Rule 213 of The General Financial Rules 2017 Inventory Physical Verification
Original Rule Text
Visual Summary
Annual verification, record outcome, investigate discrepancies.
Annual verification, record discrepancies, competent authority action.
Presence of custodian, certificate in register, report discrepancies.
Executive Summary
Rule 213 of The General Financial Rules, 2017 mandates the annual physical verification of both fixed assets and consumable goods and materials held by government departments. This crucial process requires the outcome of verification, including any discrepancies, to be meticulously recorded in the respective stock registers. Furthermore, all verification must occur in the presence of the officer responsible for the inventory’s custody, and any identified shortages, damages, or unserviceable items must be promptly reported to the competent authority for appropriate action, referencing specific rules for handling losses.
In-Depth Analysis of the Rule
Introduction: Effective inventory management is fundamental to financial propriety and accountability within government operations. Rule 213 provides the framework for ensuring that physical assets and consumables are regularly checked against records, thereby minimizing waste, loss, and fraud. This rule underscores the government’s commitment to transparent and responsible use of public funds and resources.
Breakdown of the Rule:
- Rule 213 (1) Physical verification of Fixed Assets: This sub-rule stipulates that fixed assets must be maintained at their site and physically verified at least once a year. The results of this verification, including any discrepancies, must be recorded in the corresponding register and promptly investigated and accounted for.
- Rule 213 (2) Verification of Consumables: Similar to fixed assets, all consumable goods and materials are subject to annual physical verification. Any discrepancies found must be recorded in the stock register, and appropriate action should be taken by the competent authority.
- Rule 213 (3) Procedure for verification: This section outlines the mandatory procedural aspects:
- Verification must always be conducted in the presence of the officer responsible for the custody of the inventory.
- A formal certificate of verification, detailing the findings, must be recorded in the stock register.
- Any discrepancies, such as shortages, damages, or unserviceable goods, must be immediately reported to the competent authority for action, specifically referencing the provisions of Rule 33 to 38, which deal with reporting and handling losses.
Practical Example: Consider a government office that has a stock of office furniture (fixed assets) and stationery supplies (consumables). According to Rule 213, the office must conduct a physical verification of both its furniture and stationery at least once a year. The officer in charge of the store, or the designated custodian, must be present during this entire process. During the verification, they might find that a few chairs are missing, some printers are damaged, and a significant quantity of pens and paper is unaccounted for. All these findings, including the condition of the items and the discrepancies, must be documented in the furniture register and the stationery stock register, respectively. A formal certificate of verification is then recorded. For the missing chairs, damaged printers, and unaccounted stationery, an immediate report must be sent to the Head of the Department, who will then initiate action as per Rule 33 (Report of Losses) and subsequent rules.
Related Provisions
Rule 213 is closely linked with other provisions concerning financial management and accountability, particularly those dealing with losses and their reporting:
- Rule 33 of The General Financial Rules 2017 Report of Losses: This rule details the procedure for reporting any loss or shortage of public moneys, departmental revenue, or property, which is directly referenced by Rule 213(3)(iii) for action on identified discrepancies.
- Rule 38 of The General Financial Rules 2017 Prompt Disposal of Loss Cases: This rule emphasizes the importance of prompt action at each stage of detection, reporting, write-off, and final disposal of loss cases, including action against delinquents and remedial measures.
Learning Aids
Mnemonics
- FACES: Fixed Assets & Consumables Every Single year. (Highlights annual verification for both types of inventory).
Process Flowchart
Multiple Choice Questions (MCQs)
1. According to Rule 213 of The General Financial Rules, 2017, how often should fixed assets be physically verified?
- A) Once every two years
- B) At least once a year
- C) Only when a new officer takes charge
- D) As deemed necessary by the Head of Department
Show Answer
Correct Answer: B) At least once a year
2. Who must be present during the physical verification of inventory as per Rule 213 of The General Financial Rules, 2017?
- A) The Audit Officer
- B) A representative from the Ministry of Finance
- C) The officer responsible for the custody of the inventory
- D) Any Gazetted Officer
Show Answer
Correct Answer: C) The officer responsible for the custody of the inventory
3. What action is required when discrepancies are identified during verification under Rule 213 of The General Financial Rules, 2017?
- A) They should be adjusted in the next financial year’s budget.
- B) They must be immediately brought to the notice of the competent authority.
- C) They should be recorded and reviewed during the next annual verification.
- D) Only major discrepancies need to be reported.
Show Answer
Correct Answer: B) They must be immediately brought to the notice of the competent authority.
4. Where should the outcome of the physical verification of fixed assets be recorded as per Rule 213 of The General Financial Rules, 2017?
- A) In the annual financial statement
- B) In a separate report to the Ministry of Finance
- C) In the corresponding stock register
- D) Verbally communicated to the Head of Department
Show Answer
Correct Answer: C) In the corresponding stock register
5. Rule 213 of The General Financial Rules, 2017 mandates annual physical verification for which types of inventory?
- A) Only fixed assets
- B) Only consumable goods and materials
- C) Both fixed assets and consumable goods and materials
- D) Only high-value fixed assets
Show Answer
Correct Answer: C) Both fixed assets and consumable goods and materials
Frequently Asked Questions
What is the primary purpose of Rule 213 of The General Financial Rules, 2017?
The primary purpose of Rule 213 is to ensure the accurate accounting and proper management of government assets by mandating regular physical verification of both fixed assets and consumable materials.
What happens if discrepancies are found during verification under Rule 213 of The General Financial Rules, 2017?
If discrepancies such as shortages, damages, or unserviceable goods are found, they must be immediately reported to the competent authority for appropriate action, in accordance with provisions like Rule 33 to 38 concerning losses.
Does Rule 213 of The General Financial Rules, 2017 apply to both fixed assets and consumables?
Yes, Rule 213 explicitly covers the physical verification procedures for both fixed assets (like furniture and equipment) and consumable goods and materials (like stationery and chemicals).
Key Takeaways
- Mandatory annual physical verification for all fixed assets and consumable goods.
- Verification must be conducted in the presence of the inventory’s custodian.
- All findings, including discrepancies, must be recorded in the stock register and a certificate of verification issued.
- Prompt reporting of shortages, damages, or unserviceable items to the competent authority is essential for accountability.
Conclusion
Rule 213 of The General Financial Rules, 2017 is a cornerstone of sound financial management, ensuring that government departments maintain accurate records and exercise due diligence over their physical assets and consumables. By mandating regular, documented, and supervised verification processes, the rule significantly contributes to preventing losses, promoting accountability, and fostering an environment of financial integrity within the public sector.