CHAPTER 1

CASH AND ACCOUNTS

General

1.1.    The instructions detailed herein describe the procedure to be followed in regard to the receipt, custody,and disbursement of money in Government Offices and maintenance of accounts connected therewith. These instructions are based on the Central Government Account (Receipts and Payments) Rules ,1983,and General Financial Rules and other relevant orders on the subject.

Head of Office /Drawing & Disbursing officer

1.2    The Departments of the Central Government, Heads of Departments and Administrators have powers (vide Rule 114 of Delegation of Financial Powers Rules,1978) to declare as the Head of Office any Gazetted Officer subordinate to them. The Head of Office or any other Gazetted Officer designated as Disbursing Officer by a Department of the Central Government, a Head of Department or an Administrator [vide Rule 2 (xii) of GFRs] functions as the Drawing & Disbursing Officer for drawing bills and making payments on behalf of the Central Government and is responsible for all moneys received or disbursed in his office and the maintenance of accounts thereof. In accordance with Rule 35(2) of Central Government Account (Receipts and Payments) Rules the Head of Office may, however, authorise any Gazetted Officer serving under him to sign a bill or order for him, communicating the name and specimen signature of the officer to the PAO or cheque-drawing DDO/Treasury Officer with whom he is in account. This does not however, confer on the Gazetted Officer so authorised any powers of the Head of Office nor does it relieve the Head of Office in any way of his responsibility for the accuracy of the bill or for the disposal of the money received in payment.

Types of DDOs

1.3    There are three types of DDOs namely :-

(i)    Cheque Drawing DDOs

(ii)    Non-cheque Drawing DDOs

(iii)    Merged DDOs

(i)    Cheque Drawing DDOs

(Para 3.1.1 of CAM).

Under the departmentalised accounting system all payments are to be made by the Pay and Accounts Offices of the Ministry/Department after pre-check. However, certain Drawing and Disbursing Officers of Offices which are not located at the same station as the Pay and Accounts Office have been vested with cheque drawing powers for arranging payments of specified nature viz. Pay and Allowances (including T.A.,Wages and Medical Claims), Office Contingencies, Advances from Provident Funds for all categories of staff, part final withdrawal and final withdrawals of accumlations in the GPF Account of Group D Government servants, payments arising under the Deposit Linked Insurance Scheme to Group `D Government servants, short term loans and advances to all Government servants. Bills for all other kinds of payments like payment of long-term loans and advances and for withdrawal from provident fund (other than Group `D' staff),Pension,Gratuity etc. are to be presented by these DDOs to the PAO concerned for pre-check and payment.

(Para 3.1.3 of CAM)

In certain cases Departmental Officers who have been vested with cheque drawing powers have also been authorised to issue cheques in payment of certain claims in respect of other non-cheque drawing DDOs of the same Ministries/Department located at the same station or nearby stations after exercising necessary checks.

The Departments working on public works pattern have also been permitted to draw funds directly from the local branches of the Public Sector Banks accredited to the concerned Ministry/Department.

Drawal of funds by the Departmental officers & DDOs

The cheque drawing DDOs are placed in account with a branch of the accredited bank of the Department/Ministry. Such DDOs can draw funds from the concerned bank by issue of Govt. cheques (to be supplied by the Pr.AO) upto the extent authorised by the Pr.AO/PAO. For the purpose quarterly letters of credit/assignment based on the budget allocation of the DDO(s), after taking into account the recoveries/deductions etc. are issued by Pr.AO/PAO to such DDOs.

(ii)    Non-cheque Drawing DDOs

The DDOs which have not been vested with cheque drawing powers are known as Non-cheque drawing DDOs. These DDOs prepare and submit their bills for payments to their accredited PAO/Cheque Drawing DDO. After obtaining the cheques from the PAO/Cheque Drawing DDO these DDOs handover the cheques to the concerned party/official or disburse the amount to the concerned officers after obtaining the cash from banks.

