CHAPTER XIX
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GENERAL PRINCIPLES OF FINANCIAL DISCIPLINE & MANAGEMENT
203. All Heads of Departments and other controlling and disbursing officers, as well as the officer of the administrative departments in the secretariat who have to deal with budgets and the sanctioning of expenditure, are expected to make themselves thoroughly familiar with the rules contained in this Manual. Adequate knowledge of the important financial and accounting rules contained in the various Financial Handbooks and in the various Departmental Code and Manuals is also necessary for them. Ignorance of rules is never accepted as a plea for absolving an officer from the responsibility devolved on him in financial matters.
204.The need for effective control and strict economy in expenditure has repeatedly been emphasised in various Government order issued from time to time. In spite of this case often come to notice in which it is revealed that some waste of public money has taken place. In relation to certain official transactions, the amounts wasted may be small sums. For example, a telegram may be sent where if a little forethought had been exercised and slightly prompter action had been taken, a letter would have sufficed. A telephone call may be made where a letter might have served the purpose equally well. An urgent telephone call may have been put through where an ordinary call would have been enough. E-mail, fax or speed post facilities may be used, rather than, sending special messenger to distant places. Lights of fans may be left turned on unnecessarily. Excess postage stamps may be put on envelops; and so on. In other case the amounts wasted may be very large sums as when tools and plant are ordered without sufficient care and are later on found to be unsuitable for the purposes on view; or stores and materials are stocked very much in excess of requirements and deteriorate through lack of care or passage of time; or when the execution of large works is taken in hand without proper approved designs or estimates and a necessity of modifying the designs or estimates is discovered at a later stage resulting in certain nugatory expenditure.
The employment of unnecessarily large staff in Government offices, failure to enforce reasonable standards of work and out turn, failure to take proper care of Government property, failure to ensure that the State gets its full money's worth when purchases are made on its behalf of goods or services, are some of the other forms of wastefulness which often come to notice. It is the duty of every public servant to strive to the utmost of his capacity to eliminate all unnecessary or infractuous expenditure.
It is needless to add that any drive for economy in public expenditure can be successful only if the large majority of public servants, and in particular, the senior officers in charge of the important spending departments, participate in the drive and co-operative with the Government to the fullest possible extent. The Head of Departments and other senior officer can do much by precept and example by supervision and by control to make their subordinates truly economy minded.
205. It must be added here that the mere observance of rules and regulations will not result in all the economy that is possible. The observance of the rules and regulations will certainly eliminate many loses which would otherwise have occurred; and to that extent government money will undoubtedly be saved. But rules and regulations are in general designed only to delimit the sphere of any particular type of expenditure and to prevent malpractice. Within that delimitation or restriction, however, there is always considerable scope for the exercise of discretion, specially in regard to the extent of expenditure, on the part of the spending officer. This discretion, if properly exercised, ensures that government money is spent in the most economical manner possible. If the discretion is improperly or carelessly exercised, the rules will merely ensure that the expenditure is not technically irregular. They cannot ensure that the expenditure has been as economically as possible. To put this in other words, spending officers must not only act in strict accordance with the various rules and regulations but should apply those rules and regulations in a spirit of devotion to the interests of the State. The rules should be administered not just mechanically but in an intelligent manner so that the intention behind the rules is fully realised. Spending officers should constantly remind themselves of the fact that every public officer is expected to exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money. The best way of ensuring economy in public expenditure is for every officer to keep this principle in the fore front of his mind always.
206. A related question to which a reference must also be made is the elimination of certain kinds of expenditure. It may be that a particular existing scheme or service is being administered with due regard to economy. But it may be possible either to give up the scheme altogether (because it has outlived is its utility or has not come up to expectations or changed circumstances have made its continuance unnecessary, to amalgamate it with some other allied scheme or service, or it is appreciably reduced).
207. Expenditure on contingencies has to be incurred with utmost care. Attempts are sometimes made, in the closing weeks of the financial year, to use up the full provision for contingencies by making purchase which are either unnecessary or of no real urgency. This practice must stop and no purchase whatsoever of furniture and office equipment etc., for use in office or in touring should be allowed after February 15 in any financial year. The supervisory and inspecting officers in the course of their visit or inspections of their subordinate officers must make a point of checking the details of contingent expenditure and satisfying themselves that the above instruction has not been infringed, that no expenditure has been incurred on avoidable items and that in respect of items which are necessary no lavishness has been indulged in. If any case comes to notice in which Government's instructions have not been observed, the question of taking suitable disciplinary action against the officials at fault should be examined in accordance with proper procedure.
Pro forma Accounts for commercial undertakings
208. As far as possible pro forma accounts should be maintained in respect of all schemes and undertakings of Government which have been declared as "commercial" in such details as may be prescribed by Government in consultation with the Accountant General, and the latest known profit and loss position of each such schemes or undertaking should be indicated when proposals for provision of funds for expenditure are submitted to Government.
Other miscellaneous provisions
209. The Finance Department will maintain a list of officials and of non-official institutions and individuals to whom copies of the budget literature are to be supplied free of cost or on payment. Copies will be supplied to them as soon as they are released for issue.
210.A calendar showing the important dates of the budget activities displayed in office to take timely action on prescribed format (c.f.; Appendix -D)
Zero based budgeting
211.Integrated Financial Advisor, Head of the department, programme officer and finance controller must review and justify the continuity of each unit ( personnel / functions) for the next year. Any type of time overrun, cost overrun and rush of expenditure must be taken seriously.
The surplus resources (Human, Physical and Financial) available in any department or project may be redeployed in important activities of the same department or any other department. Every official must ensure the effective delivery system and value addition to the work assigned. To observe the concept of "One transaction - One data entry - One record" computer based working and its networking is essential. System based working may be designed to avoid personal discretion in routine work.
