Duties and Responsibilities of the

DDOs
By
Safdar Shah,
Secretariat Training Institute
Islamabad
Ph.0300-9549746
FINANCIAL MANAGEMENT-
IN PUBLIC SECTOR ORGANIZATIONS

by SAFDAR SHAH

Ph. 03009549746.
 LEGAL AND ADMINISTRATIVE
FRAMEWORK FOR PUBLIC FINANCIAL
MANAGEMENT IN PAKISTAN

3
 FINANCIAL ACTIVITY FEDERAL PROVINCIAL
GOVERNMEN GOVERNEMN
T T
Consolidated Fund and Public Account 78 118
Custody of Federal Consolidated Fund and Public 79 119
Account

Annual Budget Statement 80 120

Expenditure Charged upon Consolidated Fund 81 121
Procedure relating to Annual Budget Statement 82 122
Authentication of schedule of Authorised 83 123
expenditure

4
Supplementary excess grants 84 124

Votes on accounts 85 125

Power to authorise expenditure when Assembly is 86 126

dissolved

Secretariats of majlis-e-shoora (Parliament) 87 127

Finance Committees 88

5
LEGAL PROVISIONS FOR FINANCIAL SYSTEM
LEVEL Legal provision
Federal Articles from 78 to 88
Government
Provincial Articles from 118 to
Government 127

Districts Sections 107 to 112

Local Government
Ordinance
6
Need of Training
 It is needed in an organization to enhance the job knowledge
of the participants , improve their performance productivity
and keep them up to date with the changes occurring time
to time in the rules / regulations.
 It helps on motivation and helps the organization run
smoothly.
 Training needs:- those needs that can be fulfilled by imparting
training.
 .
Identify the
training
needs

Training
Evaluate
the training needs Design the
training
cycle

Deliver the
training
FINANCIAL MANAGEMENT
Which is related to deal all the financial activities .
FINANCIAL MANAGEMENT means the operations designed
to make funds available to officials and to ensure their lawful
and efficient use.
The principal parties involved are:-
 The executive bodies, which need funds
 The legislative bodies which alone can grant funds
 The executive offices that control the expenditures of funds;
and
 The auditing offices which determine the legibility and
propriety of the use of funds.
 WHY PUBLIC FINANCIAL
MANAGEMENT SYSTEM?

1. To generate Public
Revenues/Receipts
2. To incur Public Sector Expenditures
3. To use budget formats for Financial
/Fiscal Year
4. To exercise control over system of
Accounting and Auditing processes
Functions
 Financialof the Financial
Planning Manager
and Controlling
 Acquisition of funds
 Utilization of funds judicially
 Helping in evaluating decisions
 Maintaining accounting records for departmental and audit
purposes.
 Financial Management
 Public Finance:-
 Public means “Collection of people/belonging to the people
.Finance means money. It also signify money matters and their
management . Taken together the term means “money matters
pertaining to a state”.
 The term “Public Finance” means income and expenditure of
public authorities.
 Public authorities means:- Federal Government, Provincial
Government, District Government, Local Government
,Autonomous and Corporate bodies.
 Fiscal means Purse
 Fiscal year means financial year
 Exchequer means Treasury of a state or nation
Operations of Public Finance
 Transfer of purchasing powers/delegation of powers under
the system of financial control and budgeting to public
authorities according to a set procedure regarding:-
 goods,
 works and
 services
3 PILLARS OF STATE
1. Legislature
2. Executive, and
3. Judiciary
Government is the Executive charged with

1. Responsibility to maintain law and order

2. Provide security to its citizens (life and property)
3. Carry out socio-economic development
4. Preserve territorial integrity and sovereignty of the state.
Public Financial Management in
Pakistan
Components of Financial
Management System are as under
Finance
Accounts
Audit
Financial Management
/Responsibilities of the Government
 The Government of Pakistan plays a central
role in the economic and social well beings
of the nation .As a result the people, the
general public, as tax payers and users of the
public services have a right to know of the
financial implications of policies and other
actions of Government that effect them.
National and Provincial
Assemblies
 As a representative of the public expect and
demand that taxpayer’s money be spent for
the purpose, on the objects for which it was
provided and in accordance with the
rules/regulations and laid down procedure
of the government.
Government Managers
 are responsible for delivering services and
other policy out comes, in accordance with
legislative requirements. These managers
should expect to be held accountable for
their performance in delivering these out
comes.
Responsibilities of the Govt. Managers

 To protect the public purse –

 to protect against the loss, theft or misuse of public
money,
 to handle collection and disbursement of money
prudently and
 maintain safe custody of cash.
 public-to provide financial information that explain how
much funds have been allocated and employed in social
,economic and other programs.
 To safe guard the assets of the Government-
 to protect and maintain investments in the infrastructure
and other assets of the government and
 to properly dispose of assets no longer required.
 to manage and control the Government’s financial positions-
 to manage and monitor existing public debt, and ultimately
strengthen the overall financial position of the Government.
 To be accountable to the public
 FINANCIAL CONTROL
 It is an integral part of financial administration.
 Fiscal Management is based on check & balance system
in which control is divided into public authorities i.e.
i) Administrative Control
ii) Assembly Control
iii) Control & Audit by the AGP.
 Administrative Control: it is exercised by the
executives through the MOF (Federal), FD (Provincial)
and EDOs in case of Districts.
 Parliamentary Control is exercised by the Parliament /
Assembly i.e. levying taxes and authorization of funds.
 Control by Audit:- Independent control in the system
of Finance is embodied in the functions of the AGP
OBJECTIVES OF THE FINANCIAL
CONTROL
 To ensure fidelity on the part of public officials.
 To accomplish programmed targets at minimum
and in short possible time.
 To ensure that financial outlays are programmed
with in the available resources.
 To ensure proper accounting of all receipts / assets
and expenditure without loss or leakage.
GENERAL PRINCIPAL OF THE
FINANCIAL CONTROL
 Economy
Economy means getting full value
of money you are going to spend.
Regularity:-
means spending of money for the purpose and on the
object for which it was provided and in the manner
prescribed by Law.
* Funds are spent for the purpose for which they
are allocated.
* Funds are spent in accordance with the
relevant rules and regulations.
* Expenditure should not exceed the
budgetary limit.
STANDARDS OF FINANCIAL
PROPRIETY
That expenditure is incurred with due regards to
high standards of financial propriety.
i) A public servant should exercise same
vigilance as a person of ordinaryprudence
that he exercises for the expenditure of
his own money.
ii) That the expenditure is not prima-
facie more than the occasion demands.
iii) No authority should exercise its power for
sanctioning of expenditure or pass order, which
affects directly or indirectly to his own advantage.

iv) Public moneys are not utilized for the benefit of a

particular person or a section of the community
unless it is:-
  In-significant
 Claim of the amount can be enforced in a
court of law.
 In pursuance of recognized policy or
customs.