Note:-    The difference between a Non-cheque Drawing DDO and Cheque Drawing DDO is that the former submits the bill to PAO/another Cheque Drawing DDO for pre-check and payment, whereas the latter draws the payment and then submits the paid vouchers to PAO for post-check.

(iii).    Merged DDOs

In order to avoid duplicity in maintence of accounts records/subsidiary accounts books in the office of DDO and PAO, merged DDO scheme at Secretariat level was introduced with effect from 1st April,1986. Consequently, these DDOs have been placed under the control of Chief Controller of Accounts/Controller of Accounts/Dy.Controller of Accounts, as the case may be, under the overall charge of the Financial Adviser of the Ministry/Department concerned. Under this scheme the maintenance of various broadsheet of long-term advances, short term advance and GPF ledgers etc. were done away with. The Bill Register maintained by merged D.D.O. forms the basic record for all type of transactions in respect of personal claims. As such, schedules for provident fund, long-term advances,etc. need not be prepared and attached with the bills by these DDOs. However, schedules for licence fees or other deductions for which the credits have to be passed on for adjustment in other accounting circles will continue to be attached with the Pay Bill for taking necessary action in Pay and Accounts Offices. These DDOs will also be responsibile for watching the recoveries of Leave Salary and Pension Contribution in respect of persons lent on foreign service. The merged DDOs will also be responsible for expenditure control in regard to heads of account operated by them. Under the scheme of merged DDO an Examiner from the Office of PAO is to scrutinise the bills in the office of DDO and prepare the cheques thereof which are signed by the Pay & Accounts Officer.

Duties as regards maintenance & rendition of Accounts

[Rule 8 of GFRs]

1.4    The Drawing & Disbursing Officer is personally responsible for the correct maintenance and timely rendition of accounts or returns in respect of public funds or stores handled in his office.

Specimen signatures of DDO signing cheques etc.

[ Rule 51 of CGA (R&P) Rule]

1.5    Every Government Officer who is authorised to (i) sign or countersign bills (ii) draw cheques shall send specimen of his signatures to his Accounts Officer/branch bank concerned duly attested by the relieving officer or through some superior officer whose specimen signature is already available with the Accounts Officer/ Bank concerned.

Security Deposits by govt. servants handling cash/stores

[GFR270]

1.6    The Drawing & Disbursing Officer shall see that, subject to the provision of Rule 271 and 272 of GFRs, every Government servant, whether gazzetted or non-gazzetted, who is entrusted with the custody of cash or stores, is required to furnish security, for such amount as may be prescribed and to execute a security bond setting forth the conditions under which Government will hold the security and may ultimately refund or appropriate it.

[GFR 278]

NOTE 1 -    The security to be taken from a Government servant should be in the form of cash or promissory notes or post office cash certificates or Ten Years Social Security Certificates or in other forms as mentioned in Rule 274 of GFRs.

NOTE 2 -    To safeguard fully the interests of Government the security deposit taken from a Government servant should be retained for at least six months after the date when he vacates his post, but a security bond should be retained permanently or until it is certain that there is no further necessity for its retention.

[GFR 277]

NOTE 3 -    Post Office saving bank pass books,deposit receipts of banks, fidelity bonds and security bonds or agreements should be kept in the safe custody of the departmental authority authorised to accept security under Rule 275 of GFRs.

Instruction for handling cash by DDO

[Note 4 below Rule 13 of CGA(R&P) Rules

1.7    The Drawing & Disbursing Officer shall ensure that, except where otherwise specifically authorised, Government money is kept in strong treasure chests secured by two locks of different patterns, and the keys of one lock shall be kept apart from the keys of the other and in the custody of a different person wherever practicable. The chest shall not be opened unless both the custodians of the keys of the two locks are present. (It would, however be proper that the cash chests are embedded in an inner wall of the room occupied by the DDO or by the Cashier).

