8.13. In the case of audited contingencies sub-vouchers for items not exceeding Rs. 250* should be retained in the office of the drawing officer and those above that limit should be attached to the contingent bills in support of the charges they represent.
Note 1. See also Subsidiary Treasury Rule 4.51 and the notes thereunder.
Note 2. See also notes 2, 3, 4 and 6 below rule 8.8 and note 1 below Rule 8.9.
Note 3. It is not necessary to attach copies of telephone and electricity bills exceeding Rs. 250* in each case with the departmental bills at the time of their presentation to the Treasury. Copies of bills will however, be retained in the office to be presented to audit parties, for their checking the details.
8.14 Grants-in-aid or contributions to educational and other institutions, local bodies and co-operative Societies are sanctioned either by the Government or the authorities subordinate to it (Heads of Departments, etc.) and are regulated by the orders contained in rule 19.9 of this volume, and the detailed rules made by the Heads of Department under the powers vested in them. After the budget allotment, have been communicated by the Department of Finance, the payment is authorised at the treasury through the Accountant-General or direct, as the case may be, -Vide Subsidiary Treasury Rule 4.4. The following further instructions are issued for the guidance of sanctioning authorities in the matter of according sanctions for grant-in-aid.
(a) (1) Unless in any case Government directs otherwise, every order sanctioning a grant should specify clearly the object for which it is given and the conditions, if any, attached to the grant. In the case of non-recurring grants for specified objects, the order should also specify the time-limit within which the grant or each instalment of it is to be spent.
(2) Only so much of he grant should be paid during any financial year as is likely to be expended during that year. In the case of grants for specific works or services such as buildings, water-supply schemes and the like, the sanctioning authority should us its discretion in authority payments according to the needs of the work. The authority signing or countersigning a bill for grants-in-aid under Subsidiary Treasury Rules 4.4 and 4.71 should see that money is not drawn in advance of requirements. There should be no occasion for a rush for payment of these grants in the month of March.
(3) Before a grant is paid to any public body or institution, the sanctioning authority should as far as possible insist on obtaining an audited statement of the account of the body, or institution concerned in order to see that the grant-in-aid is justified by the financial position of the guarantee and to ensure that any previous grant was spent for the purpose for which it was intended. It is not essential for this purpose, however, that the accounts should be audited in every case by the Audit Department and it will be sufficient, therefore, if the accounts are certified as correct by a Registered Accountant or other registered body of auditors, the sanctioning authority may exercise its discretion of exempting any such institution from the submission of accounts audited in this fashion.
The authority sanctioning a grant, while communicating the sanction to the Accountant-General should state whether the audited statement of account has been received when required, or whether the grantee has been exempted from submitting the statement.
Note - This order applies both to non-official institutions and to semi-official ones, such as Public Clubs, etc.
(b) In cases in which conditions are attached to the utilisation of grant in the form of specification of particular objects of expenditure or the time within which the money must be spent, or otherwise the departmental officer on whose signature or countersignature the grant-in-aid bill was drawn should be primarily responsible for certifying to the Accountant-General, where necessary, the fulfilment of the conditions attaching to the grant, unless there is any special rule or order to the contrary, The certificate should be furnished in such form and at such interval as may be agreed between the Accountant General and the Head of the Department concerned. Before recording the certificate the certifying officer should take steps to satisfy himself that the conditions on which the grant was sanctioned have been or are being fulfilled. For this purpose he may require the submission to him at suitable intervals of such reports, statements, etc. in respect of the expenditure, from the grant are inspected or audited locally, the inspection or audit report as the case may be will either include a certificate that the conditions attaching to the grant have been or are being fulfilled or will give details of the breaches of those conditions.
(c) Unless it is otherwise orders by Government every grant made for a specific object is subject to the implied conditions -
(i) that the grant will be spent upon the object with a reasonable time, if no time limit has been fixed by the sanctioning authority ; and
(ii) that any portion of the amount which is not ultimately required for expenditure upon that object should be duly surrendered to Government.
