Government of Pakistan General Financial Rules Volume I 2019 PDF

GOVERNMENT OF PAKISTAN FINANCE DIVISION Compilation of the GENERAL FINANCIAL RULES OF THE FEDERAL GOVERNMENT Volume I Updated Edition 2019  Preface This Compilation of General Financial Rules (G...

GOVERNMENT OF PAKISTAN FINANCE DIVISION Compilation of the GENERAL FINANCIAL RULES OF THE FEDERAL GOVERNMENT Volume I Updated Edition 2019  Preface This Compilation of General Financial Rules (GFR) – Vol. I incorporates all important orders relating to system of financial management and control i.e. budgeting, sanctioning the expenditure, custody and handling the stores, loans and advances etc. General Financial Rules (GFR) was last prepared in January, 1979. Since then a number of orders have been issued, amended, updated or replaced by the Government, necessitating its revision. We have revised the Compilation of General Financial Rules (GFR). The orders which have become obsolete have been deleted. The clarifications and amendments, issued from time to time since 1979, have been incorporated. It would be appreciated if any error or omission, found in the new Compilation of General Financial Rules (GFR), is brought to the notice of the Ministry of Finance. Secretary to the Government of Pakistan, Ministry of Finance Islamabad Dated: 25-06- 2019  GENERAL FINANCIAL RULES OF THE FEDERAL GOVERNMENT VOLUME – I TABLE OF CONTENTS PARTICULARS PARA PAGE CHAPTER - 1 INTRODUCTORY I Introductory 1 1 II Definitions 2-3 1-3 CHAPTER - 2 GENERAL SYSTEM OF FINANCIAL MANAGEMENT AND CONTROL I Receipt of Money - General 4-8 3-4 II Expenditure and Payment of Moneys 9-14 4-6 III Duties as regards accounts 15-17 6-7 IV Contracts 18-19 7-8 V Defalcations, losses, etc. 20-24 8-10 VI Departmental regulations 25 10 CHAPTER - 3 REVENUE AND RECEIPTS I General 26-30 10-11 II Special Rules for particular classes of receipts. 31-35 11-12 III Remissions of and abandonment of claims to Revenue 36-37 13 IV Audit of receipts 38 13-15 CHAPTER - 4 POWERS OF SANCTION I Powers of various authorities in the matter of sanctioning 39-44-A 15-16 expenditure II Powers with regard to certain special matters 45-50 17-19 III Communication of sanctions 51-54 20-21 IV Indication of the source of appropriation in the sanction to 55-56 21-22 expenditure V Date of effect of sanction 57 22 VI Retrospective sanction 58 22 VII Lapse of sanction 59-60 22-23 VIII Special rules for Works expenditure 61 23 CHAPTER - 5 BUDGET, GRANTS AND APPROPRIATIONS I Budget 62-66 23-24 II Preparation and submission of detailed estimates 67-82 24-37 III Consolidation of the estimates and demands for grants 83 37-38 IV Communication and distribution of grants 84-86 38-39  ii V Incurring of expenditure in anticipation of funds 87 39 VI Control of expenditure 88-92 40-45 VII Provision of funds for works executed through a different 93 45 authority VIII Surrender of anticipated savings 94-96 45-46 IX Expenditure not provided for, re-appropriations, supple. 97-106 46-49 grants X Appropriation Accounts 107 49-50 CHAPTER - 6 ESTABLISHMENT I Alterations of Establishment 108-112 53-55 II Variation in sanctioned pay of a post 113 55 III Transfer of Office 114-115 55-56 IV Date of Birth 116-117 56-57 V Leave applications 118 57 VI Service Books 120-121 57-58 VII Service Rolls. 122 58 VIII Arrear Claims 123-126 58-59 CHAPTER - 7 CONTINGENCIES I Introductory 127-129 59-60 II Powers of subordinate authorities to sanction contingent 130-131 60-61 expenditure III Permanent advances 132 61-62 IV Control of expenditure 133-136 63-64 V Special rules relating to particular kinds of contingencies 137-139 64-65 VI Expenditure for other officers 140 65 CHAPTER - 8 STORES I Introductory 141-142 65-66 II Purchase and acquisition of stores 143-150 66-68 III Custody and accounts of stores 151-169 69-74 IV Audit of stores and stock accounts 170 74 V Miscellaneous 171-175 74-76 CHAPTER - 9 WORKS I Introductory 176-177 88-89 II General rules 178-183 89-91 III Works under the administrative control of the Public 184-190 91-93 Works Department IV Works under the administrative control of other civil 191-192 93-94 departments V Special rules for sanitary, water supply and electric 193-195 94-96  iii installations to government buildings, etc. VI Miscellaneous Rules 196-200 96 CHAPTER - 10 MISCELLANEOUS EXPENDITURE I General 201-202 98-99 II Refunds of revenue 203-205 99 III Grants-in-aid, contributions, etc. 206-211 99-101 IV Compensation to civil officers for loss of property 212 101-102 V Special political expenditure 213 102-104 CHAPTER - 11 DEBT AND MISCELLANEOUS OBLIGATIONS OF GOVERNMENT I Rupee Debt 214-216 104-105 II Provident Funds 217-218 105-106 III Service and Other Funds 219-222 106 CHAPTER - 12 LOCAL FUNDS I Introductory 223-224 107 II Grants to Local Bodies 225 107 III Loans to Local Bodies 226 107 IV Charges recoverable from local bodies 227-228 107-108 V Revenue collected on behalf of local bodies 229-230 108 VI Use of service postage stamps 231 108 VII Audit of accounts 232-234 108-109 CHAPTER - 13 LOANS AND ADVANCES I Introductory 235-236 109-110 II General Rules 237-248 110-113 III Loans and advances to Government servants 249-272 113-133 CHAPTER - 14 MISCELLANEOUS SUBJECTS I Security Deposits 273-285 134-138 II Transfer of government land and buildings 286-287 138-139 III Insurance of Government property 288 139 IV Charitable endowments and other trusts 289 139 V Omitted 290-298 139 VI Miscellaneous 299-303 139-140 CHAPTER - 15 GOVERNMENT ACCOUNTS I General 304-309 140-142 II Capital and Revenue Accounts 310-315 142-145 III Adjustment with other Governments, departments, etc 316-323 145-150 IV Proforma Accounts 324-325 150-151 V Annual Account 326-327 151  1 GENERAL FINANCIAL RULES OF THE 1FEDERAL GOVERNMENT VOLUME I CHAPTER 1.—INTRODUCTORY 1. The rules contained in this volume, which are essentially executive orders of the President, describe primarily the financial powers of different authorities subordinate to the Federal Government and the procedure prescribed by the President which should be followed by them in the securing and spending of the funds necessary for the discharge of the functions entrusted to them. Departmental authorities should follow these rules, supplemented or modified by the special rules and instructions, if any, contained in their departmental regulations and other special orders applicable to them. DEFINITIONS 2. Unless there be anything repugnant in the subject or context, the terms defined in this chapter are used in these rules in the sense hereby explained— (i) Accountant General—means the head of an office of accounts and audit or of accounts who keeps the accounts of the Federal Government. (ii) Appropriation—means the assignment to meet specified expenditure of funds at the disposal of the assigning authority. (iii) Auditor General—means the Auditor General of Pakistan. (iv) The Bank—means the State Bank of Pakistan or any office or agency of the State Bank of Pakistan and includes any branch of the National Bank of Pakistan acting as the agent of the State Bank of Pakistan in accordance with the provisions of the State Bank of Pakistan Act 1956. “State Bank” means the State Bank of Pakistan. (v) Competent Authority—means Government or any other authority to which the relevant powers may be delegated by Government. (vi) The Constitution—means the Constitution of the Islamic Republic of Pakistan. 1 Substituted by Ministry of Law Notification No.F.24(2)/75-Pub., dated 01-8-1975, Gaz. Of Pak., Extra., Pp.435-436, dated 01-8-1975.  2 (vii) Controlling Officer—means a head of a department or other departmental officer who is entrusted with the responsibility of controlling the incurring of expenditure and / or the collection of revenue by the authorities subordinate to the department. (viii) Federal Consolidated Fund & Public account—(1) All revenues received by the Federal Government, all loans raised by that Government, and all moneys received by it in repayment of any loan, shall form part of a consolidated fund, to be known as the Federal Consolidated Fund. (2) All other moneys— (a) Received by or on behalf of the Federal Government; or (b) Received by or deposited with the Supreme Court or any other court established under the authority of the Federation; shall be credited to the Public Account of the Federation. NOTE.—The custody of the Federal Consolidated Fund, the payment of money into that Fund, the withdrawal of moneys there-from, the custody of other moneys received by or on behalf of the Federal Government, their payment into, and withdrawal from, the Public Account of the Federation, and all matters connected with or ancillary to the matters aforesaid, shall be regulated by Act of Parliament or, until provision in that behalf is so made, by rules made by the President. (ix) Ministry of Finance—means the Ministry of Finance of the Federal Government and includes the Financial Advisers attached to the Ministries / Divisions and such other authorities in which the powers of the Ministry of Finance are vested by the President. (x) Financial Year—means the year beginning on the 1st of July and ending on the 30th of June following. (xi) Government—means the Federal Government. (xii) Head of Department—(1) means any authority declared to be such with reference to Rule 2(10) of the Supplementary Rules, if the declaration is made in general terms and not with reference to certain specified rules, only, and (2) includes any other officer declared to be such by the competent authority.  3 (xiii) Non-recurring expenditure—means expenditure sanctioned as a lump sum charge, whether the money be paid as a lump sum or by installments. (xiv) President—means the President of Pakistan. (xv) Primary unit of appropriation—means a lump sum of money placed by the President at the disposal of a subordinate authority by the method prescribed in rules 5 to 7 of the Book of Financial Powers vide Appendix 3. (xvi) Public Works—means civil works and irrigation, navigation, embankment and drainage works. (xvii) Public Works Department—means the Department of the Federal Government in administrative charge of public works. (xviii) Re-appropriation—means the transfer of funds from one unit of appropriation to another such unit. (xix) Recurring expenditure—means all expenditure which is not non-recurring. (xx) Subordinate authority—means a Department of the Federal Government or any authority subordinate to or acting as Agent to the President. (xxi) Treasury Rules—means the Treasury Rules of the Federal Government. 3. Heads of departments have been authorized to declare any gazetted officer subordinate to them to be the ‘head of an office’ for the purpose of these and other financial rules of Government. CHAPTER 2.