Tuesday, February 21, 2012


5.1 The rules contained in the compilation of General Financial Rules which are essentially executive orders of the President, describe primarily the financial powers of different authorities subordinate to the Federal Government and the procedure prescribed by the President which should be followed by them in securing and spending of funds required for discharge of functions entrusted to them. All departmental authorities are expected to follow these rules, supplemented or modified by the special rules and instructions, if any, contained in their departmental regulations and other special orders applicable to them.
5.2 The fundamental principle of the public finance is that all monetary transactions to which a Government servant may be a party in his public capacity should be brought to account without delay. AH the money received as due to the Government or for deposit in the custody of the Govern­ment should be credited to the public account by depositing it in the bank or treasury. If a Government Officer receives in his public capacity any moneys, which are not Government dues or authorised by Government these should be kept separate from the Government account. A separate account should he opened for that money in a branch of State Bank or National Bank or Post Office Saving Bank or in any other bank with the prior approval of the Government and the money deposited therein. The officer concerned shall be personally responsible to see that money out of that account has been spent strictly in accordance with the regulations governing that particular fund Proper account is kept of all the transactions and accounts are subjected to proper audit checks.
5.3 As regards the revenues and other receipts of the Government, it is the primary duty of the officers concerned to see that dues of Government are correctly and promptly assessed, quickly realised and immediately deposited into the Government treasury.

5.4 No authority can incur expenditure or enter into any liability involving expenditure from the public, account, until the expenditure has been sanctioned by a general or special order of the President or of any other authority, to which the powers have been delegated. Further the proposed expenditure should have been provided for in the authorised grants and appropriations for the year. No money can be removed from the public account for investment or deposit elsewhere without the prior consent of Ministry of Finance.
5.5 Every officer authorised to incur expenditure from the public funds should observe high standards of financial propriety; a few of them are:
(i)   Every public servant is expected to exercise the same vigilance in respect of expenditure from public money, as a person of ordinary prudence would exercise in respect of expenditure of his own money;
(ii)   The expenditure should not be prima-facie more than the occasion demands;
(iii) No authority should pass any order which will be directly or indirectly to his own benefit;
(iv)  Public moneys should not be utilised for the benefit of a particular person or section of the community unless:—
(a)   The expenditure involved is insignificant; or
(b)   A claim for the amount can be enforced in a Court of Law; or
(c)  The expenditure is in pursuance of a recognized policy or custom; and
(v) The amount of allowances should be so regulated that it is not, on the whole, a source of profit to the recipients.
5.6 All Heads of Departments are responsible for enforcing financial order and strict economy at every step. They should ensure that all financial rules are strictly adhered to.
5.7    (i) The duty of controlling officer is not only to sec that the total expenditure is kept within the limits of the appropriation, but he has also to see that the funds are expended in the public interest and for those objects only for which the money was provided. In order to exercise proper control he should keep himself informed of what has actually been spent against an appropria­tion and that what commitments and liabilities have been and will be incurred against it. In the discharge of these duties he has to assume full responsibility before the Government and the Public Accounts Committee. He has to justify the excesses or explain financial irregularities that may be pointed out by the audit or otherwise.
(ii) Internal check against irregularities, waste and fraud.—In the discharge of his ultimate responsibilities for the administration of an appropriation or part of an appropriation placed at his disposal, every Controlling Officer must satisfy himself not only that adequate provisions exist within the departmental organisation for systematic internal checks calculated to prevent and detect errors and irregularities in the financial proceedings of its subordinate officers and to guard against waste and loss of public money and stores, but also that the prescribed checks are effectively applied. For this purpose each Head of the Department will get the accounts of his office and those of the subordinate disbursing officers, if any, inspected at least once in every financial year by a Senior Officer not connected with the account matters to see whether:—
(a)   Rules on handling and custody of cash are properly understood and applied;
(b)  Effective system of internal check exists for securing regularity and propriety in the various transactions including receipt and issue of stores, etc., if any; and
(c)  Satisfactory, arrangement exists for systematic and proper maintenance of Account Books and other ancillary records concerned with the Initial Accounts.
(iii) The results of these inspections should be incorporated in the form of an inspection report, copy of which should be endorsed to Audit. The Head of the Department should, after his scrutiny of the report, communicate to the Audit a copy of his remarks thereon and any orders issued in that connection.
Note.—The term "Senior Officer" should be taken to mean that the officer who inspects the accounts should be higher in status than the officer who maintains or prepares the accounts. It has necessarily to be left to the discretion of the competent authority to appoint such an officer for the inspection of the accounts as could give him an independent report on the state of accounts, records etc., proposed to be subjected to review. In exercising his discretion in the matter, the competent authority would no doubt, ensure that the contemplated inspection is entrusted to a senior B.P.S. 17 Officer or above who has had sufficient background of the Financial Rules and Orders and could carry out the check satisfactorily.
5.8 There should be no delay in the payment of money indisputably due by Government as it is contrary to all rules and budgetary principles.
5.9    (i) Every controlling officer is personally responsible for the accuracy and completeness of the accounts in respect of public money.
(ii) An Officer who signs or countersigns a certificate is personally responsible for the facts certified to, so far as it is his duty to know or to the extent to which he may reasonably be expected to be aware of them. The fact that a certificate is printed is no justification for his signing it unless it represents the facts of the case. If in its printed form it does not represent the facts, it is his duty to make any necessary amendment which will call attention to the deviation and so to give the authority concerned the opportunity of deciding whether the amendment covers the requirements.
5.10 It is the duty of every Department/Controlling Officer to afford all reasonable facilities to the Accountant General in the discharge of his functions. He should be furnished the fullest possible information which he may ask for in connection which the preparation of an account or report which it is his duty to prepare. No information or book should be withheld which is within the statutory rights of the Auditor-General to see.
           5.11 Contracts can be entered into only by those officers who have been empowered by or under the orders of the President. The following general principles should be followed by all authorities who have to enter into contract or agreements involving expenditure from the public account:—
(a) The terms of contract should be precise and definite leaving no room for ambiguity or mis-construction;    
(b) Before the contracts are finally drawn legal and financial advice should be obtained, where possible;
(c) Standard forms of contract should be adopted, wherever possible and the terms should be subjected to adequate prior scrutiny;
(d) The terms of contract, once entered into, should not be materially varied except with the prior consent of the competent authority. No payments to contractors by way of compensation, or otherwise, outside the strict terms of the contract or in excess of the contract rates may be authorised without the previous approval of the Ministry of Finance:
(e) Any uncertain or indefinite liability or any condition of unusual character should not be included in a contract without the prior approval of the Ministry of Finance;
(f) Whenever practicable and advantageous contracts, should be placed only after inviting tenders, if the lowest tender is not accepted reasons therefor should be recorded;
(g) While selecting tenders for acceptance, the financial status of the bidders should be taken into consideration;
(h) Even if in certain cases a formal contract is not deemed necessary, there should be a written agreement as to the price, while placing an order;
(i) In cases where Government property is entrusted to a contractor, there should be a provision in the contract for safe-guarding it; and
(j) When & contract is likely to run for a period of more than 5 years it should include a provision for an unconditional power of revoca­tion and cancellation by Government at any time on the expiry of 6 months notice to that effect.