*(d) The annual report and accounts of private and voluntary organisation receiving recurring grant in aid to the tune of five lac rupees and above shall be laid on the table of the Punjab Vidhan Sabha within nine months of the close of the financial year of the institution receiving the grant in aid. In the case of private and voluntary organisation receiving grant in aid of one lac rupees and below five lac rupees, all the depts. Of the Govt. shall include in the their annual reports a statement showing the quantum of funds provided to each of the aforesaid organisations and the purpose for which grants in aid were utilised for information or the council of ministers or the Governor in Council as the case may be.
* Interested vide Govt. Notification No. 2/788-2FCD/8943 dated 5-10-89
8.14-A. In order to ensure that the grants-in-aid are not disbursed to the local bodies before they are required by them, the instructions given below should be observed :-
(a) Grants-in-aid, other than those relating to works to be executed, through the agency of the Department of Public Works :-
(1) The sanctioning authority will issue the necessary letter of authority to the Accountant-General, or the Treasury Officer, as the case may be, for the payment of the amount required for immediate disbursement.
(2) The letter of authority will contain instructions that no drawal shall be allowed except on a regular bill signed by the President or the Chairman of the Local Body concerned and countersigned by a Government employee named in the letter of authority.
(3) The Government employee so named shall be responsible for satisfying himself that the money is not drawn by the local body in advance of requirements. He shall not, therefore, countersign the bill unless it is supported by the actual bill of contractors of suppliers.
(b) For the grant-in-aid to local bodies for works to be executed through the agency of the Department of Public Works -
(1) The orders sanctioning the grants-in-aid to the local body and requiring the Department of Public Works to execute the work on behalf of the local body as a contribution work shall be issued simultaneously and the local body shall be informed accordingly.
(2) The sanctioning authority will issue the letter of authority to the accountant-general or to the treasury officer as the case may be, for the payment of the amount required for immediate disbursement.
(3) The letter of authority will contain instructions that no drawal shall be allowed except on a bill presented by the local body and made payable by transfer credit to “public works deposits”
Note. Grants-in-aid to local bodies, private associations, etc., unconnected with government are made for various purposes . Some of these grants are recurring and paid year after year and other are merely lump sum grants to be paid for a definite number of years and than stopped .In the case of such grants -in-aid the head of the department, when the total grant for the entire head is communicated to him at the commencement of the year , should issue definite orders authorising the Accountant-General to disburse each such grants-in-aid included in his estimates. This would give him an opportunity of reviewing the grants and of deciding whether they are to be continued or not and thereby avoid the real danger of grants being paid automatically year after year even after even after their justification has ceased.
8.15. A register of contingent expenditure shall be kept in each officer, and the initials of the office or of a gazetted government employee to whom this duty has been delegated by him (see rule 8.25 below) shall be entered against the date of payment of each item.
This register will be in P.F.R. from 10. The actual details such as the number of columns to be opened, the sub-heads and detailed heads and such further detailed classification as may be required for purpose of control , will be settled by the Accountant-general and the controlling authority to send the conditions of each department and office. As a general rule the most common sub-heads and detailed heads may have separate columns with appropriation noted at the top. The less important and trivial items may be lumped to get her in one column when each of the separate items need not be accounted for or watched separately Any charge falling under any of the separate columns, requiring explanation may be described in the column headed “Description” though the amount of it is entered only in its special column, and the same “Description” column will serve also for note of the month for period to which any recurring charges (e.g., rent or pay any of Punkha Pullers) entered in the other columns belong :
Note 1. If more convenient, a separate register may be maintained for each class of contingent charges (see rule 8.2)
Note 2. If during the absence of the head of the office and of the Government employee to whom this duty has been delegated the entries have been initialled by a non-gazetted Government employee the register must be reviewed and the entries re-initialled by the head of the office or such gazetted Government employee on return to headquarters.
Note 3. When any sub-vouchers which should accompany a contingent bill are to follow a note to this effect should invariably be made in the “Remarks” column of the Contingent Register in order that the necessity for furnishing these vouchers as early as possible may not be overlooked.
Note 4. The contingent register maintained under this rule gives full information in respect of contingent charges. It is, therefore, not necessary to prepare and preserve office copies for contingent bills.