—GENERAL SYSTEM OF FINANCIAL MANAGEMENT AND CONTROL I—RECEIPT OF MONEY GENERAL 4. All transactions to which any officer of Government is a party in his official capacity must be brought to account without delay. 5. Moneys received as dues of Government or for deposit in the custody of Government should be credited into the Public Account in accordance with the Treasury Rules.  4 6. If a Government officer receives in his official capacity moneys which are not Government dues or the deposit of which in the custody of Government has not been authorized by Government, he must open an account with a bank for their deposit. Such accounts may be opened without special sanction with a branch of the State Bank of Pakistan or the National Bank of Pakistan acting as an Agent of the State Bank of Pakistan or with a Post Office Savings Bank. The prior approval of Government is required to their deposit in any other bank. The Government officer receiving such moneys is personally responsible for seeing that they are disbursed in strict conformity with the rules, regulations or orders governing the fund to which the money appertain, that a precise record of all the transactions is kept in a form complying with the regulations of the fund concerned and that the accounts are subjected to proper audit checks. WITHDRAWAL OF MONEYS FROM THE PUBLIC ACCOUNT 7. Unless otherwise expressly authorized by any law or rule or order having the force of law, moneys may not be removed from the Public Account for investment or deposit elsewhere without the consent of the Ministry of Finance. ASSESSMENT, COLLECTION AND CHECK OF REVENUES 8. Subject to such general or specific instructions as may be issued by Government in this behalf, it is the duty of the Revenue or Administrative Department concerned to see that the dues of Government are correctly and promptly assessed, collected and paid into the treasury. Detailed instructions on the subject are contained in Chapter 3. II—EXPENDITURE AND PAYMENT OF MONEYS ESSENTIAL CONDITIONS GOVERNING EXPENDITURE FROM PUBLIC FUNDS 9. As a general rule no authority may incur any expenditure or enter into any liability involving expenditure from public funds until the expenditure has been sanctioned by general or special orders of the President or by an authority to which power has been duly delegated in this behalf and the expenditure has been provided for in the authorized grants and appropriations for the year. STANDARDS OF FINANCIAL PROPRIETY 10. Every officer incurring or authorizing expenditure from public funds should be guided by high standards of financial propriety. Among the principles on which emphasis is generally laid are the following:—  5 (i) 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. (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) Public moneys should not be utilized for the benefit of a particular person or section of the community unless— (1) the amount of expenditure involved is insignificant, or (2) a claim for the amount could be enforced in a court of law, or (3) the expenditure is in pursuance of a recognized policy or custom. (v) The amount of allowances granted to meet expenditure of a particular type should be so regulated that the allowances are not on the whole a source of profit to the recipients. CONTROL OF EXPENDITURE 11. 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. 12. A Controlling officer must see not only that the total expenditure is kept within the limits of the authorized appropriation but also that the fund allotted to spending units are expended in the public interest and upon objects for which the money was provided. In order to maintain a proper control, he should arrange to be kept informed, not only of what has actually been spent from an appropriation but also what commitments and liabilities have been and will be incurred against it. He must be in a position to assume before Government and the Public Accounts Committee, if necessary, complete responsibility for departmental expenditure and to explain or justify any instance of excess or financial irregularity that may be brought to notice as a result of audit scrutiny or otherwise. INTERNAL CHECK AGAINST IRREGULARITIES, WASTE AND FRAUD 13. In the discharge of his ultimate responsibilities for the administration of an appropriation or part of an appropriation placed at his disposal, every Controlling officer must satisfy himself not only that adequate provisions exist within the departmental  6 organization for systematic internal checks calculated to prevent and detect errors and irregularities in the financial proceedings of its subordinate officers and to guard against waste and loss of public money and stores, but also that the prescribed checks are effectively applied. For this purpose each Head of the Department will get the accounts of his office and those of the subordinate disbursing officers, if any, inspected at least once in every financial year by a Senior Officer not connected with the account matters to see whether:— (i) rules on handling and custody of cash are properly understood and applied. (ii) effective system of internal check exists for securing regularity and propriety in the various transactions including receipt and issue of stores etc., if any, and (iii) satisfactory arrangement exists for systematic and proper maintenance of Account Books and other ancillary records concerned with the Initial Accounts. The result of these inspections should be incorporated in the form of an inspection report copy of which should be endorsed to Audit. The head of department should, after his scrutiny of the report, communicate to Audit a copy of his remarks thereon and any orders issued in that connection. NOTE.—The term ‘Senior Officer’ should be taken to mean that the officer who inspects the accounts should be higher in status than the officer who maintains or prepares the accounts. It has necessarily to be left to the discretion of the competent authority to appoint such an officer for the inspection of the accounts as could give him an independent report of the state of accounts, records etc. proposed to be subjected to review. In exercising his discretion in the matter, the competent authority would no doubt, ensure that the contemplated inspection is entrusted to a senior Class 1 Officer who has had sufficient background of the Financial Rules and orders and could carry out the check satisfactorily. DELAYS IN PAYMENT 14. Delay in the payment of money indisputably due by Government is contrary to all rules and budgetary principles and should be avoided vide also paras 105 and 106. III—DUTIES AS REGARDS ACCOUNTS MAINTENANCE OF ACCOUNTS 15. Every officer whose duty it is to prepare and render any accounts or returns in respect of public money or stores is personally responsible for their completeness and strict accuracy and their dispatch within the prescribed date.  7 16. An officer who signs or countersigns a certificate is personally responsible for the facts certified to, so far as it is his duty to know or to the extent to which he may reasonably be expected to be aware of them. The fact that a certificate is printed is no justification for his signing it unless it represents the facts of the case. If in its printed form it does not represent the facts, it is his duty to make any necessary amendment which will call attention to the deviation and so to give the authority concerned the opportunity of deciding whether the amendments cover requirements. DEMAND FOR INFORMATION BY AUDIT 17. It is the duty of every departmental and controlling officer to see that the Accountant General is afforded all reasonable facilities in the discharge of his functions and furnished with the fullest possible information for which he may ask, for the preparation of any account or report, which it is his duty to prepare. No such information nor any books or other documents to which the Auditor-General has a statutory right of access may be withheld from the Accountant General. IV.—CONTRACTS GENERAL PRINCIPLES 18. No contracts may be entered into by any authority which has not been empowered to do so by or under the orders of the President. The various classes of contracts and assurances of property authorized by the President in exercise of powers conferred by Article 99 of the Constitution to be executed by different authorities are specified in Appendix I. Subsidiary orders of Government as to the limitation upon the powers of these authorities, the conditions under which such powers should be exercised and the general procedure prescribed with regard to such contracts, such as calling for and acceptance of tenders, etc., are laid down in the appropriate departmental regulations. 19. The following general principles have been laid down for the guidance of authorities which have to enter into contracts or agreements involving expenditure from Public funds: (i) The terms of a contract must be precise and definite and there must be no room for ambiguity or misconstruction therein. (ii) As far as possible, legal and financial advice should be taken in the drafting of contracts and before they are finally entered into.  8 (iii) Standard forms of contracts should be adopted wherever possible, the terms to be subject to adequate prior scrutiny. (iv) The terms of a contract once entered into should not be materially varied without the previous consent of the authority competent to enter into the contract as so varied. No payments to contractors by way of compensation, or otherwise, outside the strict terms of the contract or in excess of the contract rates may be authorized without the previous approval of the Ministry of Finance. (v) No contract involving an uncertain or indefinite liability or any condition of an unusual character should be entered into without the previous consent of the Ministry of Finance. (vi) Whenever practicable and advantageous, contracts should be placed only after tenders have been openly invited and, in cases where the lowest tender is not accepted, reasons should be recorded. (vii) In selecting the tender to be accepted, the financial status of the individuals and firms tendering must be taken it into consideration in addition to all other relevant factors. (viii) Even in cases where a formal written contract is not made into order for supplies, etc., should be placed without at least a written agreement as to the price. (ix) Provision must be made in contracts for safeguarding Government property entrusted to a contractor. (x) When a contract is likely to endure for a period of more than 5 years, it should, wherever feasible include a provision for an unconditional power of revocation or cancellation by Government at any time on the expiry of six months notice to that effect. V.