Rule 9 — GAR

9. Accounts of State Governments with the bank Each State Government has made a separate agreement with the Reserve Bank of India by virtue of which the general banking business of that Government (in which business is included, the receipt, collection, payment and remittance of moneys on behalf of that Government) is carried on and transacted by the Reserve Bank, in accordance with and subject to the provisions of the agreement and of the Reserve Bank of India Act, 1934, and in accordance with and subject to such orders as may from time to time be given to the Reserve Bank by the State Government. The operations of each State shall, however, be confined to the offices and branches of the Reserve Bank of India and of the bank which have been designated as falling within the area of that particular State. The receipt and payment of moneys on behalf of a State outside its jurisdiction shall ordinarily be arranged through the Accountant General of the State in which the transactions take place. NOTE:- The Governments of Jammu and Kashmir and Sikkim have not so far entered into agreement with the Reserve Bank of India for the conduct of their general banking business by the Reserve Bank.

9. Department of Space.

9. Do. Do. Capital Outlay and Cooperation in Credit Cooperatives. Investment in Credit Cooperatives by States. Investment in ---- --- 4425-Capital outlay on Cooperation Investment in Credit Cooperatives. Investment in — ———

9. Subject to any separate agreements that have been or may be arrived at between the various Governments, the pay and allowances including travelling allowances of a Government servant summoned to give evidence in his official capacity in a criminal Court or in a Civil Court in a case in which Government is a party or during the period of his absence, are debited to the Government under which he is employed. Actual expenses under the rules of the court, if admissible, are, however, payable by the court, and debited to court contingencies. II. Incidence of Leave Salaries The following rules govern the incidence of leave salaries of Government Servants who have served under two or more Governments:- The liability for leave salary will be borne in full by the Department from which the Government servant proceeds on leave, whether it be his parent Department or a borrowing Department with whom he is on deputation.

III. Incidence of Pensions Except in regard to the apportionment of liabilities of pensions of Government servants who retired after serving the undivided India between India and Pakistan, the following rules regulate the adjustment of pensionary charges of Government servants who have served one or more than one Government. The liability for pension including gratuity will be borne in full by the Central/State Government to which the Government servant permanently belongs at the time of retirement. C.—OTHER CHARGES IV. Incidence of expenditure involved in Audit and Keeping Accounts The following rules govern the incidence of expenditure in Audit and Accounts:—

(i) Under Article 149 of the Constitution and the Provisions of Section 13 of the C&AG's (DPC) Act, 1971, the Comptroller and Auditor General is responsible for the audit of all expenditure from the revenues of the Union and of the States, and of certain accounts specified in the Act. In conducting such audit the Comptroller and Auditor General performs a statutory function entrusted to him and the cost of this function is a charge of the Central Government.

(ii) Besides the audit of expenditure from the revenue of the Union and of the States and of certain accounts, as mentioned in rule (i), the Comptroller and Auditor General may be entrusted with the audit of the accounts of "any other authority or body" by or under any law made by Parliament under the provisions of Article 149 of the Constitution. The cost of such audit is recoverable from the authority or body whose accounts are audited. NOTE 1—The expression, "any other authority or body' does not include private commercial and quasicommercial under taking (other than Government Companies as defined in Section 617 of the Companies Act 1956) in which Governments in India may be participating. NOTE 2—In the case of Government Companies the recovery of the cost of supplementary audit conducted under Section, 619 (3)

(b) of the Companies Act 1956 shall be waived in these cases where the audit is done by the Comptroller and Auditor General through his own departmental staff; but shall be enforced in cases where the Comptroller and Auditor General employs professional auditors for the second audit.

(iii) If a State Government requests the Comptroller and Auditor General to arrange for a more detailed or a local audit of expenditure, transactions or accounts which relate to or form part of the accounts of the State, the criterion for deciding the incidence of the expenditure involved in such audit is whether or not the Comptroller and Auditor General agrees to do the work as part of his legitimate statutory functions. If he does, the cost of the audit should be treated as a charge of the Central Government, since what is involved is an extension of audit for which the Comptroller and Auditor General is statutorily responsible. The fact that such audit is undertaken in a single State is not a decisive consideration in the apportionment of cost as the extent of audit to be conducted in any case is determined by the Comptroller and Auditor General.

(iv) The Comptroller and Auditor General is not responsible ab initio for the audit of any accounts mentioned in Section 13

(b) of the C.&A.G's (DPC) Act 1971 but, when he undertakes the audit of any such accounts he becomes statutorily responsible for the work. In this case also, the cost of audit is a charge of the Central Government.

(v) The Comptroller and Auditor General is not statutorily responsible for the audit of the accounts of local authorities (other than those in relation to the accounts of which specified duties have been entrusted to him by or under any law made by Parliament) whose accounts do

not constitute part of the accounts of the Union or of any State and of the accounts of private commercial and quasi-commercial undertakings (other than Government companies as defined in Section 617 of the Companies Act, 1956) in which Governments in India may be participating. Such Audit can be undertaken by the Comptroller and Auditor General only on a "consent" basis and on such terms and conditions as regards recovery of costs, etc., as be settled between him and the Government concerned. NOTE- The recovery of cost of audit of the accounts of local bodies/institutions that are wholly or largely financed from grants-in-aid or loans by Government shall be regulated as follows:—

(i) Where the Comptroller and Auditor General is the sole auditor for a local body/institution, whether under any law made by Parliament under Article 149 of the Constitution or on consent basis under Section 20 (1) of CAG's (DPCs) Act, 1971 charges will be payable in full unless specifically waived by Government.

(ii) Where the local body/institution has its own auditors and audit by the Comptroller and Auditor General is conducted in addition with a view to safeguard Government interests and to ensure that the grants or loans by Government have been utilised for the purpose for which they are given, the Comptroller and Auditor General will be acting in discharge of the C&AG's DPC Act 1971, is a charge of the Central ment cost.

(iii) Expenditure involved in keeping the accounts of a State in so far as the responsibility for keeping such accounts remains with the Comptroller and Auditor General under Section 10 (1), [2nd Proviso to Sec. 10 (1) and 1st Proviso to 10 (1)] of the C&AG's (DPC) Act 1971, is a charge of the Central Government. The cost of keeping such accounts of a State as are covered by the initial and Subsidiary Accounts Rules issued under Section 10 (1), 2nd Provisio to Sec. 10 (1) and 1st Proviso to 10 (1) of the C&AG's DPC Act 1971 is a charge of the State concerned. Similarly, if in any State the Comptroller and Auditor General is relieved of the responsibility for the keeping of the accounts of any particular service or department of a State Government in pursuance of Sec. 10 (1), 2nd Proviso to Sec. 10 (1) and 1st Proviso to 10 (1) of the C&AG's DPC Act 1971, the cost of keeping such accounts will be a liability of the Government of the State.

(vii) The maintenance of the internal accounts of a Department of a State is part of the ordinary duties of a State Government and is therefore a responsibility of the State concerned. Thus, if the Comptroller and Auditor General is asked to scrutinise or advise on the modification of an existing system of internal accounts kept in a department of a State, such work can be undertaken by him on a 'consent' basis and on specified terms and conditions as in rule

(v) above. V. Incidence of the cost of Police Functions on Railways including the cost of Protecting Railway Bridges.