8.16 As each payment is made, entries must be made in the contingent register of the date of payment, the name of payee and the number of sub-vouchers in the three columns to the left, and the amount in the proper column ; and in the case of any charge requiring explanation the initials of the officer incurring it shall be taken against the description.
Note. Regarding the entries to be made in the final columns, see rule 8.11.
8.17 To enable the disbursing officer to watch the progress of the expenditure under each detailed head, as compared with the budget appropriation for it, a progressive total of all the columns must be made monthly, immediately after the monthly total, so as to include all payments under each head, as also charges adjusted by book transfer (See rule 8.21) from the commencement of the year up to the end of the last expired month.
The charges relating to two or more major heads are not to be shown in one register nor included in one bill. But expenses which are shared in some fixed proportion between two branches of the same office may, unless they are reviewed by different authorities, appear in one bill. In such a case, the joint grant (vide Subsidiary Treasury Rule 4.45) may be entered in one register only for the purposes of control, the account adjustment being left to the Accountant-General.
Note. See also Subsidiary Treasury Rule 4.46.
8.18 The following procedure should be adopted by Government employee for obtaining service postage stamps from treasuries and for the adjustment of their value:
(i) Government employee who draw money from the treasury on contingent bills. - A bill in Form S.T.R. 33 should be prepared by the departmental officer when he required service postage stamps. The bill should contain the acknowledgement of the drawing officer of the receipt of the stamps indented for and should in other respects be treated in the same way as a contingent bill for drawing cash from the treasury. The treasury Officer should pass the bill for payment by transfer, have the stamps issue, and enter the amount in the list of payments, crediting the value of the stamps in the same manner as if cash were realised.
(ii) Government employees, who draw money by cheques from treasuries. Cheques to be presented in payment of the value of service stamps should be drawn in favour of the officer/official designation (without name) who supplies the stamps, whether they are drawn by the officer who indents for the stamps or by a departmental officer on the indenting officers requisition. (See Subsidiary Treasury Rule 4.15 regarding the method of crossing such cheques).
Note 1. Cheques drawn for obtaining stamps from treasuries are not subject to any minimum limit.
Note 2. Service postage stamps should be issued to the Railway Account Officers immediately when the Treasury Officer accepts the cheque and the accompanying challan 7 ; the Railway authorities should not be required to obtain the receipt challan from the bank where the treasury business is conducted by the bank before issuing the service postage stamps.
The cheque should be sent to the bank by the Treasury Officer for collection with instruction that its amount should be credited in the banks daily scroll under the head “Post Office-Sale of Service Postage Stamps”.
THE UNITED KINGDOM
8.19 Payments for articles obtained by a direct order from private firms and individuals in the United Kingdom can be made only through the High Commissioner for India or as prescribed by Government of India. The Government employee desiring such a payment should, as soon as all the formalities necessary in connection with the receipt, inspection and verification of articles have been completed, forward the firm’s bill in original to the Accountant-General for audit and payment, particular care should be taken to ensure that no double payment is authorised in respect of the same claim.
The Accountant-General when making remittances to the High Commissioner will endorse to the Government employee concerned a copy of his letter of authority (in form S.Y. 289-D) addressed to supplying firms.
Bills for stores ordered by Government employees in India direct from firms abroad on f.o.b. basis subject to inspection by the Director-General, India Stores Department, London may, however, be paid by the High Commissioner. In such cases the purchasing Government employees, may, if they consider it desirable authorise the suppliers to submit their bills to the Director General, India Stores Department, London, who will certify that the stores referred to therein have been inspected by him and despatched under his arrangement. After verification the Director General will pass them on to the High Commissioner for payment. Such payments are passed on to the Accountant General through the Remittance Account supported by the supplier’s bills duly certified by the Director General, India Stores Department, London.
Note 1. Special care should be exercised by the purchasing Government employee in differentiating the articles purchased through the agency of the Director-General of Stores, India Stores Department, London, from those merely delivered to or shipped through his agency. In the former case payment cannot be made from India; whereas in the latter case procedure prescribed above should be observed.
