INTRODUCTION OF

FINANCIAL RULES
BY

SAFDAR SHAH

DEPUTY DIRECTOR/FACULTY MEMBER

SECRETARIAT TRAINING INSTITUTE
ISLAMABAD

CONTACT NO:

051-9259024

 Federal

Treasury Rules

GENERAL LIMITATIONS
All charges actually incurred must be
paid and drawn at once, and under
no circumstances should they be
allowed to be carried forward for
payment in another financial year
[FTR 289]

No money shall be drawn from the treasury/

bank unless it is required for immediate
disbursement. It is not permissible to draw
money
from
the
treasury/bank
in
anticipation of demands or to prevent the
lapse of budget grants. [FTR 290]
The charges relating to two or more major
heads should not be included in one bill.
[FTR 291]

Contingent charges

The term," contingent charges or

contingencies means and includes
all incidental and other expenses
which
are
incurred
for
the
management of an office as an office
or for technical working of a
department (FTR 284)

Subject to any general or special orders

issued by a government, the pay of
employees B-1 to B-4, by whatever
designation they may be called, who
have been, or may be, declared by
competent authority to be ineligible for
pensions and discharge the duties of
the classes mentioned below, should be
treated as contingent expenditure;

i)
Hot weather establishment.
ii) Porters engaged on manual labour
and
paid daily or monthly wages.
iii) Sweepers

iv) Other classes of employee B-1 to B-4, e.g.

dhobies, tailors, grass cutters, gardeners
etc. [FTR 292]
Contingent charges incurred on account of
the wages of staff engaged on manual labour
and paid at daily or monthly rates shall be
supported by certificate signed by the
disbursing officer to the effect that the staff
were actually employed and paid.[FTR-293]

RESPONSIBILITY OF
DRAWING OFFICER
The drawing officer is responsible for seeing
that

The rules regarding preparation of bills are

observed.

The money is either required for immediate

disbursement or has already been
disbursed from the permanent advance

The expenditure is within the available

appropriation.

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 exceed.
In the case of contract contingencies
the proposed expenditure does not
cause any excess over the contract
grant. [FTR 295]

RESPONSIBILITY OF
CONTROLLING OFFICER

The countersigning officer shall be

responsible for seeing that:
The items of expenditure included in a
contingent bill are of obvious necessity.
The rates are reasonable.
The sanction is attached.
The requisite vouchers are in order.
The calculations are correct.

The budgetary limits have not been

exceeded nor are they likely to
exceed.
Audit officer 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. [FTR 296]

PAYMENT OF REVENUES INTO

PUBLIC ACCOUNTS (RULES 710)

All moneys received should be

deposited in a treasury or a bank in
full without any delay.
As a general rule, money so received
should not be appropriated towards
departmental expenditure nor it
should be kept apart from the public
account.

Following departments have been

authorized to appropriate the receipts
towards departmental expenditure:

Post offices/ Telegraph and Telephone

Departments
Civil Courts
PWD
Customs
Forest Department

Superintendents of Jails
Railways
Survey of Pakistan
Department of Investment Promotion
and Supplies.

WITHDRAWAL OF MONEY
FROM PUBLIC ACCOUNT (RULE
12-28)

No money can be drawn from the

Federal Consolidated Fund / Public
Account
without
the
written
permission of DAO, TO, AG.

AG may authorize the withdrawal & Funds

with in his own jurisdiction. Unless
specified
and
authorized
by
the
competent authority he can not permit
withdrawal beyond the limits of his own
jurisdiction.
Treasury and banks located within a
province are under the jurisdiction of the
respective A.G.

PLACE OF PAYMENT

Normally, a payment shall only be

made in the District (Accounting
Circle) in which the claim arises. [FTR
19]

PAYMENT TO GAZETTED
OFFICER

Any
payment
to
a
gazetted
government servant shall be made
only after Accountant General has
intimated to the T.O. about the rate
at which payment shall be made.
[FTR 20]

PAYMENT OF FIRST
SALARY

For admitting a first claim of pay and

allowances of a government servant
other than of a person who has been
newly appointed the claim should be
supported by a Last Pay Certificate.
[FTR 21]

General instruction for handling

cash (Rules 76-77)

As a general rule money may not be allowed

to pass through the hands of a departmental
officer as for as possible .
When money is tendered as due to the
Government it should be deposited in the
bank or treasury.
similarly payments should be made through
banks or treasuries whenever practicable .
In every Department when cash is handled a
cash book should be handled in form TR-4

All monetary transactions should be entered

in the cash book as soon they occur and
attested by the Head of office or by any
other gazetted officer authorized on this
behalf.
The cash book should be closed regularly.
The total should be checked by the HOO
himself or through any other officer other
than the writer of the book.
The total should be initialed by the HOO.

