Unofficial English Version

THE PUBLIC MONEYS AND BUDGET MANAGEMENT ACT, 2009

(ACT NO. 40 of 2009)
[9 July 2009]
An act for the custody of public moneys, deposit and withdrawal of money from
the Consolidated Fund or deposit and withdrawal of money from the Public
Account of the Republic and for other related issues

Whereas as per Article 85 of the Constitution of the Peoples Republic of Bangladesh

it is expedient and essential to make provisions for the custody of public moneys, deposit
and withdrawal of money from the Consolidated Fund or deposit and withdrawal of money
from the Public Account of the Republic, maintenance of sustainable budget deficit and
public debt, ensuring inter-generational equity, improvement of macroeconomic stability,
establishment of accountability and transparency in budget preparation and for other related
issues;

Therefore the following Act is hereby enacted:-

Chapter - I
Introduction

1. Short Title and Commencement.- (1) This Act may be called the Public Moneys
and Budget Management Act, 2009.
(2) It shall come into force immediately.

2. Definitions.- In this Act, unless there is anything repugnant in the subject or context-
(1) "Financial year" means the Financial Year as per article 152 of the
Constitution;
(2) "Finance Division" means the Finance Division of the Ministry of
Finance of the Government of Bangladesh;
(3) "Other Institutions" means the Institutions or Persons whose
expenditures are related to the charged expenditure of the Consolidated
Fund as per Article 88 of the Constitution;
(4) "Misuse" means spending or use of fund for purpose other than that
stipulated in the annual budget;
(5) "Borrowing" means receipts of any funds by the Government from
within or outside Bangladesh under obligation to repay;
(6) "Lending" means any funds given by the government for a specified
period of time, with or without interest, to any agency or any
government employees or any other persons under condition of
repayment;
(7) "Guarantee" means the guarantee including counter guarantee given
by the Government for repayment of principal and interest and any
other incidental charges in part or full arising out of loans taken from
within and outside Bangladesh by any agency or private institution due
to their inabilities to repay;
(8) "Department" means any attached department or directorate under
any Ministry or Division;
(9) "Charged Expenditure" means the charged expenditure of the
Consolidated Fund as per Article 88 of the Constitution;
(10) ''Specified'' means specified by rules, but unless the rules are
formulated to be specified by the written order of the Government.
(11) "Executive Authority" means the Prime Minister or Chief Adviser or
any Minister or Adviser or Minister of State in charge of any Ministry
or head of Other Institutions;
(12) ''Contingent Liability'' means any probable liability which can be
imposed upon the government due to inability to repay loans obtained
by any agency or private institution for whom guarantee has been given
by the government;
(13) "Public Account of Republic" means the Public Account of Republic
as per Article 86 of the Constitution;
(14) ''Major Head'' means the head that contains total allocations for
receipts or expenditures of a ministry, division or other institutions, and
the heads with allocations of special nature;
(15) "Budget deficit" means the deficit arising out of total payment,
excepting payment of principal of loans, exceeding total receipts,
excepting receipt of loans, in the consolidated fund;
(16) "Annual Budget" means the Annual Financial Statement as per Article
87 of the Constitution and other budget documents including Demand
for Grants as per Article 89 of the Constitution shall be included;

2
 (17) ''Bangladesh Bank' means the Bangladesh Bank established as per
Section 3 of the Bangladesh Bank Order (President Order No. 127 of
1972);
(18) ''Medium-Term Budget'' means the Medium-Term Budget spanning
over three financial years that establishes linkages between government
policies and objectives to resources and resources to performance and
shall consist of estimated receipts and expenditure of the Government
for the budget year and projections for two outer years;
(19) ''Capital Expenditure'' means the expenditure or investment, from
which benefit or service will be received more than one year;
(20) ''Revenue Earnings'' means the tax, levy or duties, or related other
charges and non-tax receipts form other sources to be deposited in the
Consolidated Fund;
(21) ''Revenue Expenditure'' means the recurring type expenditure of the
Government;
(22) "Constitution" means the Constitution of the People's Republic of
Bangladesh;
(23) "Agency" means any statutory authorities or autonomous bodies or
nationalized entities or local government institutions established under
the Act of Parliament;
(24) "Consolidated Fund" means the Consolidated Fund as per Article 84
of the Constitution;
(25) "Public Debt" means debt and stock of total outstanding loans of the
government obtained from domestic and external sources;
(26) ''Accounts Office'' means the Office of the Controller General of
Accounts, Controller General of Defence Finance, Chief Accounts
Officer of the Ministry/Division, District Accounts Officer and Upozila
Accounts Officer.