Note 2. The procedure laid down in this rule should be followed mutatis mutandis in the case of other payments, e.g. those chargeable to the estimates for a work t be made direct to a party in the United Kingdom.
8.20 An inspecting officer who is not authorised to take advances on account of officer contingent charges should provide himself with a portion of his permanent advance and recoup himself from time to time by presenting at the different treasuries or offices of disbursement contingent bills, in the ordinary form.
In the case of countersigned contingent charges, one detailed bill may adjust money drawn at more than one treasury, details of places of payment of the several encashed bills, as well as their dates and amounts being noted at foot of the bill. The amounts drawn must be taken as final payments, and not as advances
8.21 In the case of work done by a Government factory (such as jail, mint, workshop) as also in other cases in which inter-departmental adjustments are permissible (See Appendix 2) the Government employee in charge shall if the adjustment is to be made by book transfer, prepare an invoice of the quantity and price of the work done, and forward it in triplicate to the Government employee served, who, on approving the Government employee. Another copy he will file in his own office, and the third he will attach to his contingent bill for the current month, noting the amount in the statement of account at foot, in order to work out the available balance of his grant, but not including it as a disbursement among the charges of his bill. Before despatching his monthly bill, he must post the amount of the work bill in his contingent register and include it in the forward total, in order that he may agree to forward total with that shown in the statement of account on his contingent bills. In the register of the countersigning officer the amount of such a bill must in like manner be separately entered. Such invoice shall never be retained by the countersigning officer.
Note 1. The Government employee served cannot charge the amount in his contingent bill, as no cash payment is made but only a book adjustment is made in the Account Office; but the amount available for contingent expenditure is reduced, and so to work out the available balance note is made in the register of the contingent expenditure and in the statement of account at foot of the bill.
Note 2. One of the invoices returned to the Supplying Government employee by the Government employee supplied should have a note, in red ink, entered therein, showing in what month’s Departmental Return Credit has been taken for the value of the supply, and it should then be forwarded by the former to the Accountant General, who will adjust the amount in his books.
Note 3. When an abstract or detailed bill includes any charge on account of work bills and such bills have not attached to it, a note should be made on it stating the particular bill to which the work bills have been attached.
Note 4. In case Superintendents of Jials delay in sending their work bills for March (or any other month of which the cost has not been adjusted later than the 10th of April following) Government employees supplied should remind them, so that the charges may be adjusted in that year’s accounts and the submission of detailed bills may not be delayed beyond 15th April.
Disbursing Officers should attach to their detailed bills for March a certificate to the effect that they have accounted for, in that or in previous months detailed bills, the cost of all tails supplies made to them upto 31st March.
Controlling Officer should not countersign and forward to the Accountant-General any detailed bill for March unless it is accompanied by the certificate prescribed above. At the same time they should despatch the bill so as to reach the Account office not later than the 25th of April.
Note 5. All waste paper should be carefully stored and sent periodically to the nearest paper-making jail, provided the price paid by the Jail of the paper is sufficient to cover the cost of carriage.
The amount of the Waste Paper Bill, when adjusted by transfer, should be entered in the Departmental Return for the same month in which the bill has been sent to the Account Office after obtaining the countersignature of the Superintendent of Jails irrespective of the month in which the supply has actually been made.
Note 6. In the case of Forest Department the cost of the supplies has to be adjusted in the compiled accounts submitted to the audit office. A Government employee of this department receiving stores will adjust the amount of the invoice in his accounts by crediting it to the supplying Government employee and debiting it to the service head concerned and will send the third copy of the invoice to the Audit Office in support of the entry in his accounts. Similarly, if he happens to be the supplying Government Office in support of the entry in his accounts. Similarly, if he happens to be the supplying Government employee he will charge the amount expended in his accounts as a debit to the Government employee supplied and send the countersigned invoice to the Audit Office as a voucher for the expenditure.
Note 7. Bills for telephone charges are forwarded in duplicate and not in triplicate to the Government employee served who, an approving the bill, will countersign both and return one copy to the supplying Government employee. The other copy he will submit with the contingent bill to the Audit Office after making the necessary notes in his contingent register.
