From the allocations for both the current and development outlays to the utilisation of funds, the finances in Federally Administered Tribal Areas (Fata) are managed in a way totally different from the way they are managed in the federating units of the country.

Till 2002, the financial management trickled down from the President to the governor Khyber Pakhtunkhwa, to the chief secretary and then to the political agents through the Ministry of Home and Tribal Affairs.

However, with the establishment of the Civil Secretariat Fata in 2002, the Additional Chief Secretary (ACS) Fata and six secretaries, including secretary finance and secretary Planning and Development were posted to manage the administrative, financial and development matters of the tribal areas.

The Fata Finance Department looks after the matters concerning the current expenditures and matters relating to maintenance of bank accounts.

It also works out policies regarding investment of funds and release of funds, including donors’ financial assistance. It manages financial matters with the local AGPR, SAFRON and Finance Division and carries out financial planning and control of expenditure.

Recovery of government taxes and their deposit in the treasury, sale or transfer, of federal government assets and other matters related to the functions of the financial advisor of the Ministry of Finance also fall in the purview of the Finance Department.

Similarly, the Planning and Development (P&D) prepares Annual Development Programme for Fata and formulate and approve development projects.

It reviews the implementation of development projects and identifies regions, sectors and sub-sectors lacking adequate portfolio of projects. It coordinates with donor agencies for donor funded projects.

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The Fata is not receiving any specific share from the National Finance Commission (NFC) award at the moment. However, it has been proposed in the Prime Minister Fata Reforms Committee’s report that the share of these areas would be determined at three percent in the NFC when the report is implemented.

The tribal areas as federal unit receive finances from the federal government as Public Sector Development Programme (PSDP) projects. The allocation of development funds are distributed amongst the agencies and Frontier Regions (FRs) on the basis of approved policy and formula of area plus population-divided by two (A+P/2=Uplift sums).

The finances the tribal areas are receiving are classified as revenue receipts or revenue budget and capital receipts or development budget (Annual Development Programme).

It receives its both capital and development receipts as straights transfers from the PSDP, while its own receipts include taxes and rahdaris, etc (mainly illegal).

The revenue budget also includes sums allocated for the current expenditures such as salaries bills, etc in agencies and FRs and allocations to SAFRON for current expenditures on account of the salaries of the levies and khassadars.

The Fata budget-making process gets underway in December/January and completes in April/May. The Finance Division issues Budget Call Circular to the Fata secretariat with Budget Calendar--timeline and deadline for the submission of estimates and revised estimates.

Similarly, the Fata P&D issues budget call letter to the political agents (PAs) and PAs, deputy commissioners (DCs) in the FRs. The PAs called hold meeting the agencies officers to priorities projects.

The members parliament (MPs), PAs and Army establishment submit their priorities and justifications to the Fata secretariat that consolidates all proposals to prepare a draft ADP based on the ratio of 30 percent for new and 70 percent allocations for the ongoing projects.

In 2010-11 the ADP of Fata was Rs10 billion, while for the current fiscal of 2017-18 it is estimated at Rs24.5 which include Rs21.19 billion of PSDP funded Fata ADP, Fata Development Authority (FDA) share of Rs2.81 billion and foreign funded projects allocations of Rs490 million. The ADP would be distributed to around 15 main sectors.

There are several forums for approval of the ADP projects in Fata. The National Economic Council (NEC) and Executive Committee of National Economic Council (ECNEC) are the highest projects for mega projects approval.

The Central Development Working Party (CDWP) approves the projects above Rs400 million. Secretary Planning Commission heads the CDWP, while ACS P&D heads it for the four provinces and ACS Fata and concerned ministers are its permanent members.

The Fata Development Committee (FDC) can also approve the project of Rs 400 million. Governor Khyber Pakhtunkhwa heads the FDC and secretary SAFRON, secretary Planning Commission and concerned secretaries are its members. The FDC meets twice every month.

For approval of Rs 200 million projects Fata Development Working Party (FDWP) is the forum for approval. The ACS Fata heads the FDWP and its members include Finance Secretary P&D and other relevant secretaries (if need be) while secretaries SAFRON and Planning Commission represent the federal government.

The Agency Development Committee (ADC) approves Rs20 million projects and PA heads it, while for the FRs Deputy Commissioner heads the committee. Its members include Fata Finance, P&D and for FR the concerned APA, Finance and P&D are its members.

Although full-fledged monitoring and evaluation units exist in the Fata secretariat, no proper monitoring of the ADP projects in the Fata is carried out and as put by an official of the Fata secretariat, the monitoring and evaluation are carried out only on need basis.

For its current expenditures, the Fata is supposed to receive an allocation of Rs21.859 billion for the current Financial year of 2017-18 that include Rs19.227 billion for the pay and allowances of its 55,753 employees who don’t include 11739 levies and 17965 khassadars deployed in seven tribal agencies and six FRs.

It is also going to receive Rs2.63 as operating expenses that also includes payment of compensation to the victims of terrorists acts and martyred government servants.