[Note 4 below Rule 13 of CGA (R&P) Rules]

NOTE-    Duplicate keys of the departmental treasure chest, and promissory notes, savings certificates etc. received as securities can be kept for safe custody in the accredited Public Sector Bank free of charge, subject to the availablity of adequate strong room facilities at the branch concerned and the observance of the usual banking procedure. Where these cannot be lodged in the relevant branch of the accredited bank, then they may be pledged with officers of higher rank than the custodies of the chest.

Maintenance Cash Book

1.8    The DDO will ensure that all monetary transactions in his office are entered in a cash book in the prescribed form. The other important instructions mentioned in the ensuing paragraphs should be observed in this regard.

[Rule13(i) and Note 2 below Rule 13 of CGA (R&P) Rules].

1.9    The cash book should be maintained in form GAR 3/TR 4. It should be bound and its pages machine-numbered. Before bringing a cash book into use,the DDO should count the number of pages and record a certificate of count on the first page of the cash book.

[Rule 13(ii) of CGA (R&P) Rules]

1.10    All monetary transactions should be entered in the cash book as soon as they occur and be attested by the DDO in token of such check.

[Exception(a) below Rule 13(ii) of CGA (R&P) Rules]

NOTE -    ``Account payee cheques'' issued by the PAOs/Cheque-Drawing DDOs in favour of Government servants and third parties, being payable only to the parties, need not be entered in the cash book. The delivery and acknowledgements of such cheques should, however, be watched through a separate register.

[Rule 13(iii) of CGA Rule (R&P) Rules]

1.11    The cash book should be closed regularly and completely checked. The DDO should verify the totalling of the cash book or have this done by some responsible subordinate other than the writer of the cash book and initial it as correct.

[Rule 13(iv) of CGA(R&P) Rules]

1.12    At the end of each month, the DDO should verify the cash balance in the cash book and record a signed and dated certificate to that effect. In case, such verification of the balance is not possible on the last working day due to disbursement of salary, the cash verification may be done on the first working day of the next month before any transaction arises on that day.

NOTE -    The monthly verification of cash should be supplemented by a surprise check of cash by some responsible official to be nominted by the Head of Office.

[Rule 13(v) of CGA(R&P)Rules]

1.13    When Government moneys in the custody of a Government Officer are paid into Government account in the accredited bank, the DDO making such payments should compare the Bank's receipt on the paying-in-slip/challan with the entry in the Cash Book before attesting it, and satisfy himself that the amount has been actually credited into the bank.

[Rule 13(vi) of CGA(R&P) Rules]

1.14    An erasure or overwriting of an entry once made in the Cash Book is strictly prohibited. If a mistake is discovered,it should be corrected by drawing the pen through the incorrect entry and inserting the correct one in red ink between the lines. The DDO should initial every such correction and date his initials invariably.

[Rule 13(vii) of CGA (R&P) Rules]

1.15    A Government Officer who handles Government money should not, except with the special sanction of the Head of the office, be allowed to handle also in his official capacity, money which does not belong to the Government. Where under any special sanction, a Government Officer deals with both Government and non-Government money in his official capacity, the Government money should be kept in a cash box separate from the non-Government money and the transactions relating to the latter should be accounted for in a separate set of books and be kept entirely out of the Government account.

[Note 1 below Rule 13 of (R&P) Rules]

NOTE 1:    The duties under paras 1.9 to 1.13 required to be performed by the Head of Office himself may be entrusted to a subordinate Gazetted Officer nominated by the Head of Office for the purpose.

NOTE 2:    In the case of large receipts,a register of valuable as prescribed in Note 3 below Rule 13 of GCA (R&P) Rules may be maintained.

[Rule 13 (viii) of CGA (R&P) Rules]

1.16    The employment of peons to fetch or carry cash should be discouraged. Where it is absolutely necessary to employ one for this purpose, a person of some length of service and proved trustworthiness should only be selected.

Drawal and Disbursement of Pay & Allowances

[Rule 92(I) of CGA(R&P) Rules]

1.17    The Head of Office is personally responsible for the amount drawn on a bill, signed by him or on his behalf until he has paid it to the person(s) entitled to receive it and has obtained a legally valid acquittance.