—DEFALCATIONS, LOSSES, ETC. REPORT OF LOSSES 20. (1) With the exceptions noted below, any loss of public money, departmental revenue or receipts, stamps, opium, stores or other property held by or on behalf of Government, caused by defalcation or otherwise, which is discovered in a treasury or other office or department, should be immediately reported by the officer concerned to his immediate official superior as well as to the Accountant General, even when such loss has been made good by the party responsible for it. Such reports must be submitted as  9 soon as a suspicion arises that there has been a loss; they must not be delayed while detailed enquiries are made. When the matter has been fully investigated, a further and complete report should be submitted of the nature and extent of the loss, showing the errors or neglect of rules by which such loss was rendered possible, and the prospects of affecting a recovery. (2) If the irregularity be detected by Audit in the first instance, the Accountant General will report it immediately to the administrative authority concerned, and if he considers necessary, to Government as well. Exception 1.—In the case of Customs Revenue, (a) mistakes in assessments which are discovered too late to permit of a supplementary claim being made, and (b) under-assessments which are due to the interpretation of the law by the local Customs authority being overruled by higher authority more than three months after the assessment was made, need not be reported to the Accountant General. A record should, however, be kept of such cases for examination by the Accountant General at the time of audit. Exception 2.—Petty cases, that is, cases involving losses not exceeding Rs.200 each, need not be reported to the Accountant General unless there are, in any case, important features which merit detailed investigation and consideration. 21. The officers receiving a report submitted to him under para 20 must forward it forthwith to Government through the usual channel with such comments as may be considered necessary. He should also submit a detailed report, after completing such departmental investigations as may be necessary or expedient on the causes or circumstances which led to the defalcation or loss, the steps taken to prevent its recurrence and the disciplinary or any other action proposed as regards the person responsible. ACCIDENTS 22. Any serious loss of immovable property, such as buildings, communications or other works, caused by fire, flood, cyclone, earthquake or any other natural cause, should be reported at once by the Departmental officer to the head of the department and by the latter to Government. When a full enquiry as to the cause and extent of the loss has been made, the detailed report should be sent by the departmental officer concerned to the head of the department, a copy of the report on an abstract thereof being simultaneously forwarded to the Accountant General. RESPONSIBILITY FOR LOSSES, ETC. 23. Every Government officer should realize fully and clearly that he will be held personally responsible for any loss sustained by Government through fraud or  10 negligence on his part and that he will also be held personally responsible for any loss arising from fraud or negligence on the part of any other Government officer to the extent to which it may be shown that he contributed to the loss by his own action or negligence. Detailed instructions for regulating the enforcement of such responsibility are embodied in Appendix 2. WRITE OFF OF LOSSES, ETC. 24. The powers delegated to different authorities to write off the irrecoverable value of public money or stores lost through fraud or negligence of individuals or other causes are indicated in Chapter 4. VI—DEPARTMENTAL REGULATIONS 25. All Departmental regulations in so far as they embody orders or instructions of a financial character or have important financial bearing should be made by, or with the approval of, the Ministry of Finance. CHAPTER 3.—REVENUE AND RECEIPTS I—GENERAL 26. Subject to any special arrangement that may be authorized by competent authority with respect to any particular class of receipts, it is the duty of the departmental Controlling officers to see that all sums due to Government are regularly and promptly assessed, realized and duly credited in the Public Account. They should accordingly arrange to obtain from their subordinates monthly accounts and returns in suitable form claiming credit for so much paid into the treasury or otherwise accounted for and compare them with the statements of treasury credits furnished by the Accountant General, to see that the amounts reported as collected have been duly credited in the Public Account. If wrong credits thus come to the notice of the Controlling officer, he should at once inform the Accountant General, with a view to the correction of the accounts. If any credits are claimed but not found in the accounts, enquiries should be made first of the responsible departmental officer concerned. NOTE 1.—For this purpose, each Accountant General will send to the departmental Controlling Officer, an extract from his account showing the amounts brought to credit in them in each month. NOTE 2.—It is essential that the departmental accounts of revenue should not be compiled from the returns prepared by the treasury. But the Treasury Officer may be  11 required, where necessary, to verify the returns prepared for submission to the departmental Controlling authority. NOTE 3.—In order to minimize the differences between the treasury figures and the departmental figures, it is essential that the chalans with which money is remitted to the treasury should bear full and correct accounts classifications. 27. Detailed rules and procedure regarding assessment, collection, remissions, etc., of revenue should be laid down in the departmental regulations of the revenue and collecting departments concerned. NOTE.—In departments in which officers are required to receive moneys on behalf of Government and issue receipts therefore in Form T.R. 5, the departmental regulations should prescribe the procedure rules for the maintenance of a proper account of the receipt, and issue of the receipt books, the number of receipt books to be issued at a time to each officer and check with the Officer’s accounts of the used books when returned. 28. No amount due to Government should be left outstanding without sufficient reason, and where any dues appear to be irrecoverable the orders of competent authority for their adjustment must be sought. 29. Unless specially authorized by any rule or order made by competent authority, no sums may be credited as revenue by debit to a suspense head: the credit must follow and not precede actual realization. 30. Heads of departments in charge of important sources of revenue should keep the Ministry of Finance fully informed of the progress of collection of revenue under their control and of all important variations in such collections as compared with the Budget estimates. II—SPECIAL RULES FOR PARTICULAR CLASSES OF RECEIPTS RENTS OF GOVERNMENT BUILDINGS, LAND, ETC. 31. The detailed rules and procedure regarding the demand and recovery of rents of Government buildings and lands are contained in the departmental regulations of the departments in charge of those buildings. When the maintenance of any rentable building is entrusted to a civil department other than the Public Works Department, the head of the department concerned will be responsible for the due recovery of the rents thereof. The procedure for the assessment and recovery of the rents of such buildings will be regulated generally by the rules applicable to residences under the direct charge of the Public Works Department.  12 FINES 32. It is the duty of every court or authority having the power to fine to see that the money realized reaches the treasury and that adequate precautions are taken against double refunds of fines or refunds of fines not actually paid into the treasury. 33. The duty of realizing fines and of checking the receipts and refunds rests with the departmental officers. Each court, civil or criminal, is required to submit to the District Judge or to the District Magistrate, as the case may be, on the last working day of each calendar month, a statement in the prescribed form showing the demand, collection and balance of fines levied and written off by it as well as of the refunds there-from, the statement being made up for the account month of the treasury or sub-treasury with which the court deals. The District Judge and the District Magistrate should each consolidate these returns into a monthly fines statement for the courts under him and for his own and forward it to the Treasury Officer, as soon as possible after the beginning of the month, for verification of the amounts shown as remitted into the treasury with the credit appearing in the treasury account. The Treasury Officer should certify to the correctness or otherwise of these amounts. Where there is any discrepancy between a consolidated statement and the treasury account, the Treasury Officer may, if necessary, before giving his certificate, request the District Judge or the District Magistrate, as the case may be, to explain the discrepancy. NOTE I.—The statement should exhibit the amounts under each head of accounts, e.g., Magisterial fines, under the Prevention of Cruelty to Animals Act, etc., separately. Compensation fines due to an injured party which are creditable to deposits and fines which under the orders of competent authority are creditable to a Municipal or Local Fund, should be excluded from this statement. NOTE 2.—When fines are received in another district, an intimation should be given by the recovering officer to the officer concerned, who should note the fact in his monthly fine statements. 34. Not printed. MISCELLANEOUS DEMANDS 35. Realization of miscellaneous demands of Government not falling under the ordinary revenue administration will be watched by the Accountant General, such as payments due from States acceding to Pakistan, contributions from Provincial Governments, Local Funds, Contractors and others towards Establishment charges, etc.  13 III.—REMISSIONS OF & ABANDONMENT OF CLAIMS TO REVENUE 36. The sanction of the competent authority is necessary for the remission of, and abandonment of claims to revenue. NOTE.—The powers of subordinate authorities to sanction the write off of loss of revenue are indicated in Schedule V to the Book of Financial Powers. 