Note 8. The following instructions should be printed on all forms of invoices for the supply of store, etc. and the Government employee served should be required to comply with them before accepting a bill :-
“It is essential for accounting purposes that the entries below be filled in. Failure to do so will result in unnecessary delay and return of this invoice for compliance:
(1) Head of charge (Major and Sub-head, primary and Secondary unit) ………
(2) Month and year to which charge relates ……………………
(3) Designation of the Accounts Officer to whom the charge is debatable ……
(4) Name of the State to which debitable. ………………………
Note 9. Bills are submitted in quadruplicate by supplier to Inspecting Officer of the Indian Store Department. The latter, after completion of certificate No. 1 on the bill, retains the quadruplicate copy for record in his office and passes on three copies to the consignee. The consignee completes certificate No. 2 on the bill and keeping the triplicate copy for his office record, sends two copies (the original and duplicate) to the Audit Officer, Indian Stores Department, for payment. On receipt of the two copies, the Audit Officer, records necessary payment order on the original copy, issues cheques to the suppliers in payment and then raises necessary debit against the Accounts Officer of the consignee, the duplicate copy being sent to the Accounts Officer in support of the debit. The original copy is essentially necessary in the office of the Audit Officer, India Store Department, as payment order cannot be recorded on any other copy.
In the case of such bills, the particulars and amount thereof should be noted in the memorandum of expenditure in the contingent bill, which need not be supported by a copy of the bill as is required in the case of either work bills.
8.22 Government commercial concerns in the Punjab have been permitted to settle their accounts with other departments by the method of making actual payments, instead of by book transfer as laid down in Paragraph 15 of Appendix 2. This system will apply both in the case of payments to be made to the concerns, and in the case of payments to be made by the concerns, and in the case by other departments for services rendered or supplies made. In both cases the payments for services rendered or supplies made. In both cases the payments will be made by cheques, Reserve Bank Government draft or demand drafts. Payment in cash is prohibited altogether. As the issue of a Reserve Bank Government draft for less than Rs. 25 is not or demand drafts should be crossed and marked “not negotiable Accounts Payee only” so as to ensure credit of the sale-proceeds of the cheques, etc., to a Government head of account at the treasury.
8.23 When a Government employee makes purchases or incurs expenditure through a Government employee in another district and the amount to be paid on account of contingent expenditure incurred in this way is not less than Rs. 50, payment may be made by Reserve Bank Government drafts but otherwise every Government employee who incurs expenditure in this way must treat it as expenditure of his own office, and not demand recoupment from the Government employee at whose request he, as an agent, incurs the expenditure. The charge must, however, be taken as expenditure of the department to which the Government employee should address his applications for any service to the principal officer of his department in the district indented on, e.g., a police officer should ask the District Superintendent, not the Magistrate, to purchase blankets for him. The Magistrate in such a case would pass on the indent or the voucher if he has supplied any articles, to the police officer, who would deal with the charge not less than Rs. 500 as a final one of his own office, applying to the proper authority for an extra appropriation, if his own should fall short before the end of the year. The responsibility for obtaining proper sanction should always rest with the origination Government employee.
Note. This rule does not apply to expenditure to local funds, which should always be recovered.
8.24 The responsibility of drawing officers is determined by the provisions of rule 2.31. The drawing officer is further responsible for seeing that the rules regarding the preparation of bills are carefully observed and that in the case of contract contingencies, the expenditure does not cause any excess over the amount fixed therefore. He is also to see that all steps have been taken with a view to obtaining an additional appropriation if the original appropriation has either been exceeded or is likely to be exceeded.
8.25 Where there is more than one gazetted Government employee attached to an office the head of the office may delegate to a gazetted Government employee subordinate to him the immediate responsibility for the supervision of the contingent bills and registers and checking and cancelling the vouchers. The delegation of power will not, however, relieve the head of the office of the responsibility of seeing that the grants placed at his disposal are disbursed in a proper manner and under due authority. With the extension of the system of contract grant the control of expenditure rests chiefly on him and it is important that he should make use of the authority delegate with due caution.
