Rule 32 of the General Financial Rules 2017 Remission of disallowances by Audit and writing off of overpayment made to Government servants
Original Rule Text
Visual Summary
Cancelling an audit finding that an expense was improper.
Deciding not to recover extra money paid by mistake to an employee.
The process is not in this rule, but in the ‘Delegation of Financial Powers Rules’.
Executive Summary
Rule 32 provides a mechanism for correcting financial errors. It states that if an audit flags an improper payment (a ‘disallowance’) or if a government employee is paid extra money by mistake (‘overpayment’), a competent authority can cancel the audit objection or decide not to recover the extra amount. This rule clarifies that the specific procedures, powers, and conditions for taking such actions are not detailed here but are laid out in the ‘Delegation of Financial Powers Rules’ and any related instructions.
In-Depth Analysis of the Rule
Introduction
Rule 32 of the General Financial Rules, 2017, serves as a crucial directive for handling specific financial irregularities. It addresses two key situations: when an audit disallows an expenditure and when a government servant receives an overpayment. Instead of providing a detailed procedure, the rule acts as a signpost, directing the authorities to another important document for the actual process.
Breakdown of the Rule
The rule can be broken down into two main components:
- Remission of Disallowances by Audit: An ‘audit disallowance’ occurs when an auditor, during their review, finds an expenditure that violates rules or lacks proper justification. They ‘disallow’ this expense, meaning it’s officially flagged as improper. ‘Remission’ is the act of cancelling or waiving this disallowance. Rule 32 empowers a competent authority to do this, effectively accepting the expenditure despite the auditor’s objection.
- Writing Off of Overpayments: An ‘overpayment’ happens when a government employee receives more money (like salary, allowance, or reimbursement) than they are entitled to, often due to a clerical or calculation error. ‘Writing off’ this amount means the government decides not to recover the excess money from the employee.
- The Governing Framework: The most critical part of Rule 32 is that it explicitly states that the power and procedure for both remitting disallowances and writing off overpayments are governed by the Delegation of Financial Powers (DFP) Rules and any instructions issued under them. This means that to take any action under Rule 32, an officer must refer to the DFP Rules to confirm if they have the authority and what steps they must follow.
Practical Example
Imagine a government department mistakenly calculates an employee’s travel allowance, resulting in an overpayment of ₹2,000. An audit later points this out. The Head of the Office reviews the case and finds it was a genuine administrative error. Instead of recovering the ₹2,000 from the employee, which might cause hardship, the Head of Office consults the Delegation of Financial Powers Rules. The DFP Rules state that an officer of their rank can write off such small, erroneous overpayments. Following the procedure outlined in those rules, they issue an order to write off the amount, and the case is closed. Rule 32 of the GFR is the provision that allows this entire process to be initiated.
Conclusion
In essence, Rule 32 is a rule of delegation and reference. It acknowledges that financial errors like audit disallowances and overpayments will occur and provides a formal basis for their correction. However, it centralizes the authority and procedure for these corrections within the Delegation of Financial Powers Rules, ensuring a standardized and controlled approach across all government departments.
Related Provisions
This rule is closely linked to other rules concerning financial powers, losses, and responsibilities. Understanding these related provisions provides a broader context for financial management:
- Rule 23: Delegation of Financial Powers – This is the primary rule referenced in Rule 32. It establishes that financial powers are delegated to various authorities and that the Finance Ministry holds any powers not specifically delegated.
- Rule 33: Report of Losses – This rule outlines the procedure for reporting any loss of public money or property. An overpayment that is not written off might be treated as a loss and would need to be reported under this rule.
- Rule 37: Responsibility of losses – This provision details how an officer can be held personally responsible for any loss caused by their fraud or negligence. It represents the alternative to writing off a loss or overpayment.
Learning Aids
Mnemonics
- DAW: Rule 32 **D**eals with **A**udit disallowances and **W**rite-offs by pointing to the Delegation of Financial Powers Rules.
Mindmap
Multiple Choice Questions (MCQs)
1. What is the primary source of rules for remitting audit disallowances as mentioned in Rule 32?
- A) The Delegation of Financial Powers Rules
- B) The Constitution of India
- C) The Civil Accounts Manual
- D) Rule 33 of the General Financial Rules
Show Answer
Correct Answer: A) The Delegation of Financial Powers Rules.
2. Under Rule 32, what does ‘remission of disallowances’ refer to?
- A) Punishing the officer responsible for the disallowed expense
- B) Cancelling an audit objection against an expenditure
- C) Reporting the financial loss to a higher authority
- D) Recovering the disallowed amount from the concerned employee
Show Answer
Correct Answer: B) Cancelling an audit objection against an expenditure.
3. A competent authority is considering writing off an overpayment. According to the text of Rule 32, what is the sole basis for their authority and procedure?
- A) Their own discretionary power based on the situation
- B) The specific instructions contained within Rule 32 itself
- C) The provisions of the Delegation of Financial Powers Rules and its associated instructions
- D) A joint decision made in consultation with the Comptroller and Auditor General
Show Answer
Correct Answer: C) The provisions of the Delegation of Financial Powers Rules and its associated instructions.
Frequently Asked Questions
Does Rule 32 explain how to write off an overpayment?
No, Rule 32 itself does not provide the specific steps or procedures. It acts as a directive, stating that the detailed procedures and the authority to write off an overpayment are found in the Delegation of Financial Powers Rules and any instructions issued under it.
Who can decide to cancel an audit disallowance?
A ‘competent authority’ is empowered to do this. The specific officer who qualifies as a ‘competent authority’ for a particular type and amount of disallowance is defined within the Delegation of Financial Powers Rules.
What is the difference between an audit ‘disallowance’ and an ‘overpayment’?
An audit ‘disallowance’ is when an auditor formally rejects an expenditure because it violates rules or lacks proper justification. An ‘overpayment’ is when a government employee receives more money (like salary or allowance) than they were actually entitled to, usually due to an administrative error. Rule 32 provides the guiding principle for addressing both situations.
Key Takeaways
- Expenditures flagged as improper by auditors (‘disallowances’) can be officially cancelled or ‘remitted’.
- Extra money paid by mistake to government employees (‘overpayments’) can be excused or ‘written off’ without recovery.
- The authority to perform these actions and the exact steps to follow are not in this rule but are detailed in the ‘Delegation of Financial Powers Rules’.
- This rule primarily serves to direct officials to the correct set of regulations for handling these specific financial corrections.