At the end of the month when the cash book is

finally closed the cash balance should be
verified by the Head of office and a signed and
dated certificate recorded to that effect.
The cash in hand should be mentioned in
figures as well as in words.
Entries should be neat and clean and erasure
and overwriting should be avoided. If there is
an error it should be corrected by drawing the
pen through the in correct entry in red ink

All the corrections should be dully

attested over the dated initial of the
HOO.
If
any
amount
other
than
Government money is handled it
should be kept in separate chest and
accounted for in separate set of
books.

PRESENTATION OF
CLAIMS

When a person, not in the government

employment claims payment for work
done, service rendered, or articles
supplied, such claims shall unless there are
express orders of the government to the
contrary, be submitted through the head of
the department or other responsible officer
under whose immediate orders the service
was done or the equivalent was given for
which payment is demanded. [FTR 133]

GENERAL INSTRUCTIONS
REGARDING PREPARATION AND
FORM OF BILLS

All corrections and alterations in a bill should

be attested by dated initials of the person
signing the receipt as many times as such
corrections and alterations are made.
Erasures and over-writings or applying white
correcting fluid in any bill are absolutely
forbidden and must be avoided. If any
correction be necessary, the incorrect entry
should be canceled neatly in red ink and the
correct entry inserted.
Accounting classification must be recorded on
each bill by the drawing officer.

Charges against more than one major

head should not be included in one bill.
This rule does not apply to the
allowances of a government servant
drawn with pay, as in such cases all the
allowances, even if belonging to more
than one major head, should be drawn on
a single bill, if debitable wholly to one
government.

When bills are presented on account of

charges incurred under any special
order, the orders sanctioning the charges
should be quoted. Copies of sanctions
accompanying a bill must be duly
certified by a gazetted officer or by a
responsible
subordinate
specially
authorized in this behalf by the head of
the office.

Dates of payment should be noted by the

payee in their acknowledgements in subvouchers, acquaintance rolls etc.
When a drawing officer requires payment
to be made through some other person or
agency, he must specifically endorse an
order or furnish such authorization as may
be necessary to pay to that specified
person or agency. [FTR 138]

CHECKS TO BE APPLIED ON
CLAIMS PRESENTED

The bill, cheque or other documents

presented as a claim for money should
be received and examined by the
accountant and then laid before the
drawing officer who if the claim is
admissible, the authority good, the
signature and counter-signature in order
and the receipt a legal quittance, will sign
the order for payment at the foot of the
bill. [FTR 177]

Where endorsement on a bill is

unauthorized,
incomplete
or
otherwise irregular, the drawing
officer should refuse payment of the
bill and return it to the person who
presents it with a memorandum
explaining why payment is refused.
[FTR 180]

No document bearing an erasure

should be accepted and payment on
such documents should be refused
and fresh document called for [FTR
181]

With regard to a claim presented either on

bills or on cheques the signature of the
drawing officer should be compared carefully
with his specimen signatures, before
payment is ordered. In case of payment to
be made on the authority of an order
purporting to have been issued from the
office of the A.G., the signatures on the order
should be verified by the T.O. with specimen
signatures of the signing officer. [FTR 182]

The arithmetical computations on the

bills should be checked before
payment. [FTR 183]

A register shall be kept showing the names of all

gazetted government officers drawing their pay
and allowances or leave salary from the
Treasury. As each pay slip or leave salary
certificate is received from the Treasury Officer,
the amount of pay and allowances or leave
salary shall be entered against the name of the
government servant concerned. As each pay or
leave salary bill is presented for payment,
reference to this register shall be made to see
that the sanctioned rate is not exceeded. [FTR
184]

The bills for pay and allowances or

leave salary of a gazetted government
servant who is about to retire shall be
separately submitted to the A.G> for
special audit on the date of payment or
as soon as the intentions of the
government servant to retire become
known to the T.O. [FTR 185]

A T.O. shall not undertake

correspondence for a government
servant or a private individual making a
claim to any special allowance or
concession, but the person concerned
should be requested to address the A.G.
either direct or through his own official
superior as the case may be. [FTR 186]

