Main Article - Mar, 2005
DRAWING & DISBURSING OFFICER: DUTIES & FUNCTIONS
By
Ch. Srinivasa Rao, Under Secretary, CSIR, New Delhi
Introduction
There are two basic functions involved in the term “Drawing & Disbursing Officer” -- drawing bills and disbursing money. Lexically, “drawing” means to “to remove” withdraw money from a bank while “disbursing” means “to pay out; expend such money. In administrative parlance, “drawing” denotes drawing or preparation of bills for drawing money
We can also say instruments of payment; and the term “disbursing” denotes making payment to the payee.
Under the provisions contained in Central Treasury Rules/Receipts & Payments Rules, the Head of Office may authorize one of the junior Officers to carry out his functions of drawal of money and payments. This Officer is called Drawing & Disbursing Officer (DDO) whose main functions are to look after the regulation of receipt of Govt. money and incurring expenditure and also keeping the accounts of the Office on behalf of the Head of Office.
In CSIR system we hold a different view about DDO. We mostly use the term DDO while in Central Govt. Offices, he is known as “Pay & Accounts Officer”. In CSIR Laboratories, Administrative Officer or Finance & Accounts (F&AO) or a Section Officer from Administrative or Finance streams will be nominated to function as DDO. Before embarking on the job, the DDO should be well versed at least with the basic tenets of all the rules.
It is necessary to be acquainted with the definitions of the following terms:
Competent authority is an authority which is conferred with power to act in a defined manner and in consonance with the spirit of the rules. The relevance of the term "competent authority" stems from the fact that different authorities have been delegated power under various regulations or rules primarily with a view to giving practical orientation to such regulations/rules and removing difficulties in operational situations. The competent authority in relation to a Govt. servant may vary for different purposes.
Head of Department in relation to an Office or Offices under its administrative control means (i) an authority specified in Schedule of the Delegation of Financial Powers Rules, 1978, and (ii) any other authority declared as such under any general or special orders of the competent authority.
Head of Office means (i) a Gazetted Officer declared as such under Rule 14 of the Delegation of Financial Powers Rules, 1978, and (ii) any other authority declared as such under any general or special orders of the competent authority.
Controlling Officer means an Officer entrusted with the responsibility of controlling the incurring of expenditure and/or the collection of revenue. The term shall include a Head of Department and also an Administrator.
Delegation of powers
It is the primary responsibility of the DDO to ascertain the administrative and financial powers of various authorities. where he is ordained to function as DDO. For smooth functioning of drawal of bills of payment and disbursing activity, it is necessary to have a document of ”Delegation of Administrative & Financial Powers” specially drawn for the Lab. depending upon its activities and hierarchical structure.
Scope: The Directors/Heads of National Labs./Instts. shall exercise such financial and administrative powers as delegated by the CSIR from time to time. They can further re-delegate their powers to any Gazetted Officer under their control, subject to certain limitations. The power delegated to the subordinate authority can also be exercised for validation of a sanction already taken or expenditure or liability already incurred. These powers have to be reviewed from time to time in order to make them more effective and meaningful. The Directors of CSIR Labs. shall continue to be responsible for the actions of their subordinate authority with regard to the correctness, regularity and propriety of the power thus exercised.
While the DDO will be drawing and disbursing large amount of money, he does not have financial powers to sanction expenditure whatsoever. Head of Office (HoO) can authorize the DDO to exercise financial powers and those delegated under departmental instructions/executive decisions through an Office Order specifying the extent of power. However, he shall continue to be responsible for the actions of DDO. The DDO while exercising such powers has to use his designation but not as “for the HoO”.
Electronics Clearing System: Of late, the Central Vigilance Commission have been insisting on making necessary arrangement to release salaries, and other payments to staff members and general public through banks under Electronics Clearance System (ECS)/Electronic Fund Transfer (EFT) mechanism. It had also suggested that there should be an enabling environment and facilities to make payments, etc. electronically. CSIR have adopted this order and had initiated necessary action towards this.
Specimen signatures: Immediately on take over as DDO and whenever such DDO goes on leave, any other Officer duly authorised by the Director and duly endorsed by the FAO should take over. For short periods of absence, HoO himself can take over. If the HoO authorizes a subordinate Officer to function as DDO, the HoO is required to furnish specimen signatures of DDO in triplicate on a separate sheet duly attested by an Officer whose specimen signatures are already available with the Banker.
In cases in which the transfer of charge involves assumption of responsibility for cash, etc., the following instructions should be observed:
a) The Cash Book and Imprest account should be closed on the date of transfer and a note recorded in it over the signatures of both the relieved and the relieving Govt. servants, showing the cash and imprest balances and the number of unused cheques, if any, made over and received by them respectively.
b) The relieving Govt. servant reporting that the transfer has been completed should bring to the notice of the competent authority any thing irregular or objectionable in the conduct of business. He should examine the accounts, count, weigh and measure certain selected articles in order to test the accuracy of the returns. He should also describe the state of the account records.
c) In the case of sudden casualty occurring or any emergent necessity arising for a Govt. servant to quit his charge, the next senior officer of the department present shall take charge. When the person who takes charge is not a Gazetted Govt. servant, he must at once report the circumstances to higher authority and obtain orders as to the cash in hand, if any.
d) In CSIR system, the Officer taking over charge should ensure that the outstanding disbursements tally with the Cash Book balance handed over to him. Inter alia, he will also ensure that no time-barred claims are shown under the list.
