General Financial Rules, 2017 (Part 2 of 4) |
Note: Keeping the significance and magnitude of the topic (i.e. GFR, 2017) we have covered the topics (including objectives and one words) in four parts. Students are advised to go through all the 4 posts related to GFR in order to achieve optimum results. All the topics are written by topic experts, hence an appreciation from the students will give them encouragement to bring more such quality exams-oriented topics. |
CAPEX Model ( Capital Expenditure) | OPEX Model ( Operational Expenditure) |
Money spent by a business or organization on acquiring or maintaining fixed assets, such as buildings and equipment. Buyer Purchases goods, Procures consumables, maintenance of goods and finally disposes of product after usage. | Seller provides the goods, maintains it, also provides the consumables as required and finally takes back the goods after useful life. Payment is made in a staggered manner. |
Capital Expenditure is generally met from capital receipts. Capital receipts are receipts that don’t affect the profit or loss of business. | Eg; wages, rent, machine /equipment repairing, insurance, etc. |
Standards of financial propriety ( GFR 21) |
Every officer incurring or authorizing expenditure from public moneys should be guided by high standards of financial propriety. Every officer should also enforce financial order and strict economy and see that all relevant financial rules and regulations are observed, by his own office and by subordinate disbursing officers. Among the principles on which emphasis is generally laid are the following : (i)Every officer is expected to exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money. (ii)The expenditure should not be prima facie more than the occasion demands. (iii)No authority should exercise its powers of sanctioning expenditure to pass an order which will be directly or indirectly to its own advantage. (iv)Expenditure from public moneys should not be incurred for the benefit of a particular person or a section of the people, unless – (a)a claim for the amount could be enforced in a Court of Law, or (b)the expenditure is in pursuance of a recognized policy or custom. |
Some Important Definitions i.r.o GFR 2017 ( GFR 2) | |
Drawing & Disbursing Officer (DDO) | Head of office or any other Gazetted Officer having power to draw bills and make payment on behalf of the central Government. |
Subordinate Authority | A Department of the Central Government or any authority subordinate to the President. |
Account Officer | Head of an Office of Accounts or the Head of a Pay and Accounts Office set up under the scheme of departmentalization of accounts. |
Controlling Officer | An officer entrusted by a Department of the Central Government with the responsibility of controlling the incurring expenditure and/or the collection of revenue. |
Head of the Department | An authority (not below the rank of Deputy Secretary) to the GoI, declared by the concerned department in GoI as a HoD to exercise the delegated financial power rules. |
Head of Office | Gazetted officer or any other authority declared as such under general or special orders of the competent authority. |
Local Fund | Defined in Rule 652 of the Treasury rules. |
Appropriation | Means the assignment, to meet specified expenditure of funds included in a primary unit of appropriation. |
Reappropriation | Means the transfer of funds from one primary unit of appropriation to another such unit. |
Revenue Receipts | Central Taxes, duties, cess, Local taxes and duties, Interest receipts of loans and advances. |
Capital Receipts | Internal & External Debt , Disinvestment receipts, Repayment of loans and advances. |
Note: 1. Primary unit in a grant of appropriation will mean : Object Head of Account. 2. Tax revenue and non-debt capital receipts : Managed by Ministry of Finance 3. As per GFR 2017 a Ministry or department should prepare a list of likely suppliers of non-consulting services on the basis of : Yellow pages, Websites, Trade Journals. 4. Non-Tax Revenue – Managed by All Mind/Dept. E.g. Dividends, Profits, Transfer of surplus from RBI. |
Budget |
A statement of estimated receipts and expenditure of the Central Government. Provisions for preparation, formulation and submission of budget to the Parliament are contained in Articles 112 to 116 of the constitution of India. Control of Expenditure against budget:
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GOVERNMENT ACCOUNTS (GFR 71 TO GFR 129) |
1. Preparation and Presentation of Accounts (GFR 71) : Central Government’s accounts are prepared every year by the Controller General of Accounts (CGA), showing the receipts and disbursement, surplus / Deficit. It is then certified by the Comptroller and Auditor General of India, that is further submitted to the President of India, preferably within six months of closing of the Financial Year. Accounts are then laid before each House of the Parliament. 2. Principle of Accounting (GFR 73): The principles as per which Accounts of GoI are maintained are as per Government Accounting Rules, 1990 (GAR), Account Code Volume- III and Accounting Rules for Treasuries. 3. Cash Based Accounting (GFR 74): Government accounts shall be prepared on a cash basis. 4. Period of Accounts (GFR 75): All the transactions that occurred between 1st April and 31st March shall be recorded. 5. Currency in which Accounts are kept (GFR 76): The accounts of Government shall be maintained in Indian Rupees (₹). All foreign transactions shall be brought into account after conversion into Indian Rupees. |
Officer | Responsibility /Powers |
DDO | DDO is personally responsible for the amount drawn on a bill signed by him until he has paid it to the person entitled to receive it and has obtained a legally valid acquittance. |
Account Officer | Head of an Office of Accounts. |
Audit Officer | Head of an Office of Audit |
Controlling Officer | 1.Controlling officer is responsible in case the expenditure exceeds the budget allocation. 2. Will maintain the Liability Register for effecting proper control over expenditure. |
Chief Accounting Authority / Officer | 1. To be responsible and accountable for financial Management 2. To ensure that the public funds appropriated to the Ministry or Department are used for the purposes for which they are meant for. 3. To be responsible for effective, efficient, economical and transparent use of the resources of the Ministries/ Departments in achieving the stated objectives. 4. Competent for approval of excess expenditure over the allotment: |
Controller General of Accounts | 1. CGA Will prepare the accounts of the Union Government every year showing the receipts and disbursements for the year, surplus or deficit generated during the year and changes in Government liabilities and assets. 2. CGA is authorised to open a new Head of Accounts of Union and States. 3. Submit the Government Appropriation Accounts ( Civil) to the Parliament. 4. Loss of government money arises due to erroneous or irregular issue of cheques, it should be reported to the Controller-General of Accounts. |
Secretaries to Government in the respective Ministry | 1. Prepare and sign the Appropriation accounts pertaining to the Department of Posts and Defence Services. 2. The annual accounts of the Government called the Financial Accounts prepared by the CGA are countersigned by the Secretary ( Expenditure), Ministry of Finance. |
CAG | The certified Annual accounts and reports relating to the Accounts shall be submitted by Comptroller and Auditor-General of India |
Central Purchase Organization | CPO Will certify and register suppliers on GeM |
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