A.

P Financial Code
Financial Code –Volume I :- 330 Rules and 27 Forms– 16 chapters
Financial Code –Volume II :- 27 Appendices
Financial Code –Volume III :- Delegation of Financial Powers

Volume -1
1. Chapter I -Introductory (Article 1 to 6)

FINANCIAL ACCOUNTABILITY

 Every item of expenditure should be covered by adequate budget

sanctioned for the purpose.
 There should be competent administrative sanction

 DDO is responsible for any loss that may be found due to neglect
of his/her duties
 The best possible value is obtained for all public funds spent by
him/her or under his/her control
 Guard scrupulously against every kind of wasteful expenditure
from public funds
 The fact that he/she is mislead by subordinates will not mitigate
responsibility
 Ignorance of rules, is not an excuse

Article- 5: – Drawing Officers responsibility for any misappropriation

Every Government servant should see that proper accounts are

maintained for all Government financial transactions with which
he is concerned and render accurately and promptly all such
accounts and return relating to them as may have been prescribed
by the Government , the Accountant-General or the competent
departmental authorities. He should check the accounts as
frequently as possible in order to see that his subordinates do not
commit fraud, misappropriation or any other irregularity.
 The Government will hold him personally responsible
for any loss that may be found to be due to any neglect of the
duties laid upon him by the provisions for the code and the other
Financial Codes issued by the Government (see also Chapter XII) .
The fact that a Government servant has been misled or deceived
by a subordinate will in no way mitigate his personal
responsibility, since every Government servant should be familiar
with the financial rules laid down by the Government and exercise
a specially strict and close control over his subordinates, in regard
to the use of public funds and maintenance of proper accounts.

2. Chapter II – Definitions
3. Chapter-III- Receipts, their collection and check(Art 7 to 37)
Rents of Government buildings, cost of survey, Auctions, Fines,
Receipts ,Recovery, Refund, Time limit, Preparation of DCB sheets,
Audit(Appendix 10)

Article -9: Controlling Officers should monitor- D.C.B

Every department controlling officer should obtain regular accounts and

returns from his subordinates for the amount realized by them and paid into
the treasury and consolidate the figures in a register so as to show the total
receipts for each month classified according to the head of account in the
Budget Estimates .The controlling officer should compare the figures compiled
in the register with the accounts received from the Accountant-General and
reconcile any differences as early as possible in communication with the
treasury officers concerned , and if necessary, with the Accountant- General
also. The reconciliation of the figures for March is especially important and
should be completed as soon as possible, since any corrections that may be
required in the accountant – General at once in order that the accounts may be
corrected. When a subordinate Government servant’s return includes a credit
for which there is no corresponding credit in the accounts received from the
Accountant-General, the controlling officer should in the first instance call for
full information from the subordinate Government servant.

Article-13-21: Rents of government buildings due from Government

Servants
 When a building is constructed or acquired for use as residence or
additions or alteration are made in an existing residential building, the
Government servant in charge of the building should prepare a statement of
date for the calculation of the rent leviable in accordance with provisions of
the Fundamental Rules and obtain through the Accountant –General the
order of the Government or other competent authority in regard to it .Except
in cases falling under clause (v) of the proviso to Fundamental Rule 45 A-II or
under Fundamental Rules 45 A-V or where the building is used partly as
residence and partly as office the competent authority for this purpose is the
superintending Engineer of the system concerned for building in charge of the
Electricity Department and the Chief Conservator of Forests for building in
charge of the Forest Department.

Article- 22- A: Sale of Government property or right by auction.

When any Government property or right is sold by Public Auction the

government servant conducting the auction shall give adequate time before
knocking down the bid in favour of the highest bidder and shall also obtain the
signatures of the successful bidder and two other bidders lower to the highest
bid in the sale register or relevant record with the amount of the bids written
in words and figures and duly dated

Article – 32: Refunds of Revenue- Appendix Two lays down

Authorities Competent to order refund
Article – 35: Time Limits for claims for refund of revenue. Exgratia refunds
to be sought within 3 months; statutory within one year

1. Chapter IV :Expenditure-General principles and Rules

( Article 38 to 60) Sanction, Date of effect of sanction, lapse, contract,
arrear claims

Article – 38: Inevitable payments to be settled without delay

No Government servant may incur any item of expenditure from

public funds unless the following two conditions are satisfied:-

(a) The expenditure must have been sanctioned by a general or special

order of the authority competent to sanction such expenditure, and
 (b) Sufficient funds must have been provided for the expenditure in the
Appropriation Act (s) for the current financial year or by a
re -appropriation of funds sanctioned by a competent authority.

No authority subordinate to the Government should sanction any

expenditure unless sufficient funds have already been provided for
the purpose either in the Appropriation Act (s) or by reappropriation.

It should, however , be clearly understood that the fact that no

appropriation of fund has been authorized for a particular item of
expenditure is not a valid excuse for delaying the payment of any
amount indisputably due by the Government. Every claim for any
such amount should invariably be paid as promptly as possible , and
the superior authorities concerned should deal severely with any
unnecessary delays which come to their notice in regard to the
payment of claims of the kind. Similarly, the want of sanction by a
competent authority for a particular payment actually made is not a
valid excuse for delaying the entry of the payment in the
Government account .Under no circumstances may any payment
actually made by or on behalf of the Government ,kept out of the
Government accounts for a day longer than is absolutely necessary.

Article – 39 : Budget lapses by close of fiscal year

All appropriations lapse at the close of the financial year. A

Government servant should not on any account reserve or appropriate by
transfer to a deposit or any other head or draw from the treasury and keep in
a cash chest, any portion of an appropriation remaining unexpended during
the year in order to prevent it from lapsing and use it for expenditure after the
end of the year. No attempt should be made to prevent the lapse of an
appropriation by any undue rush of expenditure during March.

Article – 42 : Sanction to be in conformity with sanction and statutes

An authority subordinate to the Government may sanction expenditure or

advances from public moneys in those cases only in which it is authorized to
do so by –
(i) the provisions of any legislative enactment for the time being in
force or of rules made under any such enactment, or
 (ii) the rules in the Code, or
(iii) an order of the Government delegating to it power to incur
expenditure of a specified kind .

Except when the Government have expressly accorded their previous

sanction in each case, no authority subordinate to the Government may
under any circumstances incur any expenditure involving the
introduction of a new principal or practice.

The powers delegated by the Government to the collector and Special

Chenchu Officer , Kurnool, in regard to expenditure required for the
reclamation of the Chenchus are specified in Appendix-3.

Communication of Sanction

Article – 45 : Formal – communicated to Accountant General; Finance

Departments concurrence for Government Sanction

A copy of every order sanctioning expenditure should be

communicated to the Accountant General/Pay and Account Officer,
Hyderabad by the authority which accords the sanction .Copies of such order
involving the withdrawal of moneys from the Consolidated Fund, the
Contingency Fund in the public account o f the State of the Andhra Pradesh
shall be authenticated by an officer not below the rank of a section officer in
any Department of the Secretariat .

Sanction covered by the items 1 to 4 enumerated below may be

communicated direct to Accountant General / Pay and Accounts Officer ,
Hyderabad by the Administrative Department over the Signature of a
Gazette Officer of the Department , dealing with the subject matter of the
sanction . Two copies of the sanction order should be communication and
the Finance one and Planning (BG) Department and the other to the
concerned section in Finance and Planning (Fin-wing ) Department.

(1) Cases sent to the Finance Department in both the proposal and draft
stages and accepted by them
(2) Cases sent to the Finance and Planning (Fin-Wing) Department in the
proposal stage and accepted by them but not send in the draft stages .
 (3) Cases sent to the Finance and Planning (Fin-Wing) Department in
the proposal stage and modified by them and accepted in the draft
stage with modification.
(4) Cases sent to the Finance and Planning ( Fin-Wing) Department and
objected to by them in the proposal stage but in regard but in regard
to which order in circulation have been take in accordance with
business Rules and drafts seen by Finance.

A paragraph to the effect viz..” The order /memo , issued with the
concurrence of the Finance and Planning ( Fin-Wing) Department vide
their U.O. No. dated” may be added in the proceedings ( Government
orders, memo, letter or endorsement) in the above cases .

In respect of cases where the file of the administrative department was

seen in the Finance and Planning (Fin –Wing) Department and objection was
raised but order were takes in circulation in accordance to the business rules
and drafts issued without Finance and Planning ( Fin- wing) Department
seeing before issue . Or any other similar cases where in order have been
issued without the Finance and Planning (Fin-Wing) Department being
consulted or where the advice of Finance and Planning(Fin- Wing) has not
been followed and orders issued by an administrative department on its
individual responsibility due to reasons of urgency ,there copies of the
relevant sanction should be sent to Finance and Planning (Fin-
Wing)Department for being communicated to the Accountant –General .

In such cases two copies may be sent to the concerned section in

Finance and Planning (BG) Department

In respect of cases where the concurrence of the Finance and Planning (

Fin-wing) Department is not necessary with reference to Delegation Rules
issued by the Finance and Planning (Fin-Wing) Department sanction may be
communication to the Accountant –General direct with an endorsement in
order as follows:-

Two copies of every such sanction should be marked to Finance and

Planning (Fin-wing) Department one to the Finance and Planning (BG)
Department and the other to the concerned section in the Finance and
Planning (Fin-Wing) Department.
Government Officers shall use Digital signatures also for Electronic Service Delivery
in Government transactions instead of the INK Signed Signatures wherever
necessary as per codal provisions( GO Ms no 52,Finance(TFR) dated 22-02-2014)

Article – 46 : Reasons for sanction

An order sanctioning an addition to pay of any Government servant

should state briefly the reasons for granting it,so as to enable the Accountant-
General to verify that its classification as special pay or compensatory
allowance ,as the case may be ,is correct .

Wherever as in the instance, a rule required that the reasons for granting
any concession or allowance be mentioned in the order sanctioning it, if it is
considered undesirable to mention the reasons in the official order, the
sanctioning authority should communicate them confidentially to the
Accountant-General.

Article – 47

Every order sanctioning a grant of land or alienation of land revenue,

other than an assignment of land revenue which is treated as a cash payment
should be communicated to the Accountant -General with the details
necessary to enable him to audit the sanction accorded.

Article – 48-Sanction of fresh expenditure

Any authority, which passes any order affecting the personal

emoluments , posting ,leave , etc.., of any gazette Government servant should
communicate a copy to the Accountant-General ; but when any such order is
notified in the Andhra Pradesh Gazette, a separate copy need not ordinarily
be sent to the Accountant – General. An order of special nature sanctioning the
grant to a Non –Gazetted Government servant of any emoluments in an
addition to those admissible under the rules relating to the post which he
holds , or ordering the discontinuance of nay such additional emoluments
previously sanctioned ,should be communicated to the Accountant -General.
Otherwise, it is not necessary to communicate to the Accountant -General
order affecting the personal emoluments of Non-Gazetted Government
servants. The authorities preparing the pay bills and absentee statements
concerned should include in them all the information required for auditing the
pay and allowances of Non -Gazetted establishment , and are responsible for
seeing that the order of the competent authority are obtained in each case as
required by the rules

Date of effect of sanction

Article – 49 : Takes effect from date of issue unless otherwise specific

Statutory rules made by the president of the Union take effect from the
date on which they are passed and executive order issued by the president
take effect from the date of issue of the dispatch , letter containing the
orders.

Statutory rules made by the Government which are required by law to

be published takes effect from the date on which they are published in the
manner, if any, specified in the relevant Act or , if no special mode of
publication is laid down from the date on which they are published in the
Andhra Pradesh Gazette statutory rules made by the State Government which
are not required by law to be published takes effect from the date of order
issuing the rules. Sanction of the Government or authority sub-ordinate to the
Government takes effect from the date of order conveying the sanction

Generally, concessions ,such as revisions of pay ,grant of compensatory

allowances and special pay should not be given with retrospective effect . if
however, any such rules or orders themselves provide that they take effect
from a specified date , that takes effect accordingly.

Lapse of Sanction

Article – 50 : Sanction lapses at close of financial year if specified otherwise

after one year

A sanction for any fresh charge accorded by the Government or an

authority subordinate to the Government Lapses if it has not been acted on for
a year , unless it is specifically renewed . this rule don’t not apply to –
 (1) The sanction for an allowance granted to the holders of a post or a
class of posts subject to certain conditions ,but not drawn by a
particular incumbent or incumbents because the conditions are not
fulfilled;
(2) The sanction of a competent authority for additions to be made to a
permanent establishment progressively from year to year ; and
(3) A sanction conveyed in an order passed by a court in its judicial
capacity.

Note (1):- The period of one year laid down in the Article 50 of this code
shall be reckoned from the date of issue of the sanction which should be
considered to have been acted upon, if payment in whole or in part has
been made within the stipulated period ,subsequent payment of the balance
,may, subject to the existence of the budget provision, be made without a
fresh expenditure sanction. The bill for subsequent payment should contain
a reference to the number and date of the voucher under which the
payment was made , besides giving reference to the expenditure sanction.