GoI decisions under Rule 39 of GFR, 1963 stipulate the procedure for communication of financial sanctions and orders A gist of such procedure is outlined hereunder with reference to CSIR Laboratories:
Financial approvals/sanctions: All financial sanctions are to be authenticated by an Officer duly authorized to do so. Such authentication should specify the following components:
a) purpose for which the payment is proposed to be released
b) amount should be mentioned in figures and words
c) authority which has sanctioned
d) if a particular issue involves more than one authority, a mention about such authority should also be made in respect of non-routine issues, that is to say, if a communication is issued with the concurrence of the Finance, the fact is required to be mentioned in the order
e) issues such as additions to pay, etc. should contain a brief account of the issue
f) all expenditure sanctions should indicate relevant budget head.
g) the effective date of issue unless any other date from which they shall come into force is specified therein.
h) the communication in original should always be marked to the Accounts Officer with a copy duly endorsed to the DDO
Expenditure sanction: No expenditure can be incurred without the sanction of the competent authority. No withdrawal shall be permitted for any purpose unless there is a claim for withdrawal complying with the provisions contained in the rules as to the persons by whom and in the form in which the claim shall be preferred duly applying the prescribed checks before directing payment.
It shall be seen that (i) the expenditure is in respect of one of the purposes for which the Council is liable to make payments (ii) the expenditure is for a purpose or work specially sanctioned by the appropriate authority, and (iii) the expenditure is covered by the current budget.
Lapse of a sanction: A sanction lapses, if no payment in whole or part has been made during a period of 12 months from the date of issue of sanction or within any specified period or within the close of the financial year, whichever is earlier. Any claim of a Council servant which is preferred within 3 years of its becoming due could be settled by the DDO/Accounts Officer. All petty claims of a Govt. servant which are more than 3 years old may be admitted only after adequate explanation. In considering old claims of more than 6 years the authority concerned will also take in to account the limited period of preservation of records. Claims of more than 6 years have to be investigated into and paid only with the approval of the Director, subject to the provisions of GFR and other relevant rules.
Drawing money: DDO does not have cheque-drawing power unless specified otherwise. All bills for Contingent charges/personal claims, etc. prepared as per prescribed procedure are presented to the Accounts Officer. In some departments, the DDOs are authorized to draw cheques for payment of salaries, contingents, and other specified categories. In such case, reconciliation of cheques encashed every month is an important function of DDO.
Standards of financial propriety: Every officer incurring or authorizing expenditure from public moneys should be guided by high standards of financial propriety. He should also ensure financial order and strict economy at every step and see that all financial rules and regulations are observed by his own Office and by subordinate disbursing Officers.
Contingent expenditure means all incidental and other expenditure on stores which is incurred for the management of an Office, Laboratory, Workshop, etc. but does not include any expenditure which has been specifically classified as falling under other heads of expenditure as "Works", "Maintenance of Equipment", etc.
Miscellaneous expenditure means all expenditure other than expenditure falling under the category of pay and allowances of Govt. servants, leave salary, pension, contingencies, grants-in-aid, contributions, works, tools and plant, and the like. In CSIR system, “Miscellaneous” head has specific expenditure items indicated under various minor heads. The expenditure so incurred can be classified into any one of these.
Permanent advance: The advance is primarily intended for meeting emergent contingent expenditure. However, the holder of the advance may, at his discretion, utilize it to meet any other bona fide expenditure on Govt. account. Normally, certain amount of money will be maintained with the DDO in order to meet unforeseen emergencies of petty nature. The quantum of such advance for any organization should not as a rule exceed the monthly average of contingent expenditure for the preceding twelve months. The advance should be got recouped at least twice a month. The accountability for the advance, its utilization shall wholly rest on the holder i.e. the DDO. This is familiarly known as “Imprest Advance.
Internal checks: Surprise checks have to be conducted by the HoO and F&AO. The DDO should fully cooperate with the inspection audit party and he shall not withhold any information, books, documents, etc.
Functions
Handling cash and cheques: Every DDO shall maintain a Cash Book which is known as “Subsidiary Cash Book. Before a new book is brought into use, the pages should be counted and certificate recorded.
All monetary transactions should be entered the same day. Cheques received from the Finance & Accounts Officer should be entered on the receipt side immediately on receipt, even if they were to be encashed on the following day. If the cheques encashable on the last working day are received in advance, they may be entered on the day they are due for encashment. For easy reference, it is desirable to mention particulars of bill numbers, etc. against which cheques are received.
Cheques drawn in favour of parties received by DDOs just for handing over to the concerned parties and also cheques received in favour of Director/Finance & Accounts Officer of the Laboratory need not be entered in his Cash Book.