37. Heads of departments and Local Administrations should submit annually on the first of September to the Accountant General concerned statements showing the remissions of revenue and abandonment of claims to revenue sanctioned during the preceding year by competent authorities in exercise of the discretionary powers vested in them otherwise than by law or rule having the force of law. For inclusion in these statements remissions and abandonments should be classified broadly with reference to the grounds on which they were sanctioned and a total figure should be given for each class. A brief explanation of the circumstances leading to the remission should be added in the case of each class. Subject to any general or special order issued by Government, individual remissions below Rs.100 need not be included in this statement. NOTE 1.—Heads of Local Administrations may make rules defining remissions and abandonment of revenues for the purpose of this rule. NOTE 2.—Where the administrative year does not coincide with the financial year, the figures of the former, if this prove more convenient to the departmental authorities may be given in the statement. NOTE 3.—This rule does not apply to Railways and Posts and Telegraphs Departments. IV—AUDIT OF RECEIPTS 38. When the audit of the receipts of any department of Government is entrusted to the Auditor General, it will be conducted in accordance with the regulations reproduced in Annexure 9 to this Chapter. NOTE 1.—The procedure in respect of particular classes of receipts, e.g., stamps, opium, foreign service contributions, etc. will be governed by special orders issued by Government. NOTE 2.—The audit of receipts accruing under Debt and Remittance heads and of those included in the subsidiary accounts of Government Commercial undertakings  14 devolves on the Auditor General and is conducted in such manner and to such extent as may be prescribed by him. ANNEXURE A (See para 38) REGULATIONS FOR THE CONDUCT OF THE AUDIT RECEIPTS 1. It is primarily the responsibility of the Departmental authorities to see that all revenue or other debts due to Government, which have to be brought to account, are correctly and promptly assessed, realized and credited to public account and any investigation by Audit must be so conducted as not to interfere with this executive responsibility. Audit shall, however, have power to examine the correctness of the sums brought to account in respect of receipts of any department in such manner and to such an extent as may be determined by Government in consultation with the Accountant General. 2. In conducting the audit of receipts of any Government department, the chief aim should be to ascertain that adequate regulations and procedure have been framed to secure an effective check on the assessment, collection, and proper allocation of revenue, and to see by an adequate detailed check that any such regulations and procedure are being observed. In the audit of receipts ordinarily the general is more important than the particular. 3. In the audit of receipts it would be necessary in the case of a department which is a receiver of public money, to ascertain what checks are imposed against the commission of irregularities at the various stages of collection and accounting and to suggest any appropriate improvement in the procedure. Audit might, for instance, suggest in a particular case that a test inspection should be carried out by comparing a sample set of receipt counterfoils with the receipts actually in the hands of the tax-payers or other debtors, the result of such an inspection being made available to Audit. In no case, however, should independent enquiries be made among the tax-payers or the general public. Audit should confine itself to calling upon the Executive to furnish necessary information and, in cases of difficulty, it should confer with the Administrative authorities concerned as to the best means of obtaining the evidence, which it requires. 4. The audit of receipts should be regulated mainly with reference to the statutory provisions or financial rules or orders which may be applicable to the particular receipts involved. If the test check reveals any defect in such rules or orders, the advisability of amendment should be brought to notice.  15 It is, however, rarely if ever the duty of Audit to question an authoritative interpretation of such rules or orders, and in no case may Audit review a judicial decision, or a decision given by an Administrative authority in a quasi-judicial capacity. This instruction does not, however, debar an auditor from bringing to notice any conclusion deducible from the examination of the results of a number of such decisions. 5. Where any financial rule or order applicable to the case prescribes the scale or periodicity of recoveries, it will be the duty of Audit to see, as far as possible, that there is no deviation without proper authority from such scale or periodicity. When this check cannot be exercised centrally, a test audit may conducted at local inspections, the aim being to secure that disregard of rule or defects of procedure are not such as to lead to leakage of revenue rather than to see that a particular debt due to Government was not realized at all or on due date. 6. Ordinarily Audit will see that no amounts due to Government are left outstanding on its books without sufficient reason. Audit will continue carefully to watch such out-standings and suggest to departmental authorities any feasible means for their recovery. Whenever any dues appear to be irrecoverable, orders for their adjustment should be sought. But unless permitted by any rule or order of a competent authority, no sums may be credited to Government by debit to a suspense head; credit must follow, and not precede, actual realization. 7. The procedure prescribed by the Auditor-General for raising and pursuing audit objections in relation to expenditure, including powers of Audit Officers to waive recovery of Government dues under certain conditions, shall apply mutatis mutandis in respect of audit objection on any accounts of receipts. CHAPTER 4.—POWERS OF SANCTION I.—POWERS OF VARIOUS AUTHORITIES IN THE MATTER OF SANCTIONING EXPENDITURE GENERAL 39. (1) Deleted. (2) The responsibility for financial operations of the Federal Government as also for the exercise of all executive authorities rests on the President, whose sanction, given either directly or by persons to whom the necessary power has been delegated, is necessary to all expenditure from the Federal Consolidated Fund and Public Account. The extent to which powers to sanction expenditure have been delegated to various authorities is indicated in the following paras.  16 POWERS OF SUBORDINATE AUTHORITIES IN PAKISTAN 40. All the most important general orders on the subject of financial powers of subordinate authorities in relation to expenditure from the Federal Consolidated Fund and Public Account Book of Financial Powers are embodied in Appendices 3 and 3-A and the relevant chapters of this compilation. Delegations made under those orders are incorporated in the departmental regulations or in the Manuals of the Accountant General concerned. The financial powers of subordinate authorities in certain departments are regulated by separate schedules of powers relating to those departments and by general orders issued with the concurrence of the Ministry of Finance, which are embodied in the respective departmental regulations. 41. The powers which are commonly shared by all heads of departments and may, in the absence of any orders to the contrary, be exercised by any subordinate authority in virtue of its being declared as the head of a department, shown in Appendix 4. 42. The financial powers of the Federal Government, which have not been delegated to any other Ministry, department or authority vest in the Ministry of Finance. 43. Unless otherwise provided by any special rule or order of Government, a higher authority may exercise the powers delegated to an authority subordinate to it. POWERS OF HEADS OF PAKISTAN MISSIONS IN FOREIGN COUNTRIES INCLUDING THE HIGH COMMISSIONER FOR PAKISTAN IN THE UNITED KINGDOM 44. The extent to which powers to sanction expenditure connected with the performance of the functions of Heads of Pakistan Missions in foreign countries have been delegated to the Heads of Missions is set out in Appendix 3A. FUNCTIONS OF THE AMBASSADOR FOR PAKISTAN INTHE UNITED KINGDOM 44-A. The functions now performed by the Ambassador for Pakistan the United Kingdom on behalf of the Federal Government are specified in the list as given in Appendix 5.  17 II.—POWERS IN REGARD TO CERTAIN SPECIAL MATTERS GRANTS OF LAND, ASSIGNMENTS OF REVENUE AND OTHER CONCESSIONS, ETC. 45. No department or authority may, without previous consent of the Ministry of Finance, issue any orders (other than orders in pursuance of general delegation made by or with the approval of the Ministry of Finance) which— (i) involve any grant of land, or assignment of revenue, or concession, grant, lease, or license of mineral or forest rights or right to water power, or any easement or privilege in respect of such concessions; or (ii) in any way involve any relinquishment of revenue. NOTE.—The powers to execute instruments are governed by the orders given in Appendix I and other departmental and local orders on the subject. PAYMENT OF COMMUTATION MONEY 46. The power of the Federal Government under rule 32 in section IV of Appendix 3 to the Account Code Vol. I to authorize, in respect of pensions which are divisible between the Federal Government and a Provincial Government and in which the latter cannot find funds to meet the due share of the commutation money, the debit to the Federal Consolidated Fund and Public Account of the whole commuted value of a portion of the pension (not exceeding the commuted value of the Federal Government’s share of the pension) may be exercised by the Ministries and Divisions of the Federal Government administratively concerned. WRITE-OFF OF LOSSES NOTE.—The orders in the following paras do not apply to the Defence and the Railway Departments whose powers the matter of write off of losses are regulated by special orders incorporated in the department regulations. 47. (1) Subject to the limits and conditions specified in Schedule V to the Book of Financial Powers, a competent authority may sanction the writing off finally of the irrecoverable value of stores or public money lost by fraud, negligence of individuals or other causes, provided that— (i) the loss does not disclose a defect of system the amendment of which requires the orders of higher authority; and  18 (ii) there has not been any serious negligence on the part of some individual Government officer or officers which may possibly call for disciplinary action requiring the orders of any higher authority. These orders apply also to the writing off of losses of revenue, irrecoverable loans and advances and of deficiencies, depreciation, etc., in the value of stores included in the stock and other accounts. (See also para. 166.) NOTE.