5.I2  (i) The losses of public money, departmental receipts, stamps and stores etc., caused by defalcation or otherwise should be reported immediately by the officer concerned to his superiors and to the Accountant General, even if the loss has been made good by the party responsible for it. This report should not be held up while detailed enquiries are being made. After full investigations a detailed report should follow on the nature and extent of loss, errors or neglect of rules which caused the loss and prospects, if any, of-effecting a recovery should be fully brought out. The departmental officer who receives the above report should himself submit a detailed report to the higher authorities/Government, which should incorporate the causes or circumstances which led to the loss, the steps taken to prevent its recurrence and disciplinary action taken against the delinquents.
(ii) Every Government officer should realise fully that he will be held responsible for any loss sustained by the Government through fraud or negligence on his part or on the part of any other officer to the extent to which it may be proved that he contributed through his own negligence or action.
5.13(i) The following instructions shall be observed by the Ministries/ Divisions and their Attached Departments and subordinate offices in dealing with cases of loss to Government:—
1. The first and the foremost duty of those concerned, in the event of any loss to Government coming to notice, is to initiate timely and prompt action for fixing the responsibility for such losses.
2. Thereafter, prompt suitable action must be initiated against those found responsible. Disciplinary cases, if initiated and/or court cases filed, must be pursued vigorously for securing the earliest possible decisions on them.
3.  If anyone dealing with these cases, at any stage is found to have glossed over the defaults or deliberately or negligently delayed to initiate action at (1) & (2) above or slackened in the vigorous pursuit of action so initiated, in order to secure the final decision at the earliest possible, he should be subjected to due disciplinary action.
(ii) Attention is also drawn to the instructions contained in Appendix 2 to the Compilation of the General Financial Rules, Vol. I in which it has, inter-alia, been stressed that it is of the greatest importance to avoid delay in the investigation of any loss due to fraud, negligence, financial irregularity, etc. Should the administrative authority require the assistance of the Accountant General in pursuing the investigation, he may call on that officer for* all vouchers and other documents that may be relevant to the investigation; and if the investigation is complex and he needs the assistance of an expert audit officer to unravel it, he should apply forthwith _ for that assistance to Government which will then negotiate with the Accountant General for the services of an investigation staff. Thereafter, the administrative authority and the audit authority will be personally responsible, within their respective spheres for the expeditious conduct of the enquiry.
(Finance Division O.M No F. 3 (1)-R. 12/81, dated 14th April, 1981)
5.14 Any serious loss of Government immovable property through flood, fire or earthquake, etc., should be reported immediately to the higher authorities. The causes and extent of loss should be fully brought out in the report and copy thereof sent to the Accountant General.
5.15 All Departmental regulations embodying orders or instructions of financial character should be made with the approval of the Ministry of Finance.
5.16 The departmental controlling officers have to ensure that all sums due to Government are regularly and promptly assessed, realised and duly credited to the public account. They should obtain monthly accounts and returns of receipts from their subordinates and compare them with those of the treasury as received through the Accountant-General. Any error, omission or discrepancy coming to notice should be notified immediately and got rectified. No amount due to government should be left-outstanding without sufficient reasons and where any dues appear to be finally irrecoverable, suitable action should be initiated for their write off. No sums should be credited to revenue with debit to a suspense head. Credit must follow and not precede actual realization.
5.17 Detailed rules and procedure should be laid down for assess­ment, collection, remission, etc., of revenue and the Ministry of Finance should be kept fully informed of the progress of collection of revenue. Any important variations compared with the budget estimates should also be brought to their notice.
5.18 (i) The responsibility for financial operations of the Federal Government, in exercise of executive authority, rests with the President, whose sanction (given either directly or by persons to whom necessary powers have been delegated) is necessary to all expenditure from the Federal Consolidated Fund and Public Account. The general orders regarding delegation of financial powers to Ministries/Divisions, Heads of Departments and Ambassadors etc., are contained in Appendices 3, 3-A, 4 and 5 of the Compilation of General financial Rules, read with the Ministry of Finance O.M. No. F. 1 (5) R. 12/80 dated 11-3-1981.
(ii) The financial powers of the Federal Government, which have not been delegated to any other Ministry, Department or authority vest in the Ministry of Finance.
(iii) Unless otherwise provided by any special rule or order of Govern­ment a higher authority may exercise the powers delegated to an authority subordinate to it.
5.19  (i) Subject to the limits and conditions specified by the Finance Division a competent authority may sanction the write off of the irrecoverable value of stores, public money lost by fraud, negligence of individuals or other causes. This is, however, subject to the condition that the loss does not disclose a defect of system, the amendment of which requires the orders of higher authority and there has not been any serious negligence on the part of some individual Government officer or officers, which may call for disciplinary action requiring the orders of a higher authority.
       (ii) Ministries/Divisions of the Federal Government may waive the recovery of an amount disallowed by an audit officer otherwise found to have been overpaid to a Government servant provided:—
(i) The amount disallowed has been drawn by the Government servant in good faith (that he was entitled to it);
(ii) The enforcement of recovery would be physically impossible or is likely to cause undue hardship to the Government servant concerned;
(iii) The Government servant is not in receipt of pay exceeding Rs. 12,000 per year; and
(iv) The overdrawal has not been occasioned by delay in notifying a promotion or reversion.
5.20 All sanctions to forego recovery should be communicated to the Accountant-General. It is open to the Accountant-General to insist that the action taken should be referred to the Ministry of Finance for orders.
5.21 All financial sanctions and orders issued by various authorities within the financial powers delegated to them are communicated direct to the Accountant-General. All sanctions beyond the powers of the Ministries and Divisions should be sent through the Ministry of Finance. The Accountant-General will not refuse obedience to a sanction which was sent to him direct, but will report to the Ministry of Finance that such an order has been issued and may be communicated to him in due course. Where prior concurrence has been obtained from the Ministry of Finance, Financial Adviser, Deputy Financial Adviser, Assistant Financial Adviser and Auditor-General, this fact should duly be embodied in the sanction.
5.22 The orders conveying sanction for the grant of additions to pay such as special pay or compensatory allowance should contain a brief summary of the reasons for such additions. This would enable the Accountant-General to classify the additions to pay properly. In cases where the communi­cations of reasons is not considered desirable in an open letter, the reasons may be communicated to the Accountant-General confidentially.
5.23 All sanctions to expenditure should invariably indicate the source of appropriation. If the expenditure is to be met by re-appropriation, supplementary grant' or in anticipation of the communication of the budget grant, it may be so stated.
5.24 All sanctions to expenditure have effect from the date of ordtrs conveying the sanction. Normally retrospective effect should not be given to financial sanction, but when special circumstances so require, the approval of the Ministry of Finance should be obtained. A sanction which is not acted upon during the course of a financial year lapses with the end of the year.
5.25 (a) The powers of various authorities regarding creation of permanent and temporary posts are given in the Finance Division O.M No F. 1 (5) R. 12/80 dated the 11th March, 1981.The proposals for additions to establishment, whether permanent or temporary, or for the increase in emoluments of the existing establishment should be scrutinized by the Heads of Departments with greatest care. In submitting proposals for the expansion of establishment, the following information should also be given:—
(i)   The present cost of the establishment;
(ii) Details of the pay of the post or posts and the number of posts which it is proposed to add or modify;
(iii) As accurate an estimate as possible of the extra cost (both pay and allowances even possible claims for pension) involved and
(iv) The funds, whether within the budget grant or through reappropriation or supplementary grant.
(b) No head of office is at liberty to readjust the pay of Government servants by giving one Government servant more and another less than the sanctioned pay of the post, nor can he distribute the pay of an absentee otherwise than as provided for in the rules. But in the case of non-gazetted establishment divided into separate units or cadres, carrying different scales of pay, it is permissible to make excess appointments in a lower unit or cadre against an equal or greater number of vacancies left unfilled in the higher one.