Security of cash: Cash and other valuables in the custody of DDO should be kept in a strong cash chest. The type of chest could be decided depending on the amount of cash/valuables handled. The chest should be embedded in an inner-wall, secured by two locks of different patterns so that each key is kept by a different person, viz. DDO and the Cashier; so as to be able to open the same only when both of them are present. The duplicate set of both the keys should be kept in a sealed cover and lodged with the Bank. A duplicate key register has to be maintained and the fact of their being lodged in the bank recorded giving reference to the Bank’s acknowledgement whenever there is a change in the incumbency of DDO or Cashier, or by 1st April each year.
Security has to be furnished by the Cashier for handling cash. Such security could be in any of the forms as prescribed under GFR-277.
Entrusting Gr. D staff with carrying cash to and from Bank is not desirable. Carrying cash should be done at least by two persons, one of whom could be an Armed Guard. It is always desirable to use staff car while handling cash.
Drawing Bills: Instruments that are drawn by the DDO are pay bills (salaries), CEA, OTA (EDA), medical reimbursement, TA, LTC, PF withdrawals, arrears of pay, etc. The recoveries are Income Tax deducted at source, Licence fee, Provident Fund, CGEGIS, Post Office Insurance Fund, Court Attachments, etc.
The DDO has to ensure correct procedure for disbursement and maintenance of relevant records. The DDO will be personally responsible for the amounts drawn on a bill until he has paid it to the person entitled to receive it and has got the acquittance signed by the payee.
In CSIR system, the Stores & Purchase Officers (SPOs) and Dy. SPOs are empowered to draw bills of payment related to procurement of Stores, such as admitting bills of suppliers of material, FVC bills, Abstract bills, authenticating bills against telephonic orders, etc. All the above guidelines equally apply to them.
Receipts: There should be proper authority not only for making payment but also for receipt of money. Receipt of money could be from the staff members as well as outsiders such as contractors or general public. The bills for payment should be drawn on appropriate form and such payment should be authorised by the appropriate authority.
All moneys received by Labs. should be immediately brought to account and remitted into the Bank. Money received should not be used to meet any departmental expenditure. Even for receipt of money, there should be proper authorization. On receipt of cash, a receipt in the prescribed form should be issued to the payer after ensuring that the amount has been properly accounted for in the Cash Book. If the amount is received in the form of cheque, receipt would be given only after the cheque is cleared. Meanwhile a simple acknowledgement of receipt of cheque may be issued.
In respect of amount received in cash towards “Miscellaneous Receipts”, entry should be made by giving reference to the receipt number. Similarly, entry for remittance to Bank should contain reference to the Bank’s challan number. If the remittance is by cheque/DD, the date or realization of the same should be indicated in red ink against the remittance entry on receipt of the receipted challan from the Bank. For disbursement of salaries, etc. entry should be made for the total amount disbursed during the day against each bill separately.
Bill/Voucher: A bill is a statement of claims against the Govt. containing specification of the nature and amount of the claim either in gross or by items presented in the form of a simple receipt. A bill becomes a voucher only on its payment
Withdrawal: Money should be withdrawn from Govt. account only when it is required for immediate disbursement. Withdrawal should not be made in anticipation of demands or to prevent the lapse of allocated budget. Withdrawal should be made only by presentation in prescribed bill forms for contingent charges, personal claims, etc.
Closing entries: The Subsidiary Cash Book will be maintained by the DDO while the main Cash Book is maintained by the F&AO. The total for the day should be struck and shown separately. The closing balances under each column will be entered on the payment side and thereafter the progressive total for the month. At the end of the month, the “closing balance” of the last working day will be carried over to the first working day of the succeeding month as “opening balance” on the receipt side.
Physical verification: It shall be the responsibility of the DDO to verify the daily totals in Cash Book. Every entry both on the receipt and payment side should be initialled by him. In case of cash receipts, entry should be made simultaneously with the issue of receipt to the party and the entry for payment will be checked with reference to the challan from the Bank. Erasures and over writings in Cash Book are not permitted. The method of correcting an error is to strike-off the incorrect entry and insert the correct entry in red ink and signed. On the last working day of the month, or at least on the following day, the DDO should verify the “cash on hand” with reference to the closing balance and record a signed and dated certificate as follows:
Certified that cash amounting to Rs….. (Rupees………………only) has been physically verified and found correct as per the balance recorded in the Cash Book.
Signature
Date:
Any discrepancy noticed during verification should be reported to the higher authorities.
Un-disbursed pay & allowances: A Register of Un-disbursed Pay & Allowances has to be maintained by the DDO. Periodical inspection of this register helps in avoiding the payments lying un-disbursed for a long time. On the basis of this, a list has to be displayed on the Notice Board for the information of the employees. Amounts pending un-disbursed for a long time have to be deposited into the Lab. Account.
Imprest Register: A Register with columns to suit the requirements of the Office may be maintained by the DDO to make entries for the advances which are paid to meet unavoidable urgent expenses and their subsequent adjustment. Early settlement of Imprest advance is a must as it results in non-availability of the same for other urgent requirements.
Financial proposals are expected to be routed through DDO. The DDO will also participate in preparation of budget, scrutiny, submission of detailed estimates, etc. The DDO is responsible for maintenance of careful watch over expenditure in important non-recurring objects. The DDO is required to exercise effective control over the expenditure with reference to budget provisions. However, in CSIR system, it is not being adopted due to different kind of monitoring mechanism.
