Rule 304 of The General Financial Rules 2017 Provident Funds
Original Rule Text
schedules: –
(i) A complete list of subscribers to each fund should be maintained in each disbursing office in the form of the schedule.
(ii) Each new subscriber should be brought on this list and any subsequent changes resulting from his transfer or in the rate of subscription etc. clearly indicated in the schedule.
(iii) When a subscriber dies, quits service or is transferred to another office, full particulars should be duly recorded in the list.
(iv) In the case of transfer of a subscriber to another office, the necessary note of transfer should be made in the list of both the offices.
(v) From this list the monthly schedule to be appended to the pay bill should be prepared and tallied with recoveries made
before the submission of the bill for payment.
(vi) Similar provisions shall also be made towards subscribers to New Pension System (NPS).Rule 304 (2) Crediting of Interest. The deposit accounts of these funds on the Government book will be credited with interest at such rates and at such intervals as may be prescribed by Ministry of Finance in each case.
Visual Summary
Heads of Offices must keep complete lists of Provident Fund subscribers.
Record new subscribers, transfers, subscription rate changes, and service exits.
Deposit accounts are credited with interest at rates and intervals set by the Ministry of Finance.
Executive Summary
Rule 304 of the General Financial Rules, 2017 outlines the procedures for managing Provident Funds and the crediting of interest to their deposit accounts. It mandates Heads of Offices to maintain comprehensive subscriber lists, meticulously record all changes such as new subscribers, transfers, and alterations in subscription rates, and ensure accurate monthly schedules are prepared and tallied with recoveries. Furthermore, it specifies that interest will be credited to these fund accounts at rates and intervals determined by the Ministry of Finance.
In-Depth Analysis of the Rule
Rule 304 establishes the framework for the administration of Provident Funds within government operations, emphasizing meticulous record-keeping and proper financial management. It ensures transparency and accuracy in handling employee contributions and government obligations.
Breakdown of the Rule:
- Provident Funds Management (Rule 304(1)):
- Heads of Offices are responsible for the correct preparation of Provident Fund schedules.
- A complete list of subscribers must be maintained in each disbursing office.
- New subscribers and all subsequent changes (transfers, subscription rate alterations) must be clearly indicated.
- Full particulars of subscribers who die, quit service, or transfer to another office must be recorded.
- In case of transfer, a note must be made in the lists of both the old and new offices.
- Monthly schedules for pay bills must be prepared from this list and tallied with recoveries before bill submission.
- Similar provisions apply to subscribers of the New Pension System (NPS).
- Crediting of Interest (Rule 304(2)):
- Deposit accounts of these funds on the Government book will be credited with interest.
- The rates and intervals for crediting interest are to be prescribed by the Ministry of Finance for each case.
Practical Example:
Imagine a government department’s accounts office. Every month, the Head of Office must ensure that the Provident Fund schedule accurately reflects all employees, their current subscription rates, and any recent changes like new hires, retirements, or transfers. Before submitting the pay bill, the recoveries listed in the schedule must be cross-verified with actual deductions. Simultaneously, the Ministry of Finance periodically issues directives on the interest rates applicable to these Provident Fund accounts, ensuring that the accumulated balances grow as per government policy.
Related Provisions
To gain a more comprehensive understanding of financial management within the General Financial Rules, 2017, consider exploring these related provisions:
Learning Aids
Mnemonics:
- PF: List Changes, Interest Credits. (Helps remember the key aspects of Provident Fund management and interest crediting.)
Process Flowchart:
Multiple Choice Questions
1. What is the primary responsibility of the Head of Offices regarding Provident Funds under Rule 304 of the General Financial Rules, 2017?
- A) Investing fund surpluses in the stock market.
- B) Ensuring correct preparation of Provident Fund schedules.
- C) Approving all subscriber withdrawals without verification.
- D) Setting the interest rates for Provident Fund accounts.
Show Answer
Correct Answer: B) Ensuring correct preparation of Provident Fund schedules.
2. According to Rule 304(1) of the General Financial Rules, 2017, what information must be clearly indicated in the Provident Fund schedule regarding new subscribers?
- A) Their residential address.
- B) Their marital status.
- C) Any subsequent changes resulting from transfer or subscription rate.
- D) Their emergency contact details.
Show Answer
Correct Answer: C) Any subsequent changes resulting from transfer or subscription rate.
3. When a Provident Fund subscriber is transferred to another office, what action is required under Rule 304(1)(iv) of the General Financial Rules, 2017?
- A) The old office must immediately close the subscriber’s account.
- B) A note of transfer should be made in the lists of both the old and new offices.
- C) The new office must open a completely new Provident Fund account.
- D) The subscriber must personally inform the Ministry of Finance.
Show Answer
Correct Answer: B) A note of transfer should be made in the lists of both the old and new offices.
4. Who is responsible for prescribing the rates and intervals for crediting interest to Provident Fund deposit accounts, as per Rule 304(2) of the General Financial Rules, 2017?
- A) The Head of the Office.
- B) The individual subscriber.
- C) The Ministry of Finance.
- D) The Accounts Officer.
Show Answer
Correct Answer: C) The Ministry of Finance.
5. Rule 304(1)(v) of the General Financial Rules, 2017 mandates that the monthly Provident Fund schedule must be tallied with recoveries before what action?
- A) Annual audit.
- B) Submission of the bill for payment.
- C) Transfer of the subscriber.
- D) Crediting of interest.
Show Answer
Correct Answer: B) Submission of the bill for payment.
Frequently Asked Questions
Q: What is the main purpose of Rule 304 of the General Financial Rules, 2017?
A: Rule 304 primarily outlines the procedures for the proper management of Provident Funds, including maintaining subscriber records, updating changes, and ensuring accurate financial schedules, as well as the crediting of interest to these funds.
Q: How are changes in a Provident Fund subscriber’s status handled under Rule 304(1) of the General Financial Rules, 2017?
A: Heads of Offices must ensure that any changes, such as new subscribers, transfers to other offices, alterations in subscription rates, or cessation of service, are clearly indicated and duly recorded in the Provident Fund schedules and lists of both the old and new offices, if applicable.
Q: Who determines the interest rates for Provident Fund deposit accounts as per Rule 304(2) of the General Financial Rules, 2017?
A: The Ministry of Finance is responsible for prescribing the rates and intervals at which interest will be credited to the deposit accounts of Provident Funds on the Government’s books.
Key Takeaways
- Rule 304 of the General Financial Rules, 2017 governs the meticulous management of Provident Funds within government offices.
- Heads of Offices are responsible for maintaining accurate subscriber lists and updating all relevant changes, including new subscribers, transfers, and subscription rate adjustments.
- Monthly Provident Fund schedules must be prepared from these lists and rigorously tallied with actual recoveries before bill submission.
- The Ministry of Finance sets the interest rates and intervals for crediting interest to Provident Fund deposit accounts.
Conclusion
Rule 304 of the General Financial Rules, 2017 is fundamental to ensuring the integrity and proper administration of Provident Funds for government employees. By mandating strict adherence to record-keeping, timely updates, and accurate financial reconciliation, it safeguards the financial interests of subscribers and upholds the principles of sound financial management within the government. Its provisions, including those for the New Pension System, underscore a comprehensive approach to employee welfare and financial accountability.