v) The amount of allowances granted to meet expenditure

of a particular type is not a Source of Profit to the
recipients.
ENFORCEMENT OF FINANCIAL
CONTROL
It depends upon the system of Financial
Administration and cooperation and involvement of
the managers.
INSTRUMENTS OF FINANCIAL
CONTROL
 Annual Budget/ ADP/ Period Plans.
 Expenditure proposals and sanctions.
 Internal Audit and Reports.
 Maintenance of Accounts. (Receipt and
Expenditure)
 Post Audit and Audit Reports.
 Administrative reviews, Progress Reports etc.
AGENTS OF THE FINANCIAL CONTROL
 Principal Accounting Officers
 Financial Advisors/Deputy Financial Advisors
 Finance & Accounts Officers.
 Controlling Officers.
 Drawing & Disbursing Officers
 Audit Officers
 Treasury Officers
RESPONSIBLE AGENCIES
Parliament
MOF
Administrative
Ministries/Departments.
Audit.
 Accountability Cycle
The public sector auditing function is an
important element in the accountability
cycle, which has four elements:
 a) The legislature,

 b) The executive,

 c) The Auditor General, and

 d) The Public Accounts Committee PAC).

Accounting Structure
/
Financial Reporting and
Accounts keeping
Auditor-General
 The Auditor-General’s role and powers are established in
the Constitution of Pakistan 1973 (Articles 168 to 171)
and defined further in the Auditor General Ordinance
2001. While retaining overall responsibility for the
accounts of the Federation and Provinces, this
responsibility is delegated to the Controller-General, in
order to maintain independence between the audit
functions and the accounting functions.
AGP ORDINANCE 2001- SALIENT FEATURES
1. Replaces Audit and Accounts Order, 1973
2. Separates Accounts from Audit
3. Introduces Certification Audit
4. Highlights Audit of Receipts
5. Includes District Audit
6. Greater powers to call for accounting records

37
Controller-General
 The Controller-General is responsible for matters of
accounting policy and procedure in relation to the accounts
of the Federation and Provinces, as delegated by the Auditor-
General. The Controller-General is responsible for the
overall operations of the accounting offices within Pakistan
Audit Department and for the production of timely financial
reports of the Government and its accounting entities. His
primary responsibility is to prepare complete and accurate
Financial statements of the Federation.
 CGA to prepare accounts of the Federation,
Provinces and the Districts on the formats and timing
prescribed by AGP.
 Make payments & withdrawals from Consolidated
Fund & Public Account on the authority of
Federal/Provincial Government.
 CGA to lay down principles governing internal
financial controls.
 CGA to assist in the resolution of audit observations

39
AGPR

The Accountant General Pakistan Revenue (AGPR) is

responsible for the centralized accounting and reporting of
federal transactions. Additionally the AGPR is responsible for
the consolidation of summarized financial information
prepared by federal self-accounting entities.
 The AGPR receives accounts and reports from the sub-
offices of the AGPR, district accounts officers, principal
accounting officers of self accounting entities, federal
treasuries and the State Bank of Pakistan/National Bank
of Pakistan. The AGPR, in turn, provides annual accounts
to the CGA.
 There are sub-offices of AGPR in each of the provinces
that act as the district accounts officers in respect of
federal government transactions.
Accountant Generals
 The Accountant Generals are established in each Province
reports to the Controller-General of Pakistan. These officers
are responsible for the overall operations of accounting
offices within their jurisdiction (e.g. in each Province), and
deal with matters of accounting policy and procedure in
those areas.
District Accounts Offices
 Each Province is further divided into districts. Each
district contains its own District Accounts Office (DAO).
The DAOs are responsible for processing all accounting
transactions from the various departments in that
district. The DAOs maintain records of payments and
receipts, for Federal and Provincial transactions (in
separate ledgers) and submit consolidated monthly
accounts to the respective AGPR sub-office or AG office.
Spending divisions and departments
 Each spending division and department is responsible for
allocating their own budget into the various controlling
units, from the Principal Accounting Officer down to
each drawing and disbursing officer (DDO). The DDOs
initiate accounting transactions (eg. Purchase orders and
claim vouchers) for submission to PAD and maintain
their own accounting records and subsidiary registers
where appropriate, for departmental requirements.
Self-accounting entities
 Certain divisions and departments of Government are
established as ‘self-accounting’ entities. These entities process
and record their own accounting transactions and at the end
of each month submit a report to the respective AG/AGPR
office.
State Bank of Pakistan
 The State Bank of Pakistan plays a critical role in the
execution of Government financial transactions. Branches of
the State Bank of Pakistan, along with the National Bank of
Pakistan acting as its agent, collects money and makes
payments on behalf of the Government, and maintains a
number of Government bank accounts.
Finance Division/Department
 The Finance Division in Federal Government and
Finance Departments in provincial Governments play a
key role in the accounting process
 so far as they are a key users of financial information
produced by the accounting system and in certain cases
are a source of input to the accounting system (eg.
Budget information, details of borrowings and other
liabilities).
 Principal Accounting Officers (PAOs).
Each ministry and department has a PAO. For the self accounting
entities, the PAOs have been delegated authority to maintain
their own accounts. They provide monthly accounting data to the
AGPR and to the Accountant Generals concerned.
 The Role of the PAO
1. The PAO in case of the Federal Government Department is
the Federal Secretary; in case of Provincial Government
Department, the Provincial Secretary and in the district;
the District Co-ordination Officer (DCO)

2. PAO plays the pivotal role in the system and process of

Public Financial Management system of Pakistan

49
3. Essentially, the main function of the PAO is the proper
management of the departmental “Grants; Development &
Non-Development” placed at his/her disposal during the
course of a particular Financial Year

4. The PAO is expected to exercise adequate control over the

flow of expenditures/receipts during the course of a Financial
Year

50
5. The PAO is duty bound to ensure the propriety of all
departmental expenditures and to certify that all
departmental receipts are collected and deposited in the
government accounts in line with the current instructions of
the government on the subject

6. The PAO is to ensure the “Reconciliation” of departmental

expenditures with the AG/DAO and receipts with the
Accounts of the NBP

51
7. The PAO is to maintain a proper set of Accounts of
the Expenditures and Receipts of his/her
department for each Financial Year; and to have these
Accounts audited by the department of the Auditor-
General of Pakistan (AGP)

8. The PAO is to ensure the adequacy of “Internal

Controls” in the department so as to ovoid any lapse
in the Financial Management System and processes
of his/her department

52
9. The PAO is expected to attend to the observations of the
Department of the Auditor-General of Pakistan as
highlighted by them in their Audit Reports.
10. The PAO is to personally appear before the Public
Accounts Committee in their meetings and to satisfy the
Committee on all issues relating the Accounts and Audit
Reports of his/her department; as presented by the AGP