Custody of documents: As per rules custody of agreements, mortgage deeds, Fidelity Bonds, fixed deposit receipts, etc. are required to be kept in the safe custody of the authority sanctioning the expenditure/ advance. But as a convention, the agreements, mortgage deeds, bonds are being maintained by COA/Head of Office (HoO), while the FDRs are retained with the F&AO for effecting timely renewal/ encashment, etc. In some of the Labs., these are kept in the custody of DDOs.
Preservation of records: As per GFR, schedule for preservation of the records pertaining DDO’s Office is detailed hereunder:
i) Pay bill register … 35 years
ii) Subsidiary Cash book … 10 years
iii) Counterfoils of cheques paid … 5 years
iv) Cheques returned by Banker … 5 years
v) Arrear claims … 3+1 years after completion of audit
whichever later
vi) Acquittance rolls … 3+1 -do-
vii) Schedule of Estt. Pay bills … 3+1 -do-
viii) Contingent Expenditure Reg. … 3+1 -do-
Identification of non-staff: In order to release any payment towards arrears of salary, pension, leave encashment, gratuity and other kinds of moneys due and admissible particularly to the spouses or family members of the deceased employees, the DDO should first establish the identity of such persons to his satisfaction, verify the attestations, etc. before disbursing the payment.
Cash bills: In respect of cash bills, it is necessary that such bills should contain an acknowledgement of receipt of money or a stamp “Paid” should be affixed across them.
Bill details: The bills should invariably contain particulars such as (i) name and address of the party/firm (ii) name of office/designation in whose favour the bill is drawn (iii) date (iv) material supplied/service rendered (v) total amount both in figures and words, and (vi) signature of the party/firm.
Bills certification: The bill towards supply of materials should contain a certificate of receipt of items in good condition by the Indentor, details of stock entry duly endorsed by the authorized Officer for payment/adjustment of advance drawn. Similarly, bills for services should be paid only on certification by the concerned with regard to their satisfactory completion/ performance after making necessary entries in the Log books/Work register, etc. The DDO has to verify the correctness of the bills and the entries in the relevant registers/records and then only admit for payment/adjustment of the advance drawn, and write “Passed for payment for Rupees in figures and words”.
Contingent bills: Items of expenditure which cannot be met from the Imprest can be processed for payment through “Fully Vouched Contingent” (FVC) Bills. The bills after payment will be entered in Contingent Register. No pay and allowances should be drawn on Contingent bill.
Encashment of cheques: Cheques will be drawn in favour of DDO by designation only. However, the Cashier can be authorized to draw cash on endorsement at the back of such cheques by the DDO.
Acquittance rolls: The acquittance rolls should be neatly bound as a book duly numbered serially and certified. It should contain serial number, name of the payee, designation, amount payable and space for obtaining the signature of the payee as a token of receipt. The acquittance roll should also contain reference to the particulars of each bill. The acquittance roll is the only record that shows disbursement of amounts payable to the payee, and remains as a receipt from the payee once the disbursement is made.
When a Council servant is unable to sign the acquittance roll due to his illness, the amount can be paid to the person who has been nominated to receive payments from Provident Fund through a proper authorization letter duly verified by the DDO. Immediately after release of payment against signature, it should stamped as “Paid” with date. Similarly items paid the next day are to be affixed with date. It will facilitate reconciliation with receipts and payments on that particular day. Once the payments in the acquittance roll are complete, the DDO should record “Disbursement Certificate” and preserve the same as per rules.
Court attachments: Amounts deducted from pay and allowances have to be remitted to the Court which has issued the attachment. Normally, a maximum of 1/3rd of the salary drawn by the Council servant is liable to be deducted. In case of decree for maintenance, 2/3rd of the salary can be attached. The cost of remittance to the Court, if any, shall be deducted from the amount realized and net amount remitted to the Court.
Income Tax: It is the responsibility of Head of Office/DDO being the authority for making payment of salaries of staff to deduct Income Tax from salary on the basis of calculation at the prescribed rates every year. The DDO has to issue a certificate of tax deducted to each Council servant in whose case tax has been deducted during a financial year in Form 16 which shall contain details of income and deductions effected, rebate on IT allowed and total amount deducted and remitted towards Income Tax, etc.
Signing of NDC: The DDO is required to sign the No Demand Certificate in respect of staff members whenever they happen to go on transfer/resign/retire/die or dismissed from service after duly verifying as to whether any amount is lying outstanding against such individual in terms of advances towards TA/LTC/contingencies, etc. If any amount is due from him, the DDO should then record on the NDC in red ink in figures and words and sign.
References
1. Swamy’s Hand Book (2005), Swamy Publishers (P) Ltd., Chennai
2. General Financial Rules (2002), Swamy Publishers (P) Ltd., Chennai
3. DDOs and Head of Offices: Part II: Establishment (2001), Swamy Publishers (P) Ltd., Chennai
4. DDOs and Head of Offices: Part I: Finance & Accounts (2000), Swamy Publishers (P) Ltd., Chennai
5. Swamy’s Complete Manual on Establishment and Administration for Central Govt. Offices (1999), Swamy Publishers (P) Ltd., Chennai
6. Cash and Accounts Manual (1964), CSIR, New Delhi
Ch. Srinivasa Rao, Under Secretary, CSIR, New Delhi
Introduction
There are two basic functions involved in the term “Drawing & Disbursing Officer” -- drawing bills and disbursing money. Lexically, “drawing” means to “to remove” withdraw money from a bank while “disbursing” means “to pay out; expend such money. In administrative parlance, “drawing” denotes drawing or preparation of bills for drawing money
We can also say instruments of payment; and the term “disbursing” denotes making payment to the payee.