Chapter - II
Fiscal Management

3. Fiscal Management.- (1) The Government shall carry out all appropriate
measures for the improvement of macro-economic stability and maintain the annual budget
deficit to a sustainable limit.

3
 (2) The Government shall follow specified procedure for sound fiscal and public
debt management and shall carry out following actions to maintain affordable public debt:
(a) Borrowings from domestic source shall be reduced gradually and
annual borrowings from that source shall be within reasonable limit;
(b) Contingent liability due to sovereign guarantee of the Government shall
remain within sustainable limit;
(c) Public debt obtained from domestic and external sources shall be
reduced gradually every year as percentage of GDP.
(3) The Government may obtain Ways and Means advance from Bangladesh Bank
to meet regular cash requirements within specified limit and in case of exceeding such limit
the additional money may be obtained as overdraft, other than that the Government shall not
borrow from the Bangladesh bank.
(4) Whatsoever mentioned in sub-section (3), the Bangladesh Bank may continue to
purchase primary securities like treasury bills, bonds etc issued by the Government within
specified time limit.
(5) The Government shall determine the annual limits of budget deficit, borrowings
from domestic and external sources and contingent liabilities out of guarantees, size of
public debt and time limit to purchase primary securities by the Bangladesh Bank through
specified procedure.

4. Ensuring transparency and equity in resource distribution.- The Government,

for public interest, shall ensure further equity and transparency in resource distribution and
shall undertake the following distinctive measures for that purpose :
(a) Ensure regional equity;
(b) Ensure equality between men-women;
(c) Allocate additional resources gradually for the activities related to poverty
reduction;
(d) Resources provided to the agencies as grant, subsidy, loan, equity etc shall be
shown, as far as possible, explicitly in the budget allocation;

(e) Information related to budget allocation and out-turns to be posted and

updated regularly by all Ministries/Divisions on their websites.

5. Enhancing competency in fiscal management: The Government, in specified

methods, shall arrange necessary education and training to establish a sound and effective

4
fiscal administration and shall ensure maximum utilization of efficiency, experience and
services of the trained and educated manpower.

Chapter - III
Consolidated Fund and the Public Account of the Republic

6. Control and safeguarding of the Consolidated Fund and the Public Account
of the Republic.- The Finance Division shall be responsible for safeguarding and
controlling of the Consolidated Fund and the Public Account of the Republic.

7. Deposit of money into the Consolidated Fund.- (1) Following moneys shall be
deposited into the Consolidated Fund as per specified procedure:
(a) All revenues received by the Government, all loans raised by the
Government, and all moneys received by it in repayment of any loan, shall
be deposited into the Consolidated Fund as per article 84(1) of the
Constitution; and
(b) All grants received by the Government.
(2) Finance Division shall establish an appropriate and effective procedure for
administration of the Consolidated Fund and banking arrangements.

8. Withdrawal of repayment and refundable money from the Consolidated

Fund.- Any revenue collecting department may withdraw legitimate repayment and
refundable money from the Consolidated Fund on account of any taxes, levies or duties or
any other associated charges that has already been deposited into the Consolidated Fund;

9. Deposit and disbursement of money from the Public Account of the

Republic.- (1) All other public moneys received by or on be half of the government, other
than that deposited into the Consolidated Fund, shall be deposited into the Public Account
of the Republic as per article 84(2) of the Constitution;

(2) Finance Division shall prepare annual estimates of receipts and disbursements
from the Public Account of the Republic and shall monitor such receipts and disbursements
as per specified procedure.

