SOME IMPORTANT PROVISIONS OF THE GENERAL FINANCIAL RULES

Shish Haider ChowdhuryFinance Controller (Army), Pay-1

Dhaka Cantonment, Dhaka

Background

The GFR first introduced in British India; After 1947 the then Pakistani Regime

accepted it and introduced two- GFR and East Pakistan Financial Rules;

In Bangladesh work on GFR for the first time was entrusted to RIBEC project;

Under the guidance of a group of expert, the GFR along with some were amended;

The office orders, memorandums and circulars were included in the GFR which was approved the Honourable President.

Definitions

Accounts officer means Controller General of Accounts or any subordinate officer under his jurisdictions;

Comptroller and Auditor General refers to the Comptroller and Auditor General of Bangladesh as mentioned in the constitution;

Competent authority means the authority empowered by the Government;

Controlling officer means the head of the department or any body under his subordination empowered for revenue collection or making expenditure.

Definitions (Contd.)

DDO means the drawing and disbursing officer empowered by the competent authority;

Budget means the annual financial statement of the government;

Government accounts means the consolidated fund and the public accounts of the republic as mentioned in the article 84 and 86 of the constitution;

Principle Accounting Officer means the Secretary to the Ministry;

Standards of Financial Propriety

Every public 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;

The expenditure should not be prima facie more than the occasion demands;

No authority should exercise its powers of sanctioning expenditure to pass an order which will be directly or indirectly to his own advantage;

Standards of Financial Propriety

Public money should not be utilised for the benefit of a particular person or a section of community, unless--- the amount of expenditure involved is insignificant; or a claim for the amount could be enforced in a court of

law; the expenditure is in pursuance of a recognised policy

or custom. The amount of allowances granted to meet

expenditure of a particular type should be so regulated that allowances are not on the whole a source of profit to the recipients.

General Financial RulesSalient Feature

Recoding of financial transactions in the books of accounts immediately after their occurrence

Project/government money deposited in the designated bank account

Project money can’t be invested elsewhere or deposited in any other account without approval from competent authority

Disbursement from project money only after approved budget allocation, not in anticipation of allocation in the future

Expenditure from project fund should be made with such care as it would be done in case of his/her personal fund

General Financial RulesSalient Feature

Expenditure should not be incurred with direct or indirect intention of any self benefit through his/her own authorization

Expenditure towards any allowance not to become a source of regular income of any person

Financial and other authority can be delegated to subordinate officers. Head of office remains responsible for financial discipline of his/her department or any other offices of subordinate DDOs

Disbursement from project fund for the planned activities only

Ensure appropriate documentation before payment regarding allocation, work order, goods receipt note as per work order and financial authority

Financial Management and Control of Expenditure

Each head of a department is responsible for enforcing financial order and strict economy at every step;

He is responsible for observance of all relevant financial rules and regulations both by his own office and by subordinate disbursing officers;

A controlling officer must see not only that the total expenditure is kept within the limits but also that the funds allotted to spending units are expended in the public interest and upon objects.

Budget Responsibility of Controlling Officer

the expenditure does not exceed the budget allocation;

the expenditure is incurred for the purpose for which funds have been provided;

the expenditure is incurred in public interest; adequate control mechanism is functioning in

his department for prevention, detection of errors and irregularities in the financial proceedings of his subordinate offices and to guard against waste and loss of public money; and

mechanism or checks contemplated.

Duties and Responsibilities of Principal Accounting Officer

responsible and accountable for financial management of his Ministry;

ensure that the public funds appropriated to the Ministry are used for the purpose for which they were meant;

be responsible for the effective, efficient, economical and transparent use of the resources;

appear before the PAC and any other Standing Committee for examination;

review and monitor regularly the performance of the programmes and projects;

Duties and Responsibilities of Principal Accounting Officer

responsible for preparation of expenditure and other statements relating to his Ministry;

shall ensure that his Ministry maintains proper records of transactions and adopts systems internal controls;

shall ensure that his Ministry Government procurement procedure-PPR for procurement of Goods, Works and Services in a fair, equitable, transparent, competitive and cost-effective manner;

Categories of Government Expenditure

Pay

Officers

Establishment

Honorarium and Allowances;

Supplies & Services; and

Pension

Control of Expenditure

Head of the Department is responsible for the expenditure:- of his own and- of his subordinate offices

Control of Expenditure The Secretary shall be responsible for ensure that -

(a) funds allocated to his Ministry/Division, its attached Departments or subordinate offices are spent for the purpose for which they are allocated ;(b) the funds are spent strictly in accordance with the rules and regulations, and the expenditure is not, prima-facie, more than the occasion demands and that every Government servant exercises the same vigilance in respect of expenditure incurred from public funds as a person of ordinary prudence would exercise in respect of expenditure of his own money ;

(c) actual expenditure does not exceed the sanctioned budget allocation made for the respective items/operating units, etc. ;(d) no expenditure is incurred in anticipation of authorisation of an annual Budget/Supplementary grants, without the prior concurrence of the Finance Division ;(e) all payments and receipts are correctly classified under appropriate codes of the Classification Chart and the departmental accounts are reconciled every month with the figures communicated by the CGA and the Chief Accounts Officer.(f) audit objections are promptly settled.

