Para 3.6 — MSO

3.6 A Grant or Appropriation is intended to cover all the charges, including the liabilities of past years, to be paid during the financial year or to be adjusted in the accounts of that year. It is operative until the close of that year. Any unspent balance lapses and is not available for utilisation in the following year.

Note 1.-The expenditure recorded against a Grant or Appropriation should ordinarily represent sums which actually come in course of payment within the financial year. There are, however, in operation various special arrangements whereby expenditure actually incurred in the previous years is recorded against a Grant or Appropriation of the current year. In general these are at variance with strict constitutional theory of parliamentary financial control.

Note 2.-The special arrangements referred to above are of the nature indicated below:-

(a) One such arrangement where the expenditure actually incurred in the previous year is recorded against the Grant or Appropriation of the current

When the recoupment of the advances drawn from the Contingency Fund is made through an excess demand in the subsequent year, the expenditure of the previous year is included in the relevant Grant/Major head and a note to this effect is given in the Finance Accounts of that year. However, the expenditure is treated as expenditure of the year in which it is actually incurred and not of the year in which it is eventually recouped.

(b) Similar procedure is also followed for making inevitable payments, for which no provision exists in a financial year, by obtaining an advance from the Contingency Fund before it is actually incurred and the recoupment of which is not made during the financial year.

(c) Consequent on the departmentalization of accounts, Exchange Account system for raising debits on account of Inter Departmental Adjustments has been discontinued. Instead, P.A.Os are required to effect cash settlement for inter-departmental adjustments. It is, therefore, essential that all outward claims arising during a particular financial year should be raised against the concerned P.A.O. during the same financial year. However, in rare cases, where such debits could not be year relates to the expenditure met out of the advances from the Contingency Fund which are not recouped till the close of the relevant financial year. In this case, the expenditure met out of the advances from the Contingency Fund and met recouped during the financial year, is excluded from the expenditure of that year and a note kept under the concerned Grant/Major head in the relevant Appropriation Accounts/Finance Accounts.

raised on or before the 31st March of a year by the debit raising P.A.O., the responding P.A.O. may normally adjust them in the accounts of the following year (i.e. year in which the debit is received and actual monetary settlement effected).

(d) Where a Personal Deposit Account is required to be created by a law or rule having the force of law, and certain liabilities by way of bridging any deficit or shortfall in the account devolve on the Government out of the special enactments, which are discharged by transferring funds to it from the Consolidated Fund of India, the credit balance in the Personal Deposit Account at the end of each financial year would lapse to Government except in respect of balances in personal deposit accounts which do not lapse to Government, even if outstanding for more than three complete account years.