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Elucidates the process of public finance of Jammu and Kashmir, focusing on the systems of control over it and how these controls are exercised. It describes how proper utilization of funds, with efficiency, economy and effectiveness is ensured, and the basic rules that govern them. J&K Financial Code is a collection of general provisions to be followed by all officers of Govt. of J&K while dealing with matters of a financial nature.

Chapter II – General Principles and Rules

The said chapter is detailed under following eight headings, which did further include sub headings under each part;

  1. Duties as regards cash and accounts
  2. Receipt of money, its custody and payment into the Treasury
  3. Maintenance of Accounts Cash Books
  4. Payments
  5. Defalcations and losses
  6. Inter Government and Inter-Departmental transactions
  7. Miscellaneous Rules and Orders
  8. Departmental Regulations

Below is a summarized version of contents as in chapter II

I. Duties as regards cash and accounts

(2-1) It states that every Government servant is personally responsible, for the money received in his official capacity and for the prompt record of receipts and payments in the relevant account as well as for the correctness of the account in every respect. Further the Government will hold him personally responsible for any loss due to any neglect of the duties laid upon him by the provisions of this Code. A knowledge of the accounts and financial rules relevant to his duties is a necessary part of the equipment of every Government servant through whose hands Government money passes, and he is expected to be sufficiently familiar with financial and accounts rules to keep an adequate check over the clerks or accountants in the office under his control.

II. Receipt of money, its custody and payment into the Treasury

The rules regulating the receipt of money, its custody and payment into the treasury are clearly spelt under this part, which is dealt as under the listed sub-headings.

 (i) Receipt of money

(ii) Receipt of coin, notes etc.

(iii) Grant of receipt to the payer

(iv) Custody of receipt books

(v) Cheques tendered in payment of Government dues

(vi) Deposits in the Treasury of cash chests and valuables of other Departments

(vii) Payment of money into the Treasury

(2.2) All sums of money which any State Officer receives in his oficial capacity must immediately be paid in full into nearest treasury, without any deduction whatever and the amount must immediately be credited by the Treasury Officer to the appropriate head of account. The appropriation of departmental receipts for departmental expenditure is strictly prohibited.

Exception: This rule is relaxed in certain cases like;

Money received in Civil, Revenue and Criminal courts on account of the service of summons, diet money of witnesses etc.

Again, Sub rule (c) of rule 2.2 stipulates as under:- “No Government servant may, unless authorized by general or special orders of Government, receive in his official capacity, money which is not creditable either to the Consolidated Fund or the public Account. Where he is authorized to receive such moneys the following rules should be observed:-

(i) He must open an account with the Jammu and Kashmir Bank Ltd. for their deposit and such accounts may be opened with special sanction with a Bank entrusted with Treasury business in the State or its branch or with a Post Office Saving Bank. However the prior approval of the Finance Department is required to their deposit elsewhere.

(ii) The Government Officer receiving such money is personally responsible for seeing that they are disbursed in strict conformity with the rules, regulations or orders governing the fund to which the money relate.

(iii) A precise record of all the transactions should be kept in a form complying with the regulations of the fund concerned.

(iv) The accounts are subjected to proper audit checks.

III. Maintenance of Accounts Cash Books

2-10. Save as otherwise expressly provided in these rules or in any authorised departmental regulations, the following rules shall be observed by all Government officers who are required to receive and handle cash:

(i) Every officer receiving money on behalf of the Government should

Maintaina cash book in Form F. C. 3

(ii) All monetary transactions should be entered in the cash book as soon as they occur.

IV. Payments

Under this head following rules are detailed

  • General principles and restrictions relating to expenditure
  • Payments of money at treasury
  • Drawal of money from the treasury
  • General instructions regarding the preparation and form of bills and Vouchers
  • Vouchers for departmental Payments (Payments made out of Departmental chests)
  • Affixation of receipt stamps on Vouchars
  • Withdrawal of moneys from the Treasury on Government account  
  • Arrear claims
  • Check of charges
  • Audit objections and recoveries
  • Responsibility for over charges
  • goods lost in transit
  • Control over accounts
  • Internal check against irregularities, waste and fraud

2.16. (a) Every Government servant incurring or sanctioning expenditure from the revenues of the State should be guided by high standards of financial propriety. Among the principles on which emphasis is generally laid are the following:-

(1) Every Government servant is expected to exercise the same vigilance in respect of expenditure incurred from public money as a person of ordinary prudence would exercise in respect of the expenditure of his own money.

(2) The expenditure should not be prima facie more than the occasion demands. (3) Money borrowed on the security of allocated revenues should be expended on those objects only for which money is borrowed.

(4) No authority should exercise its powers of sanctioning expenditure to pass an order which will be directly or indirectly to its own advantage.

(5) Government revenues should not be utilised for the benefit of a particular person or section of the community unless-

(i) the amount of expenditure involved is significant, or

(ii) ) a claim for the amount could be enforced in a court of law, or

(iii) the expenditure is in pursuance of a recognised policy or custom.

(6) No authority should sanction any expenditure which is likely to involve, at a later date, expenditure beyond its own powers of sanction.