Report of Losses

Any loss of government asset should be reported without delay: - to immediate superior officials; and

- to Chief Accounts Office/ Concerned Accounts Office.

Responsibility for Losses

Every government officer is

responsible for loss incurred due to:

- the negligence of his own; and

- the negligence of the other

officials to which s/he

contributed.

Responsibility for Revenue and Receipts

It is the duty of the controlling officers to see that all sums due to Government are regularly and promptly

- Assessed - Realized and - Duly credited to Public Account

Responsibility for Revenue and Receipts

Obtain monthly Accounts and Return from the subordinate offices for the same;

No amount be left outstanding without sufficient reasons;

Where dues appear to be irrecoverable, orders of competent authority must be sought out.

Power of Sanction

No Authority or Department, without the previous consent of Finance Division, may issue an order (other than delegated power) where— There is any financial involvement; Involve any relinquishment of

revenue.

Communication of Sanction

To be communicated to the Chief Accounts Officer/Accounts Office;

Amounts should be expressed both in figures and in words;

Must be signed by an authorized gazetted officer.

Source of appropriation

Should be stated distinctly whether provision has or has not made in the budget estimates;

If not made, whether it is arranged by valid re-appropriation.

Date of effect of Sanction

From the date specified in the sanction letter;

If not specified, from the date of order conveying the sanction.

General procedures for estimates

If not expressly directed by the Govt.

Departmental Revenue and Expenditure

estimates should be prepared in two

parts:

Part-1 relating to revenue and ordinary

expenditure (standing and fluctuating

charges);

Part-2 relating to new expenditure

Estimates for revenue and ordinary expenditure

On the basis of utmost foresight ;All foreseeable items should be provided

for; Should be in proper heads;MOF has right to reduce the provision of

any item; Should be restricted to the absolute

minimum necessary.

Surrender of anticipated savings

Should be surrendered without waiting for ending the financial year;

Should not be held for future possible excess.

Government Accounts

The Controller General of Accounts

The Controller General of Accounts and subordinate offices such as UAO, DAO, DCA and CAO are responsible for annual accounts. As a collections agent of the government, the CGA through these office is responsible for proper accounting of collections of revenue and ensuring that the amounts are quickly credited to the government account.

Functions of Accounting Agents

Receipts and payments based on budget; Pre-audit for the claims submitted; Keeping proper records before making

any payments; Pension and other safety net payments; Reconciliation with executives and banks; Preparation of periodical accounts

including annual appropriation A/C and finance A/C;

Technical advice to the executives.

Annual Finance Accounts

The Finance Accounts reflect total annual receipt and expenditure of the government together with relevant financial statements. The cash balance of the government is also shown in this statement;

Preparation of the Annual Finance Accounts is vested with the C&AG according to Article 4 of the Comptroller and Auditor General (Additional Functions) Act, 1974.

Appropriation Accounts

The appropriation is a comparative statement showing detailed head-wise/code-wise final budgetary allocation and actual expenditure of different ministries and their subordinate offices with explanations of variances (if any);

According to Article 128 of the Constitution and Rule 4 of the Comptroller and Auditor General (Additional functions) Act 1974, preparation of the Appropriation Accounts by the concerned Accounts Offices, it is audited and certified by the C&AG with necessary comments.

Consolidated Fund

All revenues received by the Government by way of taxes and Non-Tax Revenues are credited into the Consolidated Fund;

All loans raised by the Government by issue of public notifications, treasury bills and loans obtained from development partners are credited into this fund;

All expenditure of the government is incurred from this fund and no amount can be drawn from the fund without Parliament’s approval.

Public Accounts

Public Account is constituted according to the Constitution;

the transactions relate to debt other than those included in the Consolidated Fund;

The transactions under debt, deposits and advances in this part are those in respect of which Government incurs a liability to repay the money received;

The receipts under Public Account do not constitute normal receipts of Government;

Parliamentary authorization for payments from the Public Account is not required.

Function of Government Treasury

To maintain cash / bank accounts of the government;

To dispose of the claims against government and maintain accounts;

To manage and ensure safe custody of various stamps and other valuable.

Payments and Expenditure

Through Accounts offices e.g. CAO, DCA, DAO, UAO;

Department having cheque issuing Authority;

Department having cash drawing Authority;

Custom Treasury; and Bangladesh missions abroad.

Thank you very much