Note (2):- When there is a specific provision in a sanction for any fresh
charge that the expenditure would be met from the Budget provision of a
specified financial year, such sanction will lapse on the expiry of the
specified financial year and will not be operative for one year from the date
of sanction.

Note (3):-Sanction of a provident fund advance under Rule 14(1) of

General provident fund (Andhra Pradesh ) Rules and the corresponding
rules of other provident funds will remain operative for a period of three
months and should be deemed to have lapsed after this period unless it
specifically renewed .(Memo .47108/Accts/60-1, dated 31-5-1960).

Contracts
Article – 51: Contracts – formats standardized in codes & manuals. New
contracts changes need legal opinion

(a) A Government servant who incurs expenditure on behalf of the

Government may have to enter into a contract with a private firm or a
contractor for the on contract to serve as an officer under them for a definite
period . Whenever a contract is made by or on behalf of the Government
also sometimes employ a person on contract to serve as an officer under
 them for a definite period. Whenever a contract is made by or on behalf of
the Government , the terms of the contract should be precise and definite
and there should be no room for any ambiguity or for misconstruction of
any of its provisions. Before finally entering into a contract on behalf of the
Government , the Government servant concerned should take legal and
financial advice except in those particular classes of cases in regard to which
the departmental codes or the Govt .Orders issued from time to time
contain clear and complete instructions. Contracts for the supply of stores
or the execution of works should be made as far as possible only after
openly inviting and receiving tenders from all who wish to tender
.Standard forms of the rates mentioned in the contracts should be inserted
in the contract safeguarding the Government against loss or damage in
respect of any Government property that may be entrusted to him or his
servants.

The Government servant who enters into a contract on behalf of the

Government and also his subordinates are responsible for strictly enforcing
the terms of the contract and for seeing that no act is done that would tend
to nullify or vitiate the contract.

(b) Appendix – 4 contains a list of the authorities empowered to enter into

contracts on behalf of the Governor. All contracts in regard to which the
Government have not issued any definite rules or order as to conditions,
forms , etc.., and all contracts containing unusual conditions or involving any
uncertain or indefinite liability should only be made after obtaining the special
sanction of the Government, who will obtain the necessary legal and financial
advice in each case .Whenever it is proposed, for special and exceptional
reasons ,to agree to any material variation in the terms of an existing contract
made on behalf of the Government, the matter should be referred to the
Government for orders.

Article – 52 - Arrear Claims

: Any claim not preferred within one year becomes time barred.. Arrear
claims – one year from due date allowed by drawing officer. If exceeds one
year pre audit by A.G. required. : Individual claims upto Rs. 500 May be paid
without pre audit up to period of 3 years. Claims on Govt. securities paid
without time limit in regard to interest.
G.O. Ms. No. 161, F&P. dt : 27.04.1991, stipulates A.Gs pre audit for claims
upto a period of six years. If it exceeds 6 years Head of the department may
order sanction without need of pre-audit.

Article – 54 : T.A claims within 3 months, L.T.C, within one month to be

preferred.

Claim for T.A. entertained by controlling officer if received within 3

months of performance of tour- L.T.C within one month. Delayed presentation
will result in a 15% cut over total claims. This is allowed only up to one year.

Treasury officer will admit pay bills for staff in a temporary scheme
only upto a period of 3 months beyond sanction on certification by head of the
office that further continuance is applied for

Over charges and Audit Objections

56—Audit objections

Every Government servant who draws bills for pay and allowances
or contingent expenses is primarily responsible for the correctness of the
amount for which each bill is drawn. If any amount in drawn. If any amount
is drawn in excess of what is due , the drawing officer will be required to make
good the excess amount so drawn .If the excess amount cannot for any
reasons be recovered from the drawing officer, the Government servant , if
any who countersigned the bill will be liable to make good any loss arising
from culpable negligence on his part and the Treasury Officer who passed it
will be similarly liable to make good any loss arising from culpable negligence
on his part.

Note :- The Inspector -General of Police may waive recovery of over- payment
of pay and allowances unto a limit of Rs.5 in each individual case , where the
amount become irrecoverable due to the death ,desertion, dismissal or
removal, invalidation or retirement of a police subordinate, provided that the
case does not disclose –

(i) a defect in the system or in the rules , the amendment of which

would require the order of a higher authority , or
 (ii) Serious negligence on the part of one or more Government
servants that might possibly call for disciplinary action requiring
the order of a higher authority.

He should maintain a register showing the amounts waived from

time to time ; review the entries and intimate to audit once a year, the total
number of cases involved and the total amount waived in a year .

57-Salary of Govt. servant

The Accountant -General is responsible for the auditing of all

expenditure charged against the Government. If any item of expenditure is
found to be regular or in excess of what is due, he proceeds to remove the
irregularity or recover the excess amount paid through the Treasury Officer ,
and he usually issue a warning slip to the drawing officer concerned at the
same time . Recoveries relating to the Forest Department are effected through
the District Forest Officer and not through the Treasury Officer .When an item
of expenditure incurred is less that what is actually due for payment and the
amount involved is not insignificant, the Accountant -General informs the
drawing officer of the fact, leaving him to prefer an additional claim or not as
he thinks proper.

Article 58:Recoveries from the salary of Govt servants not to be made at a rate
exceeding 1/3rd of pay except in case of misuse of advances.

Article- 60:
An administrative authority should not ordinarily consider any
representations or protest against a recovery ordered by the Accountant –
General unless the representation or protest is received within three month
from the date when the Government servant making the representation
received the first intimation of the order.

2. Chapter V- Establishments, claims of Govt. Servants and Recoveries

from them.(Article 61 to 90)

Article - 63:Govt.is competent for the creation of posts.

(a) No authority subordinate to the Government may sanction the

creation of any additional establishment, permanent or temporary
 except, to the extent and subject to the condition mentioned in
Appendix 5. The delegations specified there are subject to the general
conditions:-

(1) that either a sufficient specific appropriation for the

expenditure involved already exists provision can be made for it
by re-appropriation by the sanctioning authority under its own
power without reference to the Government , and

(2) that the provision of the Fundamental Rules and Subsidiary

Rules and Instruction under them are observed in fixing the pay
of the persons appointed to hold the posts created under the
delegated powder.

(b) A sanctioning authority should invariable specify the period for

which it sanctions temporary establishment. It should also specify the
date from which the sanction for a temporary establishment will
takes effect or, if it is not possible to specify the date, should state that
the sanction will take effect from the date of actual employment of the
staff or of the head of the staff.

Note :- A Treasury Officer is authorized to pass up to a period of three

months pay bills of Gazetted Officer and Non-Gazetted establishment
which involves payment not covered by the original sanction provided the
Head of the office attached to pay bill of Gazetted and non- Gazetted
establishment a certificate duly countersigned by the controlling officer
empowered to sanction the T.A. bill to the effect that “certified that the
sanction to the temporary establishment had expired on ………. Further
continuance has been applied for and is awaited . Pay and allowances have
been claimed in this bill at the same rate as drawn previously”.

The Gazetted Officer availing the facility should enclose to the bill a
declaration countersigned by the controlling officer empowered to sanction
the post to the effect that “I am holding the Post of ………….. originally
sanctioned up to …….. The sanction for the further continuance of the post
has been applied for Pay and Allowances at the same rate as I was
Drawing previously in the post have been claimed in this bill” In the case
of Gazetted officer who countersign their own T.A. bills the declaration
shall be countersigned by the next higher competent authority.
 (c) The statutory rules issued by the Government in regard to the power
of authorities subordinate to the Government to sanction additional
establishment or to vary the details of a temporary establishment are
contained in part V of the service Manual ,Volume II (1938 Edition).

Article 65 : the scale of pay proposed for a new post should be the same time
scale that already in force.

The scale of pay proposed for a new post , whether temporary or

permanent ,should be the same time-scale as that already in force for posts of
the same class or category except when a different time – scale has been fixed
for temporary posts in a particular department, e.g., the Survey Department,
are generally sanctions on the minima of the time -scale for the corresponding
permanent posts. When the new post to be created will form an addition to a
carder which is divided into grades, the pay of post should ordinarily be that
of lowest grade ,if a higher rate of pay is proposed, the special reason for
proposing the higher rate should invariably be stated .If there is no post in
existence similar to the one proposed, the following principles should be
observed in proposing a rate of pay for the new post :-

(1) If the post is to be filled by a person not already in Government

service, the pay proposed should be the minimum necessary to secure
the services of a person capable of discharging efficiently the duties of
the post.

(2) If the post is to be filled by a person who is already a Government

servant ,the pay proposed should be appropriate with reference to
the nature and responsibility of work to be done and the existing pay
of Government servants whose status is such that they are
considered likely to be suitable for section for the post .

Note :- In the case of establishment divided into separate units or cadres

carrying different scales of pay ,an authority competent to make appointment
in that establishment on both the units or cadres may make excess
appointment in a lower unit carder against the equal or greater number of
vacancies left unfilled in the higher unit or cadres.
Article 70: distribution of Gazetted and non gazetted establishments.

For the purposes of audit and preparation of pay bills the Accountant -
General divided a non-gazetted establishment, when necessary into sections in
consultation with the head of the department or of the office on the following
principles:-

(a) The division should be uniform throughout the State for the same
classes of establishment.

(b) Ordinarily, an officer or establishment containing not more that

twelve clerks should form a single section, Larger offices will
comprise two or more.
(c) The division into sections in large officer should follow the actual
working arrangements of the officer , e.g., a collector’s
establishment may be divided into the following section: Huzur
Serishatadar’s section , Huzur Head Clerk’s section, Revenue
Records section, etc.
(d) In large offices, where the member of ministerial services are
arranged by classes and grades, such as Superintendent , Upper
Division Clerk and Lower Division Clerk each class or grand may
form a separate section.
(e) An establishment consisting of a large number of subordinate
Government servants , such as village school masters, may often
be divided into sections according to taluks or subdivisions of a
district, while in an establishment employed in more advanced
school ,each school would form a separate section.
(f) Clerks, school masters , etc., should not, except in a small
establishment, be combined with subordinates in the last grade
service. Such subordinates should form a separate section or
sections unless they are very few.
(g) The pay abstracts of the district police should be prepared in
accordance with the rules in the police Standing Order . Under
those rules the details regarding subordinates of the rank of Sub-
Inspector or below should be furnished according to the several
grades in the service.

Note 1:- parts of an establishment under the same head of an office

which are charged for under different major head should be treated as
separate establishments. The pay of the prohibition establishments in
Collector’s offices should, however be included in a separate sections of the
main establishment pay bill of the office concerned and not in a separate bill.

Note 2:- The Accountant -General issues from time to time a list of the
sections, fixed by him for each officer , and the entries in pay bills, absentee
statements, annual returns of establishments ,proposition statement and other
similar documents should be made in accordance with the section so
prescribed.

Article – 72: Due date of pay is first working day of month – exceptions are –
transfer to another audit circle: retirement: ousting resignation, transfer of
among PWD circles

(a) Except as provided in clauses (b) and (c) the pay and allowances,
leaves salary and other monthly recurring payment of all the State
Government employees and also the salaries / wages to work-
charged establishments and menials paid from contingencies become
payable on the last working day of the month to which they relate
except for the month of March which shall be paid on the first
working day of April. In case the last working day of the month
happens to be a bank holiday ,the disbursement shall be made on the
previous working day.

Article – 73: Grants in aid bills need counter signature by department

Drawing officers should not sigh pay bills earlier than is reasonably
necessary in advance of the date of presentations at the treasury, so that
supplemental adjustments due charges after the monthly pay bills are signed
may be reduced to a minimum. To avoid congestion Pay Bills may be
presented at the Treasure duly signed five days before the last working day to
which they relate.

Note :- Bills claiming grant -in -aided institutions may be presented at

the Treasury or at the Accountant -General’s office as the case may be , duly
signed by the departmental officers five days before the last working day of
the month to which they relate, so that the bills can be passed before the end
 of the month to enable the staff of the aided institutions to receive their pay on
or immediately after the 1st of the succeeding month .

Article – 74: Efficiency bar orders to be issued by competent authority

When a Government servant’s pay is determined by a time -scale with

an efficiency bar at a certain stage, he cannot draw pay at a rate above that
stage until the authority competent to permit him to pass the bar has signed a
declaration to the effect that his character and efficiency are such that he is fit
to pass it .Sanctioning authorities should not treat this declaration as a mere
matter of form, and should sigh it only when satisfied after careful scrutiny of
the relevant facts and information, that the Government servant concerned is
really fit to pass the bar.

Article- 75: Drawal of Increment in pay

The Government servant should attach an increment certificate(in
form 49 signed by him) to every bill on which a periodical increment in pay
for a Government servant is drawn. He should keep a copy of every increment
certificate for record in his office.

Article – 85: Deduction of provident fund: postal life insurance & other
mandatory funds made from salary

Every Government servant who draws any pay bill should enter in it
correctly the deductions, if any ,to be made on account of various Provident
and Family pension Fund, etc. He should carry out promptly and fully any
order received from the Accountant-General or any other audit officer of a
Fund to make a particular deduction or series of deductions.