53
 Duties and responsibilities of the
PAO proposals.
 Budgetary
 Control over expenditure.
 To observe economy and regularity, propriety,prudence,public advantages.
 Observance of Rules/Regulations
 Maintenance and reconciliations of accounts
 Realization of receipts.
 To attend the DAC/PAC meetings.
 To ensure that Financial considerations are taken into account at all stages
 He is responsible for all effective economic conduct
 To see that inevitable payments may not be left unpaid and moneys paid may
not be kept out of the accounts.
 Answerable to PAC
District Governments

 Each province is divided into districts. The district

coordination officer (DCO) of each district is the principal
accounting officer (PAO) of that district. The district
coordination officer is supported by executive district officers
who, in turn, supervise offices headed by drawing and
disbursing officers.
Government Treasuries
 Federal Treasuries
 Provincial Treasuries
 District Treasuries

 Functions of the treasuries

 Departmental Treasuries. Departmental treasuries are
established to record specific accounting transactions such
as income and sales taxes and customs duties.
 Drawing and Disbursing Officer (DDOs). The DDOs
are responsible for the accounting, cash and personnel
functions of specific entities. They submit bills for pre-
audit to the district accounts officers, and report to the
district coordination officers of each district. They also
report to the principal accounting officer of their entity.
 Accounting Concepts
 Accounting Entity:- Any unit of the Government i.e.
Ministry, Division and Department, whose principal source
of funding is an appropriation from the Government of
Pakistan.
Finance Division/Department
 The Finance Division in Federal Government and
Finance Departments in provincial Governments play a
key role in the accounting process
 so far as they are a key users of financial information
produced by the accounting system and in certain cases
are a source of input to the accounting system (eg.
Budget information, details of borrowings and other
liabilities).
Types of Accounting Entity
 Centralized Accounting Entity:- Any Accounting Entity
for whom the Accountant General has primary responsibility
for the transaction processing, recording and reporting
functions of that entity.

 Self Accounting Entity:- An Accounting entity for whom

the PAO has primary responsibility for Accounting and
Reporting functions.
 Exempt Entity:- These include independent entity and
commercial undertaking and entities established under a state
resolution or a notification of the Government or under
companies ordinance.
 Accounts Office:- The office which carrying out the
accounting work.

 Accounting Period:- The time period over which financial

information is reported (Year or month).

 Accounting Record:- Any document upon which

accounting transactions are recorded or any other document
issued or used in the preparation and processing of
accounting transactions.
 Annual Financial Statement:- A set of financial reports,
produced after the close of the financial year by the
AGP/(CGA) for Federal and Provincial Government.
 Appropriation:- An allocation of funds to a spending
Ministry, Division and Department on the basis of schedule
of authorized expenditure.
 Approval:- The permission given by an authority or a
delegated authority to undertake a particular action such as
incurring expenditure.
 Assignment Account:- A Government bank account
established with the National Bank of Pakistan to provide
independent drawing facility within the prescribed
limitation.
 Audit Trail:- The capability to trace a particular balance
from the financial statements down to its source documents.
 Cash Accounting:- A method of accounting that records
the cash payments and cash receipts only.
 Cash Balance:- The amount held in a particular bank
account at any point in time.
 Cash Flow:- The net movement in the cash balance over a
particular reporting period, given by the sum of payments
and receipts.
 Cash Flow Statement:- A financial report provided to
show the net movement in cash over a particular reporting
period, showing how and where the cash has been applied.
 Certification:- A process undertaken by the account offices
involving verification (proper approval and validity) and audit
scrutiny against irregularities of a payment prior to it being
made (Pre-audit).
 Claim Voucher:- A document submitted by the DDOs to
the account offices containing the particular of valid and duly
approved claim for payment against a nominated budget head
(Bill).
 Contingent Expenditure:_ All non-development
expenditure other than salary and salary related expenditure.
 Delegated Authority:- An officer formally empowered by
the responsible authority to perform a particular function.
 Excess:- An amount of expenditure exceeding the approved
budget.
 Expense:- Decrease in future economic benefits in the form
of reduction of assets or increase liabilities of an entity.
 Out flow of Cash:- Arising as a result of payments.
 Financial Year:- Commencing 1st July and ending 30th June
(12 months)
 Fund:- A pool of money set aside and used for an intended
purpose, as provided by legislation.
 Funds available:- A term used in budgetary control.
 Grant:- Funding provided to Ministry or Department
through the schedule of authorized expenditure.
 Imprest Account:- Petty cash system for making small
payments.
 Receipt voucher:- A form with which amount is
collectable by the Government or deposited with the bank.
(Challans)
 Reconciliation:- A process of substantiating recorded
financial information against an alternative source of data
(Bank reconciliation, Reconciliation between the account
office and spending department).
 Exchange Account:- A General Ledger account through
which transactions between centralized accounting entities
and self accounting entities of the federal government are
recorded.
 Settlement Account:- A General Ledger clearing account
through which cash transaction between governments are
recorded.
 Special Deposit Accounts:- Accounts comprising of
public accounts moneys that are operated under the authority
of M/O finance but are not trust account.
 Surrender:- An amount included in the original approved
budget i.e. given back because it has not or will not be spent
in the finical year by that entity.
 Suspense Accounts:- An account used if the correct head
to be debited or credited is unable to be identified at the time
of transaction, which shall be cleared once the correct head is
identified.
 Trust Account:- Legal Entity in its own right, under the
stewardship of the Government and as such expected to
produced financial statements in their own name.
Auditor-General
 The Auditor-General’s role and powers are established in
the Constitution of Pakistan 1973 (Articles 168 to 171)
and defined further in the Auditor General Ordinance
2001. While retaining overall responsibility for the
accounts of the Federation and Provinces, this
responsibility is delegated to the Controller-General, in
order to maintain independence between the audit
functions and the accounting functions.
Controller-General
 The Controller-General is responsible for matters of
accounting policy and procedure in relation to the
accounts of the Federation and Provinces, as delegated by
the Auditor-General. The Controller-General is
responsible for the overall operations of the accounting
offices within Pakistan Audit Department and for the
production of timely financial reports of the
Government and its accounting entities.
Accountant Generals
 The Accountant Generals are established in each Province
and the Federal government, and each reports to the
Controller-General of Pakistan. These officers are responsible
for the overall operations of accounting offices within their
jurisdiction (e.g. in each Province), and deal with matters of
accounting policy and procedure in those areas.
District Accounts Offices
 Each Province is further divided into districts. Each
district contains its own District Accounts Office (DAO).
The DAOs are responsible for processing all accounting
transactions from the various departments in that
district. The DAOs maintain records of payments and
receipts, for Federal and Provincial transactions (in
separate ledgers) and submit consolidated monthly
accounts to the respective AGPR sub-office or AG office.
Spending divisions and departments
 Each spending division and department is responsible for
allocating their own budget into the various controlling
units, from the Principal Accounting Officer down to
each drawing and disbursing officer (DDO). The DDOs
initiate accounting transactions (eg. Purchase orders and
claim vouchers) for submission to PAD and maintain
their own accounting records and subsidiary registers
where appropriate, for departmental requirements.
Self-accounting entities
 Certain divisions and departments of Government are
established as ‘self-accounting’ entities. These entities process
and record their own accounting transactions and at the end
of each month submit a report to the respective AG/AGPR
office.
State Bank of Pakistan
 The State Bank of Pakistan plays a critical role in the
execution of Government financial transactions. Branches of
the State Bank of Pakistan, along with the National Bank of
Pakistan acting as its agent, collects money and makes
payments on behalf of the Government, and maintains a
number of Government bank accounts.
Finance Division/Department
 The Finance Division in Federal Government and
Finance Departments in provincial Governments play a
key role in the accounting process
 so far as they are a key users of financial information
produced by the accounting system and in certain cases
are a source of input to the accounting system (eg.
Budget information, details of borrowings and other
liabilities).
 Drawing
&
Disbursing Officers
(DDOs).
 “Drawing and Disbursing Officer”
 means the officer who prepares estimates of expenditure
and actually incurs expenditure in respect of the offices of
which he is the Drawing and Disbursing Officer as appointed
by the respective Head of Office under his administrative
control; He reports to the Principal Accounting Officer of
his entity
Responsibilities of the
DDO
 The DDOs are responsible for the
• Budget Preparation
• Cash Management
• Disbursement & Accounting
• Personnel Functions of specific entities.
• The DDOs initiate accounting transactions (eg.
Purchase orders and claim vouchers) for submission
to PAD and maintain their own accounting records
and subsidiary registers where appropriate, for
departmental requirements

