Delegation of Financial Powers

FINANCIAL POWERS DELEGATIONS TO SUBORDINATE

AUTHORITIES

SANCTIONS TO EXPENDITURE: (BASIC PRINCIPLES)

         11.1 No subordinate authority is empowered to sanction without the previous consent of the Ministry of Finance any expenditure, which involves the introduction of a new principle or practice likely to lead to increase of expenses. Moreover, exercising of financial powers by a subordinate authority is subject to the observance of any general or special direction, which the authority delegating or redelegating power may issue at any time.

         11.2 A sanction to expenditure would be operative only when the funds have been appropriated to meet the expenditure. In case of sanction to a recurring expenditure covering a specified term of years it would operate when funds are appropriated to meet the expenditure of the first year and would remain in operation for each year of the specified term subject to appropriation in such years.

         11.3 The two main principles to be observed in any system of financial control are economy and regularity, and the success of any system must depend upon the vigour with which they are observed in day to day administration, Economy means gelting the full value for money, and by regularity is meant the spending of money for the purposes and in the manner prescribed by lav,. The two are not necessarily the same thing, for it is conceivable to spend money without constitutional irregularity and yet wastefully.

         11.4 While the provisions of the General Financial Rules Vol. 1 contain general and specific instructions on the subject, the principles on which emphasis is essentially laid may be recapitulated as follows:

(a) that expenditure is incurred with due regard to high standards of financial propriety;

(b) that funds allotted to a Ministry/Division, its Attached, or Subordinate Offices are spent for the purpose for which they are allocated;

(c) that funds are spent in accordance with relevant rules and regulations;

(d) that the actual expenditure does not exceed the budget allocation;

(e) that the expenditure is not prima facie more than (he occasion demands and that every Government servant exercises the same vigilance in respect of expenditure incurred from public funds as a person of ordinary prudence would exercise in respect of expenditure of his own money;

(f) that no authority exercises its powers of sanctioning expenditure to pass an order which will be directly or indirectly to its own advantage;

(g) that public moneys are not utilised for the benefit of a particular person or section of the community unless:

(i) the amount of expenditure involved is insignificant; or

(ii) the claim for the amount can be enforced in a court of law; or

(iii) the expenditure is in pursuance of a recognised policy or custom.

(h) that the amount of allowances, such as travelling allowance, granted to meet expenditure of a particular type is so regulated that the allowances are not, on the whole a source of profit to the recipient.

11.5 The requirement that the funds allotted to a Ministry/Division, etc. are spent for the purpose or purposes for which they are allocated, constitutes an important part of the Legislature's control over expenditure. The control would be rendered nugatory if the executive authority sanctioned application of funds for purposes other than those authorised by the Legislature. It is, therefore, the duty of the Principal Accounting Officer to ensure that the expenditure falls within the ambit of a Grant or an Appropriation duly authenticated. Expenditure in excess of the amount of Grant or Appropriation as well as expenditure not falling within the scope or intention of any Grant or Appropriation, unless regularised by a supplementary Grant, will be treated as unauthorised expenditure.

11.6 While sanctioning expenditure out of the funds placed at his disposal the Principal Accounting Officer will ensure by issuing necessary written instructions to his subordinates or by other means available to him that the requirements of the relevant rules and regulations are fully met and that the approval of the Ministry of Finance has been obtained in all cases which are not covered by any standing authorities that may have been delegated to him.

         11.7 The Principal Accounting Officer is responsible for ensuring that expenditure is not incurred in excess of the budget allocation. He has also to see that the total expenditure under each of the sub-heads fixed as units of appropriation under a Grant or Appropriation does not exceed the allotment thereunder. It is clear that this requirement can be met only if the compiled accounts reflect the correct position of payments. He should, therefore, ensure by issuing suitable instructions to the controlling and disbursing officers under him that all payments are correctly classified under the appropriate heads of accounts and that the
departmental accounts are reconciled every month with the Figures communicated by the Audit Officer. He should, in addition, keep himself well informed not only of the actual expenditure but also of the liabilities which have been incurred and must ultimately be met. Any anticipated excesses and savings should be readjusted by means of reappropriation to the extent powers have been delegated to the Principal Accounting Officers under the new procedure. It is relevant to mention, in this connection, that any allotment or reappropriation within a Grant or Appropriation may be authorised at any time before, but not after, the expiry of the financial year to which such Grant or Appropriation relates.

DELEGATION AND RE-DELEGATION OF POWERS:

         11.8 As a general rule, the powers conferred on an authority under the rules cannot be delegated by it to an authority subordinate to it without the previous consent of the Ministry of Finance. The Ministry of Finance, may however, delegate powers to an authority with permission to re-delegate its powers to a subordinate authority. In cases where an authority has been empowred to delegate or redelegate powers of appropriation or re-appropriation, it may divide the primary units of appropriation into such secondary units as it thinks fit and may impose such restrictions as it may consider suitable upon the use of the powers of appropriation and re-appropriation.

POWERS DELEGATED TO MINISTRIES/ DIVISIONS/DEPARTMENTS:

11.9 Powers delegated to Ministries/Divisions/Departments. (a) In accordance with para 5 of Finance Division O.M. No F.1(5) R. 12/80, dated 11-3-1981, the powers shown in columns 3 and 4 of Annex I to this O. M. shall be  delegated to Principal Accounting Officers in the Ministries/Divisions and the heads of Departments, respectively. These powers may be exercised by them without consulting the Financial Adviser or the Finance and Accounts Officer. The Finance and Accounts Officer may, however, be consulted, wherever considered necessary or advisable but his advice can be over-ruled by the Principal Accounting Officer concerned. The powers so delegated shall be subject to the observance of austerity measures taken by the government from time to time and the availability of:

(i) funds, by valid appropriation or re-appropriation where permissible, from within the sanctioned budget grant; and

(ii) foreign exchange, where required, from within the allocation of foreign exchange sanctioned for the Ministry/Division concerned provided:

(1) specific provision exists in the foreign exchange budget;

(2) it does not involve re-appropriation from "import" to "invisible" or vice versa;

(3) it does not involve travel by another carrier on routes where PIA flights operate;

(4) it does not involve expenditure on entertainment or contingencies.

(b) All cases involving payments of Rs.10 million and above shall be reffered to the Budget Wing for ways and means clearance before effecting payment.

(c) The financial powers delegated to the Ministries/Divisions under the Fundamental and Supplementary Rules, General Financial Rules etc., prior to the introduction of Financial Adviser's Scheme, will continue to be exercised by them, subject to such modification as may be necessary in accordance with the provisions of Annex II.

(d) Except as specifically provided in Annex-I, further delegation of delegated powers shown in Columns, 3 & 4 of Annex-I may, as considered appropriate, be made as follows:

(i) By the Secretaries of the administrative Ministries/Divisions, to the officers subordinate to them in the Ministries/Divisions, without consulting their Financial Adviser;

(ii) By the Secretaries of the administrative Ministries/Divisions, to other officers subordinate to them, in consultation with their Financial Adviser;

(iii) By the Heads of Departments, to the officers subordinate to them, in their headquarters offices, without consulting the Financial Adviser;

(iv) By the Heads of Departments, to other officers subordinate to them in consultation with the Financial Adviser.

Note. The term "Head of Department denotes head of Department as defined in S.R 2(10)