Para 3.6 — MSO (A&E)

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.

What This Means

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

• 1Grant covers all charges to be paid or adjusted in the financial year, including past liabilities
• 2Grant is operative only until year-end; unspent balances lapse
• 3Contingency Fund advances not recouped in the year are excluded from that year's expenditure
• 4Inter-departmental cash settlements that cross year boundaries are adjusted in the receiving year
• 5Personal Deposit Accounts created by law may retain balances beyond three years
• 6Special arrangements are exceptions to strict constitutional theory

Practical Example

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.