Under the provisions contained in Central Treasury Rules/Receipts & Payments Rules, the Head of Office may authorize one of the junior Officers to carry out his functions of drawal of money and payments. This Officer is called Drawing & Disbursing Officer (DDO) whose main functions are to look after the regulation of receipt of Govt. money and incurring expenditure and also keeping the accounts of the Office on behalf of the Head of Office.
In CSIR system we hold a different view about DDO. We mostly use the term DDO while in Central Govt. Offices, he is known as “Pay & Accounts Officer”. In CSIR Laboratories, Administrative Officer or Finance & Accounts (F&AO) or a Section Officer from Administrative or Finance streams will be nominated to function as DDO. Before embarking on the job, the DDO should be well versed at least with the basic tenets of all the rules.
It is necessary to be acquainted with the definitions of the following terms:
Competent authority is an authority which is conferred with power to act in a defined manner and in consonance with the spirit of the rules. The relevance of the term "competent authority" stems from the fact that different authorities have been delegated power under various regulations or rules primarily with a view to giving practical orientation to such regulations/rules and removing difficulties in operational situations. The competent authority in relation to a Govt. servant may vary for different purposes.
Head of Department in relation to an Office or Offices under its administrative control means (i) an authority specified in Schedule of the Delegation of Financial Powers Rules, 1978, and (ii) any other authority declared as such under any general or special orders of the competent authority.
Head of Office means (i) a Gazetted Officer declared as such under Rule 14 of the Delegation of Financial Powers Rules, 1978, and (ii) any other authority declared as such under any general or special orders of the competent authority.
Controlling Officer means an Officer entrusted with the responsibility of controlling the incurring of expenditure and/or the collection of revenue. The term shall include a Head of Department and also an Administrator.
Delegation of powers
It is the primary responsibility of the DDO to ascertain the administrative and financial powers of various authorities. where he is ordained to function as DDO. For smooth functioning of drawal of bills of payment and disbursing activity, it is necessary to have a document of ”Delegation of Administrative & Financial Powers” specially drawn for the Lab. depending upon its activities and hierarchical structure.
Scope: The Directors/Heads of National Labs./Instts. shall exercise such financial and administrative powers as delegated by the CSIR from time to time. They can further re-delegate their powers to any Gazetted Officer under their control, subject to certain limitations. The power delegated to the subordinate authority can also be exercised for validation of a sanction already taken or expenditure or liability already incurred. These powers have to be reviewed from time to time in order to make them more effective and meaningful. The Directors of CSIR Labs. shall continue to be responsible for the actions of their subordinate authority with regard to the correctness, regularity and propriety of the power thus exercised.
While the DDO will be drawing and disbursing large amount of money, he does not have financial powers to sanction expenditure whatsoever. Head of Office (HoO) can authorize the DDO to exercise financial powers and those delegated under departmental instructions/executive decisions through an Office Order specifying the extent of power. However, he shall continue to be responsible for the actions of DDO. The DDO while exercising such powers has to use his designation but not as “for the HoO”.
Electronics Clearing System: Of late, the Central Vigilance Commission have been insisting on making necessary arrangement to release salaries, and other payments to staff members and general public through banks under Electronics Clearance System (ECS)/Electronic Fund Transfer (EFT) mechanism. It had also suggested that there should be an enabling environment and facilities to make payments, etc. electronically. CSIR have adopted this order and had initiated necessary action towards this.
Specimen signatures: Immediately on take over as DDO and whenever such DDO goes on leave, any other Officer duly authorised by the Director and duly endorsed by the FAO should take over. For short periods of absence, HoO himself can take over. If the HoO authorizes a subordinate Officer to function as DDO, the HoO is required to furnish specimen signatures of DDO in triplicate on a separate sheet duly attested by an Officer whose specimen signatures are already available with the Banker.
In cases in which the transfer of charge involves assumption of responsibility for cash, etc., the following instructions should be observed:
a) The Cash Book and Imprest account should be closed on the date of transfer and a note recorded in it over the signatures of both the relieved and the relieving Govt. servants, showing the cash and imprest balances and the number of unused cheques, if any, made over and received by them respectively.
b) The relieving Govt. servant reporting that the transfer has been completed should bring to the notice of the competent authority any thing irregular or objectionable in the conduct of business. He should examine the accounts, count, weigh and measure certain selected articles in order to test the accuracy of the returns. He should also describe the state of the account records.
c) In the case of sudden casualty occurring or any emergent necessity arising for a Govt. servant to quit his charge, the next senior officer of the department present shall take charge. When the person who takes charge is not a Gazetted Govt. servant, he must at once report the circumstances to higher authority and obtain orders as to the cash in hand, if any.
d) In CSIR system, the Officer taking over charge should ensure that the outstanding disbursements tally with the Cash Book balance handed over to him. Inter alia, he will also ensure that no time-barred claims are shown under the list.