Note 1. The disbursing officers are responsible for checking expenditure in cases where an annual limit is imposed on their spending powers. The audit will be satisfied if the disbursing officer merely furnishes a certificate either on the bill itself or separately whenever such a charge is sanctioned or incurred, to the effect that the total charges so far incurred during the year do not exceed the prescribed annual limit.
Note 2 Nazarat officers referred to in para 10.17 of the District Office Manual, Punjab, excepting routine items such as diet money of witnesses, electricity bills and menial’s pay should not pass any item of new expenditure Rs. 10 (Rupees ten) only without the sanction of the Disbursing Officers.
8.26 It is the responsibility of the countersigning officer to see that items of expenditure included in a contingent bill are of obvious necessity, and are at fair and reasonable rates; that previous sanction for any item requiring it, is attached, that the requisite vouchers are all for any item requiring it, is attached, that the requisite vouchers are all received and in order ; that the calculations are correct and specially that the grants have not been exceeded nor are they likely to be exceeded, and that the Accountant-General has been informed either by a note on the bill or otherwise of the reason for any excess over the monthly proportion of the appropriation. If expenditure be progressing too rapidly he should communicate with the drawing officer and insist on its being checked.
9.1. (a) Subject tot he provision of the relevant Acts and rules made thereunder a competent authority may accord sanction to a refund of revenue which may either be given on the vouchers itself or quoted in it, a certified copy being attached when such orders are not separately communicated to the Accountant-General.
(b) Refunds of Revenue are broadly classified as :
(i) refunds to which the claimants are legally entitled ; and
(ii) refunds which are made ex-gratia Government being under no legal obligation to make them.
Note 1. Refunds of revenue are not registered as expenditure for purposes of grants or appropriation.
Note 2. Remissions of revenue allowed before collection are treated as reductions of demands and cash payments of revenue after collection as refunds.
(c) No check can be exercised over refunds of revenue in the Account Office, except in cases where full details of the collections of such revenue are received in that office, either through the treasury accounts or other documents, e.g., Fine statements. It is, therefore, essential that every refund should be noted against the original credit in the departmental accounts or other documents in which the money received are entered in detail and a certificate of such a note having been made must be given in all vouchers for refunds.
9.2. Refunds of stamps by Courts can be made in the same way as refunds of fines. Refunds by district Officers are regulated by departmental rules.
9.2.-A. (a) Refunds of passport fees should be allowed in cases where the application for a passport is withdrawn before it reaches the State Government.
(b) Refunds are allowed on Court Fee Stamps affixed to passport applications which are rejected by Government. There is no time-limit for allowing such refunds on this account.
9.3. Before a remission or refund of any kind, otherwise in order, is allowed, the original demand or realization, as the case may be, must be traced and a reference to the remission or repayment should be so recorded against the original entry in the cash book or other document as to make the entertainment of a double or erroneous claim impossible. Any acknowledgement previously granted should, if possible, be taken back, and destroyed and note of the repayment recorded on the counterfoil of the receipt.
Note 1. As a precaution against double refunds of land revenue or other receipts the details which are not furnished to the Accountant-General, the amount and the date of each such refund should be noted by the Treasury Officer against the original item of credit in the Treasury Receipt Register or in the cash book if the item has not been credited in a separate receipt register.
Note 2. Payment on account of refunds should be recorded by the Treasury Officer in a register in For PFR 14. In the column “Miscellaneous Refunds” only those items will be entered which cannot be recorded under any other column in the form.
Note 3. A collector or other Government employee concerned should on passing an order of refund at once issue to the payee a refund order combined with a notice inviting the persons to whom the refund is to be made to receive payment at the treasury.
Note 4. There is no objection to the payment of the refund vouchers of revenue deposit through a recognised bank in whose favour they are endorsed by the payee.
9.4. The procedure to be observed for the payment of compensation for land taken up for public purposes is regulated by the rules in Appendix 12.
Note. See also notes below paragraph 8 of Appendix 2 of Punjab Financial Rules, Volume II.
