Para 19.12.11 — Defalcations and losses of public money or propert
Original Rule Text
19.12.11 REPORTS OF DEFALCATIONS AND OTHER LOSSES
(a) The department concerned should report defalcations and losses to the Pay and Accounts Officer and to the Statutory Audit Officer simultaneously.
(b) On receipt of a report on defalcation or loss of public money or property, the Pay and Accounts Officer should call for such further information as he may require on the subject, and carefully examinethe case. He shall ascertain whether the defalcation or loss was caused on account of any defect in the rules, or whether it was due to neglect of rules or want of supervision on the part of the authorities. He should report the result of such examination to the authority competent to sanction the write off for the loss. He should also report important cases of this nature to the Principal Accounts Office.
19.13 REVIEW OF BALANCES 19.13.1 At the close of any financial year, the Pay and Accounts Officer shall review and verify the balances under various Debt, Deposit and Remittance heads and ascertain wherever necessary, whether the person or persons by whom the balance is owned or to whom it is due, admits its correctness. In cases of balances due to Government, it should be ascertained as to how far they are really recoverable. Occasionally there could be a case where the broadsheet balance under a loan, debt, deposit, remittance or suspense head may be higher than the ledger balance, for which the full details would also be available in the broadsheet. In such cases, in order to rectify the book keeping error, the ledger balance has to
be increased to match with the broadsheet figure, through write-off of the difference in balance. On receiving the sanction of the competent authority in terms of Rule 38 of Government Accounting Rules,1990 , the write-off shall be effected by a contra entry under `8680- Misc. Government Account'. If however, no details are available in the broadsheet the difference between broadsheet & ledger figures shall be dropped without any accounting adjustment, and by a mere correction in the broadsheet.
(Authority: C & A.G's Circular No. 844-Comp/18-72 dt. 14.9.72.) 19.13.2 The Pay and Accounts Officer should take steps to clear the outstanding balances and to settle the discrepancies noticed after obtaining the acceptance of correct balances from the person or persons by whom they are owned or from whom they are due, wherever required. All Pay and Accounts Officers should furnish annually by 15th September each year, a detailed statement indicating the amount of unreconciled differences between broad sheet and ledger and number of cases where acceptances of balances are awaited from the persons concerned to the Pr. Accounts Office for the period ending 31st March of the preceding year, against various heads. The Pr. Accounts Office shall furnish a consolidated report for the Ministry/Department as a whole, to the Finance Accounts Section of the CGA by the 15th of October.
19.13.3 The following paragraphs provide guidelines regarding the review expected in respect of certain types of balances:
(a) Deposits of provident Fund: The balances in the Provident Fund accounts as worked out in the ledger cards should be communicated to the subscribers by 31st May each year.
What This Means
Defalcations and losses of public money or property must be reported simultaneously to the PAO and Statutory Audit. The PAO examines whether the loss was due to defective rules or human negligence, and reports findings to the competent write-off authority. At year-end, PAOs must review and verify balances under all Debt, Deposit, and Remittance heads — confirming with the persons who own or owe the balances. Discrepancies between broadsheet and ledger are resolved either by write-off under MH 8680 (with competent authority sanction) when details exist, or by broadsheet correction when no details are available. Annual balance statements must be submitted by September 15.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Defalcation reports must go to both PAO and Statutory Audit simultaneously
- 2PAO examines cause: rule defect vs. negligence/lack of supervision — reports to write-off authority
- 3Year-end review of all Debt/Deposit/Remittance head balances is mandatory
- 4Broadsheet-ledger differences with details: write-off via MH 8680 with sanction under GAR Rule 38
- 5Annual balance statement due by September 15; consolidated Ministry report to CGA by October 15
Practical Example
During year-end review, a PAO discovers that the broadsheet for a loan head shows Rs 2 crore but the ledger shows only Rs 1.8 crore. On investigation, the broadsheet has details of 3 loan accounts totaling the extra Rs 20 lakh that were never posted to the ledger. The PAO obtains sanction from the competent authority under GAR Rule 38 and makes a write-off entry via contra adjustment under MH 8680 (Misc. Government Account) to bring the ledger in line with the broadsheet. Separately, a defalcation of Rs 1.5 lakh is reported — the PAO finds it was due to lack of supervisory checks and reports this to the Secretary for write-off consideration.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Cross References
Frequently Asked Questions
How are broadsheet-ledger differences resolved?▼
What is the timeline for annual balance verification?▼
Who bears responsibility for reporting defalcations?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.