GoI decisions under Rule 39 of GFR, 1963 stipulate the procedure for communication of financial sanctions and orders A gist of such procedure is outlined hereunder with reference to CSIR Laboratories:
Financial approvals/sanctions: All financial sanctions are to be authenticated by an Officer duly authorized to do so. Such authentication should specify the following components:
a) purpose for which the payment is proposed to be released
b) amount should be mentioned in figures and words
c) authority which has sanctioned
d) if a particular issue involves more than one authority, a mention about such authority should also be made in respect of non-routine issues, that is to say, if a communication is issued with the concurrence of the Finance, the fact is required to be mentioned in the order
e) issues such as additions to pay, etc. should contain a brief account of the issue
f) all expenditure sanctions should indicate relevant budget head.
g) the effective date of issue unless any other date from which they shall come into force is specified therein.
h) the communication in original should always be marked to the Accounts Officer with a copy duly endorsed to the DDO
Expenditure sanction: No expenditure can be incurred without the sanction of the competent authority. No withdrawal shall be permitted for any purpose unless there is a claim for withdrawal complying with the provisions contained in the rules as to the persons by whom and in the form in which the claim shall be preferred duly applying the prescribed checks before directing payment.
It shall be seen that (i) the expenditure is in respect of one of the purposes for which the Council is liable to make payments (ii) the expenditure is for a purpose or work specially sanctioned by the appropriate authority, and (iii) the expenditure is covered by the current budget.
Lapse of a sanction: A sanction lapses, if no payment in whole or part has been made during a period of 12 months from the date of issue of sanction or within any specified period or within the close of the financial year, whichever is earlier. Any claim of a Council servant which is preferred within 3 years of its becoming due could be settled by the DDO/Accounts Officer. All petty claims of a Govt. servant which are more than 3 years old may be admitted only after adequate explanation. In considering old claims of more than 6 years the authority concerned will also take in to account the limited period of preservation of records. Claims of more than 6 years have to be investigated into and paid only with the approval of the Director, subject to the provisions of GFR and other relevant rules.
Drawing money: DDO does not have cheque-drawing power unless specified otherwise. All bills for Contingent charges/personal claims, etc. prepared as per prescribed procedure are presented to the Accounts Officer. In some departments, the DDOs are authorized to draw cheques for payment of salaries, contingents, and other specified categories. In such case, reconciliation of cheques encashed every month is an important function of DDO.
Standards of financial propriety: Every officer incurring or authorizing expenditure from public moneys should be guided by high standards of financial propriety. He should also ensure financial order and strict economy at every step and see that all financial rules and regulations are observed by his own Office and by subordinate disbursing Officers.
Contingent expenditure means all incidental and other expenditure on stores which is incurred for the management of an Office, Laboratory, Workshop, etc. but does not include any expenditure which has been specifically classified as falling under other heads of expenditure as "Works", "Maintenance of Equipment", etc.
Miscellaneous expenditure means all expenditure other than expenditure falling under the category of pay and allowances of Govt. servants, leave salary, pension, contingencies, grants-in-aid, contributions, works, tools and plant, and the like. In CSIR system, “Miscellaneous” head has specific expenditure items indicated under various minor heads. The expenditure so incurred can be classified into any one of these.
Permanent advance: The advance is primarily intended for meeting emergent contingent expenditure. However, the holder of the advance may, at his discretion, utilize it to meet any other bona fide expenditure on Govt. account. Normally, certain amount of money will be maintained with the DDO in order to meet unforeseen emergencies of petty nature. The quantum of such advance for any organization should not as a rule exceed the monthly average of contingent expenditure for the preceding twelve months. The advance should be got recouped at least twice a month. The accountability for the advance, its utilization shall wholly rest on the holder i.e. the DDO. This is familiarly known as “Imprest Advance.
Internal checks: Surprise checks have to be conducted by the HoO and F&AO. The DDO should fully cooperate with the inspection audit party and he shall not withhold any information, books, documents, etc.
Functions
Handling cash and cheques: Every DDO shall maintain a Cash Book which is known as “Subsidiary Cash Book. Before a new book is brought into use, the pages should be counted and certificate recorded.
All monetary transactions should be entered the same day. Cheques received from the Finance & Accounts Officer should be entered on the receipt side immediately on receipt, even if they were to be encashed on the following day. If the cheques encashable on the last working day are received in advance, they may be entered on the day they are due for encashment. For easy reference, it is desirable to mention particulars of bill numbers, etc. against which cheques are received.
Cheques drawn in favour of parties received by DDOs just for handing over to the concerned parties and also cheques received in favour of Director/Finance & Accounts Officer of the Laboratory need not be entered in his Cash Book.
Security of cash: Cash and other valuables in the custody of DDO should be kept in a strong cash chest. The type of chest could be decided depending on the amount of cash/valuables handled. The chest should be embedded in an inner-wall, secured by two locks of different patterns so that each key is kept by a different person, viz. DDO and the Cashier; so as to be able to open the same only when both of them are present. The duplicate set of both the keys should be kept in a sealed cover and lodged with the Bank. A duplicate key register has to be maintained and the fact of their being lodged in the bank recorded giving reference to the Bank’s acknowledgement whenever there is a change in the incumbency of DDO or Cashier, or by 1st April each year.