DISBURSEMENT OF CLAIMS
AND RECORDS OF PAYMENT

After a cheque or bill has been entered in

the accounts, and the order to pay has been
signed by the drawing officer, it should be
passed on together with the payees receipt
to the accountant. The accountant should
make the payment and enter it in his cash
book. The accountant should deface the
revenue stamp and a emboss stamp on the
document paid. [FTR 195]

VOUCHER OF PAYMENT

A government officer entrusted with

the payments of money should obtain
for every payment a voucher setting
forth full and clear particulars of the
claim, acknowledgement of the payee,
and all information necessary for its
proper classification and identification
in the accounts. [FTR 205]

Rate of recovery

Recoveries should not ordinarily be

made at a rate exceeding one third
of pay unless the government
servant affected has, in receiving or
drawing the excess, acted contrary
to orders or without due justification.

FIRST PAYMENT OF PAY &

ALLOWANCES

When
a
government
servant
presents his pay bill for the first time,
or when the name of a government
servant appears for the first time in
an establishment bill, the bill should
be supported by a last pay certificate
or if he was not government
employee or

is re-employed after resignation or

forfeiture of past service, a health
certificate must accompany the bill in
conformity with, and if so required by,
any rule or order governing the
conditions of the service to which he
belongs. If a pensioner is re-employed
the fact shall be stated in the bill. [FTR
230]

GENERAL FINANCIAL
RULES (GFR)

WITH DRAWAL OF MONEY

(GFR-9).

No expenditure can be incurred without

sanction of the competent authority.
No expenditure can be incurred without
the provision of appropriation and
authorized grant for the year.
No money can be removed from the
public account for investment or deposit
else with out prior consent of MOF.

POWERS OF SANCTION
(Rules 39 49)

All financial sanctions are issued in the

name of president.
The responsibility of financial operations of
the Federal Government rests with the
President of Pakistan.
Sanctioning powers have been delegated to
Ministries/ Divisions / Departments.
The powers which have not been delegated
to the Ministries/Divisions vest in the MOF.

STANDARD OF FINANCIAL
PROPRIETY. (GFR-10)
That expenditure is incurred with due regards
to high standards of financial propriety.
i) A public servant should exercise same
vigilance as a person of ordinary prudence
that he exercises for the expenditure of
his
own money.
ii) That the expenditure is not prima- facie
more than the occasion demands.

iii)

iv)

No authority should exercise its power

for sanctioning of expenditure or pass
order, which affects directly or
indirectly to his own advantage.
Public moneys are not utilized for the
benefit of a particular person or a
section of the community unless it is:-

In-significant
Claim of the amount can be enforced in a
court of law.
In pursuance of recognized policy or customs.

v)
The amount of allowances granted to meet
expenditure of a particular type is not a
Source of Profit to the recipients.

INTERNAL CHECK AGAINST

IRREGULERITIES, WASTE AND
FRAUD(GFR-13).

In order to prevent and detect errors

and irregularities in the financial
proceedings and to guard against
waste and loss of public money and
store there should be a system of
internal check.

The accounts should be got inspected

at least once a year to see whether:-

Rules on handling and custody of cash are

properly under stood and applied
ii) Effective system of internal check exists
for securing regularity and propriety in
the
various
transactions
including
receipts and issue of store.
iii) Satisfactory arrangements exist for
systematic and proper maintenance of
account books and other ancillary record
concerned with the initial accounts.

GENERAL PRINCIPLES REGARDING

Receipt of money (GFR 4 8 )

All monetary transactions should be brought

to account immediately as they occur.
All the money received as dues of Government
should be credited to the Public account by
depositing it in the bank or treasury.
Moneys received by the Government official in
his public capacity, which is not Government
dues, may be kept separate from the
Government account.

Revenues and other receipts of the

Government may be correctly and
properly assessed, quickly realized
and immediately deposited with
Government account.

WITH DRAWAL OF MONEYS

FROM THE PUBLIC FUND

No money can be removed from the

public account for investment or
deposit else with out prior consent of
MOF.(GFR-7)

Responsibility of the control of

expenditure.(GFR-11-12)

Enforcing financial order and strict

economy is the prime responsibility of
PAO/HOD.He is responsible for observance
all relevant financial rules and regulations
by his own office and subordinate
disbursing officers.
A controlling officer must see that total
expenditure is with in the limits of
authorized appropriations.

He is also responsible to see that the funds

allotted to spending units are expended in
the public interest and upon objects for
which the money was provided.
He must be in a position to assume before
Government and the PAC complete
responsibility
for
departmental
expenditure.

