THE KARNATAKA FINANCIAL CODE, 1958 NOTIFICATION

1 THE KARNATAKA FINANCIAL code , 1958 NOTIFICATIONNo. FD I COD 58, dated 1st April 1958In exercise of the powers conferred by clause (2) ofArticle 283 of the Constitution of India and in supersession ofthe Rules contained in the Mysore FINANCIAL code , Volume 1(1952 Edition) with Appendices and Forms as contained in theMysore Civil Account code , Volume 1 (1927 Edition) asamended, other than the rules relating to contingent expenditure,the Governor of KARNATAKA , hereby makes the following rules,namely:-CHAPTER - ITITLE AND DEFINITIONS1. (1) These rules may be called the KARNATAKA FinancialCode, 1958.(2) They shall come into force on the First day of If the Government considers it necessary or expedientso to do for avoiding any hardship or removing any difficultythat may arise as a result of the application of these rules, itmay subject to such restrictions and conditions, if any, as it maythink fit to impose, dispense with or relax the provisions of anyof these rules in any case or class of In this code , unless the context requires otherwise thefollowing words and phrases have the meanings hereby assignedto them:-2(1) Accountant General means the head of the Office ofAudit and Accounts who maintains the accounts of the Stateand exercise Audit functions in relation to those accounts onbehalf of the Government.

2 (2) Abstract Bill .-A bill without details either forcontingent or travelling allowance expenditure, paid at a treasurywithout the scrutiny and countersignature of a controllingauthority, to save delay in the discharge of a claim.(3) Budget Calendar means the calendar fixed byGovernment for the preparation of the budget estimates and forcompletion of the State Budget of the year (Refer to the BudgetManual).(4) Budget Estimates are the detailed estimates of thereceipts and expenditure of a FINANCIAL year. (Refer to the BudgetManual).(5) Cash Order means an order issued by a TreasuryOfficer for private remittances on another Treasury, of a specifiedamount to a specified person.(6) Cheque means a written order (not expressed to bepayable otherwise than on demand) addressed by a person calledthe drawer to a Bank or Treasury to pay a specified sum ofmoney to himself or to a third party known as the payee andincludes a demand draft drawn on any specified Bank.

3 (7) Controlling Authority means the Head of adepartment or other departmental officer who is entrusted withthe responsibility of controlling the incurring of expenditureand/or the collection of revenue by the subordinate authoritiesof a (8) Disbursing Officer means a Government servant whodraws moneys from the Treasury on bills or cheques, butexcludes a Government servant who is not the Head of anoffice and draws only his own pay and allowances from thetreasury.(9) FINANCIAL Year means the year beginning with the 1st April and ending with the following 31st March.(10) Government means the Government of KARNATAKA .(11) Government Servant means any person serving inconnection with the affairs of the Government, whetherremunerated by salary or not, and includes every person who isauthorised to receive, keep, carry or spend moneys on behalf ofGovernment.

4 (12) "Head of a Department" means any authority speciallyordered by the Government to be the Head of a Department(vide Appendix 1).(13) Inevitable Payments means money which isindisputably payable.(14) Inspecting Officer means a Government servant whois appointed solely or mainly for performing specified duties ofinspection which involve touring the State and does not includea Government servant who performs inspection dutiesoccasionally as part of his general supervision of hissubordinates.(15) Lapse of Grant means the expiry at the close of thefinancial year of the sanctioned grant not utilised for expenditureor the unexpended portion of the sanctioned grant, except grantswhich are specially exempted from the rule of lapse (Refer tothe Budget Manual).4(16) Local Body means a District Board, a MunicipalCouncil, Village Panchayat, Trust Board, etc.

5 (17) Local Fund means:-(1) the revenues administered by Bodies which come underthe control of Government by law or rule having the force oflaw whether in regard to the proceedings generally or to specificmatters such as the sanctioning of their budgets, sanction tothe creation or filling up of particulars appointments. theencashment of leave, pensioner similar rules; and(2) the revenues of any body which may be speciallynotified by the Government of KARNATAKA as such.(18) Major Head means a main head of account for thepurpose of recording and classifying receipts and disbursementsof moneys that enter into the accounts of Government (Refer tothe Budget Manual).(19) Miscellaneous Expenditure means all expenditureother than that falling under pay and allowances, contingenciesand works.(20) Proposition Statement means a statement to besubmitted to Government setting forth the FINANCIAL effect of aproposal for revision of establishments.