Security has to be furnished by the Cashier for handling cash. Such security could be in any of the forms as prescribed under GFR-277.
Entrusting Gr. D staff with carrying cash to and from Bank is not desirable. Carrying cash should be done at least by two persons, one of whom could be an Armed Guard. It is always desirable to use staff car while handling cash.
Drawing Bills: Instruments that are drawn by the DDO are pay bills (salaries), CEA, OTA (EDA), medical reimbursement, TA, LTC, PF withdrawals, arrears of pay, etc. The recoveries are Income Tax deducted at source, Licence fee, Provident Fund, CGEGIS, Post Office Insurance Fund, Court Attachments, etc.
The DDO has to ensure correct procedure for disbursement and maintenance of relevant records. The DDO will be personally responsible for the amounts drawn on a bill until he has paid it to the person entitled to receive it and has got the acquittance signed by the payee.
In CSIR system, the Stores & Purchase Officers (SPOs) and Dy. SPOs are empowered to draw bills of payment related to procurement of Stores, such as admitting bills of suppliers of material, FVC bills, Abstract bills, authenticating bills against telephonic orders, etc. All the above guidelines equally apply to them.
Receipts: There should be proper authority not only for making payment but also for receipt of money. Receipt of money could be from the staff members as well as outsiders such as contractors or general public. The bills for payment should be drawn on appropriate form and such payment should be authorised by the appropriate authority.
All moneys received by Labs. should be immediately brought to account and remitted into the Bank. Money received should not be used to meet any departmental expenditure. Even for receipt of money, there should be proper authorization. On receipt of cash, a receipt in the prescribed form should be issued to the payer after ensuring that the amount has been properly accounted for in the Cash Book. If the amount is received in the form of cheque, receipt would be given only after the cheque is cleared. Meanwhile a simple acknowledgement of receipt of cheque may be issued.
In respect of amount received in cash towards “Miscellaneous Receipts”, entry should be made by giving reference to the receipt number. Similarly, entry for remittance to Bank should contain reference to the Bank’s challan number. If the remittance is by cheque/DD, the date or realization of the same should be indicated in red ink against the remittance entry on receipt of the receipted challan from the Bank. For disbursement of salaries, etc. entry should be made for the total amount disbursed during the day against each bill separately.
Bill/Voucher: A bill is a statement of claims against the Govt. containing specification of the nature and amount of the claim either in gross or by items presented in the form of a simple receipt. A bill becomes a voucher only on its payment
Withdrawal: Money should be withdrawn from Govt. account only when it is required for immediate disbursement. Withdrawal should not be made in anticipation of demands or to prevent the lapse of allocated budget. Withdrawal should be made only by presentation in prescribed bill forms for contingent charges, personal claims, etc.
Closing entries: The Subsidiary Cash Book will be maintained by the DDO while the main Cash Book is maintained by the F&AO. The total for the day should be struck and shown separately. The closing balances under each column will be entered on the payment side and thereafter the progressive total for the month. At the end of the month, the “closing balance” of the last working day will be carried over to the first working day of the succeeding month as “opening balance” on the receipt side.
Physical verification: It shall be the responsibility of the DDO to verify the daily totals in Cash Book. Every entry both on the receipt and payment side should be initialled by him. In case of cash receipts, entry should be made simultaneously with the issue of receipt to the party and the entry for payment will be checked with reference to the challan from the Bank. Erasures and over writings in Cash Book are not permitted. The method of correcting an error is to strike-off the incorrect entry and insert the correct entry in red ink and signed. On the last working day of the month, or at least on the following day, the DDO should verify the “cash on hand” with reference to the closing balance and record a signed and dated certificate as follows:
Certified that cash amounting to Rs….. (Rupees………………only) has been physically verified and found correct as per the balance recorded in the Cash Book.
Signature
Date:
Any discrepancy noticed during verification should be reported to the higher authorities.
Un-disbursed pay & allowances: A Register of Un-disbursed Pay & Allowances has to be maintained by the DDO. Periodical inspection of this register helps in avoiding the payments lying un-disbursed for a long time. On the basis of this, a list has to be displayed on the Notice Board for the information of the employees. Amounts pending un-disbursed for a long time have to be deposited into the Lab. Account.
Imprest Register: A Register with columns to suit the requirements of the Office may be maintained by the DDO to make entries for the advances which are paid to meet unavoidable urgent expenses and their subsequent adjustment. Early settlement of Imprest advance is a must as it results in non-availability of the same for other urgent requirements.
Financial proposals are expected to be routed through DDO. The DDO will also participate in preparation of budget, scrutiny, submission of detailed estimates, etc. The DDO is responsible for maintenance of careful watch over expenditure in important non-recurring objects. The DDO is required to exercise effective control over the expenditure with reference to budget provisions. However, in CSIR system, it is not being adopted due to different kind of monitoring mechanism.