• They submit bills for pre-audit to the respective

accounts officers/AG concerned and report to
the Principal Accounting Officer (PAO) of
his/her entity.
CHARGE OF D.D.O.
 While taking over charge the officer shall physically count
cash and stores and be satisfied that the book balance tallies
with the ground balance.
 To handover the following registers:
(i) Bill register, (ii) Bill Transit Register,
(iii) Cash Book, (iv) Subsidiary Cash Book,
(v) Service Postage Stamp Register,
(vi) Stock A/C.
(vii) Register of Advances drawn and adjustment there of etc.
 While taking over charge of Cash Book D.D.O.
shall ascertain the location of deposition of the
duplicate keys of double lock and verify the
receipt of such deposition in the treasury.
CHECKS TO BE EXCERCISED WHILE
DRAWAL OF PAY BILLS
(i) This claim shall be drawn under TR . 26 and to be
specified temporary establishment or permanent
establishment by ticking and in case of temporary
establishment period of retention of post shall be stated
specifically.
(ii) Full description Head of Account upto detail Head (17
digit) is to be stated on the body of the bill.
(iii) In case of first appointment medical fitness certificates
shall be provided
(iv) in case of transfer, original L.P.C. shall be enclosed with
the pay bill.
(v) D.D.O. shall verify declarations for drawal of H.R.A..

(vi) D.D.O. shall calculate income Tax.

(vii) deduction of G.P.F. in case of Govt. employees.
Arrangement shall be made to obtain G.P.F. No. from A.G.
with in 12 months from the date of His/her joining .

viii) D.D.O. shall personally check adding of each page

horizontally and vertically and shall satisfy that all deductions
as shown in the pay bill are fully taken care of and tallies
both side of pay bills.
The Budget
 Budget Preparation
Process in Pakistan

92
 Contents
1. Budget Definition and Functions

2. Budget Cycle

3. Classification of Budget

4. Budget Preparation

5. Special Budgetary Processes

6. Exercise

93
 Budget
 A budget (from old French bougette, purse) is a
financial plan and a list of all planned expenses and
revenues. It is a plan for saving, borrowing and
spending.
 In the public sector, the Budget is an instrument by
which the Government expresses its priorities and
allocates resources to implement its policies.
 The budget allocates resources among projects,
schemes and programmes, of varying degree of
importance, compete with each other for inclusion in
the national budget.
94
BUDGET

IMF defines Budget

A statement of the projected revenues, proposed
expenditures, and planned financing of any surplus or deficit
of an entity, especially government.
 Budget is a statement of receipts and expenditure during a
financial year of the government and thus reflects the
government policies, priorities, financial strategies and
operational plans in financial terms.

96
Annual Budget statements
 Statement of the annual revenue receipt and expenditure
of the federal government, together with all other
receipts and disbursements arising both in and outside
Pakistan, prepared by the Finance Division and presented
to the legislatures as required by the article 80 of the
constitution is called the Annual Budget Statement.
CLASSIFICATION OF BUDGET
 A Budget can be classified into two areas.
 Non-development Budget
 Development Budget
Non-development Budget

 The non-development budget caters to the recurring

costs of offices and service delivery. The concerned
Finance and Budget official is responsible for the
preparation of the non-development budget which
includes establishment charges and other costs. The non-
development budget is prepared by functions and by
objects.
Heads of Expenditure

 Establishment charges
 Purchase of durable Goods
 Pre investment project analysis
 Construction of work
 Repair and Maintenance of durable goods
 Commodities and services
 Transfer payments
 Investment
 Loans and repayments
 Miscellaneous expenditures
Development Budget

The development budget caters to the development needs of

the Governments. The funds are used for creation of new
assets or for improving existing ones. In general the
development funds are the monies available after deducting
all recurring costs and liabilities.
 “Budget Year” or “Financial Year”
means the period from July 1st to June 30,
both days inclusive;
Classification of expenditure

 “Charged expenditure” means such items of expenditure

which are not subject to vote of the Parliament. It
comprises:-
(a) The remuneration payable to the president and other
expenditure relating to his office
(b) The remuneration payable to
 The judges of the supreme court
 The chief election commission
 Chairman/Dy Chairman of Senate
 The speaker/dy.,Speaker National Assembly
 The AGP
Charged expenditure

c) All administrative expenses and remunerations payable to

the officers and staff of above organizations
(d) All debt charges for which federal government is liable to
pay.
(e) Sums required to justify any judgment decree, or reward
against Pakistan by any court or tribunal
(f) Sums required to pay loan to Provinces
(g Sums required for making grants in aid for the revenues of
the provinces
(h any other sum declared by the constitution or by act of the
parliament
 “Voted expenditure”
 means expenditure that is submitted to the vote of the
Parliament,
Non-development expenditure
 refers to the on going administration operations within a
Ministry or Department in fulfilling its policy objectives.
These include salaries and allowances of the officers and staff.
There are two types of non development budgets.
 A) Permanent Budget:-
Previously approved non development expenditures that are
continuing. These include permanent staffing establishment,
traveling, fixed allowances and contingent expenditure.
 B) Temporary Budget:-
New items of non-development expenditure such as temporary
addition to existing establishments or continuing temporary
items.
Development Expenditure
 Refers to activities that typically involves the construction or
improvement of infrastructure and other assets or the
development of human resources.
 Any expenditure on development projects on new
construction, whether of entirely new works or additions and
alterations to existing works.
 It also includes all repairs to newly purchased or previously
abandoned buildings or works required for bringing them
into use and means expenditure on operations undertaken to
maintain in proper condition buildings and works in ordinary
use;
 “Current Budget” means the sum of approved estimates of the
current expenditure for a financial year;