Detailed instructions regarding the procedure that should be adopted by

the drawing Officer in marking deductions from the Pay bills an account of
prima of Postal Life Insurance and Andhra Pradesh Government Life
Insurance Policies are given in Appendix 26 of A.P.F.C.vol.II.

Article – 86: Deduction of income tax at source to be made from salaries &
annual return sent to I.T. Authorities

(a) Every disbursing officer who disburses the salary of any Government
servant should make the appropriate deduction of Income -Tax from it at
 the time of payment in accordance with the Indian Income Tax Act, 1922(
India Act Xi of 1922), as subsequently amended, and the rules and
directions contained in the Income -tax Manual and other orders of
competent authorities.

(b) Every Government servant who pays any amount to a government

servant on account of a reward, examiner’s fees or any similar item not
strictly included under the head of “Salaries” should communicate the
details to the Income -Tax Officer concerned in a separate letter or
memorandum when he makes the payment.

Article- 87 : Attachment of pay and allowances by civil courts

Article -88 : Responsibility of Govt servants for recovering amounts attached

by Civil courts from Pay and allowances.

When paying a bill for the emoluments of a gazetted Government

servant or other Government servant who drawn his pay on separate bill,
the Treasury Officer should recover any amount attached by the order of a
court from those emoluments. The responsibility for recovering an amount of
this kind from those emoluments . The responsibility for recovering an
amount of kind from the emoluments of any Government servant who does
not draw his pay on a separate bill, by making the necessary deduction in the
establishment bill, rests on the head of the office. If the Treasure or Sub-
Treasure Officer or the head of the officer ,as the case may be, receives a
relevant attachment order from a Court sufficiently early before the end of the
month ( see Article 73 ), he should see that the amount attached is deducted
from the bill concerned .Each Treasury and Sub-Treasury Officer and each
head of an office should carefully maintain a Register of Court attachment of
pay etc., in the Andhra Pradesh Treasury Code From 41-C, to enable him to see
that proper action is taken on all attachment orders received from courts (see
subsidiary Rules 2(k), 22 and 33 under Treasury Rule 16 and Instruction 9
under Treasury Rule 32).

Article – 90: Fines imposed on subordinates for neglect of duties to be

recovered (only last grade employees)
 Fines imposed on subordinates for ordinary neglect of officer duty are
properly recoverable by stoppages from pay and consequents short drawl of
establishment pay bills.

6 .Chapter VI.-Contingent expenditure (Article 91 to 121)

Article – 91: Contingencies – mean incidentals to run any organization. E.g..

Furniture, books, machinery & equipment , diet money etc.

The term “contingent charges “or “contingencies” is applied to the

incidental expenditure which is necessarily incurred in running an office. The
main items are common to most offices, e.g., expenditure on furniture , books
and periodicals, service postage and telegrams , bicycles, electric current ,
clearing charges , custome duty on imported stores , freight and tour charges.
It includes also incidental expenditure which is required for technical or other
special reasons in the working of particular offices and departments .e.g.,
expenditure on clothing and other equipment in such department as the Jail
and Police Department ,rewards paid to non – officials ,diet and road money
paid to prosecutors, witnesses , jurors and assessors, law charges , dietary and
medical charge in jails and hospitals, purchases of plants ,machinery and
laboratory equipment in colleges in colleges and schools, raw materials for
conversion into manufactured articles in the Jail department , workmen’s
wages , purchases of live – stock for the for the manufacture of sera and
vaccine and similar items.

The contingencies of special offices in the public Works Department

include also expenditure on the supply of and repairs to tools and plants.

Article – 93: Heads of offices may sanction of a routine nature for their
offices they may delegate powers to subordinates

Article – 94: Permanent advance for initial payment of office expenses

advance to be recouped at least twice in a month.

As a general rule, a Government servant is only permitted to draw

money from the treasury on presenting a proper voucher prepared in
accordance with the rules so as to show the precise nature of the expenditure
,and as a general rule no money may be drawn from the treasury until it is
required for immediate disbursement. The permanent advance system is an
exception to these general rules. Unforeseen expenditure often has to be
incurred urgently, and it would sometimes be very inconvenient to postpone
such expenditure whilst fulfilling the formalities ordinarily required for
drawing money from the treasury to enable him to make disbursements of this
kind before drawing the necessary bills ,a Government servant may be
granted a permanent advance, the amount of which should be limited to what
is absolutely to meet his ordinary requirements.

Initial sanction of permanent advance & its increase require Govt. Sanction

Article – 98 : 15th of April permanent advance acknowledgement to be sent

to the sanctioning authority& Certificate enclosed to pay bill of April of
drawing Officer

On the 15th April every year whenever there is a change of incumbent of

the post concerned or in the amount of advance sanctioned , the officer in
whose favour their permanent advance is sanctioned shell send an
acknowledgment to the sanctioning authority in form given below for the
amount due for and accountable for by him as on 31st march proceeding or the
date of charge in the incumbency proceeding or on the date of change in the
incumbency of the post or in the amount of advance sanctioned. The
sanctioning authority shall maintain a register of permanent advances in Form
27 which will be scrutinized by the Accountant-General during local audit.

Article -100: Advances for contingent expenditure on tour allowed

When satisfied that it is really necessary , the head of an office may

sanction an advance to himself or his assistant or deputy to cover contingent
charges during a journey on tour, provided, that no advance is sanctioned in
respect of the contingent charges, such as those for the hire of conveyances or
animals for the carriage of records, tents or other Government property, for a
month or for the probable duration of the tour, whichever is shorter. Except in
the Forest Department, no part of any such advance may be applied to any
expenditure of a gazetted Government servant for which his travelling
allowance is intended to provide (see also Article 84 ). The advance should be
charged to this Government servant returns to headquarters on completing the
tour, if it has not already been fully adjusted. When a Government servant
has drawn an advance of this kind he is not eligible for a second advance of the
same kind until the first one has been fully adjusted.

Article – 102: Contingent expenditure grouped as counter signed & non

counter signed

For purpose of control and audit, contingent charges are grouped as

follows:-
(1) Countersigned contingencies, and
(2) Non- countersigned contingencies.

Expenditure incurred by a Government servant on countersigned

contingencies is under the direct supervision of a higher authority, know as
the controlling officer or authority, who signs the detailed bills relating to
them .Countersigned contingencies are subdivided into contingencies
which require countersignature before payment and contingent which
require countersignature after payment. The detailed bills for the former are
submitted to the controlling authority for close scrutiny and counter
signature , and the full details of the charges are not therefore entered in the
abstract bills presented for payment at the treasury . Appendix 8 contains a
list of the contingent charges that require the countersignature of the
controlling authority.
No detailed bills are sent to the controlling authority for non-
countersigned contingencies; each contingent bill for non -countersigned
contingencies presented at treasury should therefore contain full details of
the expenditure, and the sub-voucher for any individual payment
exceeding Rs.1000/- included in the bill should be attached to it. Such bills
are sent straight to the Accountant -General for audit without any scrutiny
by a controlling authority, and the contingencies in the category are
therefore also called audited contingencies.
Contingent charges should be recorded and treated in the accounts as
charges of the month in which they are actually disbursed from the
treasury.

Article – 103: Contingent register to be maintained, Head of account wise

expenditure noted & attested by head of office

Every item of contingent expenditure, whether the charge is to be

countersigned or not should be recorded in a register to be maintained in each
office. Separate registers may be opened, if convenient, for the countersigned
and the non- countersigned contingencies, respectively. The unit for these
registers should be the major head of account, and the general arrangement
should be as in Form 7 .The number of columns to be included, and the
further detailed classification, if any , required for purposes of control and
audit, cannot be the same for all departments, and offices. The controlling
authority should pass order on these points, in consultation with the
Accountant –General contain no further details beyond the figures, under
detailed account heads, but the contingent register should show the
expenditure classified in detail under the serval items falling under a detailed
account head for departmental purpose. e.g., the preparation and check of
contingent bills, the preparation of estimates, and financial control both by the
head of the office and by superior authorities (See Article 118). The
expenditure on the less important items may be shown as a whole in one
column, and the charge for which a special explanation is required should be
described in the column headed “ Description,” though the amount need be
entered only in the relevant separate column. The column headed
“Description” should be used also for noting the month or period to which any
recurring charge ( e.g., rent or pay of punkah pullers) entered in one of the
columns related.

Article – 108: D.C. Bill for A.C. Bills to be furnished to DTO directly

For contingencies that required countersignature by the controlling

authority after payment and in regard to which the permanent advance is
recouped by presenting abstract bills at the treasure , the head of the office
submits a monthly detailed bill in form 8 signed by himself to the controlling
authority for countersignature and transmission to the Accountant -General.
The detailed bill should reach the controlling authority not later than the 10 th
of the month succeeding Rs 50 (Meno. NO. 50239/ Accts./60-1, Dt. 11-6-1960)
and with a certificate regarding the check and defacement of all sub- vouchers
for amounts of Rs 50 (Memo. No. 50239/accts./60-1, dated 11-6-1960) or less. It
should be headed “not payable at the Treasury” detailed bill, and at the foot of
the bill a memorandum should be added showing the number and date of
every abstract contingent bill cashed at the treasury during the month to which
the detailed bill relates and sub- vouchers included in each. The total amounts
of the detailed bill and the total charges shown in the contingent register for
the month should be fully explained. If any amount drawn on any abstract
 contingent bill cashed during the month has been refunded into the treasury,
the date of refund should be stated.

Article – 115: Inter departmental adjustments made by book transfer

The conditions under which a department of the Government may make

charges for service rendered or articles supplies by it and procedure to be
observed in recording such charges in the account are given in Chapter 4 of the
Andhra Pradesh Account Code, Volume I.

In the case of work done by a Government factory (such as a Jail or

Workshop) or other authorized transfer, the officer in charge will , if the
adjustment is to be made by book transfer, prepare an invoice of the quantity
and price of the work done, and forward it in triplicate to the officer served ,
who ,on approving the invoice, will countersign all, and return one copy to the
supplying officer. Another copy he will file in his own office , and the third he
will attach to the contingent bill for the current month, noting the amount in
the statement of account at foot, in order to work out the available balance of
his appropriation his monthly bill, however, he should post the amount of the
bill paid by book transfer in his contingent register, and include it in the
forward total in order that he may agree that forward total with that shown in
the statement of account on his contingent bills ; in the register of the
countersigning authority the amount of such a bill should in like manner be
separately entered .See Article 105. Such invoices will never be retained by the
countersigning officer.

Note 1 :- The officer served cannot charge the amount in his contingent
bill as no case payment is made , but only a book adjustment in the account
office; but the amount available for contingent expenditure is reduced and so,
to work the available balance, note is made in the register of contingent
expenditure and in the statement of account at he foot of the bill.

Note 2:- The Procedure for the adjustment of the cost of supplies made in
following cases is laid down in the rules noted against them.
(a) Supplies made to the village service establishments Local Ruling 11
under Article 95-99, Andhra Pradesh Account Code, Volume II.
(b) Supplies made by the public Works and Electricity Departments Articles
180-189 Andhra Pradesh Account Code, Volume III and the Local
Ruling there under.

The special rules applicable to public Works Workshop,

Hyderabad , Dowleshwaram and Vijayawada are continued in Local
Ruling 2 under Article 182 of the Andhra Pradesh Account Code,
Volume III.

(c) Supplies made by or to the Forest Department Article 242 Andhra

Pradesh Account Code, Volume II , and the Local Ruling under it ,

Note 3 :- In the case of telephones supplied by the Government

Telephone Department, bills for telephone and trunk call charges for
amount exceeding Rs . 50 each will be received in duplicate and the
officer served, on approving the bill , will countersign both and return
one copy to the supplying officer .He will submit the other copy with
countersign notes in his contingent register, in the case of bills for
amount not exceeding Rs 50 payment will be made in cash or by cheque.
Both the copies of the telephone bills should be presented at the Post
Office where the official concerned will after receiving the case, impress
both copies with date stamp and return one copy to the party along with
a separate received. The copy returns, together with the receipt should be
retained by the officer servant for record in his office. Payments should
be made at the treasury. machine impressed receipts issued by the
Manager .Telephones Madras, on a copy of the bill under the facsimile
signature of the administrative Officer may also be accepted instead of
separate receipts.

Note4:- When an officer countersigns an invoice for stores supplied of

work done for him by a government factory or department, he should
clearly note on the invoice the major, minor and sub-head and the unit
of appropriation to which the charges is debatable as also the authority
for the expenditure.

In respect of work done or supplies made by the Public Works

Workshop, Hyderabad , Dowleshwaram or Vijayawada, the officer
countersigning the invoice should indicate the cost deposited in advance
 into the treasury with date and the different requiring adjustment with
reference to the final cost.

Note5:- Bills in respect of stores, etc., purchased through the Indian Stores
Department are not governed by this Article , but by the special rules framed
by the Government of India. In the case of such bills, unless there are
instructions to the contrary, the consignee should retain only one cost of the
bill for record in his officer, the particulars and amount thereof should be
noted in the memorandum of expenditure in his contingent bill which need
not be supported by a copy of the bill as is required in the case of other bill
paid by book transfer.