[Rule 92(I) of CGA(R&P) Rules]

1.18    In a case where a Government servant is physically unable to sign the acquittance,the payment should be made to the person who has been nominated by the Government servant to receive his Provident Fund dues.

[Rule 92(2) of CGA(R&P) Rules]

1.19    If for any reason, payment cannot be made within the course of the month, the amount drawn should be refunded by short drawal in the next bill and when the occasion for making the payment arises, the amount may be drawn afresh under Rule 89 of CGA (R&P) Rules.

[Rule 92(2) of CGA(R&P) Rules]

NOTE :-    The amount of undisbursed pay and allowances may,at the option of the Head of the Office, be retained for any period not exceeding three months,provided that proper arrangements are made for the safe custody of the sums retained.

[Rule 94 of CGA(R&P) Rules]

1.20    Pay and allowances can be drawn for the day of the Government Servant's death irrespective of time of death. `Day', for this purpose means the calendar day beginning and ending at midnight.

[Rule 95 of CGA(R&P) Rules]

1.21    Dues in respect of pay and allowances of all kinds claimed on behalf of a deceased Government servant upto and including the day of death may be paid without the production of usual legal authority,if the Head of Office is satisfied about the right of claimant. If the gross amount of the claim exceeds Rs.10,000/- payment may be made by Head of Office only on the execution of an idemnity bond in form GAR 26 duly stamped for the gross amount due for payment and after obtaining two sureties.

Attachment of Salary

[Rule 74 of CGA (R&P) Rules]

1.22    It is the duty of the officer[Head of Office/DDO] receiving the attachment order from the Court of Law that proper deduction is made in satisfaction of such order from the pay of the Government Servant concerned and to keep a record of such deductions in form GAR 22.

Recoveries on account of Professional Tax & dues of Coop. Socities etc.:-

[Rule 79 of CGA(R&P) Rules]

1.23    Recoveries from the salaries of Government servants on account of profession tax levied under an Act of a State Government and dues of Co-operative Societies registered under the various Co-operative Societies Acts, where such Acts impose a statutory obligation on the Government to effect such recoveries, shall be made by the drawing and disbursing officer in accordance with such procedure as may be laid down by Government from time to time.

[Rule 79 (2) of CGA(R&P) Rules]

Note :-    A drawing and disbursing Officer may effect recoveries on account of dues of Co-operative Societies from the salary payable to a Government servant provided that Government servant authorises the Disbursing Officer in writing

Accounts of the undisbursed amounts

[NOTE 2 below Rule 92(3) of CGA(R&P) Rules]

1.24    An account of undisbursed pay and allowances should be kept in a Register in Form GAR 25/TR 71. Entries of the total and particular amount of undisbursed pay and allowances may be made against each bill serially and subsequent payments thereof entered in the appropriate columns of the Register and the Cash book, each such entry being attested by a Gazetted Officer. From this Register, an abstract of amounts remaining undisbursed for three months should be prepared in order to ensure their refund either in cash or by short drawal from the next bill.

Maintenance of Bill Register

[Note 1 below Rule 34 of CGA(R&P) Rules]

1.25    A bill register in Form GAR 9/TR 28-A should be maintained by DDOs. The register should be reviewed monthly and the result of the review recorded thereon.

Procedure for Receipts against the amounts received & rendition of accounts

[Rule 21 &22 of CGA (R&P) Rules]

1.26    The Head of Office receiving moneys on behalf of the Government must give the payer a receipt (GAR 6/TR 5) duly signed by him or by any subordinate officer authorisied by him after satisfying himself that the amount has been properly entered in the cash book.

NOTE :-    The procedure in regard to the grant of receipt to be followed in respect of cheques, bank drafts, postal orders tendered in payment of Government dues, the form and custody of receipt books and issue of duplicates or copies of receipts etc. is laid down in Rule 19 to 23 of CGA (R&P) Rules or in other departmental regulations. NOTE 2 :- The head of account to which the receipt is creditable should be clearly indicated in the challan form.