 “Current expenditure” means expenditure that is not

development expenditure;
 “Demand for Grant” means the proposal made to the
Government for withdrawal of a certain sum out of the
government fund;
 “appropriation” means an allocation of funds to an
office on the basis of the Schedule of Authorized
Expenditure;
 “Re-appropriation” means the transfer of savings in the
appropriations of one or more units of appropriations to
meet excess expenditure anticipated under another such
unit;
 “Revised estimates” means the estimate of the probable
receipts or expenditure, for a financial year, framed, in the
course of that year, with reference to the transactions already
recorded;
 “Schedule of Authorized Expenditure” means the
schedule prepared, after the approval by the Parliament
of the Annual Budget Statement or Supplementary
Budget in respect of a financial year and authenticated
by the PM;
 (Expenditure is deems to be duly authenticated if :-
1. It has been specified in the schedule of authorized
expenditure.
2. The schedule has been signed by the P.M.
3. The schedule has been laid before the N.A.
(It is valid for that financial year only.)
 “Supplementary Budget Statement” means the
statement to be laid before the National assembly
showing the amount of the additional expenditure
estimated to be required during a financial year, over
and above the expenditure already authorized, for that
year;
 “Surrender” means an amount included in the budget that
is given back, as it shall not be spent in the financial year by
the office;
 Budget Classification.-

 The Budget shall be prepared in accordance with Chart of

Classification of accounts issued by the Auditor General of
Pakistan.

 The expenditure shall be classified into Development or Current

expenditure.
FUND

 Fund – the pool of money from which budgetary allocation

is made (eg. Consolidated Fund), and is further sub-divided
into grants.
 Importance of Budget

 Budget not a mere forecast of revenue and

expenditure but an important policy document

 It is a mean of balancing revenues and

expenditures

 It reflects intentions of policy makers

 It is a system of accountability where legislature

holds executive accountable
120
 Importance of Budget

 “The budget system of the Government provides the

framework within which decisions on resource allocation
and program management are made in relation to the
requirement of the Nation, availability of the Federal
resources, effective financial control and accountability for
use of resources”.
 Consitutional provisions
Articles
78 - 84
Financial Procedures

122
123
 The Public Account consists of trust accounts and special
deposit accounts. Trust accounts are generally separated
legal entities, and as such expected to produce financial
statements. Examples of trust accounts are:
 general provident funds
 insurance funds
 benevolent funds
 relief and welfare funds
 reserves
 ..

125
 80. 8080(180 80

126
 81.81-81Charged
81

127
 .

128
 82. (1) So much of the Annual Budget Statement as

129
 (3)

131
 83. (1) 83-

132
 (2)

133
 84. If in respect of any financial year it is found -

134
 the Federal Government shall have power to authorize

135
 Budget Types

 Balanced Budget

 Surplus Budget

 Deficit Budget

136
 Other Classification

 Annual Budget Statement

 Supplementary Budget Statement

 Excess Budget Statement

137
Grants
 Allocation of funds and its execution as per schedule of
authorized expenditure
 Grants
 Token supplementary Grant to open and operate a new
budget head

 Technical supplementary grant to transfer funds from a

grant where there is saving to a grant which needs additional
funds

 Regular supplementary grant when saving is

not available either through re-appropriation or technical
supplementary grant.
Supplementary Grant
 ;- The Regular Supplementary Grant is sanctioned when
saving is not available either through re-appropriation of
funds from within the same Grant/Demand
 Grants
Technical Supplementary Grant :-
 The Technical Supplementary Grant is sanctioned to transfer
funds from a Grant/Demand as a result of accrual of saving
to another Grant/Demand. Which needs provision of
additional funds.
 Token Supplementary Grant :- The is sanctioned to open
and operate a new budget head.(Rs.1000)
Difference
 Technical Supplementary Grant does not imply any
additionality to the sanctioned budget grant, whereas, the
Regular Supplementary Grant involves an upward
change in the sanctioned budget grant.
 All Supplementary Grants have to be presented to the
Parliament for ex-post authorization.
 The funds obtained through Supplementary Grants shall be
expended for the purposes for which these have been
sanctioned.
 The last date for submission of Schedule of Supplementary
Grants/Technical Supplementary Grants to the Finance
Division (BudgetWing) shall be 31st May of the financial year.
Budgetary procedure
 Setting of Budget Policy and initiatives:- The Cabinet meets
at an early stage of the current financial year to determine
budget policy, initiatives and priorities for the following year
budget. At this stage the broad economic thrust of the budget
will be determined in the light of prevailing financial position
of the govt. and the planned size of the deficit or surplus. If
there is deficits, consideration is then given on how it will be
financed.
 Budget Overview

 One of the main activities of Ministry of

Finance is formulation of Federal
Government Budget.

 The budget year in Pakistan is from 1st

July to 30th June.

 The process of budget formulation starts

at the lowest level of the Government
and is completed at the top level after various
checks and exercises.
145
 Budget Overview

 The original estimates are framed in

minute detail by the agencies and
departments.

 The estimates, as demanded by the

Administrative Ministries and Divisions,
are subject to detailed scrutiny by the
Financial Adviser organization and
Ministry of Finance.

146
 Government
Accounts

Federal Public
Consolidated Fund Account

Receipts Expenditure Receipts Disbursement

Revenue Capital Current Development

External
Tax
Resources

Direct Public
Debt etc.

Indirect

Non-Tax

147
 Method of Budgeting

Method used for budgeting by ministries and

departments will be determined by Finance
Div/Department.
Incremental
Zero based
Programme based

Budgets should be framed according to

planned outcomes and not inputs.
Medium Term Budgetary Framework
148
 Incremental Budgeting.
 In traditional approach of budgeting, the managers start with last
year's budget and add to it (or subtract from it) according to
anticipated needs.
 This is an incremental approach to budgeting in which the
previous year's budget is taken for granted as a baseline.
 This approach is called incremental budgeting.

149
 Zero-based budgeting
 Zero-based budgeting is an approach to planning and
decision-making which reverses the working process of
traditional budgeting.
 By contrast to incremental budgeting , in zero-based
budgeting, every line item of the budget must be approved,
rather than only changes.