5.26  (i) As a general rule, and subject to any special orders to the contrary in particular cases, the headquarters of a Government servant ob the staff of a Government, as for instance, a Secretary to a Government, or a clerk in a Government Secretariat are the headquarters, for the time being, of the Government, to which he is attached.
(ii) The headquarters of any other Government servant are either the station which has been declared to be r-s headquarters by the authority which appoints him, or, in the absence of such declaration the station where the records of his office are kept.
(c.f paras 1 — 3, part II. Appendix 3 FR & SR, Vol II)
5.27 (i) The charge of an office must be made-over at its head­quarters, both the relieving and the relieved Government servants being present, unless for special recorded reasons (which must be of a public nature) the authority under whose orders the transfer takes place permits or requires it to be made in any particular case elsewhere, or otherwise.
(ii) Officers proceeding on long leave, transfer or retirement should sign a certificate of transfer of charge (Form TR-I) under Rule 114 of General Financial Rules, Vol. I. In cases where the transfer of charge involves assumption of responsibility for cash, stores, etc., the instructions laid down in rule 44 of Treasury Rules, Volume I and rules 115 and 150 of the General Financial Rules, Vol. I should be followed. As regards maintenance and handing/taking over of classified and accountable documents adequate instructions exist vide paras 25 to 29 of the booklet "Security of Classified Matters in Government Departments".
(iii) Apart from the procedure being followed in respect of cash, stores etc. mentioned in para 1 above, the officer proceeding on leave, transfer or retirement should also prepare a brief note (Note to successor) describing important cases, major issues and the directions in which they are developing and any other matter that his successor should know.
(Finance Division O.M No F. 8/6/74-F. I. dated the 7th February, 1974)
(iv) Transfer of charge of a gazetted officer should be reported to the Accountant General. The copies of charge reports should also be sent to the Head of the Department and other controlling officers, where the assumption of charge involves responsibility in respect of cash, stores, and stamps, the following instructions should also be followed:—
(i)   The cash book or imprest account should be closed on the date of transfer and a note recorded to that effect over the signature of the relieved and the relieving officers. The cash in hand and unused cheques should be duly counted and result thereof recorded;
(ii)  The relieving officer should examine the accounts, inspect the stores, count, weigh and measure certain selected articles and bring to notice anything irregular or objectionable. He should also describe the state of accounts records; and
(iii)  In the case of a sudden casualty occurring or any emergent necessity arising for an officer to quit charge, the next senior officer of the department should take charge. Where the next man available is not a gazetted officer, he should immediately inform his nearest departmental superior and obtain necessary orders.
5.28 On appointment every Government servant is required to declare his date of birth according to the Christian era and the declaration should be duly supported by a Matriculation Certificate or Municipal Birth Certificate, etc.
The date of birth should be duly recorded in the Service Book, Service Roll and History of Service, etc.
Where the actual date of birth is not known, the following procedure should be adopted and date of birth determined accordingly:—
(i)  Where the year and month of birth are known, the 16th of the month should be treated as date of birth;
(ii)  where only the year of birth is known, 1st July should be the date of birth; and
(iii) in case both year and month are not known, the Government servant should be asked to state his approximate age. The number of years representing his age should be deducted from his date of appointment and the corresponding date will be the date of birth.
(iv) when a person who first entered Military employ is subsequently employed in a civil department, the date of birth for the purpose of the civil department should be the date stated by him at the time of enrolment, or if at the time of enrolment he stated only his age, the date of birth should be deduced with reference to that age according to the method indicated in sub-para (iii) above.
5.29   The leave applications should be submitted to the higher authorities in form G.F.R. 13.
5.30 At a fixed time every year the service books should be taken up by the head of the office and after satisfying himself that all the relevant entries have been correctly made therein, record the following certificate:—
"Service verified up to---------from (the record from which the verification is made)
5.31 When a Government servant is transferred to another office his service should be verified up to the date of transfer and his service book forwarded to the office to which he has been transferred.
5.32 In case of non-gazetted Government servants, who officiate as gazetted officers, their service books should be kept by the head of office to which the Government servants permanently belong and when they are confirmed as gazetted officers, the service books should be forwarded to the Accountant-General's office for record.
5.33 (i) A treasury officer cannot entertain the claim of pay and allowances of a Government servant, if it has not been preferred within six months of their becoming due without an authority from the Accountant-General. Similarly an Accountant-General cannot audit a claim which is more than one-year old, unless he is authorised by a competent authority to investigate the claim.
(ii) The claims, which are more than three-year old are time-barred and cannot be paid unless sanctioned by the Ministry of Finance. Normally all time-barred claims should be refused at the very outset, unless there are very strong reasons, such as, their effects on pension, etc.
5.34 The financial powers of various authorities to sanction contin­gent expenditure are laid down in Appendix 8 to the G.F.R. Vol. II, read with SI. No. 15, Annexure II, of the Ministry of Finance O.M. No. F. 1(5) R. 12/80 dated the 11th March, 1981. Within the limits of these powers expenditure can be incurred on contingencies, provided the amount of appropriation is available for the purpose. Where any special rules, restriction, limit or scales have been laid down for the expenditure on contingencies, those should be adhered to. Contingent expenditure of an unusual character or involving departure from a set practice should not be incurred, nor any liability undertaken in connection therewith, without the previous sanction of the Government.
5.35 Permanent advance is granted to officers who have to make payments, before they place themselves in funds by drawing on the treasury. The amount of advance is fixed by the Government up to the amount advised as appropriate by the Accountant-General. The Heads of Departments may sanction permanent advances for their subordinate officers in consultation with the Accountant-General, but in the case of a Head of Department himself, it will be sanctioned by the next superior administrative authority. All applications for revision or increase of advance should be submitted to the sanctioning authority through the Accountant-General who will advise as to the appropriate amount of advance. If there is difference of opinion between the former and latter, the matter should be referred to the Government for orders.
5.36 The advances should not be multiplied unnecessarily. If the subordinates of an officer require petty sums, he should spare a small portion of his own advance rather than apply for a separate advance for them. He can advance the money to them after taking acknowledgements as usual.
5.37 This advance is primarily intended to provide for emergent petty advances of all kinds. If a BPS-1 or 2 Government servant is required to travel by rail, his fare may be paid from this advance. The cost of service books required for office establishment may be met initially from the permanent advance, which will be recouped from the amount realised by the sale of the books to Government servants.   
5.38 (i) The holder of the advance is responsible for its safe custody and he must always be ready to account for the total amount of money. In case of transfer of charge and yearly on the 15th July, each officer holding an advance must send an acknowledgement to the Accountant General, of the amount due from and accountable for by himself as on the 30th June, preceding.
(ii) Finance Division has decided that the FAs/DFAs may fix special imprest for obtaining P.O.L. supplies from petrol pump set up by the Benevolent Fund without referring the matter to the AGPR, relaxation of Para 132 (iii) of GFR Vol. I. subject to the following conditions:
(a)   In no case the special imprest for POL supplies shall exceed Rs.50,000.
(b)  Concurrence of AGPR shall be obtained later in each case before furnishing the requisite details mentioned in the Note below para 132 (Hi) of GFR Vol. I.
[Finance Division O.M No F. 3 (15) E.V/80-R.12 dated 22-3-81]

5.39   (i) An authority, which is competent to incur contingent expen­diture, may sanction the purchase of stores required for use in the public service in accordance with the instructions contained in Appendix 8 of the G.F.Rs Vol. II, or any general or special orders issued from time to time. The purchase must be made in the most economical manner, and in conformity with the definite requirements of the public service. Piecemeal purchases should be avoided as far as possible.