5
 Chapter - IV
Budget Management

10. Budget.- (1) The Finance Minister shall place the annual budget before
Parliament prior to each financial year.
(2) Other expenditure shall be distinguished from charged expenditure in the annual
budget.
(3) Expenditure on revenue account shall be distinguished from other expenditure in
the annual budget.
(4) The Finance Minister shall submit a Medium Term Budget along with the annual
budget before Parliament and the Medium Term Budget shall consist of estimated receipts
and expenditure of the Government for the budget year and projections for two outer years.
(5) The Medium Term Budget shall establish linkages between government policies
and objectives to resource allocations and resource allocations to performance of the
Ministry or Division.

11. Policy Statement.- Each year the Government shall laid before Parliament a
Policy Statement on macroeconomic situation along with the annual budget that will include
the followings-
(a) A review of growth prospects of the economy explaining its underlying
assumptions and medium-term targets of macroeconomic indicators;

(b) Strategic priorities of the Government, fiscal policies, revenue earnings

including grants (if applicable), total expenditure, overall budget deficit and
deficit financing;

(c) An evaluation of the strategies for borrowing from domestic and external
sources, targets of the Government borrowing from domestic and external
sources, methods and instruments, foreign currency risks against external
debt and the amounts of guarantees for private institutions etc.

12. Revised budget.- (1) If necessary, the Finance Minister shall lay before
Parliament a revised budget of each financial year;

(2) The revised budget, as far as possible, shall be laid within the month of March of
each year;

6
 (3) Article 87, 88, 89 and 90 of the Constitution have to be followed in respect of the
revised budget, and in relevant cases a “Supplementary Financial Statement” or an
“Additional Financial Statement” shall have to be submitted before Parliament as per article
91 of the Constitution.

13. Notifying of budget allocations and fund release.- (1) The Finance Division
shall notify all administrative ministries or divisions or other institutions and relevant
accounts offices regarding budget allotments including charged expenditure, immediately
after the approval of the budget or revised budget.
(2) Administrative ministries or divisions or other institutions shall reallocate the
appropriations, as per specified procedure, among the subordinate controlling or
disbursement officers.
(3) Administrative ministries or divisions or other institutions may release or
transfer funds based on approved budget or, where applicable, revised budget as per
specified procedure.

14. Fund transfer and re-appropriation.- (1) Without prior approval of the
Parliament no fund shall be transferred or re-appropriated from one grant to another grant or
from charged expenditure to other expenditure except from the unexpected expenditure
head.
(2) Without prior consent of Finance Division no re-appropriation shall be made
from revenue expenditure to capital expenditure or from capital expenditure to revenue
expenditure within the same grant or from pay and allowances codes to any other codes.

15. Budget Monitoring.- (1) The Government may formulate instructions for
regular monitoring of the progress of budget implementation.
(2) All ministries or divisions and other institutions shall, in specified methods,
conduct its internal control activities.
(3) All ministries or divisions and other institutions shall prepare and publish annual
reports, in specified methods, on their financial and non-financial performance.
(4) The Finance Minister shall review quarterly the trends of revenue receipts and
expenditures against targets set out in the budget and shall submit a statement at the ensuing
session of the Parliament on results of the aforesaid review and report on possible measures.

7
 16. Budget Management Committee.- (1) There shall be a Budget Management
Committee in each Ministry or Division and other Institution headed by the Principal
Accounting Officer for budget management and one or more Working Group(s) may be
constituted to assist the activities of above Committee.
(2) A Budget Management Wing or Branch or Section shall be established in each
Ministry or Division and Other Institution to analyze Government's strategic objectives and
policies, initiate project or programme to formulate and implement Ministry specific policy,
and to build institutional capacity and efficiency in budget preparation, execution and
monitoring activities.

17. Maintain financial accounts and reporting.- (1) All Principal Accounting
Officers shall maintain accounts of their own Ministry or Division and Other Institution, in
specified methods, and shall reconcile regularly with the accounts maintained by the
concerned Accounts Office.
(2) The Principal Accounting Officer shall prepare Annual Appropriation Accounts
at the end of the financial year and shall send it to the Comptroller and Auditor General for
certification.
(3) In order to ensure sound monitoring, the Accounts Offices shall prepare a
monthly and quarterly statements with financial information and data and shall forward it to
the Finance Division and based on these statements Finance Division may publish analytical
reports.
(4) The Controller General of Accounts shall prepare annual Financial Accounts
along with receipts for the entire year, payments and different balances deduced from the
books of accounts, and submit the same to the Comptroller and Auditor General for audit.