9.5. In cases where landed property is acquired by Government by voluntary agreement, the department concerned should be careful to see that in order to avoid any possible claims for interest, payment is made before or immediately after raking possession. If for any reason, this course is impracticable, the circumstances of the case should be reported through the Commissioner and Financial Commissioner, for the information of Government. All preliminaries to acquisition, such as examination of title deeds, etc. should be completed before possession is taken.
Loans and Advances
10.1. A competent authority may sanction loans and advances to private individuals, local bodies, co-operative Societies and Government employee for the purposes and subject to the conditions specified in the following rules.
10.2. Provision should be made in the Budget for all loans and advance which can be foreseen; a timely estimate both of the advances and of the recoveries of the coming year should, therefore, be made in accordance with the provisions of the Punjab Budget Manual.
(i) ISSUE OF LOAN MONEY
10.3. Unless in any case Government direct otherwise, the issue of loan money shall be governed by the following rules;
(i) Every loan granted to a Municipality, Co-operative Societies or a Corporation will be recorded in the books of the Accountant-General and no part of it can be issued except under his authority (see the Rule 4.110 of the Subsidiary Treasury Rules).
(ii) No department or Government employee may incur any expenditure or any liabilities against a sanctioned loan, unless a statement in writing is first obtained from the Accountant-General that the amount is available out of such loan and has been placed by him in a separate account so as to be available for the proposed expenditure.
(iii) The Accountant-General before furnishing the statement mentioned in the preceding clause, will ascertain that the Municipality or other party responsible for the loan has assented to the arrangement or that it is distinctly stated by the Government among the terms of the loan.
(iv) Funds spent under clause (ii) shall reckon for interest as if they were drawn on the last day of the month in the accounts of which they are included by the spending department or Government employee.
10.4. Loans and advances are usually made to local bodies under the following rules:
(a) A specific term should be fixed which should be as short as possible, within which each loan or advance should be fully repaid with interest due. The term may in very special cases extended to 30 years.
(b) The term is to be calculated from the date on which the loan is completely taken up or declared by the competent authority to be closed.
(c) The repayment of loans should be effected by instalments which should ordinarily be fixed on a half-yearly or yearly basis, due dates for payment being specially provided.
(d) Instalments paid before the due date will be taken entirely to principal unless, of course, any interest for a preceding period is overdue.
Note 1. When a loan of public money is taken out in instalments the first half-yearly repayment should not be demanded until six months after the last instalments is taken; meanwhile simple interest only should be realised. But, should it appear that there is undue delay on the part of the debtor in taking out the last instalment of a loan, the government may, at any time, declare the loan closed and order repayment of capital to begin. The Accountant - General will bring to notice and delay that appears to him to require this remedy and he will take the step whether there are any dates fixed for the taking of instalment or not.
Note 2. If, in any case, dates have been fixed for the payment of interest, or the repayment of instalments of debt, then such repayment should not begin, until the second of the half-yearly dates so fixed, after the loan has been completely taken up, simple interest only recovered on the first half -yearly date after the completion of the loan. For example, supposing a loan the interest on which is recoverable half-yearly to be completely taken up on 31st march and the interest to be payable on 30th June and 31st December, the first half-yearly instalment in repayment of principal will not be due until 31st December following. Simple interest only will be due on the intermediate 30th June.
Note 3. Notes 1 and 2 are applicable mutatis mutandis to loans the repayments or which are made buy other half-yearly instalments.
Note 4. It must be remembered that the calculation fixing the amount of equal periodical instalments, by which an advance is repaid with interest, presupposes punctual payment of the instalment and that, if any instalment is not punctually repaid, the fixed instalment will not in the end discharge the loan.
10.5 (i) Interest should be charged at the rate provided by Government for any particular loan or for the class of loan concerned.
(ii) A loan bears interest for the day of advance, but not for the day of repayment. Interest for any shorter period then the complete half year should be calculated as “Number of days X yearly rate of interest”
unless any other method of calculations is prescribed in any particular case or class of cases. The amount of interest received should be created to the head “49- Interest-Receipts- interest on Loans and Advance by the state Government.
