GFR.pptx

Rules and regulaton

1. General Financial Rules 2017 ( Compilation of GoI`s Financial Rules/Orders ) Prepared by Vishnu Singh

2. Applicability of GFRs General Financial Rules (GFRs) are a compilation of rules and orders of Government of India to be followed by all while dealing with matters involving public finances. To be observed by all Departments and Organizations under the Government and specified Bodies except otherwise provided for in these Rules. GFRs provide a framework within which an organization manages its business in a financially prudent manner without compromising its flexibility to deal with varied situations. Modified in 1963, 2005 and 2017 2

3. New initiatives requiring modification in GFRs 3 In the last few years, Govt. has made innovative changes Removal of distinction in non-plan and plan expenditure, Merger of Railway Budget with General Budget, Focusing on outcomes through an improved Outcome Budget document, Increased focus on Public Finance Management System(PFMS), Reliance on the Direct Benefit Transfer (DBT), Introduction of new e-sites like Central Public Procurement Portal, Government e-Marketing ( GeM ) Portal, Non-Tax Revenue Portal

4. General principles of GFRs Every officer incurring or authorizing expenditure should be guided by standards of financial propriety . Every officer is expected to exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money. Should not be prima facie more than the occasion demands . No sanction or order which will be directly or indirectly to its own advantage . 4

5. Expenditure from public moneys should not be incurred for the benefit of a particular person or a section of the people No expenditure from public funds without sanction of CA Authorizing expenditure as per DoFP Sanctions to the expenditure to indicate the details of the provisions in the relevant grant or appropriation wherefrom such expenditure is to be met. 5

6. Responsibility of Controlling Officer in respect of Budget allocation To see that the expenditure does not exceed the budget allocation that the expenditure is incurred for the purpose for which funds have been provided that the expenditure is incurred in public interest that adequate control mechanism is functioning in his Department for prevention, detection of errors and irregularities in the financial proceedings of his subordinate offices and to guard against waste and loss of public money, 6

7. Canons (Standards) of financial propriety Every officer incurring or authorising expenditure from public moneys should be guided by high standards of financial propriety Should also enforce financial order and strict economy & see that all relevant financial rules & regulations are observed by his own office and by subordinate disbursing authority 7

8. Reasonability & Accountability: Every authority procuring any item / service in pubic interest shall have the responsibility & accountability to bring in matters relating to public procurement • Efficiency & Economy • For fair & equitable treatment of suppliers • Promotion of competition in public procurement Transparency: Place on record in precise terms, the consideration(s) which weighed with the purchase officer while taking procurement decision 8

9. Financial propriety or Standards of financial propriety 1. Vigilance: Exercise the same vigilance for expenditure from public money or organisation’s money as a person of ordinary prudence would normally exercise 2. Economy: Prima-facie, expenditure should not be more than the occasion demands 3. Morality: Financial powers not to be used to sanction expenditure which will directly or indirectly be for one’s own benefit 4. Equality: Public money not to be spent for the benefit of particular person or section of people unless: 1. the claim could legally be enforced; or 1. expenditure is in pursuance with a recognised policy or custom 9

10. Basic Aims of Procurement – Five R’s of Procurement The term ‘Right’ is used here in the sense of being optimal: i ) Right quality; ii) Right quantity; iii) Right price; iv) Right time and place; and v) Right source Public Financial Management System 10

11. Govt. Accounting Rules Cash based Accounting . Government accounts shall be prepared on cash basis. The accounts of Government shall be kept in three parts, Consolidated Fund (Part-I), Contingency Fund (Part-II) and Public Account (Part-III). Classification of transactions in Government Accounts, shall have closer reference to functions, programmes and activities of the Government and the object of revenue or expenditure, rather than the department in which the revenue or expenditure occurs. Every officer responsible for the collection of Government dues or expenditure of Government money shall see that proper accounts of the receipts and expenditure, as the case may be, are maintained in such form as may have been prescribed for the financial transactions of the Government 11

12. Capital and Revenue Expenditure Capital Expenditure : Significant expenditure incurred with the object of acquiring tangible assets of a permanent nature (for use in the organisation and not for sale in the ordinary course of business) or enhancing the utility of existing assets, shall broadly be defined as Capital expenditure. Revenue Expenditure : Subsequent, charges on maintenance, repair, upkeep and working expenses, which are required to maintain the assets in a running order as also all other expenses incurred for the day to day establishment and administrative expenses, shall be classified as Revenue expenditure Capital receipts during construction mainly to be utilised in reduction of capital expenditure : 12

13. Execution of works Original works means all new constructions Minor works mean works which add capital value to existing assets but do not create new assets. Repair works means works undertaken to maintain building and fixtures. Power to accord adm . approval, sanction expenditure and re-appropriate funds as DoFP Rules Public Financial Management System 13

14. No works shall be commenced or liability incurred in connection with it until: ( i ) administrative approval has been obtained from the appropriate authority in each case. (ii) sanction to incur expenditure has been obtained from the competent authority. (iii) a properly detailed design has been sanctioned; while designing the projects etc. (iv) estimates containing the detailed specifications and quantities of various items have been prepared on the basis of the Schedule of Rates maintained by CPWD (v) funds to cover the charge during the year have been provided by the competent authority. (vi) tenders invited and processed in accordance with rules. (vii) a Work Order issued 14

15. Procurement of Goods & Services through GeM The Procurement of Goods and Services is mandatory for Goods or Services available on GeM : ( i ) Up to Rs.50,000/- through any of the available suppliers meeting the requisite quality, specification and delivery period (ii) Above Rs.50,000/- and up to Rs.30,00,000/- L1 Seller amongst at least three different manufacturers, on GeM , meeting the requisite quality, specification and delivery period. (iii) Above Rs.30,00,000/- through the supplier having lowest price meeting the requisite quality, specification and delivery period after mandatorily obtaining bids, using online bidding or reverse auction tool provided on GeM . 15

