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Contents
• Part I – General Financial Rules
• Part II- Compendium of Advances

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 Part 1:General Financial Rules
Chapter 1: Introduction
Chapter 2: General system of Financial Management
Chapter 3: Budget Formulation & Implementation
Chapter 4: Government Accounts
Chapter 5: Works
Chapter 6: Procurement of Goods and Services
Chapter 7: Inventory Management
Chapter 8: Contract Management
Chaptger 9: Grand-in-aid and Loans
Chapter 10:Budgeting and Accounting of Externally Aided
Projects
Chapter 11: Government Guarantees
Chapter 12: Misc. Subjects
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 Part 2: Compendium of
Advances
• Loans & Advances to Government
Servants
• Interest bearing advance
• No-Interest bearing advances

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 GENERAL PRINCIPLES OF FINANCE
MANAGEMENT

1. ALL MONEYS RECEIVED BY OR ON BEHALF OF GOVERNMENT

SHALL BE BROUGHT INTO GOVT. ACCOUNT IMMEDIATELY
( ART.150 ,283(1), 284 AND GFR-7)

2. THE HEAD OF ACCOUNT IN WHICH MONEY CREDITED/

W ITHDRAWN SHALL BE GOVERNED AS PER GAR-90 & RECEIPT &
PAYMENT RULES 1983 [GFR 8(2)]

3. IT IS THE DUTY OF THE DEPT. TO ENSURE THAT RECEIPTS

AND DUES OF GOVT. ARE CORRECTLY & PROMPTLY ASSESSED,
COLLECTED & CREDITED TO CONSOLIDATED FUND OF INDIA OR
PUBLIC ACCOUNT [Rule 9]

4. ISSUE RECEIPTS IN FORM NO. GAR 6 [GFR 11(2)]

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 Duties of Controlling Officer
• The Controlling Officer should collect the
details of the remittances from his
subordinates and tally it with the accounts
of Accounts Officer and bank scroll

[Rule 10]

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 GENERAL PRINCIPLES
1. AMOUNTS DUE TO GOVT. SHALL NOT BE LEFT
OUTSTANDING WITHOUT SUFFICIENT REASONS
2. IF FOUND IRRECOVERABLE, IMMEDIATE ACTION
SHOULD BE TAKEN FOR WRITE OFF
3. NO SUMS SHOULD BE CREDITIED TO REVENUE BY
DEBIT TO SUSPENSE
4. CREDIT MUST FOLLOW AND NOT PRECEDE ACTUAL
REALISATION
5. HEAD OF DEPT. IS RESPONSIBLE FOR COLLECTION OF
REVNUE & ITS REPORT TO FINANCE MINISTRY.
6. A CLAIM TO REVENUE SHALL NOT BE ABANDONED
EXCEPT THE SANCTION OF COMPETENT AUTHORITY
7. REVENUE REFUND SHOULD BE CHECKED TO ENSURE
THAT NO DOUBLE REFUND IS SANCTIONED
[GFR – 12 TO 18]
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 Report to Audit & Accounts
• ADMINISTERS AND HEADS OF
DEPARTMENT (OTHER THAN POSTS)
SHALL SUBMIT ANNUALY ON 1ST JUNE
TO THE AUDIT & ACCOUNTS A
STATEMENT SHOWING THE
REMISSIONS & ABANDONMENT OF
REVENUE

GFR 19(1)
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 STANDARDS OF FINANCIAL PROPRIETY
• EVERY OFFICER INCURRING OR AUTHORISING EXPENDITURE:

a) GUIDED BY HIGH STANDARD OF FINANCIAL PROPRIETY

b) OBSERVE STRICT ECONOMY
c) RELELVANT FINANCIAL RULES & REGULATIONS ARE
OBSERVED
d) WHILE SPENDING PUBLIC MONEY, OBSERVE SAME
VIGILANCE AS HIS OWN MONEY
e) THE EXPENDITURE SHOULD NOT BE PRIMA FACIA MORE
THAN THE OCCASION DEMANDS
f) SPENDING MONEY SHOULD NOT FOR HIS OWN GAIN
g) EXPENDITURE FROM PUBLIC MONEY NOT TO BE INCURED
FOR THE BENEFIT OF A PERTICULAR PERSON OR
SECTION OF PEOPLE.
h) NO EXPENDITURE SHOULD BE MADE UNLESS AMOUNT IS
SANCTIONED BY COMPETENT AUTHORITY