Internal Control against irregularities,

Waste and Fraud(GFR-13)

In
discharge
of
his
ultimate
responsibilities for the administration of
an appropriation placed at his disposal,
every controlling officer must satisfy
himself that adequate provisions exist
with in the departmental organization
for systematic internal checks to
prevent and detect errors and

irregularities in the financial proceedings

of his office and subordinate offices and
to guard against waste and lost of public
money and store. For this purpose he
will get the accounts of his office and his
sub ordinate offices, if any, inspected at
least once in every financial year by a
senior officer not connected with the
accounts matter to see whether:-

i.

ii.

iii.

Rules on handling and custody of cash are

properly under stood and applied.
Effective system of internal checks exists
for securing regularity and propriety in the
various transactions including receipt and
issue of stores etc., and
Satisfactory arrangements exists for
systematic and proper maintenance of
accounts books and other ancillary records
concerned with the initial accounts.

Write off losses

Name of
power

PAO

HOD

.( write off of
irrecoverabl
e value of
stores or
public
money due
to losses on
account of
fraud,theft
etc.

(i) Up to Rs. 5,000,000 in each case Up to Rs.

provided that:100.000
(a)The loss does not disclose a defect
or system the amendment of which
requires the orders of higher
authority. And
(b)There has not been a serious
negligence on the part of some
individual Government officer which
may possibly call for disciplinary
action

 (ii) Power to write off of losses up to

a limit of Rs.200,000 to cover

deficiencies on account of brakeage
,shortage in transit,wastage.spoilage
and bottling,dryness in storage and
depreciation on account of wear and
tear fluctuation in Market prices and
obsolescence.

COMMUNICATION OF
SANCTION
( Rules 51 59)

All financial sanctions and orders issued by the

authorities with in the delegated powers are
communicated to the Accountant General.
All sanctions beyond the delegated powers of
the Ministries/Divisions should be sent through
MOF.
Where prior consent has been obtained from
MOF/AGP, this fact should be recorded in the
sanction.

All sanction should indicate the source of

appropriation
All sanction have effect from the date of
orders conveying the sanction.
Retrospective effect may be given with the
approval of MOF.
A sanction, which is not acted during the
currency of the financial year lapses with
the end of the year.

Government of Pakistan
(SPECIMEN OF SANCTION)
(Establishment Division)
SECRETARIAT TRAINING INSTITUTE
No.F.8-3/96-Gen.
Islamabad, the 24th April, 2007.
The Accountant General Pak. Revenue,
Islamabad.
Subject:- WASHING CHARGES
Dear Sir,
In exercise of powers delegated to Head of Department vide
Finance Divisions O.M. No.F-3(2)exp.III/2006 dated 13-09-2006, I
have the honour to convey the sanction of the President of Islamic
Republic of Pakistan to an expenditure not exceeding, Rs.490/(Rupees four hundred ninety only) on account of washing charges of
seven Table Cloths from M/S Ever Green Dry Cleaners, Islamabad
vide their cash memo No.4632 dated 18-04-2007 (Original enclosed).
2.
It is requested that a cheque of the above amount may kindly
be issued in the name of the D.D.O., STI, Islamabad.

3. The expenditure involved in debitable to the following heads and will be

met from within the sanctioned budget grant for the year 2006-2007:01 - General Public Services
019 - General Services not elsewhere defined.
0191 - General Public Services not elsewhere defined.
019101 - Administrative Training
A039 - General.
A03970 - Others.
Yours Faithfully,
Sd/(Muhammad Ijaz Ghani)
Assistant Director (General)
Copy to: 1) DDO, STI, Islamabad.
2) Sanction Register.
(Muhammad Ijaz Ghani)

Incurring of expenditure in
anticipation of funds(GFR-87)

In the event of not being received the

funds from Finance Division before
commencement of the financial year,
the DDOs are authorized to incur
expenditure in anticipation of funds
on pay and other charges on the
basis of that incurred in the last
month of the preceding year

Re-appropriation of Funds
(GFR-99)

Re-appropriation means the transfer of

funds from one unit head to an other such
unit with in a grant under formal orders of
the competent authority..Any allotment or
re-appropriation
with in a grant or
appropriation may be authorized at any
time before close of the financial year to
which such grant or re-appropriation relates.
Officers of Pak Army employed in the central
Government whenever called to Army service.

Any Question

Thank You