1 GUIDING PRINCIPLES FOR AN OFFICER High standards of financial propriety Financial Economy Observance of Financial Rules and Regulations Expenditure within limits of authorised grants

2 RULES AND REGULATIONS OF FINANCIAL MANAGEMENT GENERAL FINANCIAL RULES, 1963 DELEGATION of FINANCIAL POWERS RULES, 1978 CENTRAL GOVERNMENT ACCOUNT (RECEIPTS AND PAYMENTS) RULES, 1983

3 PURPOSE OF FINANCIAL MANAGEMENT To prevent and detect errors and irregularities To guard against loss and wastage of public money and stores To apply prescribed systemic checks effectively

4 BUDGET - definition Oxford English Dictionary has defined Budget as “a statement of probable revenue and expenditure for the ensuing year with financial proposals founded thereon annually submitted by the Exchequer for the approval of the House of Common…….hence, any analogous statement, estimate or proposals”

5 BUDGET - elements Budget comprises of three documents- a statement of the sums required for the due conduct of affairs during the period to which such estimate relates; an estimate of the probable income from revenue and loans on the basis of existing provisions of law regarding public dues and credit operations. a statement showing conditions of treasury in terms of the assets and liabilities.

6 BUDGETING Involves preparation of the estimates; collection and custody of funds; disbursement and control of expenditure, and recording of all the transactions whose legality and regularity are duly verified by the independent offices

7 ANNUAL FINANCIAL STATEMENT AUTHORITY Article 112 (1) of the Constitution Rule 45 of General Financial Rules, 1963 DEFINITION Statement of Estimated Receipts and Expenditure of Central Government of a Financial Year -also referred as ‘BUDGET’

8 Departmental Accounting System Introduced in 1976 Applicable to all Central Civil Ministries/ Departments and Union Territories Exceptions Defence, Postal/ Telecommunications Departments and Railways have their own departmental accounting system.

9 BROAD FEATURES Chief Accounting Authority –Secretary of the Ministry/ Department C & AG – provides directions to the Ministries and Departments Pay and Accounts Officer (PAO) Cheque-Drawing and Disbursing Officer (DDO)

10 TYPES OF CHEQUES Negotiable cheques Non-transferable cheques Government account cheques

11 Modes of Payments By Drafts Legal requirement Pay and Allowances Private parties Mail Transfer To Autonomous Bodies To Private Sector Undertakings To Grantee Institutions for payment of grant-in- aid

12 PROCEDURE – for Payments Submission of bills by non cheque drawing officers Pre-check of bills Payments – Form CAM 13 Post-check – objection memo Cancellation of sub-vouchers Consolidation of Accounts – Compilation Sheet (CAM 33), Receipts (CAM 37), Disbursements (CAM 38) and Consolidated (CAM 39)

13 Provident Fund Account - Maintenance Allotment of Account Number – Rule 4 of GFRs Nominations Advance / Withdrawals Transfer of account Annual Accounts Accounts for Group ‘D’ staff

14 Relevant General Financial Rules Rule 62 & 63(1) Rule 45 r.w.r.54 & 62 Rule 53 Rule 60 Submission of Budget estimates by individual offices/ Heads of Departments Plan and Non-Plan estimates to be given separately Financial management for the months when budget is pending Communication of grants to the Departments

15 Budget preparation Parliament Ministry / Department Estimate budget Plan Non- Plan Office C Office B Office A Grants Gran t G

16 Relevant General Financial Rules - contd. Rule 70 Rule 64, 69, 71 & 72 Rule 48 & 59 Provision for Supplementary grant Application of the grant towards a given financial year Submission of estimates in the given forms

17 REVISED ESTIMATES – aspects Due dates Budget Estimates Plan and Non-Plan Estimates Revised Estimates Final Estimates Communication of Budget Grant

18 CONTROL OF EXPENDITURE –procedure and requirements Bill Passing –cum-Expenditure Control Register : Bill-wise and Head-wise in Form GFR 9 [Rule 66(2)(i)] Monthly Statement –to be maintained by the DDOs Broadsheet in GFR 10 – to be maintained by the Controlling Officer Statement in GFR 11- by the Controlling Officer Complete Expenditure in GFR 12 – to be shown by Head of the Department Quarterly returns Liability Register Appropriation Audit Register (CAM 62)

19 RECONCILIATION -procedure PAO to send figures of expenditure/ receipts booked for a month and progressive figures up to that month, from the DDO-wise Expenditure Control Register or Compilation Sheet to the DDOs DDO will send monthly statement (containing departmental figures, PAO’s figures, differences, and details of adjustments pending with DDO/ PAO) showing progress of reconciliation to Head of Department Head of Department to furnish a Quarterly Certificate to the PAO certifying the correctness of the figures

20 FINANCIAL POWERS - relevant GFRs and DFPRs Defines - General powers Head of Department – the ‘Authority’ Head of Office Powers of subordinate authorities Delegation of enhanced powers Rule 34 GFRs & Rule 5 DFPRs Rule 3(f) GFRs and Schedule I to DFPRs Rule 14 DFPRs Rule 13 DFPRs Rule 13(2) and 35 DFPRs, GID 1 to Rule 13 DFPRs.

21 FINANCIAL POWERS - relevant GFRs and DFPRs contd.- Authorisation of subordinate officers Powers are to be exercised subject to availability of budget provisions Sanctions Rule 13(3) and 16DFPRs. Rule 89 GFRs and Rule 13 DFPRs Explanation below Schedule V to DFPRs and GID 1, Rule 89, GFRs