Rule 64 of The General Financial Rules 2017 Additional Allotment for Excess Expenditure

Rule 64 of The General Financial Rules 2017 Additional Allotment for Excess Expenditure

Visual Summary

Executive Summary

Rule 64 of the General Financial Rules, 2017, outlines the critical procedures for managing and addressing excess expenditure. It places the primary responsibility on subordinate authorities to ensure that allocated funds are not exceeded. If an excess is anticipated, the rule mandates obtaining additional allotment beforehand, often by maintaining a ‘Liability Register’ (Form GFR 3). Furthermore, a Disbursing Officer is explicitly prohibited from independently authorizing payments that would lead to an excess. Instead, they must seek orders from their administrative superior, who is then responsible for securing the necessary funds through re-appropriation, supplementary grants, or advances from the Contingency Fund.

In-Depth Analysis of the Rule

Rule 64 is a cornerstone of financial discipline within government operations, specifically targeting the prevention and management of unauthorized excess expenditure. It establishes a clear chain of responsibility and a structured process for addressing situations where allocated funds might be insufficient.

Breakdown of the Rule:

• Subordinate Authority’s Responsibility (Rule 64(1)): The rule unequivocally states that a subordinate authority incurring expenditure is responsible for ensuring that the allotment at its disposal is not exceeded. This proactive stance is crucial for maintaining budgetary control.
• Action on Apprehended Excess (Rule 64(1)): If an excess over the allotment is anticipated, the subordinate authority is required to obtain an additional allotment before incurring the excess expenditure. This emphasizes foresight and adherence to financial planning. The maintenance of a ‘Liability Register’ (Form GFR 3) is prescribed for this purpose, serving as a tool for tracking potential overruns.
• Disbursing Officer’s Limitation (Rule 64(2)): A Disbursing Officer lacks the independent authority to sanction payments that would result in exceeding the allocated funds. This prevents individual officers from unilaterally creating financial liabilities beyond approved limits.
• Seeking Administrative Orders (Rule 64(2)): When a Disbursing Officer faces a claim that would cause an excess, they must refer the matter to their administrative superior. This ensures that decisions regarding excess expenditure are escalated to the appropriate level of authority.
• Administrative Authority’s Role (Rule 64(2)): The administrative authority, upon receiving such a request, is responsible for arranging the necessary funds. This can be achieved through various mechanisms: re-appropriation (transferring funds from another head), obtaining a Supplementary Grant or Appropriation (parliamentary approval for additional funds), or securing an advance from the Contingency Fund (for unforeseen urgent expenditures).

Practical Example:

Consider a government department’s ‘Maintenance of Office Premises’ budget head. A subordinate authority responsible for this budget realizes in January that due to unexpected repairs, the allocated funds for the financial year (ending March 31st) will be insufficient. According to Rule 64(1), this authority must not simply incur the excess. Instead, they must immediately seek an additional allotment. They would consult their ‘Liability Register’ (GFR 3) to document the anticipated overrun. If a Disbursing Officer then receives a bill for a repair that would push the expenditure over the limit, Rule 64(2) dictates that they cannot authorize payment on their own. They must escalate the matter to the administrative authority. This authority would then explore options like re-appropriating funds from another head (e.g., ‘Office Supplies’ if there are savings) or, if necessary, initiate the process for a Supplementary Grant or an advance from the Contingency Fund to cover the legitimate, but unforeseen, expense.

Related Provisions

Understanding Rule 64 is enhanced by reviewing related financial regulations:

• Rule 58 of The General Financial Rules, 2017: Maintenance of Liability Register – Details the requirement for maintaining a register to track liabilities and control expenditure.
• Rule 61 of The General Financial Rules, 2017: Excess Expenditure – Outlines procedures for dealing with excess expenditure and the role of the Chief Accounting Authority.
• Rule 65 of The General Financial Rules, 2017: Re-appropriation of Funds – Explains the process of transferring funds between different units of appropriation to manage budgetary needs.
• Rule 66 of The General Financial Rules, 2017: Supplementary Grants – Describes the process for obtaining additional grants from Parliament when existing provisions are insufficient or for new services.
• Rule 67 of The General Financial Rules, 2017: Advance from Contingency Fund – Provides for obtaining advances from the Contingency Fund for unforeseen expenditures when there is insufficient time for supplementary grants.

Learning Aids

Mnemonics:

• A.A.D.S.A.F.C. – Allotment Always Don’t Surpass. Ask For Correction. (Subordinate Authority must not exceed allotment; must ask for additional funds).
• D.O.N.T. A.C.T. A.L.O.N.E. – Disbursing Officer Never Takes Action Alone; Look Out for Necessary Escalation. (Disbursing Officer must not authorize excess; must seek administrative orders).

Process Flowchart:

Multiple Choice Questions (MCQs)

Frequently Asked Questions

Key Takeaways

• Subordinate authorities are directly responsible for preventing expenditure from exceeding their allotments.
• Anticipated excess expenditure requires proactive steps to obtain additional allotments, often using a ‘Liability Register’.
• Disbursing Officers cannot independently approve payments that would lead to an excess; administrative approval is mandatory.
• Administrative authorities must secure necessary funds for legitimate excess expenditure through re-appropriation, supplementary grants, or contingency fund advances.

Conclusion

Rule 64 of the General Financial Rules, 2017, is fundamental to maintaining fiscal discipline and accountability within government departments. By clearly delineating responsibilities and establishing a structured process for managing excess expenditure, it ensures that public funds are utilized judiciously and within approved budgetary frameworks. Adherence to this rule prevents unauthorized financial liabilities and promotes transparent financial management.