150
 ...... Zero-based budgeting
 During the review process, no reference is made to the
previous level of expenditure. Zero-based budgeting requires
the budget request be re-evaluated thoroughly, starting from
the zero-base.
 This process is independent on whether the total budget or
specific line items are increasing or decreasing.

151
 Advantages of ZBB
 Efficient allocation of resources, as it is based on needs and
benefits rather than history.
 Drives managers to find cost effective ways to improve
operations.
 Detects inflated budgets.

152
 Advantages of ZBB
 Identifies and eliminates wasteful and obsolete operations.
 It helps in identifying areas of wasteful expenditure and, if
desired, it can also be used for suggesting alternative courses
of action.

153
 Disadvantages of ZBB
 More time-consuming than incremental budgeting.
 Justifying every line item can be problematic for
departments
 Requires specific training, due to increased complexity vs.
incremental budgeting.
 In a large organization, the amount of information backing
up the budgeting process may be overwhelming.

154
 Budgeting Cycle

 Setting of budget policy and initiatives

 Preparation
 Authorisation
 Implementation
 Reporting and Monitoring
 Review

155
 Cabinet

Preparation
Policy of Budget
Setting

Review of Authorization
Budget of Budget
Budget Cycle

National /Provincial
Reporting Assembly
& Implementation
Monitoring of Budget

DAOs, AGs/AGPR,
CGA, Executive
Departments
156
STAGES OF BUDGET

Following are the seven stages of Budget :-

i) Preparation
ii) Compilation
iii) Authentication
iv) Execution
v) Monitoring
vi) Accounting
vii) Auditing

157
Preparation:-
Based on the parameters set by finance division,
ministries then prepare and submit their budgetary estimate
through the financial advisor. These officers coordinate the
budgets of the Ministry and its various Attached Departments
with the Finance Division.
Authorization:-
This stage involves submission of the annual budget
statement before the national assembly for approval as required
under the constitution. The approved budget referred to as the
schedule of authorized expenditure, which is then authenticated
by the P.M.
Implementation:-
The next stage is the communication of the approved
budget to the spending Ministries/Departments and the
incurring of expenditure of those entities in accordance with the
accounting policies and controls.
Reporting and Monitoring :-
Throughout the year, expenditure and receipts are
progressively monitored against budget estimates.
Review:-
From time to time the government will review actual
expenditures and receipts and the achievement of policy
objectives. Where necessary, supplementary and excess budget
may be prepared and authorized for major changes to the annual
budget.
General classification of receipts
 Forecasts of revenues shall be prepared by those entities
responsible for administration of those revenues, on the basis
of expected collection. This includes tax authorities such as
CBR (FBR) in the federal govt. and respective excise and
taxation departments in the province.
Revenue Receipts – (Direct Taxes)
Income tax:- includes
personal and company
income taxes. It is regulated
under the income tax
ordinance 1979.
Property and wealth tax:-
Includes taxes on wealth, Capital
Value Tax (CVT), and tax on
immoveable property and land-
regulated under the wealth tax
ordinance 1963.
Revenue receipts – (Indirect taxes)
Custom duty :- Includes custom
duty imposed on imports and
exports and custom related fines,
fees and penalties. These receipts
are normally recorded by the
custom treasuries.
Excises:- include federal and
provincial excise duties on a
range of products, commodities
and services. It is regulated by
the custom act 1969.
Sales tax:- applies to goods
imported, exported or produced in
Pakistan. Specific procedure, levies
and exemptions in relation to sales
tax is regulated by the sales tax act
1990.
 With Holding Tax:- On interest earned
in bank account shall be deducted by
bank, transferred to the bank account.
With holding tax payable by the
contractor is deducted at source.- it is
regulated under income tax ordinance
1979
Revenue Receipts – Other Income (non
taxes)
 Income from trading enterprises:-
these includes proceeds of excess
wheat and other commodities,
recoveries, subsidies and receipts from
the sale/ privatization of trading
enterprises.
Interest received:- At the
time of loan and advance are
repaid or upon encashment
of government investments.
Dividend received:- Dividend
received from any trading
enterprises in which a govt. is a
share holder – It forms as the part
of Federal Consolidated fund.
 Proceed from sale of stores and assets:- It
forms the part of federal consolidated
fund. where the initial purchase was made
from the consolidated fund. if initial
purchase made from the public account,
the amount should be credited back to the
public account head.
Grants and Contribution received:-
Any grant or contribution received
by the govt. which results in an
inflow of cash or cash equivalent is
to be treated as consolidated fund
revenue.
 Judicial receipts:- Refers to any fees, fines
or penalties levied by the civil and criminal
courts arising from the judicial process.
These receipts are distinguished from
judicial deposits (which are placed into
public account) and judicial stamp duties
which are classified under indirect taxes.
Capital Receipts
 Recoveries of Investment:- Refers
to recoveries made from various capital
works including drainage and irrigation
work. It also include recoveries from
investment in financial institutions.
 Recoveries of Loan and Advances:- Where
the govt. provides loans to provinces, local
bodies or other institutions, where govt.
servants take out advances such as HBA, Motor
vehicle Adv. The recoveries are also a capital
receipts and will be recognized when
repayments are made by salary deductions.
Public Debt:- Receipts arising from
all public debt including internal
and external borrowings or placed
into the consolidated fund and
called capital receipts.
 Budget calendar
Budget call Circular
December 2012
Completion of all Budget Documents
(and ‘Green Book’), Schedules and
Summaries for Cabinet etc.
(May- June 2013)
Presentation of Budget (including
‘Green Book’) to the Cabinet and
Parliament
May- June 2013
179
Submission of Forms
by Ministries/Divisions for current
budget to FAs/DFAs
February 2013
Priority Committee, APCC, NEC
(April – May 2013)
Authentication of the schedule of
approved expenditure by Parliament
June 2013
Submission of Forms by
Ministries/Divisions for development
budget to Sector Chiefs in Planning
Commission and copy to FAs/DFAs
March 2013
submission of Forms
(BOs/NISs) on Chart of Accounts for
recurrent and development
expenditure to the Budget Wing
(Finance Division)
March 2013
Funds release by Finance department
July 2013
 Roles and Responsibility in Ministries

Principle
Accounting
Chief Officer
Finance and
Drawing and Accounts
Disbursing Officer
Officers

