Finance Minister Dr Kwabena Duffuor said on Wednesday that government would maintain fiscal discipline by keeping its expenditure within budget targets to avoid eroding the macro-economic gains chalked so far.

"The government is committed to maintaining fiscal discipline and will not repeat the mistakes of previous election years," Dr Duffuor, told journalists after a meeting with colleague Ministers and Chief Directors on a directive from the President.

"We are meeting on the implementation of the 2012 budget and the concerns about the management of the economy in an election year and how to go through the year without compromising the macro-economic gains," he said.

A circular, which seeks to give effect to the President’s directive to the MDAs, asked them not to commit funds to projects that were not included in the approved Annual Budget to ensure fiscal discipline ahead of the 2012 elections.

"The continuing crystallization of unfunded commitments into unpaid arrears, leading sometimes to unbudgeted expenditures has tended to undermine the effective implementation and control of the national budget. To maintain budget discipline, MDAs should refrain from authorising payments for unbudgeted items," the circular said.

The circular asked the ministries and departments not to sign MOU for a project, procurement of vehicles, equipment and or procurement of services unless such mandate had been approved by cabinet and adequate provision made in the annual budget.

Also, contracts for the procurement of goods, services and works should be forwarded to the Attorney General's office for review and clearance before the documents are signed.

The circular further directed the MDAs not to conclude a contract, agreement and/or concession for a project or procurement of any service unless such project or service had been approved and fully funded in the annual budget.

The circular tasked the MDAs to adhere strictly to the provisions of the Public Procurement Act in the procurement of goods, services and works.

It asked the MDAs to adhere strictly to the use of commencement certificates as a commitment control mechanism for both new and on-going projects and services in line with an earlier directive in October 2010.

The circular further reminded the MDAs to ensure that payment requests and authorizations to the Ministry of Finance and Economic Planning, in respect of new or on-going projects should specify the funding source and appropriate expenditure codes.

Besides, no new project should commence until the ongoing projects have been completed, the circular said, adding that, any violation of the directive would receive a heavy sanction.**