Rule 138 of The General Financial Rules 2017 Utilizing Project Savings
Original Rule Text
Visual Summary
Identified from sanctioned estimates.
Savings cannot fund additional, unplanned work.
Required for any deviation from original project scope.
Executive Summary
Rule 138 of The General Financial Rules, 2017, strictly prohibits the application of anticipated or actual savings from a sanctioned project estimate towards any additional work not originally contemplated within that project. Any such deviation, even if savings are available, requires explicit special authority. This rule ensures financial discipline, prevents scope creep, and maintains the integrity of approved project budgets and objectives.
In-Depth Analysis of the Rule
Rule 138 is a critical provision within The General Financial Rules, 2017, designed to enforce stringent financial control over government projects. It addresses the common temptation to utilize unspent funds or savings from one aspect of a project to introduce new, unplanned elements. The core principle is that once an estimate for a definite project is sanctioned, its scope is fixed, and any deviation requires formal re-approval.
Breakdown of the Rule:
- Anticipated or Actual Savings: This refers to any funds that are expected to be left over or have already been identified as surplus from the original budget allocation for a project.
- Sanctioned Estimate for a Definite Project: This emphasizes that the rule applies to projects with clearly defined scopes and approved budgets. The ‘sanctioned estimate’ is the financial approval for that specific scope.
- Additional Work Not Contemplated in the Original Project: This is the crux of the restriction. It means any work, however minor, that was not part of the initial approved plan or scope of the project.
- Without Special Authority: This provides the only avenue for deviation. ‘Special authority’ implies a formal approval process, likely from the same or a higher competent authority that sanctioned the original estimate, after due justification and re-evaluation. It is not an automatic right to reallocate funds.
Practical Example:
Imagine a government department sanctions a budget for constructing a new community center, including specific facilities like a library and a multi-purpose hall. During construction, due to efficient procurement and favorable market conditions, a significant saving is realized. An officer proposes using these savings to add a swimming pool to the center, arguing that it would enhance community welfare. According to Rule 138 of The General Financial Rules, 2017, this is not permissible without obtaining ‘special authority’. The swimming pool was not ‘contemplated in the original project’, and therefore, the savings cannot be unilaterally diverted for its construction, even if funds are available. A formal proposal, justification, and approval from the competent authority would be required to amend the project scope and reallocate funds.
Related Provisions
To fully understand the context of project financial management, consider these related rules:
- Rule 136 of The General Financial Rules, 2017 Commencement of Works and Liabilities: Outlines the conditions that must be met before any work can commence or liability incurred.
- Rule 139 of The General Financial Rules, 2017 Procedure for Execution of Works: Details the broad procedure for the execution of works by Ministries or Departments.
- Rule 65 of The General Financial Rules, 2017 Re-appropriation of Funds: Governs the transfer of funds from one primary unit of appropriation to another within a grant.
Learning Aids
Mnemonics:
- S.A.F.E.: Savings from projects, Additional work, Forbidden without Explicit authority.
Process Flowchart:
Multiple Choice Questions (MCQs)
1. According to Rule 138 of The General Financial Rules, 2017, what is the primary restriction on using savings from a sanctioned project estimate?
- A) They can only be used for emergency repairs.
- B) They must be surrendered to the Finance Ministry immediately.
- C) They cannot be applied to additional work not contemplated in the original project.
- D) They can be freely reallocated to any other project within the same department.
Show Answer
Correct Answer: C) They cannot be applied to additional work not contemplated in the original project.
2. Under Rule 138 of The General Financial Rules, 2017, what is the only condition under which savings from a sanctioned estimate can be used for additional work?
- A) With the approval of the project manager.
- B) If the additional work is minor in nature.
- C) With special authority.
- D) If the financial year is nearing its end.
Show Answer
Correct Answer: C) With special authority.
3. The term “additional work not contemplated in the original project” as per Rule 138 of The General Financial Rules, 2017, refers to:
- A) Minor changes in material specifications.
- B) Any work not included in the initial approved plan or scope.
- C) Cost overruns due to unforeseen circumstances.
- D) Routine maintenance tasks.
Show Answer
Correct Answer: B) Any work not included in the initial approved plan or scope.
4. What kind of savings does Rule 138 of The General Financial Rules, 2017, specifically address?
- A) Savings from the annual departmental budget.
- B) Savings from a sanctioned estimate for a definite project.
- C) Savings from employee salaries.
- D) Savings from procurement of office supplies.
Show Answer
Correct Answer: B) Savings from a sanctioned estimate for a definite project.
5. The underlying purpose of Rule 138 of The General Financial Rules, 2017, is to:
- A) Encourage departments to save money on projects.
- B) Allow flexible reallocation of funds within a project.
- C) Ensure financial discipline and prevent unauthorized scope changes in projects.
- D) Simplify the process of project modifications.
Show Answer
Correct Answer: C) Ensure financial discipline and prevent unauthorized scope changes in projects.
Frequently Asked Questions
What constitutes “special authority” under Rule 138 of The General Financial Rules, 2017?
“Special authority” typically refers to a formal approval from the competent authority that originally sanctioned the project estimate, or a higher authority, after a detailed justification for the proposed additional work and reallocation of savings has been presented and reviewed. It is not an automatic or informal approval.
Does Rule 138 of The General Financial Rules, 2017, apply to minor deviations or only major changes?
Rule 138 is broad in its application, stating “additional work not contemplated in the original project.” This implies that even minor deviations or additions, if not part of the initial approved scope, would require special authority. The intent is to prevent any unauthorized alteration of project objectives or scope using project savings.
Why is this rule important for financial management in government projects?
Rule 138 is crucial for maintaining financial discipline, transparency, and accountability in government spending. It prevents arbitrary changes to project scopes, ensures that funds are utilized for their intended, approved purposes, and helps avoid cost overruns or diversions of funds to unapproved activities, thereby safeguarding public money.
Key Takeaways
- Savings from a sanctioned project estimate cannot be automatically used for new, unplanned work.
- Any application of project savings to additional work requires explicit ‘special authority’.
- The rule reinforces financial discipline and prevents unauthorized scope creep in government projects.
- Adherence ensures that public funds are spent strictly according to approved plans and objectives.
Conclusion
Rule 138 of The General Financial Rules, 2017, serves as a fundamental safeguard against the misuse or misdirection of public funds in project execution. By mandating special authority for any deviation from the original project scope, even when savings are available, it upholds the principles of fiscal prudence and accountability, ensuring that every rupee is spent as intended and approved.