(7) The amount of allowances, such as travelling allowance, granted to meet expenditure of a particular type, should be so regulated that the allowances are not on the whole a source of profit to the recipients.

V. Defalcations and losses

(i) Responsibility for losses sustained through Fraud or Negligence of Individuals

(i-a) Exhibition oft~ in Government

(ii) Report to the Accountant General and the Departmental superior authority

(iii) Losses due to natural calamities

(2-50) Every Government servant should realize fully and clearly that he will be held personally responsible for any loss sustained by Goyemment through fraud or negligence on his part, and that he will also be·held personally responsible for any loss arising from fraud or negligence on the . part of any other Government servant to the extent to which it may be shown that he contributed to the loss by his own action or negligence

VI. Inter Government and Inter-Departmental transactions

(2-53) The conditions under which a department of a Government may make charges for services rendered or articles supplied by it and the procedure to be observed in recording such charges itt the accounts of the Government concerned are given in.Appendix (3) to these rules.

APPENDIX 3 (See Note under rule 3) Sections 10, 11 and 22 of the C&AG’s (Duties, Powers and Conditions of Service) Act, 1971, and orders issued by the President in exercise of the powers conferred by sub-section 1 of section 10 and first proviso to section 11 thereof Section 10.—Comptroller and Auditor General to compile accounts of Union and States.

Section 22— Power to make rules (1) The Central Government may, after consultation with the Comptroller and Auditor General, by notification in the Official Gazette, make rules for carrying out the provisions of this Act in so far as they relate to the maintenance of accounts. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:- (a) the manner in which initial and subsidiary accounts shall be kept by the treasuries, offices and departments rendering accounts to audit and accounts offices; (b) the manner in which the accounts of the Union or of a State or of any particular service or department or of any particular class or character, in respect of which the Comptroller and Auditor General has been relieved from the responsibility of compiling or keeping the accounts, shall be compiled or kept; (c) the manner in which the accounts of stores and stock shall be kept in any office or department of the Union or of a State, as the case may be; (d) any other matter which is required to be, or may be, prescribed by rules.

VII. Miscellaneous Rules and Orders

(i) Erasures, overwriting and corrections

(2-54) It states that any Erasures, overwriting and Corrections in any account register, schedule or cash book are absolutely forbidden. If any correction be necessary, the incorrect entry should be cancelled neatly in red ink and the correct entry inserted. (See rule 2-27).

(ii) Issue of Duplicates or Copies of Documents:

2-55 It states that no Government Officer may issue duplicates or copies of receipts granted for money received, or other documents for the payment of money which has already been paid, on the allegation that the original have been lost If any necessity arises for such a document, certificate may be given that on specified day a certain sum on a certain account was received from or paid to a certain person

(iii) Prohibition regarding sending of communications at public expenses:

2-56 It states that:

(a)    All references by Government servants on personal matters such as leave, leave salary, pay, increments, funds subscriptions, house rent, posting etc., must be submitted in covers stamped with ordinarily postage and not with service postage stamps. This rule applies only to the letters of Government servants regarding their own personal matters.

(b)    All telegraphic messages regarding personal matters must be paid for by the persons sending them.

(c)     This rule applies also to the use of telephone for trunk calls.

(iv) Call of vouchers from Audit Office:

2-57 It states that vouchers once received in the Accounts Office will not be returned to the Department except when these are required for investigation purposes by an investigating officer and a requisition to this effect is received from the Police Department or a Court of Law.

(v) Claims against the Railway for goods lost in transit:

2-58 It states that the Government Officers should take due care when ordering or consigning goods to destinations outside the State on Government account and have to be booked through Railway with the relevant Railway Rules. Claims for any losses or shortages, should be lodged with the Railway Department immediately and within time. Any default in this respect will render the Government Officer concerned responsible for the loss.

(vi) Departmental check of receipts and disbursements:

2-59 It states that the check of receipts consists in seeing:

(a) that sums due are received and checked against demand, and

(b) that all sums received are brought to credit in the accounts

VIII. Departmental Regulations

(2-60) All Departmental codes, rules or regulations in so as they embody orders or instructions of a financial character or have important financial bearing should only be issued under the authority of Government, after consultation with the Finance Department.


General Principles Chapter II of Jammu & Kashmir Financial Code deals with various kinds of rules to be followed for the efficient maintenance of financial records in respect of public money in the government departments and the procedure to be followed while recording the financial transactions covering payments, expenditures and procedures to keep check so as to insure proper accounts of public money. It lays rules to avoid the financial discrepancies and also lays responsibility in case of fraud or embezzlement on the official handing such transactions. Prescribes formats and procedures to be strictly followed while dealing with the public money, how it should be recorded, where the money should be kept and reporting and maintaining of proper records for the same.  It is expected that that J&K Financial Code will provide greater flexibility to officers in transacting Govt. Business while ensuring accountability commensurate with responsibility at different levels of Govt. It is a compendium of general provisions which describes how proper utilization of funds, with efficiency, economy and effectiveness is ensured, and the basic rules that govern the financial aspects of government offices in totality.


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