Full powers Full powers -- -- --
1. Include payments to government department for services rendered; law charges; payments to others for
services rendered; service charges; special cost incurred in performance of government functionaries.
2. Subject to admissibility under the rules and observance of prescribed conditions.
(iii) Write-offs of public Up to PKR -- -- -- --

money / loss of 100,000
assets
1. Includes loss of public money; inventories obsolescence / slow-moving charge; impairment of property, plant
and equipment; write-off of inventories; loss on disposal of property, plant and equipment; loss on sale of
scrap.
2. Provided that the loss does not disclose a defect of system the amendment of which requires orders by a
higher authority.
3. That there has not been any serious negligence on the part of some individual government officer or officers
which may possibly call for disciplinary action requiring orders of any higher authority.
4. All sanctions to write off shall be communicated to the Accountant General and Finance Department.
(iv) Scholarships and Full powers Full powers Full powers Full powers Full powers
other awards
1. Includes merit scholarships; other scholarships; cash awards to informers.
2. Subject to number of scholarships and rates sanctioned by Finance Department in consultation with
Administrative Department.
3. Cash awards subject to admissibility under the rules and observance of prescribed rates and conditions.
(v) Entertainment and gifts

(a) Entertainment Full powers Full powers -- -- --
1. For light refreshment up to PKR 50 per head at meetings convened for official business.
2. For serving lunch boxes up to PKR 300 per head in meetings which are prolonged beyond office hours
without a break in the interest of government work.
3. For receptions, lunches, and dinners: up to PKR 40,000 in each case subject to condition that per head
expenditure should not exceed PKR 1,200.
(b) Purchase of gifts for Principal -- -- -- --
state guests Secretary to
CM
Rs. 100,000
1. For presentation to foreign dignitaries only.
(vi) Expenditure on Full powers Full powers Up to Up to PKR Up to PKR
acquiring physical PKR 1,000,000 500,000 300,000
assets at a time at a time at a time

1. Include purchase of building; computer equipment; commodity purchase (cost of state trading); other stores
and stock; purchase of transport; purchase of plant and machinery; purchase of furniture and fixtures;
purchase of other assets.
2. Subject to fulfilment of all codal formalities enunciated by relevant legislative and regulatory frameworks.
(vii) Civil works i. Approved i. Approved -- -- --

development development
schemes: schemes:
full powers full powers
ii. Non- ii. Non-
development development
schemes: schemes:
PKR 1,000,000 PKR 500,000
1. Includes roads, highways and bridges; irrigation works; embankments and drainage works; building and
structures; other works; telecommunication works; drought emergency relief assistance works.
2. Subject to fulfilment of all codal formalities enunciated by relevant legislative and regulatory frameworks.
(viii) Repairs and PKR 300,000 PKR 150,000 PKR 70,000 PKR 50,000 PKR
maintenance or 50% of or 50% or 25% or 10% 25,000
the of the of the of the
book value of book value of book value of book value of
machinery, machinery, machinery, machinery,
whichever is whichever is whichever is whichever is
less less less less
1. Include transport.
2. Subject to carrying out repairs in government workshops, in t h e absence of which due process of public
procurement and specific conditions shall be strictly adhered to.
(ix) Repairs and Full powers Full powers Full powers Up to PKR Up to PKR
maintenance 200,000 100,000
at a time at a time
1. Includes machinery and equipment; furniture and fixtures; buildings and structures; irrigation; embankment
and drainage; roads, highways and bridges; computer equipment; general; telecommunication works.
(x) Honoraria Full powers -- -- -- --
(xi) Reimbursement of Full powers Full powers Up to Up to Up to

medical PKR 10,000 PKR 5,000 PKR 3,000
charges each case each case each case

ANNEXURE 3 – GLOSSARY OF KEY
TERMS USED IN THESE GUIDELINES
a. Budget
A budget is a financial plan for revenue receipts and expenditure for a financial year. A
government budget is a document representing the government's proposed revenues and
spending for a financial year.12
b. Budget estimate
This is a general term used in financial management in the public sector. It means, in
relation to expenditure, the expenditure proposed for that year, and, in relation to
receipts, the receipts expected to be realised during that year.
c. Indicative budget ceiling

Budget ceilings are provided by Finance Department at the start of the budget cycle to
guide the administrative departments in formulating budget estimates and are referred to
as ‘indicative budget ceilings’. During the later part of the budgetary process, budget
review and finalisation meetings are held. These meetings facilitate a dialogue between
the Finance Department and Administrative Department to determine whether the
indicative budget ceilings are adequate to meet the funding requirements of the
Administrative Department and for each department to understand the limitations of the
other. As a result of these deliberations, budget ceilings are finalised. Once budget
ceilings are finalised these become agreed budget ceilings.13
d. Current budget (or current expenditure or non-development expenditure)

This means expenditure relating to the ongoing operations of the government, which
includes pay and allowances of employees, operating expenditure, repair and
maintenance, etc.14
e. Development budget (or development expenditure)

This means an expenditure of an activity undertaken to acquire, build or improve
physical assets or services or develop human resources.15
f. Actual expenditure
Actual figures of expenditure incurred in a financial year.
12
Adopted from Budget Manual First Edition, Government of Pakistan (see Chapter 1, Section
1.3).
13
This explanation is derived from the Integrated Budget Call Circular, Finance Department,
Government of Khyber Pakhtunkhwa (see Section 2: Guidelines for Indicative Budgetary
Ceilings).
14
Definition adopted from Section 2(n) of KP Public Financial Management Act 2022.
15
Definition adopted from Section 2(o) of KP Public Financial Management Act 2022.
g. Financial year
This means a year commencing on the first day of July and ending on the 30th day of
June.16
h. Recurring expenditure and how it differs from new expenditure.