Article – 120: Municipal & local taxes on buildings not occupied as

residences
The occupant dept should pay taxes
If more than one dept is occupied revenue dept should pay taxes if it is one of
the occupant
If revenue dept is not in occupation the dept in major occupation should pay
taxes
No municipal tax is payable on a public building situated in a cantonment

3. Chapter-VII : Stores( Art 122 to 146)

 Article- 122 :The term stores is used to indicate all articles &
materials like furniture, chemicals, scientific instruments,
appliances, stationery, diet in hospitals, jails, material for
construction of buildings ,departmentally manufactured stores,
tools & plant but exclude books, publications periodicals etc in a
library.

Article – 123 : Competent authorities are as directed by Government from

time to time

Article – 124 : Forecast of requirements and time of purchase

Article -125 : Rules and instructions governing the purchase of stores

 materials/ stores costing more than Rs.1,00,000 shall be procured through e-

procurement platform only. (G.O.Ms.No. 258, Date:20-9-2013 )
 The matter has been reviewed by the Government and after examining in
detail, hereby clarify that, stores means all articles and materials purchases
(both for works and office use i.e., for all the purchases of
Goods/Products/works/services etc.,) including live-stock [other than cash
and documents] shall be procured through e-procurement platform only,
which come into the possession of a Government servant for use in the
public service, as defined under Article-6 of A.P. Financial Code Vol
(G.O.Ms.No. 40 , Date:14-02-2014 )

Article- 127 : Acceptance of tenders

A Government servant who has to select a tender for acceptance should
take into account the financial status of the tenderers.”After opening the
tenders at the specified time the Government servant shall record a brief
statement on the spot giving the names of the tenderers and amount of
the tenders and obtain the dated signature of such of those tenderers who
are present in token of their presence.” If other conditions are equal, the
lowest tender should be accepted .When the lowest tender is not accepted,
the reasons should be recorded , and all the relevant records made
available to the Accountant –General during his local inspection of the
account of the disbursing officers. The acceptance or rejection of a tender is
a matter entirely within the discretion of the Government servant
responsible for the purchase of materials but a superior authority or the
Accountant –General may call on him to justify the manner in which he has
used his discretion and to give his reasons for rejecting any tender. No
tenderers has any right to be told the reasons for rejecting his tender and
the reasons for rejection should not be communicated to any tendered .No
tender should be accepted from any person directly or on in directly
connected with the Government service .If any collusion is detected
between a tenderer and a Government servant it should be dealt with
severely.

[ G.O.Ms.No 62,Finance (Accts.),Dt 25-2-1969]

Article-128 : agreement for the supply of stores
Article-133 : Stock accounts
Article-139: Inspection of stores

No Government servant should hold stores in stock in excess of the

amount likely to be required during a reasonable period. To ensure that this
rule is observed, a responsible officer of the department should inspect all
perishable stores once in each half year and all other stores once a year unless
there is a sufficient reason ( which should be recorded) to the contrary. If he
considers that any of the stores inspected are obsolete or in excess of
reasonable requirements, he should submit a report to the authority competent
to sanction the writing off a loss of case equivalent to their value under Article
297 and Appendix 23. This authority should then pass order as to the disposal
of such stores.

Price preference

 Indigenous products over imported products up to 15%

 Cottage & small scale industries 10 % price preference
 Co-operatives 5% preference (Article:123)

 Foreign Goods: As far as possible to be placed through local representatives

of manufacturers preferring those who have after sale service and holding
stock sufficient spares (Govt. MEMO No. 41990) Acts (60-10 F.DD 24-2-1961
Goods manufactured with in state allowed 5% price preferred \The products
manufactured out s0ide the state (Govt. MEMO No.8410/Accts/62-
UFD282/62)

 Purchasing officer to keep a list of reputed dealers in the trade well in

advance so that communications are sent directly also besides
advertisement in news papers

Article: 140: Unserviceable stores to be written off as items if it is due to

fair wear & tear other wise money value to be written off

Article 143 &144: Stores to be verified periodically by competent

person

Article-145: Discrepancies found on verification of stores

incorrect accounting , theft, fraud, wastage, negligence, etc

4. Chapter –VIII : Works (Article 147 to 208)

Article – 163: Works are executed by four methods – departmental, piece
work, lump sum, schedule contract

Article -172: muster role

Article -174 : Measurement book

Article -176: check measurement of works

Article -181: completion report – report to be sent after work is completed

Article-197: revised estimates

9. Chapter –IX : Miscellaneous Expenditure( Article 209 to 218)

Article 211 A: Grants in aids to public bodies, institutions etc

10. Chapter -X : Loans and Advanes(Article 219 to 260)

Main classes of loans and advances
Article -219 Loans to Zilla parishads and other local bodies

The Government grant loans and advances under the following main
heads.
I. Loans to municipalities, port trusts, etc.,( including advances to
cultivators).
II. Loans to Government servants.
III. Advances to repayable.
IV. Permanent advances.
This Chapter contains the detailed rules governing these loans and advances.

Article-220 General instructions

 This head covers all interest- bearing loans made by the Government
except those made to Government servants and includes the following classes
of loans
(a) Loans to Municipal Corporation, Port Trust and other port funds.
(b) Loans to municipalities.
(c) Loans to Zilla Parishad and other local bodies.
(d) Loans to landholders and their notabilities and private individuals.
(e) Advances to cultivators.
(f) Advances under special laws.
(g) Loans to local bodies for railway construction.
(h) Miscellaneous loans and advances.

Heads of departments and other Government servants may sanction

loans of classes (e) and (h) to the extent of the powers delegated to them
and the appropriations placed at their disposal see Appendix 16. The
Government have not delegated to any authority and power to sanction
loans of the other classes falling under this head, and they are therefore
sanctioned only by the Government.

Article-221 Interest

The following general instructions apply to all loans falling under this
head, and the conditions on which the loans are granted should be framed
accordance with them-

(i) Interest should be charged at the rate prescribed by the Government

for the class of loans concerned. It should be charged for the day of
advance but not for the day of repayment. For a period less than a
complete , half year, the interest should be calculated as the number of
days/365 X the yearly rate of interest. For a period of more than a
half-year but less than a year half the yearly interest should be
charged in respect of the completed as above .In the case of
“Advances to Cultivators,” however the interest for a period of less
than a year should be calculated by taking, the calendar month as the
unit, periods of fifteen days or more in a calendar month being treated
as calendar month and periods of less than fifteen days being ignored.

Repayment
 (ii) (a)The borrower should be required to repay the loan in full within
a specific term, which should be as possible, by paying the
appropriate fixed installment not later than the dates prescribed
by the Government or other competent authority. The term should
run from the date on which the drawal of the loan in completed,
unless the Government or other competent authority declare the
loan closed with effect from that date. The amount of each
installment to be repaid by the borrower should be rounded to the
nearest rupee, except in the case of the last installment where the
amount will be rounded to the nearest Five paisa.

(b)If a borrower draws a loan in installments and is required to

repay it by half- yearly installments for which no specified half-
yearly dates are fixed when the loan is sanctioned, he should be
required to take the first regular, half yearly payment six months
after the date from which the term of loan runs and simple interest
only should be charges on the date for the period prior to it.

If specified half-yearly dates are fixed for the payment of the half -
yearly installments when the loan is sanctioned the borrower should be
required to make the first half- yearly payment on the second of those half-
yearly dates after the date from which the terms of the loan runs , and simple
interest only should be charged on the first half-yearly date. For example, if
the drawl of a loan is completed on 31st December following, and simple
interest only should be charged on the 31st June.

If a borrower unduly delays the completion of the drawal of a loan , the

matter should be reported to the Government or other competent authority
with a recommendation that the loan be declared to have been closed as from
a suitable specified date

The Accountant – General watches the recoveries relating to each

individual loan included in any of the classes of loan mentioned in item
(a),(b),(c),(g) and the portion of (h) relating to loans to local bodies to cover
revenue deficits.

The department authorities concerned will have to watch the recoveries

relating to each individual loan at items (d),(e ), (f) and the portion (h) relating
to loans other than to the local bodies to cover revenue deficits of Articles 220
of A.P.F.C. Vol.I by maintaining the detailed accounts in the proper forms.
They should report to Government any undue delay in completing the drawal
of any such loan payable in instalments, whether dates have been fixed, for the
drawal of instalments or not . They will be responsible to see that been fixed,
for the drawal of installment or not. They will be responsible to see that the
conditions attached to each loan or advance are fulfilled. They should take
necessary action in regard to undue delay in completing the drawal of any
other loan payable in installments. All the Heads of the Departments of the
Secretariat shall send to the A.G.,A.P., Hyderabad by 30th September of each
year, an annual statement for the previous financial year in the prescribed
form for the Andhra and Telangana areas separately containing the
Information about the outstanding balance overdue arrears or principal and
interest and the steps taken for the recovery of arrears etc. Copies of these
annual statement should be send to Finance and Plg.(A.&L.) Department also
This instruction applies mutatis mutandis to loans repayable by installments
other than half-yearly installments.

(c ) Any amount paid by a borrower in advance when no installment or

part of an installment is due should be credited to the next installment ,
first to the extent necessary to interest and then to principal as if it were
paid on the date, unless a different procedure is prescribed for special
reasons in any particular case or class of cases.
Defaults in payments
(iii) (a) The Accountant _general should report promptly to the
Government any failure by a borrower to pay on the due date a
payment due under a loan included in one of the classes of loans
which he watches individually See sub-clause (b) of clause (ii)
above. The department authorities should take the necessary
action immediately in regard to any default in marking a payment
due under any other land. They should bear in mind the fact that a
loan repayable with interest by equal periodical installments will
not really be fully discharged by the installments unless each is
paid punctually on the due date.

(b) The authority which sanctions a loan should ordinarily lay down in
the order of sanction a penal rate of compound interest to be charged
on any payment due by the borrower on account of the loan which is
not received by the due date ,and should ordinarily actually levy
 interest at that rate on any such payment which is not received by the
due date.

Note :- In order to avoid any default in the repayment of loan the sanctioning
authorities who maintain the detailed account of loans should warn the loanee,
say a month in advance, of the due date for the repayment of any instalment of
the principal and or interest thereon. Omission to give this waring does not,
however, give the loanee any claim to exemption from the consequences of
default in the repayment of principal and or interest thereon.

Modification of original terms

(iv) Every borrower should be required to fulfill strictly the terms
settled when his loan was sanctioned. No Government servant
should recommend to the Government or other competent
authority a charges in the original terms for the benefit of a
borrower unless there are very special and exceptional grounds for
doing so.

Loans to Zilla parishads and othe local bodies

Article -222

The detailed procedure to be required in connection with borrowing by

local authorities both from the Government and otherwise is laid down in the
Local Authorities Loans Rules ,1937 (see Appendix 17 ) .Article 204 contains
certain rule relating to the execution of works by the public Works
Department and the Electricity relating to the execution of works by the Public
Works Department and the Electricity Department on behalf of local bodies
out of loan funds sanctioned by the Government.

Article – 223
Advances to cultivators include –

(i) advances made under the Land Improvement and Agriculturist Loans
(General) Rules , 1933;
(ii) advances made under the Land Improvement and Agriculturist’s Loans(
Pumping Installations and Agriculture Machinery on Plant ) Rules, 1933 ;
(iii) advances made under the Agency Tracts (Partially excluded Areas)
Agriculturists’ Loans Rules , 1938;
(iv) advances made under the Agriculturists’ Loans ( Relief of Indebtedness)
Rules,1938,and
any other advances made to cultivators in connection with revenue agriculture
of famine under any Act of the Legislature or under any order of the
Government.

The Board of Revenue controls these loans and detailed rules and
instructions regarding items (i) to (iii) above are contained in the Loans
(Takkavi) Manual.

Article - 224

Advances under special laws included at present only advances

sanctioned by the Government under thee Madras State Aid to Industries Act,
1922 (Madras Act V of 1923 ) and the rules framed under it .

Article – 225

Loans ( other than loans to Government servants) which do not fall

strictly under any of the other classes mentioned in Article 220 come under the
head,e.g.,loans for the acquisition of house-sites for members of the
communities eligible for help by the general principles laid down in Article
221 , and the detailed orders issued by the Government from time to time. A
Government servant who is concerned with any category of loans falling
under this head should keep an up -to -date file of the order in force regarding
them.

Article -225-A
The Departmental Officer authorized to issue loans or advances and who is
required to maintain the initial accounts there for is responsible for the
monthly reconciliation of the figures in respect of each head of account which
enter his registers and return. For this purpose, the District Officer or the
Principal District Officer of the Department concerned should arrange to
reconcile, monthly, his departmental figures with those shown in the plus and
minus memoranda maintained separately for each head of account by the
Treasury Officer , in the manner indicated for the reconciliation of transactions
relating to “Advances to Cultivators” ( vide local ruling 3 under Article 90 of
the Andhra Pradesh Accounts Code, Volume II). The head of the department
should watch that the reconciliation is effected by his subordinate officers in
the districts without fail. The head of the department will then consolidate the
figures for the whole State, reconcile them with closing balances according to
the books of the Accountant -General.