(ii) It is advisable to prepare periodical -indents and make bulk purchases, but this does not mean that stores may be purchased much in advance of the actual requirements. Where scales of consumption have been laid down by competent authorities, care should be taken that the scale is not exceeded. The purchase orders should not be split up in order to avoid the necessity of obtaining the sanction of higher authority.
(iii) The detailed procedure for procurement of stores from within the country and through the Pakistan Missions abroad is contained in Annexure 'A' to Rule 144 of the G.F.Rs Vol. I and should be rigidly followed.
5.40 While examining the accounts of the Federal Government for the year 1971-72 it was inter-alia, noticed by the Ad-Hoc Public Accounts Committee that in a case where tenders had been invited, negotiations were held with the highest bidder and the firm which had quoted the lowest rate was ignored and not asked to bid again. Thus, the negotiations were, firstly, entered into with only one of the tenders and that also the highest one. Secondly, the lowest bidder was not given any opportunity at all to quote for the second time. The sanctity of the tender was hence violated and the Government interest went by the board. The Committee, therefore, recommended that the Government departments be again advised to ensure that irregularities of this nature were strictly guarded against and those found responsible for them should be dealt with severely, according to the rules.
[Finance Division O.M No F. 3(1)—R.12/81, dated 14-4-1981]
5.41 All stores received should be examined, counted, measured or weighed, as the case may be, when delivery is taken. The officer responsible for the stores should see that the quantities are correct and their quality good, and record a certificate to that effect. The officer should also record a certificate to the effect that he has actually received the material and recorded them in the appropriate stock register.
5.42 When material is issued from the stock, this should be done on receipt of an indent in the prescribed form. The material should be delivered only after obtaining an acknowledgement therefor and making necessary entries in the relevant stock registers.
5.43 All the officers entrusted with stores are required to take special care for their safe custody, keeping them in good and efficient condition and protect them from loss, damage or deterioration. Suitable accommodation should be provided for valuable and combustible stores. Suitable accounts and inventories should be kept for all kinds of stores—Dead Stock, consumable articles, perishable stores and Library Books, etc. The stock accounts may vary according to the nature of stores. It is preferable to keep the inventories at the site of the stores.
5.44 In the case of Government Commercial Undertakings priced accounts have to be kept. In such cases the fixation of prices should be done with reasonable accuracy. The prices once fixed should be periodically reviewed and revised, if necessary1, in accordance with the market prices of the stores. The losses and depreciation should also be exhibited properly.
5.45 A physical verification of stores should be carried out at least once a year by a competent authority. The work should not, however, be entrusted to a person:-
(i) Who is the custodian, the ledger keeper or the accountant of the stores to be verified or who is a nominee or is employed under the store keeper, ledger keeper or the accountant?
(ii) Who is not conversant with the classification, nomenclature or technique of the stores to be verified-; or
(iii)  Who is a low paid subordinate?
As far as possible this work should be entrusted to a responsible officer who is independent of the superior executive officer in charge of the stores. While carrying out the physical verification it is necessary that it should be done in the presence of the custodian of stores or of a responsible person deputed by him.
5.46 A certificate of verification of stores with its results should be recorded on the inventory. All discrepancies should be brought to account immediately, so that the stores account may represent the true state of stores. Shortages, damages and unserviceable stores should be reported to the competent authority to write off the loss.
5.47 The stores should not be held in excess of requirements of a reasonable period or in excess of any prescribed maximum limit. For this purpose a periodical inspection should be conducted by a responsible officer, who should submit a report in respect of surplus and obsolete stores. This inspection should be done yearly and in respect of perishable stores six monthly.
5.48   (i) the previous sanction of competent authority is required to writing off all losses, deficiencies or depreciation in the value of stores.
(ii) The obsolete, surplus or unserviceable stores may be disposed of by sale or otherwise under the orders of competent authority, but all orders declaring the stores as unserviceable should contain reasons for condemning them as unserviceable. The cost of those stores, which have either been lost or damaged should be written off under the orders of the competent authority.
WORKS (RULES 176 TO 200):
5.49 All the central buildings and other works are divided into the following classes for the purpose of administration and control:
(i)   Military works—Buildings, defence works and ancillary services intended for different branches of the Defence Services, which are carried out by or on behalf of the Military Engineering Services;
(ii) Public works—Civil Works, Irrigation, Navigation, Embank­ment and Drainage Works under the administrative control of the Pakistan Public Works Department; and
(iii) Buildings and other works under the administrative control of the Departments; using or requiring them, e.g.—
(a)   all works pertaining to the Railways, Posts and Telephones, Telegraphs, Forest, Salt, Lighthouses, Broadcasting and other quasi-commercial departments and undertakings;
(b)   works pertaining to the Mint;
(c)   Archaeological works in connection with conservation of ancient monuments;
(d)   Construction and maintenance of civil aerodromes; and
(e)   Any other works or class of works allotted under orders of the Government to the Departments using or requiring them.
5.50 The administrative control means, inter alia, the assumption of full responsibility for the construction, maintenance and upkeep of buildings and other works and the provision of funds for the execution of these projects. The initiation, authorisation and execution of these works should be regulated by detailed rules and orders contained in the respective departmental regula­tions and other special orders applicable to them.
5.51 As a general rule no work should be commenced or liability incurred until:—
(a)   Administrative approval has been obtained from an appropriate authority;
(b)   Expenditure sanction has been obtained;
(c)   A properly detailed design and estimate has been sanctioned; and
(d)   Funds to cover the charge during the year have been provided by a competent authority.
5.52 If due to certain emergent reasons a superior authority requires the execution of certain work and that involves the infringement of these fundamental rules the authority concerned should be asked to convey its orders in writing and the audit officer apprised of this situation. The approximate amount of the liability should also be intimated to him
5.53 Tile powers delegated to various authorities regarding administrative approval, expenditure sanction and appropriation and re-appropriation of funds are contained in the Finance Division O.M. No. F. 1 (5)-R. 12/80 dated the 11th March, 1981. For the purpose of approval and sanction, a group of works which forms one project should be treated as one work. The necessity of obtaining the sanction of the higher authority for a project, which consists of a group of such works, should not be avoided simply because each particular work within the project is within the power of approval of a lower authority. 'Similarly an authority granted by a sanction to an estimate should be treated as strictly limited to the precise objects which the estimate was intended to provide. All anticipated or actual savings on a sanctioned estimate for a definite project should not, without specific authority, be applied to carry out additional work not contemplated in the original estimate. Any development of project deemed necessary while the work is in progress, should always be covered by a supplementary estimate.
5.54. In order to facilitate the preparation of estimates and finalization of contract agreements, a schedule of rates for each kind of work commonly executed should be maintained in each locality and kept up-to-date. These rates should generally agree with those of the estimates. Where there is any deviation ample reasons therefor should be given.
5.55 The provision for expenditure in respect of all buildings and works pertaining to civil departments which have not been specifically allotted so other departments is included in the grant for 'Civil Works' to be administered and accounted for by the P.P. W.D. No work is executed with the funds partly provided in the budget of the department and partly from the budget for civil works. All the Civil Works are charged to the Major Function.300 Community Services and Major Object 300 Construction of Works.
5.56 All rules relating to execution of works, appropriating and re-appropriating of funds are contained in the Central Public Works Department C ode and Central Public Works Account Code. These rules will be applicable in those cases also where certain works are executed by Provincial P.W.D. and Military Engineering Service, etc., as an agency for the P.P.W.D.
