Government / Public Financial Management
Government and Public Financial Management tests how public money is authorised, spent, accounted for and audited. The focus is on constitutional funds, grants, treasury procedure and audit institutions.
Funds and authorisation
- Consolidated Fund: all revenues and loans; withdrawal needs legislative authorisation.
- Contingency Fund: advances for unforeseen expenditure, later regularised.
- Public Account: money held in trust, including GPF, deposits and suspense.
- Expenditure is voted or charged; charged expenditure is not submitted to the vote of the legislature.
- Grants include supplementary, additional, excess, token, vote on account and appropriation.
Spending chain
- Sanction by the competent authority, budget availability, DDO certification, voucher with bills, treasury or PAO payment, accounting and reconciliation.
- Reappropriation shifts savings within a grant; a new service needs a supplementary grant.
- GPF is a Public Account fund, not Consolidated Fund money.
Audit
- CAG audits government accounts; the PAC examines audit reports; internal audit and pre-audit check propriety and regularity.
Worked example
A department needs ₹2 lakh for travel but has savings of ₹2 lakh under office expenses in the same grant. It may seek reappropriation, subject to delegation limits. If the need is a new service not covered by the grant, a supplementary grant is required.
Traps
- Treating Public Account as Consolidated Fund.
- Saying charged expenditure is voted.
- Confusing reappropriation with a supplementary grant.
- Assuming a vote on account is a full budget.
- Forgetting that GPF balances sit in the Public Account.