For this purpose , he should depute his reconciliation staff to the

Accountant -General’s office by the first week of each month for the figures
and receipts relating to the various loan heads of account under his control. He
should compare these figures with the departmental figures obtained from
the District Officers and other subordinate officers under his control and
reconcile the discrepancies .He should send the reconciliation certificates
along with the reconciliation statement and report by the last day of month i.e.,
the reconciliation certificate for a particular month ( e.g., April 1963 ) should be
sent on the last day of the second succeeding month ( i.e., 30-06-1963.) Memo.
No . 12284-A/607/Accts./63-1/, Dt. 30-06-1963)
Loans to Government servants
Article - 226

The following interest – bearing advances are included under this

head:-
(A) Advances for the purchase of motor cars.
(B) Advances for the purchase of other conveyance.
(C) Passage advances.
(D) Advances for the purchase and construction of houses.
(E) Advances for the purchase of horse and saddlery, and
(F) Other advances.
The Government grant these advances to their servants in accordance with the
rules contained in Article 227 to 235.

Article – 227

The following general principles and conditions apply to these advances:

(1) No authority may sanction any advance if it would involve a breach

of a standard of financial propriety ( Article 3)

Government servants to whom advances may be granted

(2) As a general rule no advance should be granted to any Government

servant unless he is in permanent service since the pay of a non-
 permanent Government servant is not adequate security for the
repayment of an advance. The Government servant who is an
approved probationer in a service and is not likely , so far as can be
foreseen at the time, to be ousted subject to the rules applicable to
advances of the kind and to the following further conditions:

(i) No such advances should be granted unless a personal security

bond is furnished in Form II duly executed by the borrower together
with a permanent Government servant drawing a pay not less than
that of the borrower as surety guaranteeing the repayment of the
advance.

(ii) The number of monthly installments by which repayment is to be

made should , when necessary with reference to all the circumstances
including the period for which the temporary post is sanctioned , be
fixed at a suitable number lower than the permissible maximum.

An authority subordinate to the Government that is competent to

sanction an advance to a permanent Government servant under Article 228 or
Article 254 may also sanction such an advance to an officiating or temporary
Government Servant.

Exception :- The Direct Recruit Junior I.P.S. officers posted to sub-divisional

charges during the period of probation, even through they are not approved
probationers can apply for and get an advance for the purchase of motor cars
as provided for in Article 230 subject to the condition that each applicant in
addition to mortgaging the Vehicle to Government executes a personal
security bond in Form II together with surety of a permanent Government
servant, drawing a pay not less than that drawn by him, guaranteeing the
repayment of the advance.( Meno .No 10234/Exp – I-C/ Finance, dt 26-2-1957).

Note :- permanent Government servants of the union Government or the

State on deputation to this State should be treated as temporary for purpose of
these rules.

Interest

(3) Simple interest should be charged at the rate fixed by the Government
from time to time
 Repayment

(4) (a) The principal of an advance should be recovered in equal

monthly installments by compulsory deductions from the pay of the
borrowing Government servant, beginning with the first payment of a
full month’s pay after the advance is drawn provided that a borrower
may repay two or more installments at the same time. The amount of
the monthly installment other than the last should be fixed in whole
rupees ,and as the last instalment the remaining balance including any
fraction of a rupee should be recovered. The maximum number of
monthly installments in which the sanctioning authority may permit
the principal of an advance of each kind to be repaid is as follows:

A (1) Advances for the purchase The principal of the loan shall
be
Of Motor Cars. recoverable in 90 monthly
Installments and interest
accrued there on in 30 monthly
Installments.

A(2) Advances for the purchase The principal of the loan shall
be
0f Motor Cycles. recoverable in 60 monthly
installments and interest
accrued there on in 12 monthly
installments.

Such of the officers who are eligible for both the advance shall be sanctioned
only one of the advances i.e., either for Motor car or Motor cycle.

(B) Advances for the purchase 24. In the Case of Bicycle advance,
of Conveyances not the amount of interest amount
included in item(A). shall be recovered shallbe
recovered in 2 installments.

(C ) Passage advances 36.

( D) Advances for the purchase 120. (Principal together with

 And construction of houses. Interest )

(E )Advances for the purchase 36.

of horses and saddlery.

(G) Other advance 12.

for the purchase of
typewrites.

In the case of non-gazetted Government servant where the head of office

draws and disburses the pay and allowances and makes the recovery of
advances paid to Government servant, the responsibility to calculate interest
due lies with head of officr . The Account-General will furnish such
particulars as the head of office may require for calculation of interest ,as well
as such assistance he may need.

[ Note (1) : - Deleted by Meno .No 68759,B/1981/Accts. /Dt 21-8-1974.]

Note (2) :- No interest is to be collected from the loanee for any period
beyond the date of his retirement on that portion of the outstanding advance (
referred to in Article 226) as interest on the date of retirement would be wiped
off by adjustment of the gratuity or the leave salary payable to him by the
Government.

The recovery of interest should begin with the pay of the next month
after the repayment of the principal is completed .If the total amount of interest
to be charged does not appreciable exceed the amount fixed for the equal
monthly installments for recovery of the principle , it should be recovered in a
single instalment; otherwise it should be recovered in installments not
appreciably exceeding that amount. Interest may however, be calculated for the
last month of recovery up to the date or repayment and no interest need be
charged for the day of repayment .( Memo. No. 103608/Accts./60-1, Dt 27-1-
1961).

(b) Unless otherwise provided in the rule applicable to advances of a

particular kind, the amount of the monthly installments to be recovered on
account of an advance should not be changed by reason of the borrowing
Government servant’s going on any kind of leave with leave salary or his
drawing subsistence grant. In special circumstances the head of the department
may recommend that the Government should reduce the monthly installments
in a particular case for the duration of the period during which the borrower
does not draw pay. The whole amount due should, however, always be
completely recovered within the period originally fixed unless, for exceptionally
strong reasons, the Government sanction a special extension of that period.

(c ) Penal interest at 7 % per annum shall be collected from the loanees

who either apply and or draw loan amount but fail to utilize the amounts
within the period stipulated in the rules without specific permission of the
Government or utilize them for clearance of private debts. In the former
category penal interest shall be levied for the period not covered by
Government sanction. This will be without prejudice to summary recovery
which may also be ordered by Government. ( Memo. No .49878/ Accts./61-2,
Dt. 23-9-1961).

11. Chapter –XI : Deposits (Article 261 to 272)

12. Chapter -XII : Responsibility for losses of public money or
Property (Article 273 to 302)
Article 294 – Reports of the Losses

When any facts indicating that defalcation or loss of public

moneys, stamp, opium, stores or other movable or immovable property has
occurred or that a serious account irregularity has been committed come to the
notice of any Government servant, he should inform the head of the office
immediately .if it appears to the head of the office prima facie that there has
been any such occurrence which concerns his office or in which a Government
servant subordinate to him is involved, he should send a preliminary report
immediately to the Accountant -General , and through the proper channel, to
the head of the department .On receipt of the information, the head of the
department should report the matter to the Government without delay. These
reports should be sent even when the person responsible for a loss has made it
good. Reports regarding a loss by way of damage to immovable property
belonging to the government should be sent in accordance with the special
provisions of Article 299.

The Collectors should submit telegraphic intimation, immediately

followed by detailed reports, to the Board of Revenue and the Government in
all cases of misappropriation of public money involving Rs . 5,000/- and
above. The Board of Revenue should submit a detailed report to the
Government, as to the steps taken by it in the matter, as early as possible
thereafter.

The preliminary report to the Accountant -General may be either a copy

of the report to the head of the department or relevant extracts from it
showing, so far as information is available at the time, the exact nature of the
defalcation or loss and the circumstances which made it possible.

Losses involving embezzlement, serious irregularities, etc. should be

reported by the Government servant concerned to higher authorities
irrespective of amount involved.

After sending the preliminary reports, the head of the office should
investigate the matter fully without delay and take all necessary further action
see Article 300 to 302. As soon as the investigation is complete he should send
a complete and detailed final report to the Accountant -General and, through
the proper channel to the head of the department describing the nature and
extent of the loss or account irregularity and the circumstances (including any
breach or neglect of an existing rule) which made it possible, and stating
whether any amount lost has been recovered and, if not, whether it is possible
to recover it in any way . The report should also state what disciplinary action
has been taken or is recommended against the government servant
responsible and what steps have been taken or are recommended with a view
to prevent the recurrence of any such loss or account irregularity. The head of
the department should also submit a final report to the Government giving full
information on all these points and , when necessary, making his
recommendations.

When a petty loss not exceeding Rs .400/- does not appear to involve an
embezzlement, a serious account irregularity or any other important feature
requiring detailed investigation and consideration, or to concern the Reserve
Bank, the Preliminary and final reports prescribed in this article need only be
sent to the authority competent to write off the loss or deal with it otherwise.
The Board of Revenue is authorized to dispose of all cases of embezzlement
by village officers without reference to the Government, unless in its opinion
the case presents special features or the order of the government are required
on any specific points.
 An Individual report of misappropriation of collections by a village
officer or loss of money while in his custody which does not exceed Rs 200/-
need not also be sent by the Collector to the Board of Revenue and by the
latter to the Accountant -General unless there are, important features of defects
of system which merit consideration. The Collector should, how -ever, send to
the Board of Revenue half – Yearly a statement of cases of embezzlements or
losses of money involving amount not exceeding Rs 400/- which occurred in
the half – year showing the amount , place with district , name of official
responsible, disciplinary action taken if any , in each case, the amount
recovered by the Accountant- General had not been shown previously. The
Board of Revenue will review the half yearly statements received from the
collectors and furnish to the Accountant General a copy of the statements.

Note :- Any loss of Departmental revenue due to whatever cause or any

loss in respect of stores occurring otherwise that in the ordinary course or on
account of fair wear and tear should be treated as a loss to the Government
within the meaning of this Article see also Articles 141 and 298.

Article 302 -Prosecution for embezzlement of public money or property

(a) Wherever the head of an office finds that there is a reasonable

suspicion that a criminal offence has been committed in respect of
any public moneys or property, he should as a general rule report
the matter at once to the police and simultaneously inform the
District Magistrate ( or, in Hyderabad city, the Commissioner of
police) and the head of the his department that he has laid an
information before the police. District Magistrate (or, in
Hyderabad city , the Commissioner of Police) informed as to the
action they take in the matter.

If , however, it is suspected that a village headman or office has failed to

remit Government revenue collected by him, the Tahsildar or Deputy
Tahsildar should make an immediate enquiry and endeavor to collect any
amount found to be in deficit. He should then report the result of this action
to the Revenue divisional officer who will decide whether a criminal
prosecution should be launched or whether departmental action will be
sufficient.
 (b) When the case is heard by the Court, the head of the office
concerned should see that all the witnesses serving in his
department and all documentary evidence in the control of his
department are punctually produced .He should also appoint a
Government servant of the department to attend the proceedings
in the Court and assist the prosecuting staff.
(c) If prosecution for an offence of this kind results in the discharge
or acquittal of any person, or in the imposition of any sentence
which appears to be inadequate, the head of the office concerned
should at once send a full statement the facts of the case to the
District Magistrate or , in Hyderabad City , the Commissioner of
Police; if the District magistrate or the Commissioner of Police, as
the case may be, considers that further, proceeding should be
taken in revision or appeal, he should proceed as he would in any
other case and should keep the head of the office concerned
informed regarding the further proceedings. As pecial order of the
Government is necessary for filling an appeal against an acquittal.
(d) The head of the office concerned should submit , in addition to
the reports prescribed in Article 294 and 300 prompt reports to the
Government through the proper channel at each stage regarding—
(i) the commencement of the Police investigation.
(ii) the decision to prosecute in any particular case.
(iii) the result of any prosecution.
(iv) the decision to proceed further in revision or appeal
in any case,and
(v) the result of any proceedings in revision or appeal.

(e ) Notwithstanding anything contained in the preceding portion

of this Article, the head of the office concerned may, when he considers it
to be desirable, refer any matter through the proper channel for the
orders of the Government before taking action.

13. Chapter- XIII : Local Funds (article 303 to 313)

Introductory

Article – 303
The transactions of local funds (as defined in Article 6 ) are not included
as such in the Government Account, except in so far as their cash balances are
deposited with the Government under the rules and accounted for under the
deposit head “ Deposits of Local Funds” in the “Public Account “. The
Government function in regard to such deposits is that of a banker ( see
Chapter XI of this Code and Chapter VII of part III of the Andhra Pradesh
Treasury Code).

Article - 304

The main classes of local funds are :

( See also Chapter IV and Part III of the Andhra Pradesh Treasury Code)

(i) (a) District Funds [i.e., the moneys of Zilla Parishad government by the
Andhra Pradesh Panchayat Raj Act, 1994 ]

(b) panchayat Funds [i.e., the moneys of Panchayats government by the

A.PA Panchayat Raj Act , 1994 ]

(ii) Municipal Fund [ i.e., the moneys of municipal councils government by

the A.P. District Minimalities Act, 1965.]