180
Schedule of Authorized Expenditure
Cash Management
Functions (Cash Receipt &
Cash Disbursement )


Cash Functions
 Cash collection and cash disbursement
 Payments from Departmental chest (Permanent
advance)
 Disbursement of Wages etc to Staff.
 Disbursement to Contractors
 PERMANENT ADVANCE / REVOLVING IMPREST.
(Rule – 132 GFR)
 Advance is granted to the officers who may have to make
payments before they can place themselves in funds by
drawing on the treasury. It is meant for emergent petty
advances for all kinds.
 CONDITIONS.
 The amount of advance will be fixed by the
Government.
 HOD may sanction the amount of advance to their
subordinate officers in consultation with the AG
concerned.
 Application for grant of advance or revision of advance
must be submitted through AG concerned.
 The amount of advance must not be larger than is
absolutely essential.
 These advances should not be multiplied unnecessary.
 It should be utilized only for emergent expenses.
 The holder is responsible for safe custody of the amount
and accountable for the total amount
Maintenance of Accounting Record
 Cash Book
 Control over/Appropriation Register/Petty cash
register.
 Expenditure statements
 Stock register.
 Log book
Appropriation Accounts and Finance Accounts
Personnel Functions of
specific entities.
Personnel Functions

 Appointments
 Transfer /posting
 Grant of award/honorarium
 Pay fixation
 Sanction of Leave
 Disciplinary actions
•Duties and Responsibilities of
Cashier
 To Draw and disburse Cash
 To prepare bills (Pay , TA & Contingent bills)
 To maintain in the prescribed performa:-
 Cash Book
 Contingent Register
 Expenditure Accounts Register
 Appropriation Accounts Register
 Stock Register
 Stamp Accounts Register
 Preparation of Expenditure statement to the quarter
concerned.
 Statement of access and surrenders
 Re-appropriation order for approval
 Preparation of change statements for computer pay rolls
 Reconciliation of departmental figures of expenditure with
the AGPR
 All steps have been taken with a view to obtaining an
additional appropriation if the original appropriation has
either been exceeded, or is likely to exceed.

 In the case of contract contingencies the proposed

expenditure does not cause any excess over the contract
grant. [FTR 295]
General instruction for handling cash
(Rules 76-77 FTR )
 As a general rule money may not be allowed to pass
through the hands of a departmental officer as for as
possible .
 When money is tendered as due to the Government it
should be deposited in the bank or treasury.
 Similarly payments should be made through banks or
treasuries whenever practicable .
 In every Department when cash is handled a cash book
should be handled in form TR-4
 All monetary transactions should be entered in the cash
book as soon they occur and attested by the HOO or by
any other gazetted officer authorized on this behalf.
 The cash book should be closed regularly.
 The total should be checked by the HOO himself or
through any other officer other than the writer of the
book.
 The total should be initialed by the HOO.
 At the end of the month when the cash book is finally
closed the cash balance should be verified by the HOO
and a signed and dated certificate recorded to
that effect.
 The cash in hand should be mentioned in figures as well
as in words.
 Entries should be neat and clean and erasure and
overwriting should be avoided. If there is an error it
should be corrected by drawing the pen through the in
correct entry in red ink
 All the corrections should be dully attested over the dated
initial of the HOO.
 If any amount other than Government money is handled it
should be kept in separate chest and accounted for in separate
set of books.
 Withdrawal of Money
 Public money may not be withdrawn from the
federal consolidated fund or the public account of
the Federation except by presentation of
bill.(FTR-130)
 GENERAL INSTRUCTIONS REGARDING
PREPARATION AND FORM OF BILLS FTR
138
 Printed forms of bills should be adopted
 All bills should be filled in and signed in ink
 All corrections and alterations in a bill should be attested
by dated initials of the person signing the receipt as many
times as such corrections and alterations are made.
 Erasures and over-writings or applying white correcting
fluid in any bill are absolutely forbidden and must be
avoided. If any correction be necessary, the incorrect
entry should be canceled neatly in red ink and the
correct entry inserted.
 Accounting classification must be recorded on each bill by the
drawing officer.
 Charges against more than one major heads should not be
included in one bill.
 This rule does not apply to the allowances of a government
servant drawn with pay, as in such cases all the allowances,
even if belonging to more than one major heads, should be
drawn on a single bill, if debitable wholly to one government.
 When bills are presented on account of charges incurred
under any special orders, the orders sanctioning the charges
should be quoted.
 Copies of sanctions accompanying a bill must be duly
certified by a gazetted officer or by a responsible subordinate
specially authorized in this behalf by the head of the office.
 Dates of payment should be noted by the payee in their
acknowledgements in sub-vouchers, acquaintance rolls
etc.
 When a drawing officer requires payment to be made
through some other person or agency, he must
specifically endorse an order or furnish such
authorization as may be necessary to pay to that specified
person or agency. [FTR 138]
SIGNATURE AND
COUNTERSIGNATURE ON BILLS
 Head of an office may authorize any gazetted officer serving
under him to sign a bill or order on his behalf,
communicating the name and the specimen signatures of the
officer. This will not, however, relieve the head of the office,
in any way, of his responsibility for the accuracy of the bill or
for the disposal of the money so received. [FTR 142]
 Bills which under any rule or order require to be checked by
the A.G. before disbursement, shall not be presented to T.O.
for payment except through the A.G.[FTR 144]
DUPLICATES AND COPIES OF THE
BILLS
 No government officer may issue duplicate or copies of
bills or other documents for payment which has already
been paid on the assertion that the original have been
lost. If any necessity arises for such a document, a
certificate may be given that; on a specified day certain
sum was paid to a certain person. The prohibition
extends only to the issue of duplicate on the assertion
that the original have been lost and does not apply to
cases if any, in which, by any rule or order duplicates
have been prepared and tendered with the original.
 In case of a bill passed for but lost before payment, the
government officer who drew the original bill shall
ascertain that the payment has not been made on it
before he issues a duplicate one. The duplicate bill if
issued, must bear distinctly on its face the word duplicate
written in red ink. A proper record should be kept of the
payments made on duplicate bills and it should be
ensured that no payment is made if the original bill is
presented again.
 When any kind of bill is required to be prepared in duplicate
or triplicate, only one copy should be signed, or
countersigned in full and the other copy or copies shall only
be initialed. The original should be sent to the A.G. with
accounts. [FTR 145]
CHECKS TO BE APPLIED ON
CLAIMS PRESENTED
 The bill, cheque or other documents presented as a claim for
money should be received and examined by the accountant
and then laid before the drawing officer who if the claim is
admissible, the authority good, the signature and counter-
signature in order will sign the order for payment at the foot
of the bill. [FTR 177]
 Where endorsement on a bill is unauthorized, incomplete or
otherwise irregular, the drawing officer should refuse
payment of the bill and return it to the person who presents
it with a memorandum explaining why payment is refused.
[FTR 180]
 No document bearing an erasure should be accepted and
payment on such documents should be refused and fresh
document called for [FTR 181]
 With regard to a claim presented either on bills or on
cheques the signature of the drawing officer should be
compared carefully with his specimen signatures, before
payment is ordered. In case of payment to be made on
the authority of an order purporting to have been issued
from the office of the A.G., the signatures on the order
should be verified by the T.O. with specimen signatures
of the signing officer. [FTR 182]
 The arithmetical computations on the bills should be checked
before payment. [FTR 183]
 A register shall be kept showing the names of all gazetted
government officers drawing their pay and allowances or leave
salary from the Treasury. As each pay slip or leave salary certificate
is received from the Treasury Officer, the amount of pay and
allowances or leave salary shall be entered against the name of the
government servant concerned. As each pay or leave salary bill is
presented for payment, reference to this register shall be made to
see that the sanctioned rate is not exceeded. [FTR 184]
 The bills for pay and allowances or leave salary of a gazetted
government servant who is about to retire shall be separately
submitted to the A.G for special audit on the date of payment
or as soon as the intentions of the government servant to
retire become known to the T.O. [FTR 185]
 A T.O. shall not undertake correspondence for a government
servant or a private individual making a claim to any special
allowance or concession, but the person concerned should be
requested to address the A.G. either direct or through his
own official superior as the case may be. [FTR 186]
VOUCHER OF PAYMENT
 A government officer entrusted with the payments of money
should obtain for every payment a voucher setting forth full
and clear particulars of the claim, acknowledgement of the
payee, and all information necessary for its proper
classification and identification in the accounts. [FTR 205]
 GENERAL PRINCIPLES REGARDING
Receipt of money (GFR 4 – 8 )