—The expression ‘Value of Stores’ used in this sub-para should be interpreted as meaning Book Value, where priced accounts are maintained and Replacement Value in other cases. (2) All sanctions to write off should be communicated to the Accountant General for scrutiny in each case and for bringing to notice any defect of system which requires attention. NOTE.—Sanctions to the writing off of irrecoverable balances of income-tax demands accorded by competent authorities need not be communicated to the Accountant General. Irrecoverable balances of income-tax demands written-off by competent authorities should, however, be included in the statement required to be submitted to the Accountant General under para. 37. 48. The orders contained in the last preceding para. do not apply to loss of cash in treasuries, whether in the course of remittance or out of treasury balance, small coin depot or currency chest. Individual cases of such losses should be reported to the Ministry of Finance and its specific approval obtained before any item can be written-off in the accounts of the Federal Government. NOTE.—It has been decided with the concurrence of Provincial Governments and the Auditor-General, that, in general, losses sustained by the Federal Government through the negligence or culpability of the staff paid for by a Provincial Government and vice versa, should be borne as they occur, i.e., by the Federal Government, if the loss occurs in connection with 2Federal transactions and, by the Provincial Government, if it is on account of a Provincial transaction. In cases where recoveries are made in cash, e.g., by deductions from pay or otherwise from the persons responsible for a loss, the entire amount recovered should be credited to the Government which, under the above arrangement, would bear the loss for this purpose. Recoveries made indirectly, e.g., by stoppage of increment or promotion as 2 Substituted by Ministry of Law Notification No.F.24(2)/75-Pub., dated 01-8-1975, Gaz. Of Pak., Extra., Pp.435-436, dated 01-8-1975.  19 a measure of punishment, should not be treated as recoveries made in cash. Where the staff is paid for by one Government and the loss is borne by another Government, a copy of the orders regarding the action taken against the persons responsible for the loss should be communicated by the former to the latter. REMISSION OF DISALLOWANCES BY AUDIT AND WRITING-OFF OF OVERPAYMENTS MADE TO GOVERNMENT SERVANTS 49. (1) Ministries and Divisions of the Federal Government, Governors of Provinces acting as agents to the President may, for reasons to be recorded waive the recovery of an amount disallowed by an Audit Officer or otherwise found to have been overpaid to a Government servant, if— (i) the amount disallowed has been drawn by the Government servant concerned under a reasonable belief that he was entitled to it; (ii) the enforcement of the recovery will, in the opinion of the competent authority, cause undue hardship, or it will be physically impossible to effect the recovery; and (ii) in the case of disallowances of emoluments of the nature of pay as defined in Fundamental Rule 9 (21), made within one year of the date of payment— (1) the Government servant is not in receipt of pay exceeding Rs.12,000 a year or in the ease of others, the overdrawal has not the effect of raising the Government servant’s pay beyond Rs.12,000 in any year; and (2) the overdrawal has not been occasioned by delay in notifying a promotion or reversion. These powers may be exercised by the authorities to which the powers may be specially delegated by Government, provided that the yearly pay limit referred to in sub- clause (1) above does not exceed Rs.1,500 in any individual case:— (2) All sanctions to forego recovery under these orders should be communicated to the Accountant General. It is open to the Accountant General to require that the action taken in any case should be reported to the Ministry of Finance for orders. 50. The powers delegated to Audit Officers to waive objection to or to forego recovery of, irregular expenditure in individual cases are laid down in paras. 248 to 250 of the Audit Code, from which relevant extracts are reproduced in Appendix-6.  20 III.—COMMUNICATION OF SANCTIONS 51. Financial sanction and order of competent authorities under these or any other authorized rules, e.g., the Fundamental and Supplementary Rules, the Civil Service Regulations, the Provident Fund Rules, the Civil Pensions (Commutation) Rules, the Treasury Rules, The Public Works Department Code, the 3Federal Public Works Account Code, etc., will be communicated to the Accountant General concerned in accordance with the procedure set out below:— (i) All financial sanctions and orders issued by a Ministry or Division within its own financial powers as a Ministry or Division of the Federal Government will be communicated direct to the Accountant General, by the Ministry or Division concerned. All other orders involving financial sanctions which may be issued by the Ministry or Division of the Federal Government i.e., sanctions beyond their financial powers will be communicated to the Accountant General through the Ministry of Finance. (ii) Sanctions and orders of any other authority to which the power of sanction has been delegated will be communicated to the Accountant General by that authority. (iii) In cases referred to in clause (i) above, if an order sanctioning expenditure is sent to the Accountant General, direct by a Ministry or Division and that Ministry or Division is not competent to sanction the expenditure the Accountant-General will not refuse obedience but will report to the Ministry of Finance that such an order has been issued and request that it may be communicated to him by the Ministry of Finance in due course. (iv) If an order or sanction, has been issued with the concurrence of the Auditor- General, the fact should be mentioned in the endorsement to the Accountant General. (v) In all orders conveying sanctions to expenditure of a definite amount or up to a specified limit, the amount of sanction should always be expressed both in words and in figures. (vi) All letters or orders conveying sanctions to expenditure, appointments, etc., must be signed by an authorized gazetted officer, whose specimen signatures should be supplied to the Accountant General concerned. 3 Substituted by Ministry of Law Notification No.F.24(2)/75-Pub., dated 01-8-1975, Gaz. Of Pak., Extra., Pp.435-436, dated 01-8-1975.  21 NOTE.—In cases in which the documents relating to any sanction or order are deemed secret, the Accountant General will accept a statement of fact signed by the President in lieu of those documents. 52. All orders conveying sanction to the grant of additions to pay, such as special pay and compensatory allowance, should contain a brief but clear summary of the reasons for the grant of the addition so as to enable the Accountant General to see that it is correctly classified as special pay or compensatory allowance, as the case may be. In cases in which an official record in an open letter is considered undesirable, the reasons for the grant of such additions to pay should be communicated confidently to the Accountant General. A similar procedure should also be followed in all other cases in which the rules require that reasons for the grant of special concessions or allowances should be recorded. 53. Sanctions accorded by competent authority to grants of land and alienation of land revenue, other than those in which assignments of land revenue are treated as cash payments, should be communicated to the Accountant General, in a consolidated monthly return giving the necessary details to enable him to audit the sanctions accorded. 54. When proposals for a new grant-in-aid are placed before the Standing Finance Committee, details should be furnished showing the purpose of the grant and the exact nature of the conditions on which it is proposed to be made. To enable the Accountant-General to compare such purposes and conditions with those enumerated by the sanctioning authority in its subsequent orders of sanction, the Accountant General should be supplied, when the sanction is conveyed to him under para. 51, with relevant extracts from the Proceedings of that Committee. IV.—INDICATION OF THE SOURCE OF APPROPRIATIONS IN THE SANCTION TO EXPENDITURE 55. In all applications for sanction to expenditure it should be distinctly stated whether provisions for the proposed charge has, or has not, been made in the budget estimates of the year, and, if it has not been made whether the funds can be found by valid re-appropriation. 56. Authorities which sanction new expenditure after funds have been communicated should be careful to indicate the source of appropriation. Where it is desired to sanction expenditure before funds have been communicated, as may be necessary in order to avoid delay in starting work at the beginning of a new financial year (vide para. 87), or to prevent duplication of orders, the authority which does so should be careful to add the words “subject to funds being communicated in the budget of the year”.  22 NOTE.—Vague expressions such as “subject to budget provision” should be carefully avoided in conveying sanctions to expenditure. V.—DATE OF EFFECT OF SANCTION Rule 57 (Sub-para. 1) 57. Unless otherwise indicated specifically in the order conveying the sanction, a sanction issued by a competent authority has effect from the date of orders conveying the sanction. In all cases, these orders are subject to general order contained in para. 3 of the Book of Financial Powers regarding appropriation of funds and to any special provisions as to the date of effect in the rules, orders or sanctions themselves. NOTE.—Orders sanctioning the creation of temporary posts should, in addition to the sanctioned duration of the post, invariably specify the date from which it is to run whether it be the date of entertainment or otherwise. VI.—RETROSPECTIVE SANCTION 58. (1) All authorities which are competent to sanction revision of pay or the grant of concessions to Government servants should bear in mind that retrospective effect should not be given to financial sanctions, except in exceptional circumstances, without the special approval of Government. (2) In the absence of special reasons to the contrary, concessions regarding rates of pay for any class of Government servants should take effect as from the first of June and not from some date in the middle of a financial year. VII.