Rule 256 — GFR

Rule 256 (1) Submission of Utilization Certificate, Reports, Statements, etc. In cases in which conditions are attached to the utilization of loan, either in the shape of the specification of the particular objects on or the time within which the money must be spent or otherwise, the authority competent to sanction the loan shall be primarily responsible for certifying to the Accounts Officer where necessary, the fulfillment of the conditions attaching to the loan, unless there is any special rule or order to the contrary. The loans sanctioned to the State Governments and the Local Administration of Union Territories shall not, however, come within the purview of this rule.

Rule 256 (2)

(i) The certificate referred to in Rule 256 above shall be furnished as in Form GFR 12-B and at such intervals as maybe agreed to between the Audit Officer and/or the Accounts Officer, as the case may be, and the Ministry or Department concerned. Before recording the certificate, the certifying officer shall take steps to satisfy himself that the conditions, on which the loan was sanctioned, have been or are being fulfilled. For this purpose, he may require the submission to him at suitable intervals of such reports, statements, etc., which shall establish the utilization of loan for the purpose for which it was sanctioned. The loanee institution may also be required to furnish a certificate from its Auditors that the conditions attaching to the loan have been or are being fulfilled. The certificate shall give details of the breaches, if any, of those conditions.

(ii) A Certificate of Utilization of the loan shall be furnished to the Accounts Officer in every case of loan made for specific purposes, even if of the any conditions is not specifically attached to the grant. Such certificates are not, however, necessary in cases where loans are sanctioned not for any specific purpose or object but take the shape of a temporary financial aid or where the loans have been sanctioned to the Public Sector Undertakings intended for financing of their approved capital outlays. The repayment of loan, however, has to be watched in the usual manner.

(iii) In respect of loans the detailed accounts of which are maintained in the Audit Offices, the authorities sanctioning the loan shall furnish the Utilization Certificate in respect of each individual case.

(iv) Where the detailed accounts of the loans are maintained bythe Departmental authorities, a consolidated Utilization Certificate shall be furnished to Audit by the Ministries/Departments sanctioning the loans to Institutions / Organisations for the total amount of the loans disbursed during each year for different purposes including the loans sanctioned by their subordinate officers. This certificate shall not cover the loans to individuals for which Utilization Certificates need not be furnished to the Accounts Officer. The Certificate shall indicate the year-wise and object-wise break-up of loans disbursed and the loans for which Utilizations Certificates are furnished. The utilization certificate shall also show the loans disbursed separately for each sub-head of account to facilitate verification by the Accounts Officer.

(v) The Utilization Certificates shall be furnished within a ‘reasonable time’ after the loan is paid to the institutions. The Department of Central Government shall prescribe, in consultation with the Ministry of Finance, target dates for the submission of the Utilization Certificates by the Department concerned to the Accounts Officer. The target date shall, as far as possible, be not later than eighteen months from the date of sanction of the loan.

(vi) In respect of loans, the detailed accounts of which are maintained by Departmental Officers and where consolidated Utilization Certificates are to be furnished to Accounts Officer, the period of 18 months shall be reckoned from the expiry of the financial year in which the loans are disbursed. The consolidated Utilization Certificates in respect of such loans paid each year shall, therefore, be furnished not later than September of the second succeeding financial year.

(vii) The due dates for submission of the Utilization Certificates shall be specified in the letter of sanction for loan. The target date as specified shall be rigidly enforced and extension shall only be allowed in very exceptional circumstances in consultation with the Ministry of Finance under intimation to the Audit Officer and/or the Accounts Officer, as the case may be. No further loans shall be sanctioned unless the sanctioning authorities are satisfied about the proper utilization of the earlier loan sanctioned to an Institution, etc.