 All monetary transactions should be brought to account

immediately as they occur.
 All the money received as dues of Government should be
credited to the Public account by depositing it in the
bank or treasury.
 Moneys received by the Government official in his public
capacity, which is not Government dues, may be kept
separate from the Government account.
 Revenues and other receipts of the Government may be
correctly and properly assessed, quickly realized and
immediately deposited with Government account.
WITH DRAWAL OF MONEYS FROM
THE PUBLIC FUND
 No money can be removed from the public account for
investment or deposit else with out prior consent of
MOF.(GFR-7)
Essential conditions governing
expenditure
 No expenditure can be incurred without sanction of the
competent authority.
 No expenditure can be incurred without the provision of
appropriation and authorized grant for the year.(GFR-9)
POWERS OF SANCTION
(Rules 39 –49)
 All financial sanctions are issued in the name of
president.
 The responsibility of financial operations of the Federal
Government rests with the President of Pakistan.
 Sanctioning powers have been delegated to Ministries/
Divisions / Departments.
 The powers which have not been delegated to the
Ministries/Divisions vest in the MOF.
COMMUNICATION OF SANCTION
( Rules 51 – 59)
 All financial sanctions and orders issued by the authorities
with in the delegated powers are communicated to the
Accountant General.
 All sanctions beyond the delegated powers of the
Ministries/Divisions should be sent through MOF.
 Where prior consent has been obtained from MOF/AGP,
this fact should be recorded in the sanction.
 All sanction should indicate the source of appropriation
 All sanction have effect from the date of orders conveying the
sanction.
 Retrospective effect may be given with the approval of MOF.
 A sanction, which is not acted during the currency of the
financial year lapses with the end of the year.
Government of Pakistan (SPECIMEN OF SANCTION)
(Establishment Division)
SECRETARIAT TRAINING INSTITUTE
No.F.8-3/96-Gen. Islamabad, the 24th April, 2007.
The Accountant General Pak. Revenue,
Islamabad.

Subject:- WASHING CHARGES

Dear Sir,
In exercise of powers delegated to Head of Department vide Finance
Division’s O.M. No.F-3(2)exp.III/2006 dated 13-09-2006, I have the honour to
convey the sanction of the President of Islamic Republic of Pakistan to an
expenditure not exceeding, Rs.490/- (Rupees four hundred ninety only) on
account of washing charges of seven Table Cloths from M/S Ever Green Dry
Cleaners, Islamabad vide their cash memo No.4632 dated 18-04-2007 (Original
enclosed).
2. It is requested that a cheque of the above amount may kindly be issued in
the name of the D.D.O., STI, Islamabad.
3. The expenditure involved in debitable to the following heads and will be met from
within the sanctioned budget grant for the year 2006-2007:-

01 - General Public Services

019 - General Services not elsewhere defined.
0191 - General Public Services not elsewhere defined.
019101 - Administrative Training
A039 - General.
A03970 - Others.
Yours Faithfully,
Sd/-
(Muhammad Ijaz Ghani)
Assistant Director (General)
Copy to: 1) DDO, STI, Islamabad.
2) Sanction Register.
(Muhammad Ijaz Ghani)
Following are some steps to ensure internal
control over cash:-

 Separation of functions of handling cash and

maintenance of accounting record.

 Control listing of cash receipts and payments.

(Accounting the transactions immediately when they
occur.)
 All cash receipts be deposited in the bank on daily basis.
 Payment through cheques.
 Verifications of the claims before payments.
 Separate the function of approving expenditure from the
functions of signing the cheques.
 Reconciliation with the banks.
 Every Government officer who is supplied with Government
fund for expenditure is fully responsible for them until he
has rendered an account for the same to the satisfaction to
the AG concerned.
 He is also responsible to ensure that the payments are made
to persons entitle to receive them
 GENERAL LIMITATIONS
 All charges actually incurred must be paid and drawn at once,
and under no circumstances should they be allowed to be
carried forward for payment in another financial year [FTR
289]
 No money shall be drawn from the treasury/ bank unless
it is required for immediate disbursement. It is not
permissible to draw money from the treasury/bank in
anticipation of demands or to prevent the lapse of budget
grants. [FTR 290]
 The charges relating to two or more major heads should
not be included in one bill. [FTR 291]
RESPONSIBILITY OF CONTROLLING AUTHORITY[FTR
296]

The countersigning officer shall be responsible for seeing

that:
 The items of expenditure included in a contingent bill are
of obvious necessity.
 The rates are reasonable.
 The sanction is attached.
 The requisite vouchers are in order.
 The calculations are correct.
 The budgetary limits have not been exceeded nor are they
likely to exceed.
 Audit officer has been informed either by a note on the
bill or otherwise of the reason for any excess over the
monthly proportion of the appropriation.
PLACE OF PAYMENT
 Normally, a payment shall only be made in the District
(Accounting Circle) in which the claim arises. [FTR 19]
PAYMENT TO GAZETTED OFFICER[FTR
20]

 Any payment to a gazetted government servant shall be made

only after Accountant General has intimated to the T.O.
about the rate at which payment shall be made. (LPC)
PAYMENT OF FIRST SALARY
 For admitting a first claim of pay and allowances of a
government servant other than of a person who has been
newly appointed the claim should be supported by a Last Pay
Certificate. [FTR 21]
ARREARS CLAIMS
 No claims against the government not preferred within
six months of their becoming due can be presented
without any authority from the A.G. except payments of
claims on account of pensions, or payment of interest on
government securities or any other class of payments
which are governed by special rules or orders of the
government. [FTR 136]
Thank You