[Rule 3&4 of GFR]

1.27    All moneys received by or on behalf of Government either as dues of Government or for deposit, remittance or otherwise should be immediately brought to account by the DDO in the cash book and remitted into the Bank.

[Rule 6 of CGA (R&P) Rule]

Note :-    These receipts should not be utilised to meet departmental expenditure except in certain cases by Deptt. of Posts, Deptt. of Telecommunication, Railways, Public Works Deptt. etc.

Departmental Officers other than Cheque Drawing DDOs

[Note 2 below Rule 18 of CGA (R&P) Rules]

1.28    Departmental Officers (other than cheque drawing DDOs) located at the same station as the PAO should remit the collections received in cash or by local cheques/demand drafts into the bank in which the PAO holds an account duly supported by a paying in slip (challans).

[Para 1.16.4 of Civil Accounts Manual]

1.29    They should send to the PAO a weekly list of remittances into the bank to enable the latter to verify the corresponding credits in the Bank Scroll received by him from the Bank.

[Note 2 below Rule 18 of CGA (R&P) Rules]

1.30    Departmental Officers located at a station other than that of the PAO should accept receipts either by Bank Draft drawn in favour of the PAO concerned or in cash which should be converted into a demand draft drawn in favour of the Pay and Accounts Officer. They should then remit these demand drafts to the PAO for credit to Government Account.

Cheque Drawing Departmental Officers

[Rule 6(1)of CGA(R&P) Rules and para 1.16.2 of Civil Accounts Manual]

1.31    The receipt accepted by the cheque drawing officer should be remitted into the branch of the Bank accredited to that officer on prescribed paying in slips (challans).

[Para 3.4.4 read with Para 1.16.2 of Civil Accounts Manual]

1.32    Based on the paying in slips (challans) received by him the cheque drawing officer shall prepare a weekly statement of receipts, indicating the No. and date of the paying in slip (challan), name of the depositor, and the amount deposited and check the entries with the Bank Scroll received by him. He should also reconcile discrepancies, if any, between his figures and those in the Bank Scrolls and send a monthly bank reconciliation statement in the prescribed form to the PAO concerned.

[Rule 24 of CGA(R&P) Rules]

NOTE :-    In the case of revenue earning departments like CBEC,CBDT,etc. the detailed procedure for crediting revenues into the banks and their reconciliation etc. as laid down in the departmental manuals will be followed.

Refunds of Revenue

1.33    The procedure for payment of refund of revenue as laid down in Rules 139 to 145 of CGA (R&P) Rules should be observed except that the bill for refund of revenue should be presented to the PAOs to whom the departmental officers are attached. The PAO will, before making payment, verify the original credit from his records.

[Rule 142 of CGA (R&P) Rules]

1.34    In the case of refunds of revenue which were originally deposited before the date of departmentalisation of accounts and accounted for by the Treasuries, the departmental officers will first send the bill to the treasury officers concerned for verifying the original credit with reference to the details in columns 4 and 5 of the refund bill GAR 33/TR 41 and for affixing their (TOs) signature in column 6 in token of having done so. The bills after due certification by the Treasury Officer should be presented by the departmental officers to the PAOs concerned for making payment. The PAOs will ensure that the above requirements have been compiled with.

Defalcations & Losses

(GFR 16).

1.35    Except where otherwise specifically provided, any loss or shortage of public money, departmental revenue or receipts, stamps, stores or other properties held by or on behalf of Government, cannot by defalcation or otherwise including losses and shortages noticed as a result of physical verification, should be reported immediately by the subordinate authority concerned to the next higher authority.

[Government of India Decision (1) below GFR 16 ]

1.36    The subordinate authority should also report the losses and shortages (other than petty losses and shortages not exceeding Rs.2,000 in each case) to the Principal Accounts Officer of the Ministry/Department and the Statutory Audit Officer, even when such loss has been made good by the party responsible.