5.57 In cases where for administrative or economic reasons certain buildings under the charge of P.P.W.D, are entrusted to any civil department original works and special repairs costing Rs. 2,500 or less and all ordinary repairs irrespective of cost in respect of such buildings may be carried out by the Head of Department concerned in accordance with such instructions as are issued by the P.P.W.D. Provision for such work will be made under the Major Object as mentioned in Para 5.55 In such cases while the full budgetary control rests with the P.P.W.D., the charges incurred by a civil department may be drawn under the rules and procedure governing contingent expenditure In all other cases in which a civil department is entrusted with the execution of Central Public Works, the Departmental Officer carrying out the work will act as a Public Work Disburser and will be guided by the rules and regulations of the P.P.W.D.
5.58 In respect of those buildings and works which are under the administrative control of departments other than the P.P.W.D. all original works and special repairs costing more than *Rs. 25,000 should he executed through the agency of the P.P.W.D., unless there are specific orders to the contrary. This work can be entrusted to a Provincial P. W.D., or M .E.S. also as agency of the P.P.W.D. In case it is not convenient to entrust the work to any of these, the audit officer should invariably be consulted at the initial stage; i.e. prior to an agreement being entered into with an architect or contractor, so that suitable arrangements may be made for normal audit and financial control.
*[Finance Division O.M No F. 3(I4) R. 12/88 dt. 5-4 1988]
5.59 The works and repairs connected with sanitary, water supply and electric installations to Government buildings, where such buildings are not in charge of the M.E.S. or Railways are carried out by or through the agency of P.P.W.D. except in special cases under orders of Government.
5.60  (i) No authority lower than the Head of Local Administration is competent to authorise the acquisition of a building by purchase despite the fact that the purchase might have been sanctioned by a competent authority, in all these cases a survey and valuation report is submitted by the P.P.W.D to the head of the local administration.
(ii) Any public building which is not a purely temporary structure should not be sold or dismantled without the previous sanction of the Government, if the cost exceeds Rs. 10,000, or of the Chief Engineer. Pak P.W.D. or of the Head of Local Administration, if otherwise
5.61 The powers of sanction for payment of grants-in-aid are contained in Annexure II, item (xxiv), Finance Division O.M. No. F. 1(5) R.12/80 dated 11-3-1981. Every order sanctioning a grant should specify clearly the object for which the grant is given and conditions governing it. In case of non­recurring grants for specified objects the time limit within which the grant is to be spent should be clearly stipulated.Only that much part of the grant should be paid during any financial year as is likely to be expended during that year. The grant may be made in installments also according to the need of work such as buildings, water supply schemes, etc. The authority signing or countersign­ing a bill for grant-in-aid should see that money is not drawn in advance of requirements. There should be no occasion for rush of payments of these grants in the month of June.
5.62 All the bodies and institutions receiving the grants should be required to produce audited accounts for every year. It is not necessary that audit should be done by Pakistan Audit Department only. It would be sufficient if the accounts are certified as correct by a registered accountant or other recognized body of auditors. This is very necessary in order to ensure that grant-in-aid is justified by the financial position of the grantee and that the previous grant was spent for the purpose for which it was intended. In case of smaller institutions which cannot afford to get their accounts audited, the sanctioning authority can exercise its discretion of exempting them from submission of the audited accounts.
5.63 In all sanctions for grant-in-aid communicated to the Accountant General, it should be stated whether the audited statements of accounts have been received or whether the grantee has been exempted from submitting the statement.
5.64 Where conditions are attached to the utilisation of a grant in the form of specification of particular objects of expenditure or the time within which the money should be spent, or otherwise, the officer who signs or countersigns the bill for grant-in-aid will be primarily responsible for certifying to the Accountant General the fulfilment of the prescribed conditions. This certificate should be furnished in such form and at such intervals as may be agreed to between the Department and the Accountant General. The manner in which the departmental officer will satisfy himself before furnishing the certificate is for him to decide. He may, for example, call for progress reports from time to time or arrange for periodical inspections.
5.65 Every grant made for a specified object is subject to the following implied conditions:—
(i)   that the grant will be spent on the object within a reasonable time, even if no time limit has been specified; and

 (ii)   that any portion of the amount which is not ultimately required for expenditure on that objects should be duly surrendered to the Government. All "grants-inlaid not utilised within the financial year or any unspent balance thereof lapse and the amount should be surrendered1 back to the Government.
5.66 The loans and advances made by Government fall under two main heads—Loans and Advances bearing interest and Interest-free Advances. In the former category are loans made to Provincial Governments, Local Funds and private individuals and also advances made to Government servants for building houses and for purchase of conveyances, etc. Under the latter category come advances made to Government servants on tour and transfer.
5.67 As a general rule advances are not payable to Government servants who are not in permanent employ, because their pay does not constitute adequate security for the advances. In special cases, however, and subject to such conditions as may be deemed appropriate temporary Government servants may also be allowed the advances.
5.68 (i) Simple interests at the rate fixed by Government should be charged on advances granted to Government servants for building houses or for purchase of conveyances. Where an advance is drawn in more than one instalment, the rate of interest recoverable should be determined with reference to the date on which the first instalment was drawn. The interest is calculated on balances outstanding on the last day of each month. If a Government servant dies before retirement no recovery will be made on account of interest. In case recoveries on account of interest were in progress at the time of death, no recovery will be made for the remaining amount of interest.
(ii) The following exceptions are permissible to the general rule quoted in (i) above,—
(a) No interest will be charged, from government servants on advances for the purchase of cycles granted from Government funds on or after December 2, 1978, or on an advance which is in the process of repayment on that date.
(b)  No interest will be charged from Government servants in BPS 1 to 15 on house-building advances sanctioned on or after the December 2, 1978, or on an advance which is in the process of repayment on that date.
(c)  In case a Government servant, who was in BPS 15 or below at the time when house-building advance was sanctioned to him, if promoted to BPS 16 or above, no interest shall be charged from him. However, if the amount of advance is revised on the basis of his pay in BPS-16 or above, interest will become payable under the normal rules/orders.
(d) In case a government servant, who was in BPS-16 or above when house-building advance was sanctioned to him is reverted to a post in BPS-15 or below, interest will be charged from him under the normal rules and orders.
(e)   The government servants, who do not claim interest on G.P. Fund balances, will be granted House Building Advance, Motor Car Advance & Motor Cycle Advance free of interest if sanctioned on or after 1st July, 1983 and no interest is claimed on G.P. Fund balances by the Government Servant concerned on or after this date.
[F. I (l) lmp/83 dated 18th August. 1983 read with Ministry of Finance O.M No F.7(8) R7/83 dated 9th July. 1984]
(f)   The Government servants, who had made their (J.P. Fund account interest free prior to 1st July, 1983 no interest would be charged on the balance of the advance that stood outstanding against them on or after 1st July, 1983. For the balance outstanding against them on 30th June, 1983, interest would be remitted to the extent of the amount of interest foregone by such Government servants on their G.P. Fund account.
[Ministry of Finance O.M. No. 7(8) R7/83 Vol II dated 27th February. 1986]
5.69 (i) The amount of the advance is recovered from the monthly pay bills ,n such instalments as may be specified. This should not be effected by the fact of the borrower being on leave of any kind and drawing leave salary or bring under suspension drawing the subsistence grant. During the extra ordinary leave without pay and allowance the instalments should be recovered in cash. If the Government servant fails to pay the instalment in cash, the arrears of instalments should be recovered in lumpsum from the first payment of pay and allowances, which may become due at the end of leave.