—LAPSE OF SANCTION 59. A sanction for any fresh charge which has not been acted on for a year must be held to have lapsed, unless it is specifically renewed. NOTE 1.—This order does not apply to a case where an allowance sanctioned for a post or a class of Government servants has not been drawn by a particular incumbent or incumbents, nor does it apply to additions made gradually from year to year to a permanent establishment under a general scheme which has been sanctioned by competent authority. NOTE 2.—the term year as used in this paragraph means financial year.  23 60. Deleted. VIII.—SPECIAL RULES FOR WORKS EXPENDITURE 61. Special rules for regulating administrative approvals and sanctions to expenditure on works are contained in the 4Federal Public Works Department Code and other departmental regulations—see also Chapter 9. CHAPTER 5—BUDGET, GRANTS AND APPROPRIATIONS I.—BUDGET INTRODUCTORY 62. A statement of the estimated annual revenue receipts and expenditure of the Federal Government, together with all other receipts and disbursements of the Federal Government, arising both in and outside Pakistan, is prepared by Finance Division and presented to the legislature as required by Article 80 of the Constitution. This statement is referred to as the “Annual Budget Statement”. This statement along with the book of Demands for Grants and Appropriations is generally known as the” Budget”. 63. The proposals of the Federal Government in connection with the votable part of the Budget are submitted to the vote of the legislature in the form of Demands for Grants. The detailed estimates presented in support of each demand include provision both for votable and non-votable (charged) expenditure, though the two classes of expenditure are clearly distinguished. The charged expenditure comprises the following:— (a) The remuneration payable to the President and other expenditure relating to his office. (b) The remuneration payable to:— (i) the judges of the Supreme Court; (ii) the Chief Election Commissioner; (iii) the Chairman and the Deputy Chairman of the Senate; (iv) the Speaker and Deputy Speaker of the National Assembly; and (v) the Auditor-General. (c) The administrative expenses, including the remuneration payable to officers and servants of the Supreme Court, the department of the Auditor-General 4 Substituted by Ministry of Law Notification No.F.24(2)/75-Pub., dated 01-8-1975, Gaz. Of Pak., Extra., Pp.435-436, dated 01-8-1975.  24 and the office of the Chief Election Commissioner and the Election Commission, and Secretariats of the Senate and the National Assembly. (d) All debt charges for which the Federal Government is liable, including interest, sinking fund charges, the repayment or amortization of capital and other expenditure in connection with the raising of loans and the service and redemption of debt on the security of the Federal Consolidated Fund. (e) Sums required to satisfy any judgment, degree or award against Pakistan by any court or tribunal. (f) Sums required for making loans to the Provinces. (g) Sums required for making grants-in-aid for the revenues of the Provinces by an Order of the President. (h) Any other sums declared by the Constitution or by Act of Parliament to be so charged. NOTE.—”Remuneration” according to the Constitution, includes salary and pension. 64. The form of the Budget and Demands for Grants is laid down by Finance Division and no alteration of arrangement or classification can be made without the approval of that Division. 65. The material on which the Budget and Demands for Grants are based is obtained by Finance Division in the form of detailed estimates submitted by heads of departments, administrations etc., who in their turn depend for the material on heads of offices and other offices who collect the revenues or incur expenditure. The Accountant- General is responsible for rendering such assistance in the preparation, check and the consolidation of Budget Estimates and Demands for Grants as may he required by Finance Division in consultation with the Auditor-General. 66. All estimates of revenue and expenditure included in the Budget are for the financial year. II.—PREPARATION AND SUBMISSION OF DETAILED ESTIMATES GENERAL PROCEDURE FOR ESTIMATING 67. Except in cases in which Government has expressly directed otherwise, departmental estimates of revenue and expenditure should be prepared in two parts, namely:—  25 Part I relating to standing charges which though they may vary from year to year are nevertheless not dependent upon the volition of the heads of department. Examples of such charges are permanent establishments (both officers and staff), traveling and other fixed allowances, and ordinary contingent expenditure. Part II relating to fresh charges which may include new objects of expenditure, such as temporary additions to existing establishments or to services, facilities and organizations which are either continued from year to year on temporary basis or have been newly sanctioned and have not been provided for in the current year’s budget. This applied also to estimates of development expenditure special features of whose estimates have been dealt with separately in these rules. Both Part I and Part II estimates should be submitted by administrative Ministries/Divisions through their Financial Advisers in the form of self- contained memoranda explaining the variations between:— (i) current year’s sanctioned grant and the revised estimates as admitted; (ii) the admitted budget estimates for the current year and those for the next year. 68. The prescribed procedure for the preparation and submission of the several classes of detailed estimates which go to make up the Budget Estimates of revenues and expenditure of Government is set out in paragraph 69 et. seq. and in Annexure A to this Chapter. Supplementary instructions for the collection of subsidiary details and preparation and scrutiny of subsidiary estimates are contained in the Codes, Manuals, etc., of the departments concerned. Special rules for the preparation and submission of departmental estimates, e.g., the Defence, Railways, Post Office, Telegraph and Telephone Department etc., are laid down in the departmental regulations of the respective departments. ESTIMATES OF REVENUE AND ORDINARY EXPENDITURE (PART I—Non-development) 69. The detailed estimates should be prepared on forms supplied by the Accounts Offices which contain separate columns to show:— (i) the sub-heads and detailed heads of the estimates; (ii) the actuals of the past three years under each detailed head or sub-head;  26 (iii) the budget estimates for the current year; (iv) actuals for the last eight months of the previous year and first four months of the current year; (v) the revised estimates for the current year, and (vi) the budget estimates for the ensuing year. The actuals for the past three years will be filled in by the Accounts Offices in the forms sent out by them to the estimating authorities; the latter should fill in the actuals for the last eight months of the previous year and the first four months of the current year and the revised estimates in the relevant columns with reference to information available with them. The revised estimates, like past actuals, are one of the important factors to be taken into account in preparing the budget estimates. The column “Revised” should, therefore, be invariably filled in and great care should be taken in including or omitting commitments that are likely to materialize or not during the year. 70. The making of the revised estimates should always precede an estimate of a future year. A revised estimate should be framed in the light of–– (i) actuals for the first 4 months of the current year; (ii) the actuals for the last 8 months of the previous year; (iii) the 12 months’ actuals of the past three years; (iv) orders issued or proposed to be issued regarding— (a) appropriation or re-appropriation within the sanctioned grant, (b) new items of expenditure sanctioned through supplementary grants, and (c) surrenders already made or likely to be made during the year, (v) Any other relevant factors. Any information required from the Accountant General in connection with these estimates should be obtained from him separately. 70-A. Where Revised Estimates of expenditure for the current financial year exceed the sanctioned grant, it should be clearly stated whether the increase has been authorized by competent authority and, if so, attested copies of relevant orders should be appended to the estimates. It is also necessary to indicate how the increase is proposed to  27 be met (i.e., by re-appropriation of savings within the grant or through supplementary grant). When the Revised Estimates are less than authorized grant, reasons for the savings should also be given. These requirements are applicable to both Part I and Part II estimates. 71. In framing the budget estimates, the estimating authorities should exercise the utmost foresight. All items of receipt and expenditure that can be foreseen should be provided for and care should be taken in consultation with the Accountant General, where necessary, to see that the provision is included under proper heads. Needless to say, although the estimating authorities are asked to provide for all foreseeable items, Finance Division will exercise its right to excise or reduce the provision for any item which it thinks unjustifiable. An exhortation to show foresight is not an invitation to provide for additional items of expenditure without adequate justification. While provision should be made for all items of expenditure that can be foreseen, it is essential that the amount of the provision should be restricted to the absolute minimum requirement. The budget Estimates of non-development expenditure for ensuing year should be accompanied by such details as nominal rolls in the prescribed form, calculation of Allowances, Honoraria, etc. and Other Charges so as to permit proper scrutiny. They should further be supported by a comparative statement in Form S-203 showing the position of past three years actual, the sanctioned grant and the Revised Estimates for current year and the proposed Budget Estimates for next year. 72. In making estimates in respect of fixed charges, it must be borne in mind that what are called fixed establishments are not irrevocably fixed for all items and should be brought under the formal critical review of heads of departments from time to time. Even when there is no thought or intention of making any change in establishments, heads of departments should review the entire estimates of the requirements of their departments. Similarly, sanction to recurring contingent expenditure should also be brought under the review of heads of department from time to time. 73. The following are the main rules for the preparation of the detailed estimates:— (i) The Federal Budget is on disbursement basis and not on commitment basis. Only provisions for foreign exchange from own resources, which term includes, cash, bartered commodity and are to be made on commitment basis. The estimates should, therefore, be prepared on the basis of what is expected to be actually received or paid (under proper sanction) during the ensuing year, including arrears of previous years and not merely the demand or the liability of expenditure falling due within the year. The transactions are to be shown gross and in full even where the receipts are treated as deduction from expenditure. In no case the net receipts or the net charge only are to be entered.  