(iii) Education Funds [i.e., the Fee Funds of Universities and The Elementary
Education Funds and Zilla Parishads and Municipal Councils governed by the
A.P.Elementary Education Act, 1982]

(iv) Port and Marine Funds that do not relate to major ports [including the
Minor Ports Fund and the Tuticorin Port Fund government by the Indian
Ports Act, 1908 ( India Act XV of 1908 ), as subsequently amended and the
Landing and Shipping Dues Funds Government by the Madras Out Post ,
Landing and Shipping Fees Act 1885 ( Madres Act III of 1885 as subsequently
amended).]

(v) Market Committee Fund[i.e., the moneys of Market Committees

governed by the A.P.Agricultural Market Committees Act 1964.]

(vi) The Central Fund constituted to meet the leaves salary, salary and
contribution towards provident fund in respect of the Municipal
Commissioners and the Panchayat Executive Officers during leaves,and
(vii) Library Fund (i.e., the money of the Local Library Authorities governed
by the A.P.Public Libraries Act).

Article – 305

Local bodies (as defined in Article 6 ) perform functions closely allied to

those of the Government, and received aid from the Government in the form of
grants and loans for certain purposes. This chapter contains the rules relating
to some of financial transaction between the Government and local bodies.

Grants to local bodies and other bodies

Article – 306

The payment of the various classes of grants to local bodies, e.g., grant
for hospitals and dispensaries, grants for the maintenance of roads and
educational grants , is governed by the general or special order of the
Government in regard to each class of grant.

A list of the grants paid to local and other bodies on account of certain
fines realised by Courts and credited to the Government is contained in
Appendix 24 . The grants on account of these fines should be drawn, and paid
in the manner indicated in the Andhra Pradesh Treasury Code.(See subsidiary
rule 23 under Treasury Rule 16 )

Loans to local bodies

Article – 307

The detailed procedure to be followed in connection with borrowing by

local bodies from the Government is laid down in the Andhra Pradesh Local
Authorities Loans Rules , which are printed in Appendix 17. ( See also Article
222 )

Charges recoverable from Local bodies

Article-308

When the Government agree to render a service to, or incur a charge on

account of a local body the estimated amount of the charge or cost of the
service should ordinarily be recovered in advance in accordance with the
Principal laid down in Article 12 .In exceptional cases , however, the
Government may authorize one of the following special arrangements-

(a) The expenditure may be charged against the local body’s account with
the treasury as and when it is incurred; or
(b) The expenditure may be met by advances from Government funds in
the first instance and then recovered promptly from the local body
either in cash or by adjustment against its account with the treasury.

Article- 309

Any amount due to the Government by a local body and remaining

unpaid, including any amount overdue for payment in respect of a loan,
should be recovered at the earliest opportunity in the manner indicated in
subsidiary Rules 25 under treasury Rule 16 by adjustment from any non-
statutory grant which the Government have sanctioned for payment to it .

Land cess including Education cess payments to district boards and

panchayaths
Article -310

On behalf of Zilla Parishads, Mandal Parishads and Gram

Panchayats the Revenue Department of the Government collects, along with
the Government’s land revenue, the land cess including education cess levied
for the benefit of those bodies. The Village Officers while remitting the land
revenue along with cess should show separately the Land Revenue, the Land
Cess and Education Cess in separate columns in the Chitta as well as in the
village remittance(Irsalnama or Chalan) so that the Land Revenue clerk in the
Tahsil Office may check the correctness of the cess amount at the rate fixed by
the Government from time to time towards Education Cess and Land/Local
cess. The Land Revenue clerk after checking the correctness of the Irsalnama
(Chalan) may enter the cess amount separately in the Land Revenue Chitta
maintained in theTahsil Office, and pass on the chalan to the Sub-Treasury or
the Bank as the case may be for acceptance. At the end of the month i.e. on the
treasury closing day, he should post the cess amounts village-wise, make totals
of the village-wise remittances and apportion the Local/Land Cess and
Education Cess amounts among the several local bodies in the ratio ordered
by the Government from time to time . The Tahsildar may then issue
proceedings sanctioning the amount to the various local bodies at the Taluk
level it self. The Proceedings of the Tahsildar sanctioning the cesses should be
communicated to the Revenue Divisional Officer, District Panchayat Officer,
Extension Officer(Panchayat) and the District Treasury Officer. The Taluk
Officer, Extension Officer(Panchayats) and the District Panchayat Officer
should open monthly periodicals to watch the prompt adjustment of cesses.
The Tahsildar after sanctioning the amount will also present an adjustment bill
at the Sub-Treasury enclosing the copy of the proceedings for the adjustment
of amount to the various local bodies as prescribed in instruction 38 under
T.R. 16 of Andhra Pradesh Treasury Code Volume -1. Any excess or under
payments made provisionally in the monthly payments are liable to be
adjusted from the subsequent payments.

The Revenue Divisional Officer concerned will check the accounts

maintained by the Tahsildars at least once in six months to ensure correct
apportionment and to avoid any over payments. The accounts maintained by
the Tahsildar who are empowered to authorize the refunds without sanction of
the Collectors will also be subjected to periodical internal check by the
Collectors concerned once a half year to ensure the correct apportionment and
to avoid any possible over payment.

Article 310 A

The following are the Local bodies entitled to compensation from the
process of entertainments tax under Section 13 of A.P. Entertainments Tax Act
1939 in respect of entertainments held within their respective jurisdiction.

(1) In Municipal areas- The Municipal Council concerned

(2) In the area of Panchayat Boards – The Panchayat Board
(3) In other areas –The Zilla Parishad concerned.

Commercial Tax Officer are the authorities empowered:-

 (i) To sanction payment of the proceeds of the entertainment tax to the
Local bodies in their jurisdiction.
(ii) To evaluate the arrears due to the Local Bodies in their jurisdiction.

Procedure of assignment :- Assignment of the proceeds to Local Bodies should

be made once a quarter. For this purpose Entertainment Tax Officers should
submit to Commercial Tax Officers, in the first week of April, July, October
and January every year, a statement showing the amount of tax under Sections
4,5,14 and 15 of the A.P. Entertainment Tax Act 1939 realized in the previous
quarter with details as to the respective areas. The statements should contain a
certificate of the Entertainment Tax Officer concerned that the departmental
and treasury figures have been verified and found correct. The Commercial
Tax Officer after satisfying himself of the verification, with the Treasury
figures shall issue proceedings sanctioning the amounts to the local bodies to
which the amounts are adjusted. The Commercial Tax Officers shall send the
proceedings to the Treasury Officers for adjustment to the concerned local
bodies. The Treasury Officer after verifying the amounts should append pay
order on the proceedings itself which becomes a voucher and the Treasury
Officer will issue a certificate of credit in respect of the amount adjusted to
several local bodies for each individual local body such as Panchayat Samithi,
Gram Panchayat, Municipality etc., as desired by the Commercial Tax Officer.

If after reconciliation any modification is found necessary, the Local

Bodies concerned should be informed of the same and the necessary
adjustments may be made while sanctioning payment of the difference in the
case of short payment.

Time limits for claims by Local bodies

Article 311
A Local Body should prefer its claim for any amount which the
Government sanctioned for payment to it not later than the latest date
specified by the Government for the payment, or, if the Government have not
specified any such date in respect of a particular payment or class of payments
within six months from the date on which the local body receives the orders of
the Government authorizing the payment.

In the case of water supply and drainage schemes or other

works for which the Government have promised a grant on the post-payment
system, the local body concerned should prefer its claim for the grant within
six months of the execution of the work (or installments of the work, where the
work is executed and paid for in separate installments) unless the local body
has been definitely informed that the Government will consider the claim only
after provision has been included for the purpose in the budget, in which case
the claim for the grant should be preferred within six months of the execution
of the work or within one month of the date of receipt of information that
provision is available in the budget , whichever is later.

Any amount due by the Government to a local body and failing

within an item in the following list should be claimed by that local body not
later than the date shown against that item:
Items Latest date for preferring claims
(a) Monthly grant for the Within six months from the 15th of the
maintenance of medical month to which the claim relates, e.g.:-
institutions the grant or subsidy due in respect of
(b) Monthly subsidy towards the April should be claimed ordinarily the
cost of an accountant in the 15th of that month or by the next 15th
office of the Agency area of October at the latest.
Z.P., East Godavari
(c) Monthly grant for the
maintenance of elementary
schools
Note: A sanction accorded in any year for a grant towards the cost or opening a
new elementary school or employing additional teacher lapses on the 1 st October of the
next year, unless by then school has been opened or the additional staff employed, as
the case may be, and the grant claimed.
(d) Advance monthly grant for Within 6 months from the date on which
the maintenance of trunk the claim falls due or within three
 roads. months from the end of the financial
(e) Advance monthly grant for year in which it falls due, whichever is
the maintenance of important earlier. The claim for each month falls
marketing roads. due on 20th of the subsequent month
(f) { Deleted as per G.O. Ms. No until prescribed percentage(75 percent
210 Fin. Plg (Accts. II) dated for a grant for trunk roads and 80
20-8-81} percent for a grant for important
marketing roads) the maximum grant
admissible for local body has been
drawn.

Arrear Claim of Local Bodies

Article 312
A claim preferred by a local body after the latest date prescribed for
it in Article 311 should be paid, unless the competent authority (as indicated
below) has specially sanctioned the payment:

Items Authority competent to Remarks

sanction payment
(i) Items of revenue The Collector if the An arrear claim made
collected by amount claimed does after the expiry of three
Revenue not exceed Rs.100/- years subsequent to the
Department on and he is satisfied after year in which the claim
behalf of local verification that the fell due should not be
bodies claim is correct and paid without the special
(a) Land Cess including other wise vested in the sanction of the
Education cess Government Inam. Government. The
(b) Profession Tax Government will
Collected by village summarily reject every
headman. such claim, unless the
(c) Ferry Rents amount claimed exceeds
(d) Income from certain a rupee and was credited
endowments in local to the Government
bodies owing to a mistake on
 (e) Dasabandham the part of a
Revenue Government Servant
(f) Excess of ground rent they are satisfied that the
over agricultural local body had no direct
assessment (On behalf means of ascertaining
of municipalities ) The collector the mistake earlier.
(g) Revenue or Tax on
trees & porambokes
formerly vested in
Local Bodies but
relinquished to the
Government and
(h) Ferry Rents
( ii ) Statutory grants from The Government The Government will
the Government , e.g : summarily reject every
grant under Section 37 of arrear claim which is
the Madras Elementary made after the expiry of
Education Act 1920 three years subsequently
(Madras Act VII of 1920) to the year in which the
claim fell due.

( iii ) Non-statutory Grants The Government The Government will

and other amounts due by summarily reject all
the Government arrear claims.

14 Chapter –XIV : Miscellaneous subjects(Article 314 to 328)

Article 314

The Chapter contains the Financial Rules relating to certain

miscellaneous subjects which do not fall within the scope of the other chapters
of the code
Allocation of expenditure between capital and revenue
Article 315

Expenditure on the public service falls into two broad divisions of

expenditure on revenue account and expenditure on capital account. The
latter is called briefly capital expenditure of capital out lay. Appendix to the
Andhra Pradesh Accounts Code, Volume -II, contains the detailed rules
framed by the Government regarding the allocation of expenditure to capital
and revenue and the financing of capital expenditure.

Interest on capital

Except in special cases regulated by special orders of Government

interest at such rates as may be specified from time to time shall be charged in
the accounts of all Commercial Departments or undertakings for which
separate capital and revenue accounts are maintained within the Government
accounts.

(1) For Capital outlay met out of specific loans raised by Government the
interest should be charged at such rate as may be prescribed by
Government having regard to the rate of interest actually paid on
such loans and the incidental charges incurred in raising and
managing them.
Explanation:
(1) By specific loans are meant loans that are raised in the open market
for one specific purpose which is clearly specified in the prospectus and in
regard to which definite information is given at the time of raising of the loans
that for the purpose of the accounts they are to be regarded as specific loans.
(2) The interest should be calculated on the direct capital outlay to end
of the previous year plus half the out lay of the year itself, irrespective of
whether such outlay has been met from current revenue or from other sources.
 (3) When under any special orders of Government charges for interest
during the process of constructions of a project are temporarily met from
capital , the writing back of capitalized interest should from the first change on
any capital receipts or surplus revenue derived from the project when open for
working .