(ii) For all interest bearing advances a competent authority should not issue a sanction unless the Accountant-General has certified the availability of funds in the year in which payment is proposed to be made.
5.70 House building advance.-A. competent authority may sanction the grant of advance to a Government servant for construction of house, purchasing a house, completely reconstructing a house or extending or renovating a house already owned by him at any place in Pakistan including Azad Kashmir for occupation by himself.
5.71 The advance is granted only once in service for the construction of new houses and for the bonafide residential requirements of the Govern­ment servant himself. In case of construction of a house at Islamabad, however, a second advance may be granted to a Government servant", provided the previous advance drawn by him has been repaid in full together with the interest. An advance can be drawn for purchase of a house built by the Federal or a Provincial Government or local authority.
5.72 House Building advance for the purchase of flats in multi-storeyed buildings may be granted to Government servants to the extent and subject to the usual conditions prescribed for the admissibility of house building advance. This shall be subject to the following further provisions: —
(a) Before receiving the amount of the advance, or payment of the amount to the construction agency direct, the Government servant concerned should be required to execute an Agreement in the prescribed Form; and after the purchase of the flat is completed to execute and register the Mortgage deed in the prescribed form as security for repayment of the amount advanced with interest;
(b) Satisfactory evidence will have to be produced within 3 months of the drawl of the advance to show that the amount has beer spent on the purchase of flat. This can be done by showing the valid legal receipt issued by the Construction Agency concerned in token of the purchase deed.
5.73 Where a Government servant desired that the payment of advance sanctioned under the above orders be made direct to the construction agency, he may indicate it in his application for the grant of advance. In such a case, the Drawing & Disbursing Officer will arrange for the direct payment of the sanctioned amount to the agency concerned and obtain a valid receipt in the name of the Government servant from that agency and hand over the same to him.
5.74 The advance should not exceed 36 months pay of a Government servant. The advances should be paid by instalments; the amount of the each instalment being such as is likely to be spent during the next three months. The borrower should produce satisfactory evidence before the sanctioning authority to the effect that the instalment previously drawn has actually been utilized towards the construction of house and then only a second instalment will be paid. All the bills for the drawl of advances, when presented to the audit office should be duly supported by the following certificate from the controlling officer in respect of officers BPS 16 and above and from drawing officer in respect of others:—
"Certified that the amount of Rs......:..... ....being........ ..instal­ment towards the house building advance granted to Mr. ..................................is likely to be required for expenditure in the next three months, and that I am satisfied that the amount previously advanced (if any) had actually been utilized for the purpose for which it was drawn".
5.75 Advance from G.P. Fund account for the construction of house will not be taken into account for the purposes of calculating total house building advance to which a Government servant is entitled. An advance for the construction of a new house may be drawn in two equal instalments. The first instalment will be paid on production of documents establishing proprietary rights on the land and the second will be paid only when the house reaches plinth level. An advance granted for purchase, reconstructing or renovating a house may be drawn in one instalment, provided the execution and registration of mortgage deed is duly completed and Government interest is fully secured. The total amount drawn in one instalment should be utilised within eighteen months of its drawl. The recipient is also required to give a certificate at the end of financial year duly supported by a certificate of his immediate superior, as to how much money drawn has been utilized for the purpose for which it was drawn and the reasons for short utilization.
5.76 The repayment of advance commences from the fourth issue of pay after the first instalment is taken and is completed in 120 equal instalments. In case of Government servants of BPS 1 to 3 the recovery is affected in 240 instalments. The interest is recovered in one or more instalments from the month following that in which the recovery of the principal amount is completed, each such instalment being not more than the amount of instalment by which the principal amount was recovered. The monthly rate of recovery should be fixed in whole rupee except in the case of last instalment when the remaining balance including the fraction of a rupee should be recovered.
5.77 Those Government servants who are likely to retire from Government service within 10 years and are paid the house building advance, the instalments of recovery in their case should be so fixed that the recovery of principal together with the interest accrued thereon is completed before the date of retirement. The rate of instalment should not exceed one fourth of the pay of a Government servant and if the rate of recovery exceeds that limit due to earlier anticipated retirement of the Government servant, amount of advance may be so reduced that it is recovered together with the interest before retirement.
5.78 In case of BPS 1 to 3 employees the grant of advance will be regulated by the age limits indicated below:—
(i)   Full amount of house building advance, i.e., 36 months pay recoverable in 240 instalments may be granted up to the age of 40 years.
(ii)   Full amount may also be granted between the ages of 40 to 48 subject to the written undertaking being furnished by the government servant to the effect that recovery of the advance may be made from his pay at such a uniform rate not exceeding l/4th of pay so that amount of the advance is repaid in full before attaining the age of 60 years.
(iii)   In the case of government servants who are above the age of 48 years the amount of the advance will be reduced so much as would enable the recovery of the advance at a rate not exceeding l/4th of pay in any one month, being made possible before attaining the age of 60 years.
5.79 In order to secure Government from loss consequent on a Government servant dying or quitting service before the repayment of advance together with the interest is completed, the house so built and the land on which it stands, should be mortgaged to the President of Pakistan, which will be released only when the entire amount of advance and interest is liquidated. The mortgage deed should be executed in Form GFR 23, 24, 25 or 29 as the case may be. The sanctioning authority should scrutinize the deed and record a certificate regarding its correctness. The mortgage deed should be registered within 4 months of its execution. The deed will be kept in the safe custody of the sanctioning authority, until the advance with interest is fully repaid.
5.80 The officer applying for the advance much satisfies the sanction­ing authority regarding his title to the land upon which the house is proposed to be built. In case of doubt the Revenue, Registration and law authorities may be consulted. It should be seen that the officer concerned has undisputed title to land and there is no legal obstacle to the property being mortgaged to the Government and right of fore-closing on the conditions mentioned in the mortgage bond. There is no objection to grant of advance to a Government servant who has a lease on a plot of land, of which the unexpired portion is of a term and value sufficient to justify the grant of the advance and that there is no danger of the lease lapsing or of Government being unable to dispose of it, should it become necessary to fore-close the mortgage.
5.81 The house building advance may also be granted to those Government servants, who have taken plot of land on lease from the Government in Nizamabad Karachi, or for the lands acquired through the Cooperative Housing Societies, which have duly been registered. The Government servants concerned should be asked to produce the original documents showing that the land has actually been allotted to them. In the first instance they may be paid the development charges demanded by the Societies. When the actual construction is intended to be started, they may be allowed up to 25% of the total amount of advance, so as to enable them to build the house at least up to the plinth level. As soon as practicable and. in any case but not latter than three months alter the date the 25% of the advance was drawn, the borrower should produce a certificate from the Executive Engineer (as may be nominated by the Government for the purpose) that the house has been built up to the plinth. Then the Government servant should be asked to mortgage the land and structure built upon it to the President in Form G.F.R. 25 which should be registered within 4 months: Further installments will be allowed only after the execution of the mortgage deed.
5.82   If the land is mortgaged and the deed registered it is permissible to advance up to 70% of the total amount of house building advance.