28 (ii) The budget estimates should only include items which have already been cleared with Finance Division. Any item which is appearing in Part I estimates for the first time should be supported by a copy of the sanction authorizing the continuance of that particular item of expenditure on a permanent basis. Fresh items of expenditure which have been previously agreed to by Finance Division should be included only through Part II estimates. Provision for posts sanctioned for a specific period should, if their continuance be considered necessary, be made through Part II estimates. In such cases, justification should be established to the satisfaction of Financial Advisor concerned before submission of budget estimates. (iii) The estimates proposed under the primary units, ‘Pay of Officers’ and ‘Pay of Establishments’ should be accompanied by detailed nominal rolls in Form GFR-I. (iv) The estimates should further show the charged and other than charged portions of the provision under the relevant primary units separately:— (1) In framing estimates for sanctioned establishment whether permanent or temporary, the full amount of pay and increments likely to be drawn by officers and staff on duty during the year should be included. Suitable provision for leave salary should be made both for officers and establishment on the basis of past actuals with due regard to any known factors which may affect the past actuals. No provision of leave salary should be made for officers and staff of those cadres for which leave reserve has been provided. Provision for those who are on deputation or otherwise absent and unlikely to return to the strength within the period of budget should be excluded, but the names of the personnel on deputation should be shown in the nominal rolls. A lump deduction should be made where experience shows that a saving may occur by reason of posts remaining vacant or for other reasons. (2) When consolidating the detailed estimates in respect of “Pay of Officers” and “Pay of Establishments” the number of posts must be carefully checked and in case of variation in numbers or the amounts of the provisions compared to those in the current year’s budget, an explanation should be included in the estimates. If the increase is based on specific Government sanction, a copy of the sanction should be enclosed with the estimates. (3) Provision should not be made in the estimates for posts which it has been decided to leave unfilled. If it is desired to revive any of these posts which has remained vacant for more than a year, prior concurrence of Finance Division should be obtained before including  29 any provision in the estimates on this account. In all such cases, the relevant estimates should be accompanied by a copy of the sanction. (v) For all fixed recoveries and fixed payments (other than establishment charges) an authenticated copy of the sanction fixing the amount should be enclosed. (vi) Opposite every item of fluctuating charges (such as traveling allowance, contingent charges, official postage, telephone charges, etc.) the actual expenditure in the last three years should be shown in red ink. If estimates of these charges for the ensuing year differ to any appreciable degree from the actuals of the preceding year, full explanation for the variation should be given. NOTE.—The estimates of contingent charges should be carefully checked by the Controlling Officers by comparison with past actuals. In the case of contract contingent charges, only the sanctioned amount of the contract grant should be included. (vii) The provision for traveling allowance and honoraria under the primary unit Allowances, Honoraria, etc, should be shown distinctly and separate from other allowances. (viii) The estimate of receipts and varying charges should not be merely an arithmetical average of three year’s figures. The average is a guide but it should not be taken absolutely. (ix) Under revenue, the calculation of fixed revenue is to be based on actual demands, including arrears, if any and likelihood of realization during the year. The arrears and current demand are, however, to be shown separately. The estimates of fluctuating revenue may be based on the average of last 3 years’ actuals, unless there are any known circumstances to affect these actuals one way or the other. (x) Every department will provide for the whole receipt and charge with which it deals finally; thus, when the Pakistan Public Works Department collects revenue on account of civil works, it will estimate for it. (xi) Lump sum provision in the budget should not be made or proposed except in most exceptional circumstances, which should be invariably recorded. As far as possible, provision for contingent charges under the primary unit “Other Charges” should be proposed according to the prescribed detailed heads of expenditure so that the number of references to the Financial Advisers / Finance Division is reduced to the minimum.  30 (xii) Provision for losses should not be made in the expenditure estimates. If, however, the nature of the work of a department is such that some losses must be regarded as inevitable each year, provision in this behalf may be made with the specific sanction of Finance Division. (xiii) Estimates of anticipated revenue both for current and subsequent years will be prepared by each Ministry / Division / Department and rendered to the Accountant General on dates to be prescribed by him; (xiv) Part I of the budget which relates to standing charges and Part II estimates relating to fresh charges should be scrutinized finally by the Financial Adviser concerned. He would issue to AGPR / Budget Wing of the Finance Division copies of the Budget orders in respect of Part I estimates and New Item Statements in respect of Part II estimates. The admitted Part I and Part II estimates would be compiled together into relevant “Demands for Grants” by the Finance and Accounts Officer of the Administrative Ministry / Division and sent through the Financial Adviser to the Budget Wing of Finance Division. ESTIMATES OF FRESH CHARGES (Part-II—Non-development) 74. Subject, as provided in Annexure A to this Chapter, proposals if any, involving fresh charges should be submitted by heads of departments and other estimating authorities to the Administrative Divisions concerned not later than the 15th October, each year to permit the latter to undertake an examination of the proposals in their various aspects. It is open to the Administrative Divisions to require heads of departments, etc, to submit proposals for fresh charges in the course of the year without reserving them for a consolidated report at the time of the submission of the budget estimates of the ensuing year and also to require them to submit direct to other Ministries/ Divisions of the Federal Government such of the proposals for fresh charges as require to be considered by the later, in order to ensure that the proper consideration of the proposals from the administrative and financial points of view is completed before the 1st of November. 75. No scheme of fresh charges will be included in the Budget unless it is complete and finally approved. In submitting proposals for fresh charges, administrative difficulties and delays in sanctioning processes should always be borne in mind and not more should be recommended for provision in the budget than is likely to be spent during the course of the financial year. 76. All proposals for fresh charges should be referred to the Financial Advisor not later than November 25th of each year. Ordinary, no proposals will be accepted after  31 that date, but the Financial Advisers will exercise his discretion in admitting provision for items, which have not been completed through all the requisite sanctioning processes. This does not mean that Finance Division will provide for unforeseen items, nor in general admit items into the Budget in regard to which there is insufficient proof that expenditure will be undertaken in the following year. November 25th has been fixed as the latest date for referring proposals to the Financial Advisor, but special efforts should be made by Administrative Divisions to ensure that schemes are prepared and submitted as early as possible so as to avoid rush of work during the last few days. Suitable instructions should accordingly be issued by the administrative Divisions to all authorities subordinate to them. 77. The Financial Adviser will complete the examination of all proposals and transmit by the 20th January of each year fair copies of New Item Statement (Form 5- 186) duly verified to the Accountant General, Pakistan Revenue and Finance Division (Budget Wing) together with explanations of variation between (a) the Budget Estimates and Revised Estimates for the current year and (b) the Budget Estimates for the current year and the admitted Part II estimates for the next year. 78. Omitted. 79. The procedure for preparation and submission of estimates for works expenditure under “34-Frontier Regions”, “50-Civil Works” and other Public Works major heads will be regulated mutatis mutandis by the rules contained in Appendix 6 to the 5Federal Public Works Account Code. Proposals for new major works should, just like other fresh item of expenditure be referred to the Financial Adviser for consideration. A consolidated list in Form GFR-2 of all new major works accepted by the Financial Adviser should be sent to him by the Administrative Division concerned by the 20th January. Finance Division will allot a lump sum for new major works under each of the major heads “ 34-Frontier Regions” , “50-Civil Works” and the distribution of these lump sums among various new works accepted by the Finance Division in principle will be settled in according with the procedure described in Appendix 6 to the 6Federal Public Works Account Code. 80. Close adherence to the time-table given above is an essential part of the procedure and all departments should make every possible effort to submit their original proposals and subsequent statements in advance of the last dates fixed above. This will also be applicable to Part II-Development Expenditure provided for in the subsequent rules. 