Chapter - V
Principal Accounting Officer and Executive Authority

18. Principal Accounting Officer.- (1) There shall be one Principal Accounting
Officer for each Ministry or Division and Other Institutions.
(2) Secretary of the Ministry or Division shall perform the responsibility of the
Principal Accounting Officer of that Ministry or Division.
(3) Other Institution shall appoint an officer to act as the Principal Accounting
Officer in consultation with the Finance Division;

8
 19. Duties and responsibilities of the Principal Accounting Officer.- Duties and
responsibilities of the Principal Accounting Officer shall be as follows :–
(a) To ensure efficient and transparent financial management and internal
control process at the relevant Ministry or Division or Other Institution;
b) To make sure appropriate and effective utilization of resources of the
relevant Ministry or Division or Other Institution;
(c) To ensure compliance of relevant acts, rules and regulations and bona fide of
all financial expenditures at the relevant Ministry or Division or Other
Institution and their subordinate departments and agencies;
(d) To take appropriate measures for collection of all obtainable revenues by the
relevant Ministry or Division or Other Institution and to prevent unapproved
and wasteful expenditures;
(e) To ensure that the budget has been prepared according to the specified
methods and the budget allocations have been made based on priority for
implementing the policies of the Ministry or Division or Other Institution
and for achieving the strategic objectives of the Government;

(f) To take appropriate measures for immediate implementation of decisions of

the Standing Committee on Public Accounts.

20. Financial responsibilities of the Executive Authority.- (1) The Executive

Authority shall ensure appropriate measures for compliance of instructions laid down in this
Act and other financial rules by the Ministry or Division or Other Institution under its
jurisdiction.

(2) The Executive Authority shall ensure that any decisions, which have financial
involvement, have been recorded properly in compliance with all existing rules and
regulations.

Chapter - VI
Borrowings and Guarantee

21. Borrowings.- (1) The Government may borrow from domestic and external
sources.

9
 (2) No Ministry, Division, Other Institution, department or agency shall borrow any
loan other than the Ministries or Division or Other Institutions those have been authorized
to borrow on behalf of the Government.
(3) The Government may borrow to achieve following objectives:-

(a) To finance budget deficit;

(b) To implement any project or programme;
(c) On-lending to any agency;
(d) To pay back previous loans or financing any loans on their maturity;
(e) For any other purposes approved by the Parliament.

22. Guarantees.- No Ministry or Division shall issue any guarantee on behalf of the
Government other than the Finance Division.

Chapter - VII
Financial Misconducts

23. Financial Misconducts.- (1) Any employee of the Republic while discharging
his duties entrusted upon him under this Act -

(a) deliberately or by negligence fails, or

(b) incurs any unapproved or wasteful expenditures or instructs to execute such

expenditures, or fails to ensure bona fide of the expenditure and non-
compliance of relevant Acts, rules and regulations shall be deemed to have
committed financial misconduct;
(2) Punitive measures may be taken against any accused employee of the Republic
for financial misconduct under sub-section (1) as per existing Acts, rules and regulations.

Chapter - VIII
Miscellaneous

24. Power to frame Rules.- The government may, by notification in the official
gazette, make rules for the purpose of this Act.

25. Power of the Government to resolve difficulties.- In case of any difficulties to

apply and execute this Act because of ambiguity of any provision, the government may, by

10
notification in the official gazette, clarify or explain the provision and provide direction for
doing the needful in accordance with other rules and regulations.

26. Continuity of existing Rules and Regulations.- Unless it contradicts with any
provision of this Act, and unless new rules, regulations, manuals, codes and orders under
this Act are issued, all existence rules, regulations, manuals, codes and orders related to
public moneys and budget management will be in effect.
27. English version of the Act.- There shall be an authentic English text of the
Bengali original version of this law:

Provided that, in case of any inconsistency between the original Bengali text and the
English text, the Bengali text shall prevail.

11