5.83 Advance may also be given where considered necessary to Government servants who are members of the Cooperative Housing Societies and the Government servants who purchase land in Islamabad from the Capital Development Authority, for the purchase of land or for leasing land on which to construct a house, if the other conditions, laid down in regard to the grant of house building advance are satisfied and the total amount of the advance for the purchase of leasing of the land and the construction of the house does not exceed 36 months" pay of the official concerned: As prescribed under the rules the drawl of advance is permissible by instalments and each such instalment should not exceed the amount which is actually required for expenditure within three months. Each instalment is usually limited to 25% of the total house building advance. However, the first instalment of the advance on account of cost of land in Islamabad purchased from the Capital Development Authority may be raised from 25% to 40% of the total amount of the advance admissible to the Government servant and allowed subject to fulfilment of other conditions laid down in the rules. The balance of the advance on account of construction of house may be drawn in two equal instalments after the necessary formalities required under the rules have been completed.
5.84 The recoveries in respect of the House Building Advance which have been drawn only to the extent of the amounts payable to the CDA towards the cost of land (including the balance payable to the CDA on that account) may be made in 40 monthly instalments. The rate of recovery should not be increased until the government servants concerned have actually drawn further instalments required for the construction of the houses. After drawl of the instalments for the purpose of construction the rate of recovery should be so regulated that the entire advance together with the interest thereon is recovered within 10/20 years calculated from the date of which recovery of the advance commenced. This period of 10 years will be suitably reduced in the case of those who have attained the age of 45 years on or before the date on which recoveries start in accordance with the existing orders, to enable the recovery of the total advance plus interest, being affected before the date of retirement.
5.85 The above relaxation will not be allowed to Government servants who obtain House Building Advance for constructing houses at stations other than Islamabad.
5.86 A Government servant may draw an advance for house building advance everywhere in Pakistan (partly or whole of it) from the amount standing at his credit in his G.P. Fund account on the following conditions:-—
(i)   The advance should not exceed 36 months pay of the subscriber or 80 per cent of the amount at the credit of the subscriber In the Fund, whichever is lesser.
(ii)  The land and house should be mortgaged to the President within three months after the advance is drawn and registered within 4 months of its execution.
(iii)  Recovery will be made@ 7% of the subscriber's pay commencing from the fourth issue of pay after the first instalment is drawn. Where advance has partly been drawn from Government and partly from the G.P.F. the recovery for the G.P.F. portion will commence immediately after the loan from the Government with interest accrued thereon has been fully repaid.
(iv)   If a subscriber is due to attain the age of compulsory retirement within 10 years of the date on which an advance is to be granted, he may be sanctioned as advance from his GPF for the construc­tion of a house anywhere in Pakistan on land owned by him or by his wife and children or by any one of them. No recovery will be made from the subscriber on account of this advance and this will be treated as a part of the final payment of the amount standing at his credit. The land and house built thereon will not be required to be mortgaged to the President. The first instalment will be paid only after the subscriber has executed an agreement in the pres­cribed form. In case the land or house so built is sold or otherwise alienated by its owner to any other person, while he is still in service, he should be required to repay forthwith into the Fund the entire amount of advance together with the interest accrued thereon in lumpsum.
5.87 The house building advance may be granted to temporary government servants also, on the following conditions; —
(i)   The temporary Government servant has completed at least 10 years continuous service. BPS 1 & 2 temporary employees are eligible irrespective of the length of temporary service.
(ii)   Head of the department certifies that the services of the Government servant concerned are not likely to be terminated within the period prescribed for the repayment of advance;
(iii)   Security of two permanent Government servants (who are not likely to retire before the house is built and mortgaged) is furnished which will be released when the house has been built and mortgaged to the Government;
(iv)   Where the land has already been acquired, it should be mortgaged together with the house to be built thereon before the advance is sanctioned;
(v)   In case the advance is required for the purchase of land, the first instalment should be limited to 25%of the total advance or the actual cost of land, whichever is less;
(vi)   the Government servant concerned should produce a certificate from the appropriate house building society, improvement trust or CDA etc., that the land has been allotted to him. This should also indicate the price and the amount of instalment immediately payable after allotment.
5.88 If, however, a temporary Government servant wishes to draw the entire house building advance from his G.P.F. it can be sanctioned to him subject to the following conditions:—
1. the temporary government servant concerned has completed at least 5 years continuous service;
2. a certificate is produced from the Head of Department to the effect that his services are not likely to be terminated within the period prescribed for the repayment of the advance; and
3.    Surety from the permanent Government servants is furnished
5.89 The revision of House Building Advance is admissible if the following conditions are fulfilled:—
(i) the increase in pay otherwise than by accrual of time scale . increments is not less than 20%;
(ii) the net amount payable against the revised sanction be arrived at after the adjustment of any amount drawn against the original sanction, whether that amount, or any part thereof, has been repaid or not;
(iii) the instalments of recovery will be refixed so as to recover the total amount minus the amount already repaid within the maxi­mum period originally prescribed;

(iv) the revision will be admissible only if the event entitling the Government servant for the revision of the advance takes place within a period of 12 months prescribed for the completion of house from the date of the drawl of the first instalment of advance for construction, as distinct from the instalment for development charges;
(v) the revision will not be allowed, if the house has been completed and occupied by anyone; and
(vi) if the mortgage deed already executed and registered for the advance originally sanctioned, the mortgagor may be required to execute a new separate deed in Form GFR 34 The new deed should also be registered under the Registration Act.
5.90 Advance for purchase of conveyance (Rules 254 & 255).—The Government servants may be granted advances for purchase of conveyances (including animals) if the competent authority is satisfied that the maintenance of a conveyance will be in the interest of public service. The advance may be sanctioned by the Ministries/Head of Departments.
5.91 Advance for purchase of motor car (Rule 256).—A Government servant drawing pay of [1]Rs. 27IO/- p.m. or above may be granted advance for the purchase of motor car. A Minister of the Government of Pakistan may also be allowed the advance; but he will have to refund the entire amount in lumpsum together with the interest if he demits office before the recovery is completed. The total amount advanced should not exceed [2]@ Rs. 3 5,000 or eighteen months1 pay of the Government servant or the anticipated price of car whichever is less. If the actual price paid is less than the advance drawn by a Government servant, he should forthwith refund the balance to the Government: In case of those Government servants who draw the advance in England the 'actual price' may include the amount of freight actually paid on the car up to a Pakistani port, the cost of its insurance during the voyage and the Customs duty paid in Pakistan.      
5.92 When the advance has been approved for a Government servant, who is on leave or about to proceed on leave he should not be allowed to draw the advance earlier than a week before the expiry of leave, but if he is on leave outside Pakistan. Burma, India, Ceylon and Nepal or is about to proceed on such leave, he may be allowed to draw it from the Embassy of Pakistan in U.K. six weeks before his departure for Pakistan. The advance is, however, not ad­missible to a Government servant who goes on deputation out of Pakistan and desires a motor cat for use during the deputation.
5.93 The recovery of the advance will start from the first issue of pay after the drawl of the advance, will be in whole rupees and completed in 60 (sixty) equal instalments. It may be recovered in smaller number of instalments if the Government servant concerned so desires. The interest will be recovered in one or more instalments, the amount of instalment not being higher than that of the principal. The recover)' of interest should commence from the month following the month in which the recovery of the principal is completed
[Finance Division O.M No F8 (2)-R 8/77 dt. 20.6-1979]
5.94 If the recovery of the advance has not been completed and a Government servant wants to sell the car purchased with the aid of advance, he should obtain the permission of the competent authority. The car so purchased may be transferred to another Government servant, with the prior approval of the competent authority, if the maintenance of a car by the former is in interest of public service and he records a declaration to the effect that he is aware that the car being transferred to him is subject to the mortgage bond and that he is bound by its terms and conditions. In all cases where a car is proposed to be sold before the complete recovery of the advance together with the interest, the sale proceeds must be utilised towards the repayment thereof. If the car is sold in order to purchase another car, a competent authority may allow the sale proceeds to be applied for the purchase of another car on the conditions that:—
(i)   The amount outstanding should not be permitted to exceed the cost of new car;
(ii)   The amount outstanding will be continued to be repaid at the rate already fixed; and
(iii)   The new car should be mortgaged and insured as usual.