5 Substituted by Ministry of Law Notification No.F.24(2)/75-Pub., dated 01-8-1975, Gaz. Of Pak., Extra., Pp.435-436, dated 01-8-1975. 6 Substituted by Ministry of Law Notification No.F.24(2)/75-Pub., dated 01-8-1975, Gaz. Of Pak., Extra., Pp.435-436, dated 01-8-1975.  32 81. For purpose of economic classification of the Federal Government’s budget, the provision of contingent charge and other expenditure included under the primary unit, ‘Other Charges’ will be broken down into the under-noted detailed heads, wherever applicable:— (a) Land and buildings, purchase of. (b) Plant, machinery, equipment, livestock etc. (c) Purchases of Transport (specify whether Motor Cars, Motor Cycles or Cycles). (d) Stores, furniture, tents, stationery, etc. (e) Repair and maintenance of:— (i) Building and structures, plant machinery and equipments. (ii) Transport (Car, Motor Cycle, etc.) (f) Books, Periodicals, newspapers, etc. (g) Liveries, uniforms, etc. (h) Electricity, gas and water charges. (i) Hot and cold weather charges. (j) Payments to contingent staff (part time employees such as Sweepers, Farashes, Malis, etc., and charges for supply of drinking water). (k) Conveyance allowances paid from contingencies. (l) Rewards, bonuses, etc. (m) Section-writing and copying charges. (n) Royalties paid (details to be given.) (o) Stipends, scholarships, prizes, etc. (p) Postage and telegram charges. (q) Rent: (i) Office Buildings. (ii) Residential Accommodations. (r) Telephone and trunk call charges. (s) Transportation charges. (t) Local rates and taxes. (u) Other taxes and duties. (v) Grant in aid, contributions, donations (details to be given). (w) Payments to other Government Departments, etc, for services rendered (details to be given). (x) Expenditure on delegations (details of traveling and other allowances to be given). (y) Law charges. (z) Printing and publication charges. (aa) Entertainments and gifts. (ab) Expenditure on fares and exhibitions (details of expenditure on establishment, equipment, etc., to be given). (ac) Expenditure on subsidies (details to be given).  33 (ad) Surveys and experimental operations (details of expenditure on staff, tools, and plants, etc, to be given). (ae) Publicity charges (details to be given). PART II.—DEVELOPMENT 82. (1) The concept of a workable definition of development expenditure should take into account of following basic considerations:— (i) That it creates material assets; (ii) That it is designed to keep intact, to enlarge and to improve the physical resources of the country; (iii) That it will improve the knowledge, skill and productivity of the people; and (iv) That it will encourage efficiency with which available resources are used. (2) The estimates of development expenditure will include only the schemes approved in according with the prescribed procedure. Simultaneously with the formulation and submission of their Annual Development Program to Planning Division, the administrative Ministries / Divisions will supply a copy of the program to their respective Financial Adviser. This will be accompanied by detailed expenditure estimates for budget provision in respect of individual projects. Other relevant information or material shall be supplied according to the time-table prescribed by Planning Division. (3) In the case of on-going projects, the estimates should also be accompanied by relevant files in which budget provision was admitted. All new projects for which budget provision is proposed for the first time should be supported by relevant PC I or PC II Form. A statement in PPWD Form 4 showing the provision that may have been separately proposed to Works Division for works expenditure if any, pertaining to a project should also be submitted alongwith the budget estimates. Works Division will compile them according to individual development projects included in the Annual Development Program and furnish a copy to the Budget Wing of Finance Division within three days after the finalization of the Budget estimates in respect of development projects. (4) While proposing budget estimates for projects/schemes included in the Annual Development Program, the Ministries / Divisions will ensure that there is no overlapping as to be nature and scope of project / scheme included in the ADP between (a) items proposed for the development budget, and (b) those provided for in the non- development budget. In cases where budget provision for carrying out certain activities and operations is made partly through the non-development budget and partly through the development budget (e.g., Plant Protection, Survey of Pakistan, Meteorological services, etc.) the administrative Ministry / Division concerned should present a consolidated picture while referring its budget estimates of development expenditure to the Financial Adviser.  34 (5) Fair copies of New Item Statements in respect of accepted estimates of development expenditure will be distinctly marked to indicate that the provision relates to development expenditure. Another important point to be kept in view is that the classification of expenditure (i.e., major, minor and sub-heads of accounts) are correctly shown on the NISs and submitted to the Budget Wing of Finance Division within 24 hours of approval by Priorities Committee. (6) The revised estimates will not in any case exceed the original budget plus supplementary grants already sanctioned minus surrenders and shortfall in utilization of foreign project assistance. (7) The foreign exchange component of estimates of development expenditure is required to be shown distinctly together with the source from which it will be met (i.e., whether from “own resources” or from “foreign aid”). This information should be furnished in separate statements to be submitted to the Financial Adviser along with the estimates of development expenditure. When the foreign exchange component is intended to be financed (wholly or partly) from foreign aid, the source and type of aid will be invariably indicated in the New Item Statement. The foreign exchange component from “own resources’ will be distinguished between each, barter, and / or commodity assistance. Similarly foreign aid will be distinguished between loans and grants / suppliers credit, etc., and the source of foreign aid clearly identified. (8) Irrespective of its source / type, all foreign aid (loan or grant) is required to be reflected in the expenditure estimates of the relevant projects. The estimates of foreign aid will be cleared with Economic Affairs Division before incorporation in the budget estimates. All foreign aid directly or indirectly received by the Federal Government / Provincial Governments bodies and other agencies should be duly accounted for in the relevant Federal or Provincial sections of accounts as the case may be. In case of foreign aid received by any private body / individual with the approval / guarantee of the Government, all transactions in this behalf shall be made with the knowledge and approval of the respective Government. (9) Foreign commodity assistance, though classified as foreign aid, is budgeted on the resource side in bulk and is not apportioned to projects even though some of the commodities may be utilized for development projects. Since such commodities have to be paid for in rupees, the portion of expenditure related thereto will be included by the Ministries / Divisions in their requirements of local currency for the relevant projects. This provision will also be clearly distinguished in the relevant New Item Statements. (10) The provision made for foreign exchange expenditure is not available for rupee expenditure or vice versa and no re-appropriation is permissible between the provision for rupees and foreign exchange expenditure. This should be kept in view while framing the estimates for rupee as well as foreign exchange requirements.  35 (11) When furnishing the above information the estimating authorities should, as far as feasible, specify the physical targets in quantitative terms e.g., road mileage to be constructed, hospital beds to be provided, number of new school seats to be made available, acreage to be covered by Plant Protection measures, etc., etc.). In cases where quantitative assessment of physical targets is not feasible, the likely achievements should be specified in broad details. (12) As in the case of non-development budget, details of posts under “Pay of Officers” and “Pay of Establishment” should be given in respect of development budget as well. (13) The sponsoring agencies will accord priority to foreign aided projects as are in conformity with national objectives. (14) All schemes may be classified into on-going/new and approved or unapproved, as the case may be, according to the status of the scheme. If the original scheme is revised, approval of the competent authority for revised cost will be obtained before any request for budgetary allocation is made. (15) No expenditure should be incurred, nor any commitment of funds made for any project not included in the Annual Development Program, nor any work started, contract awarded, any down payment made, letters of credit opened for which there is no budgetary provision. (16) Ongoing projects which are in fairly advanced stage of completion or such projects as are likely to yield quick return to the Government should be given priority. (17) All schemes shall automatically qualify for inclusion in the Annual Development Program if these are also included in the short or mid-term plan viz, Five Year Plan, Mid Term Perspective etc. as the case may be and would be given priority over other schemes while making allocation of resources within the sectoral ceilings. (18) The Annual Development Program will be prepared within the following parameters:— (i) Annual Phasing of sectoral allocations in the Medium Term (5 year) plan. (ii) Phasing of expenditure on approved projects included in the Medium Term Plan and their present status. (iii) Actual resource availability compared with projected resource for the year in the Medium Term Plan. (19) The agencies concerned will prepare their Annual Development Programmes on the basis of the annual sectoral allocation in the Plan and requirements of individual projects according to their actu