6 (21) Re-appropriation means the transfer of funds fromone head of account to another. (Refer to the Budget Manual).(22) Receipts of Government means and includes allmoneys received by a Government servant on behalf of theGovernment, not only the proceeds of taxation and the yield ofordinary revenue but also capital receipts, such as, the proceedsof sales of land; the proceeds of borrowing operations unfounded5debt, and such receipts of a banking or deposit nature as byvirtue of any statutory provision or of any general or specialexecutive order of the Government have to be held in the custodyof the Government.(23) Revised Estimates -Refer to the Budget Manual.(24) Surrender of Grants means the formal surrender ofgrants which are not likely to be utilised before the expiry ofthe year to be placed at the disposal of Government (Refer tothe Budget Manual).

7 (25) Treasury means any Treasury in the State and includesa Taluk Treasury.(26) Treasury Officer means the officer in immediateexecutive charge of a Treasury.(27) Unit of Appropriation means the lowest accounthead under which the Government place a specific appropriationat the disposal of the spending authority concerned (Refer tothe Budget Manual).(28) Ways and Means Estimates -Refer to the IIGENERAL PRINCIPLES AND RULESD uties as regards accounts3. Every Government servant should see that properaccounts are maintained for all Government financialtransactions with which he is concerned, and render accuratelyand promptly all such accounts and returns relating to them asmay have been prescribed by Government, the AccountantGeneral, or the competent departmental Government servant should realise that thecorrect maintenance of his accounts is as important a part of hisduties as his executive work.

8 A knowledge of the accounts andfinancial rules relevant to his duties is a necessary part of theequipment of every Government servant through whose handsGovernment money passes, and he is expected to be sufficientlyfamiliar with FINANCIAL and account rules to keep an adequatecheck over the clerks or accountants in the office under hiscontrol. He should check the accounts as frequently as possiblein order to see that his subordinates do not commit fraud,misappropriation or any other irregularity. The Govern- mentwill hold him personally responsible for any loss that may befound to be due to any neglect of the duties laid upon him bythe provisions of this code . The fact that a Government servanthas been misled or deceived by a subordinate, will in no waymitigate his personal responsibility, since every Governmentservant should be familiar with the FINANCIAL rules laid down bythe Government and exercise a specially strict and close controlover his subordinate in regard to the use of public funds and themaintenance of proper (a)

9 All transactions to which any Government servantin his official capacity is a party must, without any reservation,be brought to account, and all moneys received should be paidin full without undue delay in any case within two days, intoa Government treasury, to be credited to the appropriate accountand made part of the general treasury If in exceptional circumstances, the time limitof two days cannot be observed, the Heads of Departmentsshould by specific order, extend the said time limit up to sevendays. Unless the time limit is so extended by a specific order,by the Head of Department, the time limit of two days The provisions regarding the time limitfor crediting Government money contained in clause (a) of thisArticle are not applicable to remittances like Land Revenue forwhich specific rules exist in the Department Manuals .Note The following procedure shall be observed ifa Government officer receives in his official capacity, moneyswhich are not Government dues:-(i) All moneys received by or deposited with any officer,other than Revenues or Public money raised or received byGovernment, shall be paid into the public account ;(ii) All moneys received by or deposited with any court tothe credit of any cause, matter, account or persons shall also bepaid into the public account;(iii) Moneys not being Government dues received by aGovernment servant in his official capacity, , Poor Fund inHospitals, Sports Fund in Educational Institution, etc.

10 , shall be8deposited in the Savings Bank of the KARNATAKA Government/Post Office Savings Bank.(iv) The Head of Account to which such moneys shall becredited and the withdrawal of moneys therefrom shall begoverned by the relevant provisions of the Account CODE, Volumes I and II, the KARNATAKA FINANCIAL code , The KarnatakaTreasury code or such other general or special orders as maybe issued in this accounts of such transactions should be keptdistinct from those pertaining to State RECEIPTS1[(b) Government dues paid in the form of cash, cheques,bank drafts, postal orders and money orders should be acceptedby the Departmental Officers. The following procedure shouldbe observed in accepting the Government dues.(i) Acceptance of Government dues in cash at theDepartmental Counters:-Government dues tendered in cash may be accepted byDepartmental Officers in their office upto an amount notexceeding Rs.]