[GFR - 21]
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DELEGATION OF POWER

THE FINANCIAL POWERS OF THE GOVERNMENT

HAVE BEEN DELEGATED TO VARIOUS
SUBORDINATE AUTHORITIES

FINANCIAL POWERS THAT HAVE NOT BEEN

DELEGATED VEST IN THE FINANCE MINISTRY

GFR 23 10
 SANCTION
• ALL SANCTIONS TO THE EXPENDITURE
SHALL INDICATE THE GRANT NO. OF
APPROPRIATION
• ALL PROPOSALS FOR SANCTION TO
EXPENDITURE SHALL INDICATE WHETHER
SUCH EXPENDITURE CAN BE MET BY VALID
APPROPRIATION OR RE-APPROPRIATION
• IN CASES WHERE IT BECOME NECESSARY TO
ISSUE A SANCTION TO EXPENDITURE
BEFORE FUNDS ARE COMMUNICATED,
SANCTION SHOULD SPECIFY THAT FUNDS
BEING COMMUNICATED IN THE BEDGET OF
THE YEAR.
GFR-25 11
 COMMUNICATION OF SANCTION
ALL THE SANCTIONS SHOULD BE COMMUNICATED TO
ACCOUNTS OFFICER AND AUDIT OFFICER
ALL SANCTIONS WHICH REQUIRE PAYMENT SHALL BE
ADDRESSED TO THE ACCOUNTS OFFICER
ALL OTHER SANCTIONS SHOULD BE ENDORSED TO THE AOs
FINANCIAL SANCTION ACCORDED IN CONCURRENCE WITH
IFA, C&AG, HOME AFFAIRS ETC. SHOULD BE INDICATED AS
SUCH
AMOUNT OF SANCTION SHOULD BE SPECIFIED IN WORDS
AND FIGURES
SANCTIONS ISSUED BY THE HOD MAY BE COMMUNICATED
BY ANY GO
ORDERS CONVEYING SANCTIONS OF ADDITIONS TO PAY
SUCH AS SPECIAL ALLOWANCE, P.P. ETC SHOULD CONTAIN
BRIEF SUMMARY OF THE REASONS TO ENABLE ACCOUNTS
OFFICER TO SCRUTINISE THE SANCTION.
(GFR 29)

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 LAPSE OF SANCTION
• GENERAL PROVISION
IF NO PAYMENT IN WHOLE OR IN PART HAS BEEN
MADE DURING A PERIOD OF 12 MONTHS FROM THE DATE
OF SANCTION, SANCTION WILL LAPSE.
• PROVISIONS:

a) WHEN A PERIOD OF CURRENCY OF THE SANCTION IS

SPECIFIED, SANCTION WILL LAPSE ON THE EXPIRY OF
THAT PERIOD

b) IF SANCTION SPECIFIES THE FINANCIAL YEAR IN WHICH

THE EXPENDITURE TO BE MET, SANCTION WILL LAPSE ON
31ST MARCH OF THAT FINANCIAL YEAR

c) IN CASE OF PURCHASE OF STORES (EITHER THROUGH

DGS&D OR DIRECT) SANCTION WILL NOT LAPSE IF
TENDERS HAVE BEEN ACCEPTED OR INDENT HAS BEEN
PLACED WITHIN ONE YEAR FROM THE DATE OF SANCTION
EVEN THOUGH THE PAYMENT IN WHOLE OR PART COULD
NOT BE PAID DURING THE YEAR. GFR-30 13
 Exemption
Sanction in respect of an addition
to permanent establishment made
from year to year under a general
scheme or in respect of allowance
sanction for a post or a class of
Govt. Servant will not lapse even
the payment not drawn
GFR 31

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RESPONSIBILITY OF CONTROLLING OFFICER
EXPENDITURE DOES NOT EXCEED THE BUDGET ALLOCATION