5.95 When a Government servant has drawn the advance he is expected to complete the negotiations for purchase of car and pay finally within one month of the date of drawl of advance. If this is not done, the entire amount together with the interest should be refunded to the Government immediately except in such cases where competent authority has granted him an extension.
5.96 At the time of drawl of advance the Government servant should execute an agreement in Form G.F.R. 16. The controlling officer should scrutinize the agreement and record a certificate on the bill that the agreement is in order. When the purchase has been finalised the Government servant should execute a mortgage deed in Form G.F.R. 17 hypothecating the car to the President as security for the advance. The cost price of the car should be entered in the schedule of specification attached to the mortgage deed. The mortgage bond should be kept in the safe custody of the sanctioning authority until the recovery of the advance is completed and then it may be cancelled and returned to the Government servant concerned after the Accountant General has given a clearance certificate.
5.97 The car must be insured against full loss by fire, theft or accident. It should be a comprehensive insurance policy and not a 'Third Party Insurance' etc. In case of purchase of second hand cars third party insurance is permissible, provided the Government servant furnishes the following undertaking:—
(i)  He will not seek any abatement, relief or waiver of the outstanding amount of advance in case of damage to or loss of vehicle; and

 (ii) In the event of the Government servant's demise the balance will be recovered from the gratuity/pension or other dues payable to the heirs.
The insurance should be affected within one month of the date of purchase.      
[Finance Division O.M No F. 8(1) Reg. 8/76, dated 19-11-1976.]
5.98 As soon as the purchase is finalised, mortgage deed executed and insurance affected the following documents should be submitted to the Accountant General:
(i)    Vendor's receipt:
(ii)   Mortgage Bond:
(iii)  Insurance Policy; and
(iv)  A letter in Form G.F.R. 18.
The Accountant General will scrutinize the above documents and with the exception of the last item return them to the sanctioning authority for further necessary action. The letter in Form G.F.R. 18 will be sent by him to the Insurance Company, so as to notify to them the fact that the President is interested in the insurance policy secured.
5.99 The Government servants who are in foreign service may also be paid the advance for purchase of motor car by the foreign employers out of their own funds, but sanction thereof will be issued by the Government. If, however, the financial position of the foreign employer does not permit it, then the advance may be paid by the Government.
5.100 A second advance for the purchase of motor car is not admis­sible even if the previous advance together with the interest accrued thereon has been fully repaid.
[Ministry of Finance O.M No 8 (3) R7/83-649 dated 19th July.1983.]
5.101   An advance for the purchase of motor cycle may be granted to a Government servant drawing pay @ Rs. 1,036/- and above but not more than Rs. 2,709/- per month. The advance should not exceed eighteen months pay of the Government servant or Rs. 12,000/- or the anticipated price of the motor cycle, whichever is less. Other conditions will be the same as in the case of motor car.
[Ministry of Finance O.M No F-8(2)-.Reg. (7)/87-1145 dated 16th September, 1987]
5.102 Advance for purchase of bicycle may be granted to Government servants, who are temporary or permanent and are in receipt of pay not exceeding Rs. 1,035/~ per month subject to the following conditions:—
(i)   The amount of advance should not exceed Rs.800/-
(ii)  Recovery to be made in 48 instalments from permanent government servants and in 30 instalments from those who are not permanent;
(iii) Temporary Government servants should produce a surety from a permanent Government servant. In case of temporary BPS I to 3 Government servants advance is admissible to those only who have at least 3 years service at their credit;
(iv) The sanctioning authority should satisfy itself that the Government servant will continue in service till the completion of the recovery of advance. If the Government servant quits the service earlier, the advance should be recovered in lumpsum;
(v)  The sanctioning authority should also satisfy itself that the advance has actually been utilised towards purchase of a cycle; and
(vi)  a second advance cannot be drawn before expiry of three years from the drawl of previous advance.

[Ministry of Finance O.M No F 8(1) Reg (7)/ 87 dated 14th April, 1987 read with Ministry of Finance O.M. No F 8(2) Reg (7)/87 dated 16th September, 1987.]

5.103 Interest-free Loans-No interest should be charged on the house building and conveyance advances drawn by a Government servants before 1st July, 1983 whose deposits in the Provident Fund account carry no interest subject to the following conditions:—
(i) The Government servant has not received interest on his Provident Fund accumulations prior to the drawl of the advance from the Government;
(ii) the interest to be remitted under these orders shall not exceed the amount of interest foregone by the Government servant concerned on his Provident Fund account up to the date on which the interest on Government loans would become due for payment;
(iii) If at any time in future the Government servant who has availed himself of this concession chooses to take interest on his G.P. Fund deposits, he will be required to pay in full to the Govern­ment the amount of interest accrued on the advances drawn by him from the Government.
The above decision will also applicable in the case of Government servants who have already drawn advance from the Government but the recovery of interest charges accrued thereon has not been made from them.
[Finance Division O.M No F 6(1)-8/74 dated 18th October I975]
5.104 Advances on transfer (Rule 265).—(a) A Government servant under orders of transfer may be allowed advance of pay not exceeding one month's substantive pay. He may also, be paid advance of traveling allowance as admissible under the rules. Such advances may be sanctioned by a Head of Office or any other authority empowered in this behalf. Such an authority may sanction advance for itself also. The Government servant on leave, if transferred, can be paid the advance The advance of pay can also be drawn at the new station, if it is not drawn at the old station. There is no objection to a Government servant drawing a second advance of Travelling Allowance if any member of his family did not accompany him at the time of transfer but joins him afterwards within 6 months.
(b) These advances should be recorded in the Last Pay Certificate. The advance of pay is recoverable in 3 equal instalments and recovery will commence from the month in which pay or leave salary is drawn for the full month on joining the new appointment. The advance of Traveling Allowance is adjusted through the travelling allowance bill. The advance of Travelling Allowance may be adjusted partly, if a member of the family is to join afterwards and then another Travelling Allowance bill may be submitted.
5.105 Advances for journeys on tour (Rule 269).—Advance of Travelling Allowance on tour may be granted to B-l to B-15 Government servants by a competent authority. The amount of advance should be sufficient to cover their personal travelling expenses for a month. The B-l6 and above Government servants may also be granted advance if they proceed on long and expensive tours and the cost of travelling is so heavy as to be a serious tax on their private resources. The amount should be sufficient to cover travelling Expenses for a month.
5.106 The authority competent to grant advance may sanction advance for itself also.
5.107 The advance should b£ adjusted through Travelling Allowance bill immediately on return to headquarters or on 30th June, whichever is earlier. Second advance cannot be allowed until the previous advance has been adjusted. If a Government servant has been paid an advance for a particular journey the Travelling Allowance bill for that journey will not be admitted in audit unless the advance drawn for the purpose is properly adjusted.

[1][Ministry of Finance O.M.No F 8(2)-Reg.(7)/87-1145 dated 16th September. 1981]            

[2] Finance Division O.M. No F 4(5) Pt.111[82-83] 1614 dated 22-8-1982 & O.M.No F.8(7) /83 dated 19th June, 1984.


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