10.6 Borrowers should be required to adhere strictly to the terms settled for the loans made to them. Modifications of those terms in their favour can be made subsequently only for very special reasons.
10.7 (a) Any default in the payment of interest upon a loan or advance or in the payment of the principal, will be promptly reported by the Accountant-General to Government. On receipt of such a report the Government should immediately take steps to get the defaults remedied.
Note. The responsibility of the Accountant-General under this rule refers only to the loans the detailed accounts for which are kept up by him.
(b) The authority which sanctions a loan may, in so far as the law allows, enforce a penal rate of compound interest upon all overdue instalments of interest, or principal and interest. If a penal rate is enforced, it should not be less than 8 percent per annum.
10.8 If a Government employee authorised to make revenue advances desires to question the accuracy of the plus and minus memorandum of loans and advances maintained at the treasury in which transactions of each loan are separately recorded (vide Article 90 of Accountant Code, Volume II) he must address the Accountant-General and satisfy him as to its incorrectness and ask him to correct it. Every Government employee should, therefore, see that the debits and credits made to his account accurately correspond with those which enter his own registers and returns. If he is not the District Officer, he should obtain from the treasury a copy of the plus and minus memorandum with which he is concerned. Special care should be taken in paying recoveries into the treasury to show the amount of interest and of principal separately so that they may be separately credited in the treasury accounts, as the former must not, and the latter must be, credited in the treasury plus and minus memorandum of loans and advances.
Note. In the case of Tacavi advances recoveries effected in one district on account of advances made in another district, should not be included in the plus and minus memorandum of the treasury in which the recovery is effected but shown separately as distinct items in the miscellaneous portion of the cash account, the intimation of the recovery being at the same time sent to the Treasury Officer who has made the advance so that he may “include” it in his plus and minus memorandum. Recoveries on account of Public Works Tacavi advances should be shown distinctly in the schedule of unclassified items appended to the cash account.
(i) REVENUE DEPARTMENT RETURNS
10.9. (a) With every return of revenue advances made to the Revenue Authorities a memorandum should be submitted setting forth the figures of the treasury plus and minus account, and agreeing them with the figures of the return.
(b) The Accountant-General will at the close of every half-year’s accounts, send to the Financial Commissioner as the chief Revenue controlling Authority a return in such form as may be agreed upon, showing the figures that pass upon the books in respect of revenue advances. The object of the statement is to enable the Chief Revenue Authority to check the reconciliation prescribed in clause (a).
10.10. A competent authority may remit or write off any advances which may be found irrecoverable or otherwise. Such loans or advances should be debited to the State Revenues by per contra credit to the loan or advance account concerned.
See note 2 below Rule 18.4.
10.11. In respect of Revenue or other advances for the detailed control, accounting and supervision of which departmental offices are responsible, it is the duty of the departmental authorities concerned as soon as any such advance is ascertained to be irrecoverable, to take necessary steps to get it written off the accounts under the sanction of competent authority and to advise the Accountant-General, in order that he may make the necessary adjustment in the accounts. Irrecoverable advances written off should, nevertheless, be registered by the Departmental Authorities in a separate account or record, in order that any possible eventual recovery may be made ; such recoveries will not effect the treasury plus and minus memorandum, and will be taken as revenue. See also note below Article 90 of Account Code, Volume II.
Note 1. In the case of Revenue and other advances mentioned in para 12.8 of Punjab Budget Manual, the responsibility for supervision, accounting and control devolves upon the departmental authorities and detailed rules and instructions governing them are contained in the Departmental regulation (Punjab Government U.O. No. 6568-FR-52, dated 11th September, 1952).
Note 2. In the case of the loans to private individuals or private parties under any scheme, the detailed accounts of such loans shall be maintained by the departmental authorities concerned instead of the Accountant-General, Punjab. The departmental authorities will also be responsible to watch their recoveries and to see that conditions attached to each loan or advance are fulfilled. The Accountant-General will, however, continue to maintain detailed accounts and watch the recovery, and the fulfillment of the conditions in the case of loans to the institutions and organizations, etc.