Rule 61 of The General Financial Rules 2017 Excess Expenditure
Original Rule Text
Visual Summary
Cannot authorize payments exceeding budget without Chief Accounting Authority approval.
FA/CAA must ensure funds via re-appropriation or supplementary demands.
Funds for excess expenditure must come from approved sources.
Executive Summary
Rule 61 of The General Financial Rules, 2017, establishes strict controls over “Excess Expenditure.” It mandates that an Accounts Officer cannot authorize payments exceeding budget provisions without the explicit approval of the Chief Accounting Authority. Furthermore, before granting such concurrence, Financial Advisers and the Chief Accounting Authority must ensure that the necessary funds are secured either through re-appropriation or by obtaining Supplementary Demands for Grants. This rule underscores the government’s commitment to fiscal discipline and proper financial management, ensuring that all expenditures are duly authorized and funded.
In-Depth Analysis of the Rule
Rule 61 is a cornerstone of financial propriety within the General Financial Rules, 2017, specifically addressing the critical issue of managing expenditure that exceeds allocated budget provisions. It sets clear boundaries and processes to prevent unauthorized spending and maintain fiscal accountability across government departments.
Breakdown of the Rule
- Accounts Officer’s Restriction: Sub-rule (1) explicitly states that an Accounts Officer is prohibited from allowing any payment that exceeds the sanctioned budget provisions. This is a fundamental control point, ensuring that the first line of financial processing adheres strictly to budgetary limits. The only exception is if there is specific approval from the Chief Accounting Authority.
- Chief Accounting Authority’s Role: Sub-rule (2) places a significant responsibility on Financial Advisers and the Chief Accounting Authority. Before they can concur with any excess expenditure under a particular head, they must first ensure that adequate funds are available. This availability must be secured through established mechanisms like Re-appropriation (transfer of funds from one head to another within a grant) or Supplementary Demands for Grants (seeking additional funds from Parliament). This ensures that any deviation from the original budget is formally recognized and funded through proper channels, preventing arbitrary overspending.
- Fiscal Discipline: The rule collectively reinforces the principle that government expenditure must be meticulously planned and controlled. Any unforeseen or additional spending requires a formal process of justification and fund allocation, thereby upholding transparency and accountability in public finance.
Practical Example
Imagine the Ministry of Health has a budget for medical supplies. Due to an unexpected surge in a particular illness, the demand for a specific medicine far exceeds the allocated budget. The Accounts Officer, upon receiving bills for this medicine that would push expenditure beyond the budget, must halt payment. To proceed, the Ministry’s Financial Adviser and Chief Accounting Authority would need to identify potential savings from other budget heads (re-appropriation) or, if no such savings exist, initiate a request for a Supplementary Demand for Grants from Parliament. Only after securing these additional funds through the proper channels can the Accounts Officer then authorize the payment for the excess medical supplies, ensuring compliance with Rule 61.
Related Provisions
Rule 61 is closely related to other rules that govern budget management and expenditure control:
- Rule 62 of The General Financial Rules, 2017 Surrender of Savings: This rule outlines the process for surrendering anticipated savings to the Finance Ministry, which is crucial for efficient budget management and complements the control over excess expenditure.
- Rule 65 of The General Financial Rules, 2017 Re-appropriation of Funds: Details the conditions and procedures for transferring funds from one primary unit of appropriation to another, a key method for managing excess expenditure as per Rule 61.
- Rule 66 of The General Financial Rules, 2017 Supplementary Grants: Explains the process for obtaining additional grants from Parliament when existing provisions are insufficient or for “New Service” expenditures, directly supporting the provisions of Rule 61.
Learning Aids
Mnemonics
- Excess Expenditure: Always Check Funds Required. (Accounts Officer, Chief Accounting Authority, Financial Advisers, Re-appropriation)
Process Flowchart
Multiple Choice Questions
1. What is the primary restriction placed on an Accounts Officer by Rule 61 of the General Financial Rules, 2017, regarding excess expenditure?
- A) They must always seek parliamentary approval.
- B) They cannot allow payments exceeding budget provisions without specific Chief Accounting Authority approval.
- C) They can allow payments if the expenditure is urgent.
- D) They must consult the Ministry of Finance for all excess payments.
Show Answer
Correct Answer: B
2. According to Rule 61 of the General Financial Rules, 2017, what must Financial Advisers and the Chief Accounting Authority ensure before concurring with excess expenditure?
- A) That the expenditure is for a new service.
- B) That funds are available through re-appropriation or Supplementary Demands for Grants.
- C) That the Accounts Officer has already made the payment.
- D) That the expenditure is non-recurring.
Show Answer
Correct Answer: B
3. Which of the following is NOT a mechanism mentioned in Rule 61 of the General Financial Rules, 2017, for ensuring availability of funds for excess expenditure?
- A) Re-appropriation
- B) Supplementary Demands for Grants
- C) Direct withdrawal from the Contingency Fund without subsequent regularization
- D) Specific approval of the Chief Accounting Authority
Show Answer
Correct Answer: C
4. If an Accounts Officer identifies that a payment would lead to excess expenditure, what is their immediate action as per Rule 61 of the General Financial Rules, 2017?
- A) Authorize the payment and report it later.
- B) Halt the payment and seek specific approval from the Chief Accounting Authority.
- C) Re-appropriate funds from another head immediately.
- D) Request a Supplementary Demand for Grants directly.
Show Answer
Correct Answer: B
5. Rule 61 of the General Financial Rules, 2017, primarily aims to enforce which of the following principles in government financial management?
- A) Flexibility in spending
- B) Fiscal discipline and accountability
- C) Rapid expenditure authorization
- D) Decentralization of financial powers
Show Answer
Correct Answer: B
Frequently Asked Questions
What is the role of the Accounts Officer under Rule 61 of the General Financial Rules, 2017?
The Accounts Officer’s role is to prevent payments that exceed sanctioned budget provisions unless specific approval from the Chief Accounting Authority has been obtained. They act as the initial gatekeeper against excess expenditure.
How can funds be made available for excess expenditure according to Rule 61 of the General Financial Rules, 2017?
Funds for excess expenditure can be made available through two primary mechanisms: re-appropriation of funds from other budget heads where savings are anticipated, or by obtaining Supplementary Demands for Grants from Parliament.
Does Rule 61 of the General Financial Rules, 2017, allow for any exceptions to its restrictions on excess expenditure?
Yes, the rule allows for exceptions, but only with the specific approval of the Chief Accounting Authority. Even with this approval, the Financial Advisers and Chief Accounting Authority must ensure that funds are made available through re-appropriation or Supplementary Demands for Grants.
Key Takeaways
- Rule 61 strictly prohibits Accounts Officers from authorizing payments beyond budget limits without explicit approval.
- Chief Accounting Authorities and Financial Advisers must secure funds via re-appropriation or supplementary grants for any approved excess.
- The rule emphasizes fiscal discipline, ensuring all government spending is authorized and properly funded.
- It acts as a critical control mechanism to prevent arbitrary overspending and maintain financial accountability.
Conclusion
Rule 61 of The General Financial Rules, 2017, is a vital regulation that underpins sound financial governance. By establishing clear protocols for managing excess expenditure, it ensures that public funds are utilized responsibly and within sanctioned limits. Adherence to this rule is paramount for maintaining budgetary integrity and fostering public trust in government financial operations.