This is an expenditure which recurs from year to year. Recurring expenditure is also
known as continued expenditure, whereas new expenditure is an expenditure which is
not recurring or an expenditure which is for a new purpose.
i. Appropriation
This means any schedule of authorised expenditure given assent to by the Provincial
Assembly of Khyber Pakhtunkhwa, to authorise payment from the Provincial
Consolidated Fund and Public Account of a given financial year.17
j. Re-appropriation
This means a transfer of funds from one head of account of appropriation to another such
head of account within the same budget grant.18
k. Revised estimates
This is a general term used in financial management in the public sector. This refers to
estimated expenditures for a fiscal year, determined during that year based on recorded
transactions, at the time of preparing the revised budget.
l. Excess
An amount of expenditure exceeding the approved budget, which is regularised through
an Excess Budget Statement.19
m. Surrender
An amount included in the initial approved budget that is given back because it has not
or will not be spent in the financial year by the entity.20
n. Administrative (or line) department

This means a self-contained administrative unit in the Secretariat responsible for the
conduct of business of government in a distinct and specified sphere, and declared as
such by the government.21
o. Drawing and Disbursing Officer

16
Definition adopted from Section 2(s) of KP Public Financial Management Act 2022.
17
Definition adopted from Section 2(d) of KP Public Financial Management Act 2022.
18
Definition adopted from Section 2(am) of KP Public Financial Management Act 2022.
19
1.3).
20
1.3).
21
Definition adopted from Rule 2(h) of Khyber Pakhtunkhwa Rules of Business 1985.
This is a general term used for an officer who is authorised as such by the Administrative
Department to incur expenditure in respect of an office, or offices, for which he is
designated as the Drawing and Disbursing Officer.
p. Chart of Accounts
A listing of codes on the basis of which accounting transactions are classified, to provide
meaningful financial information.22
q. Cost centre
A cost centre is the lowest organisational level at which budgetary control occurs and
organisation information is collected and reported.
22
Definition adopted from Section 2.6 ‘Definition’ of Accounting Policies and Procedures
Manual.

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Facility-Level Budgeting and Expenditure

Government of Khyber Pakhtunkhwa

I am pleased to present the ‘Facility-Level Budgeting and Expenditure Management

Amer Sultan Tareen

i | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

ii | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

BHU Basic Health Unit

1 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

1.1.3 Overview of the primary healthcare system in Khyber Pakhtunkhwa

1.2 BUDGETARY RESOURCE ALLOCATIONS AND FUNDS FLOW AT THE

1.2.1 Budgetary resource allocations process

4 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

1.2.2 Utilisation of various kinds of budgetary resources at the primary healthcare

6 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

2.1 HEALTH SECRETARY / PRINCIPAL ACCOUNTING OFFICER

2.2 DIRECTOR GENERAL HEALTH SERVICES

7 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

2.4 FACILITY MANAGERS AND PCMCs

8 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

9 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

3.1.1 Annual healthcare facility needs assessment

10 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

3.1.2 Facility-level budget-making process

11 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

3.2 BUDGET RELEASES

Step 1: Budget release requests by DHOs

3.3 BUDGET EXECUTION

3.3.1 Expenditures out of facility budgets

• Facility managers, with PCMCs, request expenditures based on approved

13 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

3.3.2 Expenditures out of PCMC funds

3.4 BUDGET ADJUSTMENTS

• The DHO is authorised to re-appropriate funds within non-salary budget heads of a

• The concerned facilities will be informed about the re-appropriations, including

i) Purpose-driven re-appropriations: Re-appropriations should only be made when it

3.5 EXCESSES AND SURRENDERS – REVISED BUDGET ESTIMATES

15 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

3.6.1 Financial statements

3.6.2 Budget execution review at facility level

3.6.3 Budget execution review at the district level

3.6.4 Budget execution review at department level

3.7 OVERSIGHT, ACCOUNTABILITY, AND TRANSPARENCY

3.7.1 Regular monitoring and oversight

3.7.2 Internal controls reviews

17 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

3.8 E-APP/ IT SOLUTION FOR ENHANCED FINANCIAL MANAGEMENT

3.8.1 Establishment of an e-App/IT solution

3.8.2 Using the e-App/IT solution

3.8.3 Integrated system for budget management

3.8.4 Distinct modules

3.8.5 Manual process until implementation of e-App/IT solution

18 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

3.9.1 Pilot phase

3.9.2 Roll-out phase

19 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

Section A: Key performance indicators and targets

20 | Facility-Level Budgeting and Expenditure Management Guidelines, 2024

i. Current budget ceiling (non-salary) Xxx

ii. PCMC revenues Xxx

iii. Funds from other sources Xxx