The interest on Capital should be calculated on the Direct

Capital Outlay to the end of the precious year, plus half the capital outlay of
the year itself irrespective of whether such outlay has been met from current
revenues or from other sources. The Opening Capital should be arrived at by
taking the capital at charge in the previous year plus profit or loss of the last
year. As regards the capital during the year , it should be calculated on the
follow basis:
(a) Government Capital as per last year -----X
(b) Add withdrawals (including adjustments made in Government account)
During the year -------Y
(c ) Less remittance (including adjustments made in Government Account
during the year ------Z
(d ) Add/Loss net adjustments ( made in the proforma accounts for
Which no financial adjustment is carried out in the Government
account) during the year --------P
(e ) For the purpose of calculation of interest the capital for that year would
Therefore be X (x) Y-Z + or – P as the case may be
2
Note : (a) In cases where the audit of a Commercial or Quasi Commercial
concerns is the statutory responsibility of the Comptroller and Auditor
General Vice para 12 (i) (ii) of the Audit & Accounts Order, audit fee should
not be recovered and adjusted to Government Accounts.
(b)In case of Commercial or Quasi Commercial concerns of State
Government also , there should be no adjustment on account of audit fee to the
credit of either the Central Government or the State Government, as the audit
of the concerns is a statutory responsibility of the Comptroller and Auditor
General . Audit Charges need not also be debited to the Government accounts
under the budgeted expenditure, for the concerns, as it is unnecessary to
inflate the general accounts with such adjustment , when no audit fee is
actually recovered. Recovery of audit fee cannot also be regarded as receipts
of the State Governments.
(c ) In cases covered by both (a) and (b) above, the cost of audit should be
shown in the proforma accounts, in order to arrive at the correct financial
position of the concern. This may be done by charging that audit fee in the
P&L accounts and crediting the corresponding amount to the balance sheet as
on “ undischarged liability “ rather that adding it to “ Government , Capital”.
(d) Where, however, the audit of a body, Corporation , etc,., has been
specifically entrusted upon the Comptroller and Auditor General by a
particularly legislative enactment whether Central or State, which has
provided for the recovery of the cost of audit , such recovery should be made
and adjusted to the Government Accounts also,.
(e ) For the purpose of clauses (c ) and (d ) above, the audit the should be
charged for central and or local audit whichever is applied. (Meme No
66757/284/68-4 dated 15-04-1969)

Work done for another Government

Article - 316
The head of the department is responsible for seeing that no work
(Unless it is negligible in amount ) is done by his department for another
Government without obtaining a definite ruling from the Government as to
whether a charge should be made for it or not.

Disposal of Government Land and Buildings

Article -317
In regard to the sale , transfer , etc., of Government land and
building all Government Servants should observe the rules contained in
Chapter I of the Standing Orders of the Board of Revenue-see particularly
Board’s Standing Orders 22 and 23, extracts from which are contained in
Appendix – 25.
Note :- Government Property should as far as possible be sold by public auction, and
if disposed of otherwise, the amount realized should not be less than the market value.
Note : - Adjustment of Value of Government land transferred to project (Commercial)
should be made in the accounts of the projects at the book value or the market value,
whicheveris less, where the land is valued in the books. In other cases no amount will
be charged.

Endowment for scholarships, prizes etc .

Article 318
If any person informs a Government Servant that he proposes to place
funds at the Government’s disposal for use as an endowment for the grant of a
scholarship or prize etc., the Government Servant should report the matter to
the Government through the proper channel for orders. The Government will
take action , if necessary under the Charitable Endowments act 1890 (India Act
of 1890).

Insurance of Govt. property

Article 319
Subject to exceptions shown in the list below, no Government property
should be insured at the cost of the Government.
Exceptional Cases in which insurance is permitted:

(i) Special Goods such as The General Superintendent, Public

mathematical and scientific Works, Workshops and Stores,
instruments, articles made of Hyderabad. Junior Superintendents ,
glass, stoneware pipes and other Public Works, Workshops,
fragile articles, stores which the Vijayawada , Dowlaishwaram.
railways insist on insurance as a
condition of transport, delicate The Director of Medical Services
machinery items including their The Director of Public Health
components and all categories of The Director of Public Instruction
stores which in their peculiar The Chief Engineer (Electricity)
nature are required to be The Superintending Engineers in
transported with special care to charge of power systems.
 avoid packages of damages The Executive Engineer, Electricity,
during Railway transit. In respect Vijayawada.
of the last mentioned category of The Chief Electrical Inspector of
stores, the authority competent to Government.
insure mentioned in column -2 The Superintending Engineers of
may, in his discretion , and after power Development Branch in
recording his reason there for Electricity Department.
authorize the incurring of an The Director of Industries &
expenditure towards transitCommerce.
insurance at rates not exceeding The Joint Director of Industries &
those quoted by the Indian Commerce.
Insurance Pool. The Principals of Government Arts &
Professional Colleges in the state.
The State Port Officer, The Radio
Engineer, Research Labs.
The Director of Printing, Stationary &
Stores Purchase.
The Director of Technical Education
The Director,Oil Technological
Research Institute
(GO Ms. no 151, Fin&Plg., dated 26-
04-83)
(ii) Stores obtained from abroad See note – 1 below
during shipment to India
(iii)Other specially valuable The Government or a Government
property Servant specially authorized by the
liable to special risks. Government
(a) Timber, Fuel and Bamboo felled Divisional Forest Officer (GO Ms No
under departmental extraction 71 Fin&Plg ., Dt 5-3-1980)
(iv)In all cases where special The Government Servant specially
packing at extra cost is necessary to authorized by the officer mentioned in
confirm to railway standards for being Column-2 of exception (i)above
transported at “ Railway Risk ” the
authority compotent to insure shall
order the consignment to be booked at
“ owner’s risk” rages duly insuring
against transit risks, provided such a
course involves the less expenditure
as compared to the “Railway Risk
Rates” with special packing .
(v ) In cases not covered by exception The Government Servant specially
(iv) above the authority component to authorized by the officer mentioned in
insurance may authorize the incurring Column-2 of exception (i)above
the expenditure not exceeding Rs.
250/- for a single consignment in
respect of freight charges for booking
goods at railway risk rates in cases
where the booking on consignments at
railway rise rate is only optional
(vi)All the stocks that are stored in “ Director of Agriculture or such other
godowns of Agriculture department officer-in-charge of go down specially
which are susceptible to fire accidents authorized by the Director of
may be covered by adequate Agriculture for this purpose “ (GO
insurance Ms. No 247 Fin.&Plg., Dt 1-8-1980

Note-1 : The High Commissioner for India Charges one fourth of one percent
of the value of all stores shipped to India by the Indian Stores Department
London to cover the cost of Insurance during shipment. The Government do
not meet the costs of insurance during shipment of imported stores not
shipped by the India Stores Department , London, except when they do so by
paying a purchase price that covers the cost, Insurance and freight of the stores
as delivered at the required port of station in the state-see article 132.

Note -2 :- The Government do no insure Government Motor cars, when they

supply a government motor car for the use of the person holding an office, it is
open to the latter to protect himself against the risks involved in the use of the
car by insurance at his own cost. When a Government Servant buys a motor
vehicle with an advance granted by the Government they required him to
insure it at his own cost. (See articles 230 and 231)

Note -3 :- The Director, Central Stores Purchase Department may in his

discretion, stipulate in the purchase orders specified condition for the
insurance of the stores ordered , therein payable by the indenting officer or the
consignee, provided the said director is satisfied on the advice of the supplying
firm that the nature of the said store warrants such insurance or where the
supplier insistence payable extra by Government as a condition of his offer
which is offer wise acceptable in all other respects. (G.O .Ms No 417 Dt 24-06-
1963)

Rounding off of transactions in government accounts

Article 320
(a) All Government transactions whether involving receipts of payments
of book adjustments should be brought to account in the nearest
whole rupee. Fractions of fifty paise and above should be rounded off
to next whole rupee and those below fifty paise being ignored.
(b) In the case of pay and allowances, the net amount of bill should be
rounded off. In the case of deduction or recoveries from the pay bills,
each deduction/recovery should be made in a whole rupee in respect
of insurance premia etc., in which the rates are fixed in rupee and
paise.
(c) In the case of Travelling Allowance bills, the rounding off shall be
done only at the last stage in respect of the each individual claims and
not in respect of each item, e.g., Railway fares, Mileage Daily
Allowance etc., which comprises the claim of an individual.
(d)In respect of the payments for contingent and other claims, the
rounding off shall be done for the net amount of the bill and not for
each item of expenditure.
 (e) The amount of Land Revenue assessments, sales tax, excise and other
revenues to be collected by the State Government shall be rounded off
to the nearest rupee.
(f) Any sum due from Local body on a final adjustment in respect of
Land Cess collections of each fasli should be rounded to the nearest
rupee and recovered/paid accordingly.
(g) Reserve Bank remittance, other than those of sums representing dues
fixed by or under any contractual obligation of the government
involving fractions of rupee shall be brought to account in nearest
rupee.
(h) Deposits and receipts other than those which are fixed by or under
any law or are specially exempted by the Government from the
operation of this rule involving fractions of a rupee shall be brought
to account in multiples of whole rupees as indicated above( GO Ms
No 167 Fin. &Plg.,Dept., Dt. 29-04-1989)

Art. 320 –Clarifications

I. Accounts-Transaction of Revenue and Expenditure of State

Government-Rounding off of transaction-Transaction involving of a
fraction of a rupee brought into account by rounding off to the nearest
rupee-Certain Clarification-Issued.,
{ Memo No 18877/231/TFR/89, Fin. &Plg., Dt 4-2-1990}
Ref: 1. GO Ms No 167 Fin. &Plg., (FW.TFR) Dept. Dt 29-04-1989
2.From the Director of Treasuries and Accounts , AP., L.No F1/25379/89
Dt.,1-7-1989
In the GO cited, orders were issued that all transactions in Government
Account involving fraction of a rupee shall be brought into account by
rounding off to the nearest rupee, ie., an amount of fifty paise and above
less than one rupee should be taken as one rupee while an amount less
than fifty paise should be ignored and omitted from the accounts.

On the above orders, the Director of Treasuries and Accounts ,

AP., the Pay and Accounts Officer , Hyderabad and certain other Heads
of Offices has raised certain points for clarification. The matter has been
examined in consultation with the Accountant General, AP, Hyderabad.
The Government after careful consideration here by issue the following
clarification on the orders issued in the GO cited.,

1. Pay bills : - Pay and Allowances rounding off should be done for each
item of earning. All entitlements due to an individual employee by
way of Pay/HRA/DA/TA and all inner column deductions from
salary bills on account of license fees, tax savings loan recoveries etc.,
including book transaction shall be rounded off to whole rupee by
taking the fraction off a rupee paisa 50 and above to next rupee and
ignoring below 50 paisa.
2. Challans : - Challans to be remitted by private parties, shall be
accepted only in whole rupee. All Sub-Treasury Offices/Banks
transacting Government Business should accept remittance only in
whole rupee and not in fraction.

3. Pensions & Pension Relief : - In respect of payments on account of

Pension Relief on Pension , DCRG/COP the amounts may be rounded
off to the next rupee instead of rounding off to the nearest rupee.

4. Recovery of Interest : - Recovery of interest on loans & advances to an

employee which is computed as percentage of base amount and
effected in installments shall be made in whole rupee.

5. Transaction between Government and Departments : - Transactions

between one Government and another or between two departments
of the same Government shall be rounded to the nearest rupee.

6. Bills for recoupment of PA : - The Bills for recoupment of permanent

advance should be rounded off to the whole rupee on each occasion to
avoid fractions appearing in Government Accounts.
 7. PLI Deductions : - The Issue relating to rounding off PLI deductions
is under examination of Government of India and necessary
clarification will be issued soon after a decision is taken in the matter.

II. Transaction of Revenue and Expenditure of State Government –

Rounding Off of transaction –Transaction involving of a fraction of a
rupee brought into account by rounding off of to the nearest rupee-
Rounding off of Postal Life Insurance Premia-Deductions to the
nearest rupee-Clarification –Issued .,
{ Memo No 18877/231/TFR/89-2 Fin. &Plg., Dt 8-10-1990}
Ref : -1. GO Ms No 167 Fin. &Plg. (FW –TFR) Dept., dated 29-4-89 r/w
Govt. Memo No 18877/231/TFR/89 Dt. 4-2-1990
2.Lr No 23-3/87L1 Dt. 15-1-1990 of the Govt. of India, Ministry of
Communications, Dept. of posts Communicated through the Lr No
TM(A/cs-I) /II/10-5/90-91/3 Dt. 29-05-1990 of the AO (A&E), AP,
Hyderabad

In the GO first read above, orders were issued that all the
transactions in the Government Accounts involving fraction of a rupee shall be
brought into account by rounding off to the nearest rupee. It has been stated
there in that the issue relating to rounding off of Postal Life Insurance (*PLI)
premia deductions is under the examination of the Government of India and
necessary clarification would be issued soon after a decision is taken in the
matter.

A copy of the Government of India, Circular Letter No 23-3/87L1

Dt. 15-1-1990 of the Govt. of India, Ministry of Communications, Dept. of
posts containing instructions in this behalf is enclosed for information and
guidance to all the Government Departments as also the Drawing and
Disbursing Officers concerned for the implementation of the instructions
contained therein.

Copy of Lr No23-3/87L1 Dt. 15-1-1990 of the Govt. of India, Ministry of

Communications, Dept. of posts Dak Bhavan, New Delhi-1.
 Sub: Rounding off of PLI transactions – Recommendations of the
Geetha Krishnan Committee.