Custody of documents: As per rules custody of agreements, mortgage deeds, Fidelity Bonds, fixed deposit receipts, etc. are required to be kept in the safe custody of the authority sanctioning the expenditure/ advance. But as a convention, the agreements, mortgage deeds, bonds are being maintained by COA/Head of Office (HoO), while the FDRs are retained with the F&AO for effecting timely renewal/ encashment, etc. In some of the Labs., these are kept in the custody of DDOs.
Preservation of records: As per GFR, schedule for preservation of the records pertaining DDO’s Office is detailed hereunder:
i) Pay bill register … 35 years
ii) Subsidiary Cash book … 10 years
iii) Counterfoils of cheques paid … 5 years
iv) Cheques returned by Banker … 5 years
v) Arrear claims … 3+1 years after completion of audit
whichever later
vi) Acquittance rolls … 3+1 -do-
vii) Schedule of Estt. Pay bills … 3+1 -do-
viii) Contingent Expenditure Reg. … 3+1 -do-
Identification of non-staff: In order to release any payment towards arrears of salary, pension, leave encashment, gratuity and other kinds of moneys due and admissible particularly to the spouses or family members of the deceased employees, the DDO should first establish the identity of such persons to his satisfaction, verify the attestations, etc. before disbursing the payment.
Cash bills: In respect of cash bills, it is necessary that such bills should contain an acknowledgement of receipt of money or a stamp “Paid” should be affixed across them.
Bill details: The bills should invariably contain particulars such as (i) name and address of the party/firm (ii) name of office/designation in whose favour the bill is drawn (iii) date (iv) material supplied/service rendered (v) total amount both in figures and words, and (vi) signature of the party/firm.
Bills certification: The bill towards supply of materials should contain a certificate of receipt of items in good condition by the Indentor, details of stock entry duly endorsed by the authorized Officer for payment/adjustment of advance drawn. Similarly, bills for services should be paid only on certification by the concerned with regard to their satisfactory completion/ performance after making necessary entries in the Log books/Work register, etc. The DDO has to verify the correctness of the bills and the entries in the relevant registers/records and then only admit for payment/adjustment of the advance drawn, and write “Passed for payment for Rupees in figures and words”.
Contingent bills: Items of expenditure which cannot be met from the Imprest can be processed for payment through “Fully Vouched Contingent” (FVC) Bills. The bills after payment will be entered in Contingent Register. No pay and allowances should be drawn on Contingent bill.
Encashment of cheques: Cheques will be drawn in favour of DDO by designation only. However, the Cashier can be authorized to draw cash on endorsement at the back of such cheques by the DDO.
Acquittance rolls: The acquittance rolls should be neatly bound as a book duly numbered serially and certified. It should contain serial number, name of the payee, designation, amount payable and space for obtaining the signature of the payee as a token of receipt. The acquittance roll should also contain reference to the particulars of each bill. The acquittance roll is the only record that shows disbursement of amounts payable to the payee, and remains as a receipt from the payee once the disbursement is made.
When a Council servant is unable to sign the acquittance roll due to his illness, the amount can be paid to the person who has been nominated to receive payments from Provident Fund through a proper authorization letter duly verified by the DDO. Immediately after release of payment against signature, it should stamped as “Paid” with date. Similarly items paid the next day are to be affixed with date. It will facilitate reconciliation with receipts and payments on that particular day. Once the payments in the acquittance roll are complete, the DDO should record “Disbursement Certificate” and preserve the same as per rules.
Court attachments: Amounts deducted from pay and allowances have to be remitted to the Court which has issued the attachment. Normally, a maximum of 1/3rd of the salary drawn by the Council servant is liable to be deducted. In case of decree for maintenance, 2/3rd of the salary can be attached. The cost of remittance to the Court, if any, shall be deducted from the amount realized and net amount remitted to the Court.
Income Tax: It is the responsibility of Head of Office/DDO being the authority for making payment of salaries of staff to deduct Income Tax from salary on the basis of calculation at the prescribed rates every year. The DDO has to issue a certificate of tax deducted to each Council servant in whose case tax has been deducted during a financial year in Form 16 which shall contain details of income and deductions effected, rebate on IT allowed and total amount deducted and remitted towards Income Tax, etc.
Signing of NDC: The DDO is required to sign the No Demand Certificate in respect of staff members whenever they happen to go on transfer/resign/retire/die or dismissed from service after duly verifying as to whether any amount is lying outstanding against such individual in terms of advances towards TA/LTC/contingencies, etc. If any amount is due from him, the DDO should then record on the NDC in red ink in figures and words and sign.
References
1. Swamy’s Hand Book (2005), Swamy Publishers (P) Ltd., Chennai
2. General Financial Rules (2002), Swamy Publishers (P) Ltd., Chennai
3. DDOs and Head of Offices: Part II: Establishment (2001), Swamy Publishers (P) Ltd., Chennai
4. DDOs and Head of Offices: Part I: Finance & Accounts (2000), Swamy Publishers (P) Ltd., Chennai
5. Swamy’s Complete Manual on Establishment and Administration for Central Govt. Offices (1999), Swamy Publishers (P) Ltd., Chennai
6. Cash and Accounts Manual (1964), CSIR, New Delhi