16. Purchase of goods without quotations Purchase of goods upto the value of Rs. 25,000 only on each occasion may be made without inviting quotations or bids on the basis of a certificate to be recorded by the competent authority in the following format. “I am personally satisfied that these goods purchased are of the requisite quality and specification and have been purchased from a reliable supplier at a reasonable price.” Public Financial Management System 16

17. Purchase of goods by Purchase Committee Purchase of goods costing above Rs. 25,000 on each occasion may be made on the recommendations of LPC certifying: Certified that we, members of the purchase committee are jointly and individually satisfied that the goods recommended for purchase are of the requisite specification and quality, priced at the prevailing market rate and the supplier recommended is reliable and competent to supply the goods in question, and it is not debarred by Department of Commerce or Ministry/ Department concerned.” Purchase of goods directly under DGS&D Rate Contract. 17

18. Purchase of goods by obtaining bids It is mandatory for all Ministries/Departments to publish their tender enquiries and details of bid awards on the Central Public Procurement Portal (CPPP) It is mandatory for Ministries/Departments to receive all bids through e-procurement portals in respect of all procurements. 18

19. The following are the standards methods of obtaining bids: ( i ) Advertised Tender Enquiry (ii) Limited Tender Enquiry (iii) Two-Stage Bidding (iv) Single Tender Enquiry (v) Electronic Reverse Auctions Public Financial Management System 19

20. Advertised Tender Enquiry For procurement of goods of estimated value of Rs. 25 lakhs and above. Advertisement in such cases should be given on Central Public Procurement Portal (CPPP) at www.eprocure.gov.in and on GeM . The organisation should also post the complete bidding document in its website and on CPPP to enable prospective bidders Minimum time for submission of bids should be three weeks for Domestic tenders and four weeks where deptt contemplates obtaining bids from abroad 20

21. Limited Tender Enquiry For purchase value up to Rs.25Lakh. Copies of the bidding document should be sent directly by speed post/registered post/courier/email to firms borne on the list of registered suppliers The number of supplier firms in LT Enquiry should be more than three. The unsolicited bids should not be accepted Spl LT where value>Rs25Lakh when: The demand is urgent & certified that additional expenditure involved by not procuring through advertised tender enquiry is Justified Sources of supply are known and possibility of fresh sources is remote 21

22. Single Tender Enquiry Procurement from a single source may be resorted to in the following circumstances : -When particular firm is the manufacturer of the required Goods -In a case of emergency, the required goods are necessarily to be purchased from a particular source and the reason for such decision is to be recorded and approval of competent authority obtained. -the required item is to be purchased only from a selected firm for standardized spare parts. For this propriety certificate to be provided by the department. 22

23. Two bid system (simultaneous receipt of separate technical and financial bids)-high value plant & machinery of complex nature Two-Stage Bidding (Obtain bids in two stages with receipt of financial bids after receipt and evaluation of technical bids)- applicable when it is not feasible to formulate detailed specifications or identify specific characteristics for the subject matter of procurement, without reeciving inputs regarding its technical aspects from bidders Electronic Reverse Auction- an online real-time purchasing technique utilised by the procuring entity to select the successful bid 23

24. Award of Contract on nomination basis Management Award of Contract on nomination basis A contract can be awarded on nomination basis in the following circumstances only: i . During natural calamities and emergency declared by Government where the procurement possible from a single source only ii. Where the supplier has exclusive rights in respect of goods & services and no reasonable alternative exist. iii. When an auction held several times but no bidders came forward or bids offered were very low All works awarded on nomination basis to be brought to the notice of governing body or Ministry for information 24

25. Steps for preparation of Estimates for works Prepare perspective planning for Works Preparation of Preliminary Project Report (PPR) or Rough Cost Estimate Acceptance of necessity and issue of in-Principle Approval Preparation of Detailed Project Report (DPR) /Preliminary Estimates (PE) Administrative Approval and Expenditure Sanction (A/A and E/S) Detailed Designs, Detailed Estimates and Technical Sanction Appropriation of funds Procurement Planning 25

26. Types of Contracts Lump sum (Fixed Price) Contract-fixed price & scope Item rate (Unit Rate) Contract ( BoQ )-commonly used Percentage Rate Contract-where major design process & direction Piece Work Contract-in anticipation of approval Engineering, Procurement and Construction (EPC) Contracts-design and build contract 26

27. Bidding Systems Single Stage Bidding System Single Stage Single Bid/ Envelope System Single Stage Two Envelope Systems Single Stage Multiple Envelope System Two Stage Bidding with Expression of Interest ( EoI ) 27

28. Preparing Bid Documents, Publication, Receipt and Opening of Bids Bid document should clearly spelt out qualification criteria, scope of works, GCC-no ambiguity SBD should be followed, if don’t have one, CPWD may be followed Bid document should have followeing sections: NIT Instructions to Bidders GCC SCC Tech. specifications 28

29. Forms of Bid Bill of Quantity Standard form: Bid Security, Performance Security, Advance payments security, Form of agreement Schedule of supplementary information Draweings Documents to be furnished by bidders 29

30. Bid Security-2 to 5 % Performance Security- 5 to 10% Security Deposit/Retention money(1/2 of RM to be released on issue of ,Taking Over Certificate and remaining ½ 365 days after DLP EVALUAGTION OF BIDS AWARD OF WORK MONITORING OF WORK -OOOOO- 30

31. 31

32. 32

33. 33

34. Public Financial Management System 34

35. Public Financial Management System 35

36. 36