EXPENDITURE IS INCURRED FOR THE PURPOSE FOR WHICH

FUNDS HAVE BEEN PROVIDED

EXPENDITURE IS INCURRED IN THE PUBLIC INTEREST

ADEQUATE CONTROL MACHANISM IS FUNCTIONING IN HIS

DEPARTMENT FOR PREVENTION, DETECTION OF
ERRORS & IRREGULARITIES IN THE FINANCIAL PROCEEDINGS

HE IS RESPONSIBLE TO GUARD AGAINST WASTE & LOSS

OF PUBLIC MONEY

MECHANISMS OR CHECKS CONTEMPLATED ABOVE ARE

EFFECTIVELY APPLIED
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gfr26
DATE OF EFFECT OF SANCTION

FROM THE DATE OF ORDER UNLESS SPECIFIED

GFR 27

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 DEFALCATION & LOSSES

• ANY LOSS OR SHORTAGE OF PUBLIC

MONEY, DEPARTMENTAL REVENUE
SHALL BE IMMEDIATELY REPORTED
TO COMPETENT AUTHORITY,
STATUTORY AUDIT & PRINCIPAL
ACCOUNTS OFFICER
• SERIOUS IRREGULARITIES SHOULD
BE REPORTED TO IFA & CGA
GFR-33

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 DEFALCATION & LOSSES

• LOSSES NEED NOT REPORT:

i. MISTAKES IN ASSESSMENTS WHICH ARE
DISCOVERED TOO LATE TO PERMIT
SUPPLEMENTARY CLAIM
ii. UNDER ASSESSMENT WHICH ARE DUE TO
INTERPRETATION OF LAW BY THE LOCAL
AUTHORITY BEING OVERRULED BY HIGHER
AUTHORITY AFTER THE EXPIARY OF TIME-LIMIT
iii. REFUNDS ALLOWED ON TIME BARRED CLAIM
iv. PRETTY LOSSES OF VALUE NOT EXCEEDING
RUPEES 2000
GFR 33(1)(i)
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RE-DRAWAL OF LOST MONEY

AMOUNT LOST THROUGH EMBEZLEMENT /

MISAPPROPRIATION / DEFALCATION MAY BE
RE-DRAWN ON A SIMPLE RECEIPT, PENDING
INVESTIGATION, RECOVERY OR WRITE-OFF

HEAD OF ACCOUNT : 8550 CIVIL ADVANCE –

104-OTHER ADVANCE

GFR-33

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LOSS OF GOVT. PROPERTY DUE
TO FIRE, THEFT, FRAUD
1. All losses above 10,000/- due to
suspected theft, fraud, fire etc. is to be
reported to Police for investigation
2. Once the matter is reported to police,
all concerned should assist police in
their investigation
3. A formal investigation report should be
obtained from police
GFR 34
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 LOSS OF IMMOVABLE PROPERTY DUE TO
FIRE, THEFT, FRAUD & EARTHQUAKE

• ALL THE LOSSES ABOVE, THE VALUE

OF WHICH IN EXCESS Rs. 50,000/-
SHALL INVARIABLY BE REPORTED TO
POLICE ALSO FOR INVESTIGATION
GFR 35

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 RESPONSIBILITY FOR LOSSES
• THE DEPARTMENTAL PROCEEDINGS FOR
ASSESSMENT OF RESPONSIBILITY FOR
THE LOSS SHALL BE CONDUCTED

• ACTION AT EACH STAGE OF DETECTION,

REPORTING, WRITE OFF, FINAL DISPOSAL
& TAKING REMEDIAL MEASURERS SHOULD
BE COMPLETED PROMOTLY.
GFR – 37 & 38

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 SUBMISSISON OF RECORDS &
INFORMATION
• AUTHORITIES SHOULD FURNISH FULL
RECORDS & INFORMATION TO THE
AUDIT OR ACCOUNTS OFFICER
• AUTHORITIES SHALL NOT WITHHOLD
ANY INFORMATION, BOOKS OR OTHER
DOCUMENTS REQUIRED BY THE
AUDIT OR ACCOUNTS OFFICER
• “SECRET” FILE/INFORMATION MAY BE
FORWARDED TO THE HEAD OF THE
AUDIT OFFICER DIRECTLY FOR HIS
REQUIRED ACTION GFR 39 TO 41 23
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