Sir,
The Government of India issued instructions vide its GO Ms No
F-23(8)-EII(S)-86 dated 26-6-1986 regarding rounding off of transactions in
Government Accounts w.e.f 1-4-1989. Accordingly , all “inter Column”
deductions from salary bills on account of Postal Life Insurance were required
to be rounded off in whole rupee . However, the above decision of the
Government of India could not be implemented due to unavoidable measures.

(2) The whole issue has been examined in consultation with Ministry of
Finance and after careful consideration the following decisions have
been taken.

(i) PLI Premium for pay recovery cases(Deduction from salary ) and cash
deposits will be made in rounded figures. The fraction of less than
fifty paise will be rounded of to lowest rupee, the fraction of fifty
paisa or more to higher rupee. A suitable correction in the amount of
premia will be made on the 1st page of P.R Book, under the signature
of in charge post office (SPM or APM)

(ii) By rounding off premia as above, an insurant would be paying

extra premia if at present his rate of premia is in the fraction of fifty paisa or
more. All such excess recovery either as deductions from salary or
deposits by cash will be rounded to the time of settlement of claims of
maturity.

(iii) The Heads of Circles will instruct all DDOs and Post Masters to
round off premia paid by the insurants. If any insurant makes
enquiries about change, he should be politely informed about the
changes.
(iv) Rubber stamps should be supplied at the counter which should be
affixed on the P.R. Book indicating the change of the premium.
 (v) Detailed information /instructions should be got cyclostyled and
displayed prominently and handed over to each insurant if
desired, who comes for payment of premia in cash at the counter.
(vi) A suitable remarks of excess recovery will be made on each
KLC.
Director PLI, Calcutta will thereafter print advance schedule in rounded of
figures only for all DDOs/PAOs.
Erasures
Article – 323

A Government servant should be on no account erase or

overwrite any entry in any cash book , account, register or schedule. If he
finds it necessary to make a correction he should cancel the incorrect entry
nearly in red ink and insert a correction entry. Whenever a Government
makes any correction or interpolation in any such document, he should
request the head of the office to authenticate it by writing his dated initials
against it –See subsidiary Rule 32 ( C)under Treasury Rule 16.

Exception : - The authentication of any correction or interpolation in the

accounts, registers, books , schedules etc., relating to an operating system in
the Electricity Department may be done by a responsible section head not
lower than an Accountant.

Supply of forms
Article – 324
The Director , Government Press , maintains stocks of the
standard forms prescribed for use by Government Offices including the forms
prescribed in this code, the Andhra Pradesh Treasury Code and the Andhra
Pradesh Account Code. Heads of offices and other Government Servants who
are entitled to indent for these forms should send their indents to him in
accordance with the rules contained in Part 1 of the Andhra Pradesh Printing
Manual.

Service books
Article- 325
A record should maintained of the services of every Government
servant in accordance with the rules framed by the Government under
Fundamental Rule 74 (a)(iv) see Part –III of Annexure II to the Fundamental
Rules. The Accountant General will maintain the record for Gazetted
Government Servant in the “History of Services “, which he compiles annually.
The head of each office should maintain the record for each Non-Gazetted
Government Servant working under him in a service book (or service roll).
Each district treasury keeps a stock of service books and service rolls and
supplies those required of keeping in stock and sale at sub-treasuries on
quarterly indents, which should not be excessive. Other offices should obtain
from the sub-treasury only the number of service books (rolls) actually
required for use on each occasion and should not hold any stock to meet future
requirements.

Service roll forms required by heads of Government Offices for last

grade Government Servants, Police Constables and head constables and
leading firemen and other equivalent ranks in the Fire Services Department
will be issued free of cost.

Note : - All heads of Departments and Offices should attach to the

pay bills for the month of June every year a certificate to the effect that annual
verification of service will local records in respect of all the incumbents (whose
pay is drawn in the bill) has been completed. In the absence of the certificate,
the bill is not to be passed by the Treasury Officer/Pay and Accounts Officer . {
Memo No 74538-A/Accts./1614/69 Dt. 25-5-1971 }

Government after careful consideration ordered adoption of e Service Book

for the use of all Government employees to whom Fundamental Rules apply.All
the Government employees shall have e Service Book. The Service Books of
existing employees shall be replaced with e Service Books.( G.O.MS.No. 99 Dated:
27-06-2018)

Destruction of official records connected with accounts

Article – 326

A competent authority may destroy official records from time to

time subject to the careful observance of the relevant rules contained in the
department code or manual and of any other relevant orders of the
Government. The following rules apply generally to the destruction of records
(including correspondence) connected with accounts.

(a) The following should on no account be destroyed : ---

 (i) Records connected with expenditure which is within the period of
initiation fixed by law.
(ii) Records connected with expenditure on projects, schemes or works
which have not yet been completed, even though the expenditure
is not within the period of initiation fixed by law.
(iii) Records connected with claims to service and personal matters
affecting Government Servants who are still in service and
(iv) Orders and sanction of a permanent character, until revised.

(b) The following records should be preserved for not less than the period
specified against each item : -
Description of Records Period of Preservation
Annual Establishment Return(Books of 35 years
Establishment)

Pay bills and, when maintained

separately, acquaintance rolls for pay and
allowances (other than travelling
allowance) of Government Servants for
whom no establishment returns are
submitted or no service books or service
rolls are maintained. 35 years
Note : - Pay bills relating to head constables
and constables of the Police Department , for
whom long rolls are maintained in addition to
service books and to copyists and examiners
in the Revenue Department who are not in
pensionable service, need not be preserved
beyond six years .
Pay bills and , when maintained
separately acquaintance rolls for pay and
allowances (other than Travelling
allowance ) of Government servants for 3 years
whom establishment returns are
submitted and service books or rolls are
maintained. – See the last sentence of
clause (c) below { GO No 260 Fin. &Plg.
Dt. 25-7-1994}
 Pay bills and , when maintained
separately acquaintance rolls of 45 years
Government servants in last grade service
Registers of contingent expenditure 5 years
Sub-Vouchers 3 years
Detailed budget estimates of an office 5 years
Travelling Allowance bills and 3 years
acquaintance rolls relating to Travelling
Allowance
Pension cases (including Service books
and leave accounts attached to them ) in
which in valid or compensating pensions 25 years
have been sanctioned
Other pension cases (including Service
books and leave accounts attached to 35 years
them) after the retirement of the
Government Servant concerned.
Note 1 : - Service boos and other papers
relating to a claim for a gratuity should be
retained until the claimant attains 55 years of
age or dies, which ever is earlier and also until
final orders have been passed on the claim.
Note 2:- In regard to service books of
Government servants who have been
dismissed or discharged to have resigned or
died whilst in service see Rule 14 to 16 of the
subsidiary rules under Fundamental Rule 74
(a)(iv) contained in Part –III of Annexure II
of the Fundamental Rules
Statements of monthly progressive
expenditure and correspondence relating 2 years
to any discrepancy in the figure
Mortality returns of the pensioners 5 years.

(c ) When the Government have prescribed a minimum period after which

records of a particular kind may be destroyed, the head of a department or any
other authority duly authorized to do so, may order in writing that such
records in this own office and the office allowed any pay bills or acquaintance
rolls to be destroyed .He should take care to satisfy himself that the procedure
in regard to the maintenance and verification of service books prescribed in
subsidiary Rules 6 and 12 under Fundamental Rule 7(a)(iv) (part III of
Annexure II of the Fundamental Rules ) has been strictly followed in regard to
those pay bill acquaintance rolls.

(d) The head of a department is competent to sanction the destruction of such

other record in his own office and the offices subordination to him as he
considers to be useless , but he should forward a list of such records as
properly appertain to the concurrence in their destruction before ordering
them to be destroyed.

(e ) Every head of an office should see then lists showing full details of all
records destroyed from time are properly and retained permanently.

Amendment to Article 326 (b) of A.P.F.C. Volume-I Preservation of Vouches-

Reduction of time limit for preservation from 6 years to 3 years.

( G.O Ms.No.185,Fin.&Plg.(TFR-I) Department, dated 26-07-2005)

Ref: 1. G.O.Ms.No.260,Fin.&Plg. (FW-TER)Department, dated 25- 07-1994.

2. D.O.Letter No TM-I/III/14-1/2003-04/9,Dated 07-07-2003 of

Accountant General (A& E), A.P., Hyderabad.

3.Lr.No 60/P.A.C./2005-1,Dated:24-06-2005 of the Secretary to State

Legislature, Andhra Pradesh, Hyderabad.

Order:- In the Reference 1st read above ,order have issued reducing the time
limit for preservation of vouchers from 6 years to 3 years with the following
exceptions:

(i) the records/ vouchers relating to Court Cases pending before Public
Accounts Committed embezzlement cases.
 (ii) such other vouchers that may be required by the Department for
special reasons where specific requisition for retention of records send to
Accountant General’s office well in time before the destruction of records and;

(vii) All records/ vouchers pertaining to the Land Acquisition.

In the reference 2nd read above , the Accountant General (A&E),A.P.,

Hyderabad has stated that their Office has been reaching 15 lakhs vouchers
every month.
In The Reference 3rd read above ,the Secretary to State Legislature has
stated that the suggestions of the Accountant General A.P., Hyderabad has
been places before the Committee on the Public Accounts at its meeting held
on 06-06-2005.After taking into consideration of the difficulties explained for
preserving vouchers in Accountant General’s Office and in order to overcome
the present difficulties and after holding deliberations among members, the
Committee has accepted the following proposals which were submitted by the
Accountant General.

( i) The Vouchers may be retained in the normal course till the prescribed
period of preservation before weeding out with the exceptions mentioned in
item(ii) and (iii) below. The period of preservation of vouchers may be
delinked from the examination of a given year’s account by the Public Account
Committee.

(ii) Vouches that may be required by the Department for special reasons or
in connection with cases of misappropriation / fraud/embezzlement or Court
Cases may be preserved if the requisitions are sent to Accountant General by
the Department Government within the prescribed period of preservation.

(iii) Vouchers pertaining to the Land Acquisition may be preserved

permanently after careful consideration. Government here by order that.

After careful consideration, Government hereby order that:

(i) The vouchers may be retained in the normal course till the prescribed
period of preservation before weeding out with the exceptions mentioned in
item (ii) and (iii) below. The period of preservation of vouchers may be
delinked from the examination of a given year’s account by the Public Account
Committee.
(ii) Vouches that may be required by the Departments for special reasons or
in connection with cases of mis-appropriation/fraud/embezzlement or Count
Cases may be preserved if the requisitions are sent to Accountant General by
the Department/ Government within the prescribed period of preservation.

(iii) Vouchers pertaining to the Land Acquisition may be preserved

permanently Necessary amendment shall be issued to Article 326 (b) of
A.P.F.C. Volume -I separately.

Article – 327
Reports of deaths of European Government Servants

When a European Government servant dies while on duty or on leave in

India, the head of the office should submit a report immediately to the
Government( in the G.A.DEPARTMENT) in Form 21.

Article -328
Reports of death of pensioners

Every executive authority of a municipal council and village head-man

should report immediately to the disbursing officer concerned the death of
any person who was residing within his jurisdiction and drawing a
Government pension whether civil military . political or of any other kind.
Pension disbursing officers should supply these authorities with lists of the
pensioners residing within their respective jurisdictions. Whenever any
pension remains undrawn for one year , the Disbursing officer should make
enquiries through the District Police as to the case of his non -appearance
stating clearly where the pensioner of pensions shall be continued if no
objection is found as a result of the enquiry.

( Meno.No .9073/3441/Accts./65-3,Dt 28-10-1966)

In Hyderabad city , the above report will be made by the Commissioner

of the Corporation of Hyderabad to the Accountant – General.
 On receipt of intimation of the death of a civil pensioner , the disbursing
officer should report the particulars immediately to the Accountant -General.
When the Account-general receives intimation of the death of European
pensioner, he will submit a report immediately to the Government in Form21.

5. Chapter –XV : Delegation of Union Functions by consent of

State( Article329)

The Government are primarily concerned with State transactions to

which the rules in the foregoing chapters apply .The Government are also
exercising certain function in relation to Union subject under power delegated
to them. Tease functions fall under the following categories:

(i)Statutory and other executive functions entrusted by the Central

Government to the Government and their officers with the Government’s
consent ( Article 258(2) of the Constitution of India).

(ii) Functions imposed by Acts of the Indian Legislature upon the

Government and their officers (Article 258(2) of the Constitution of India).

The transactions relating to these functions are regulated by the rules

and orders issued from time to time by the Central Government and embodied
in the “Financial Rules of the Central Government “ or other Central
Government codes and manual. Chapter X of the Andhra Pradesh Budget
Manual contains a summary of the general instructions issued for the guidance
of estimating officer and others in regard to the estimate of revenue and
expenditure relating to the Union subjects and the control of such expenditure.

16. Chapter- XVI : Relaxation of Rules(Article 330)

The Government may relax the provisions contained in any of these rules in
favors of any Government servant or class of Government servants. A
department or departments. [G.O.Ms.No.317/Fin.(Accts,),Dt 26-4-1963]

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