Financial Reappropriation and Post Creation of Posts
General Restrictions on Reappropriation
Universal Applicability: These restrictions are applicable to the Finance Department as well. Even the Finance Department is prohibited from bypassing these specific rules of reappropriation.
Temporal Restrictions:
Reappropriation can be performed only within the duration of a single financial year.
Authority cannot sanction reappropriation before the commencement of the financial year or after the close of the financial year.
Single Grant Constraint: Reappropriation must be contained within a single grant. It is strictly prohibited to perform reappropriation from one grant to another grant (e.g., moving funds from Grant Number 3 to Grant Number 4 is not allowed).
Voted vs. Charged Heads: Reappropriation is not permissible from a "voted" head to a "charged" head.
Capital vs. Revenue Heads: Reappropriation between the capital section and the revenue section is strictly forbidden. This applies regardless of whether the heads are within the same single grant. Moves from capital to revenue, or vice versa, are not allowed.
Supplementary Demand Restrictions: No reappropriation is admissible from a supplementary demand that has been voted by the legislature for a specific purpose. Once the assembly votes on a supplementary grant for a specific task, the department cannot later decide the funds are unneeded and move them elsewhere.
Definitions and Categorical Differences
Revenue Expenditure:
In layman's terms, these are expenditures used for the normal day-to-day running of an organization or department.
Examples: Salaries, wages, and office expenses.
Metaphor for Maintenance: If the director of a building wants to paint a room, this is classified as revenue expenditure because it does not create anything new; it merely maintains or improves the aesthetic of an existing asset.
Capital Expenditure:
In layman's terms, this expenditure is likely to create a new asset for the government or reduce its existing liabilities.
Example: The construction of the new assembly building across the street is capital expenditure. It created a visible, tangible asset (tiles, structure) where there was previously barren land.
Voted Expenditure:
This refers to estimates that the state legislature has the authority to discuss, vote upon, permit, deny, or modify during the budget session.
It generally covers the normal running of departments and development schemes.
Charged Expenditure:
These are estimates reserved for constitutional functionaries to maintain their independence from the political executive.
Authorized Figures: Salaries and allowances for the Governor, Judges of the High Court, and the Chief Electoral Officer.
Legislative Role: The assembly cannot vote on, deny, or reduce these expenditures; they can only discuss or "gossip" about them. The estimates provided by these authorities, such as the Governor, are usually accepted as is.
The Advance from Contingency Fund (ACF) and Supplementary Demands
Nature of ACF: The Contingency Fund is outside the Consolidated Fund. It is used when the legislature is not in session and the expenditure is of an urgent nature that cannot wait for a formal session.
Regularization Process:
An Advance from the Contingency Fund is effectively "borrowed money."
Metaphor: It is like borrowing money from a parent or friend that must be paid back later from one's own account.
To return the money, a Supplementary Demand (SD) is proposed to regularize the ACF, moving money from the main budget head back to the ACF head.
Specific Departmental Rules and Secret Service Expenditure
Secret Service Expenditure (Home and Political Departments):
Certain expenditures for intelligence and state security cannot be disclosed in detail.
The 25% Rule: If a reappropriation to the secret service expenditure exceeds of the original budget (e.g., needing an additional rupees for an original rupee budget), the Finance Department cannot pass it independently. It requires the approval of the Accountants General.
Rule 12 (Power of Subordinate Authorities): This rule regarding the power of administrative departments and directorates to sanction reappropriation has been kept in abeyance (suspended). Currently, all reappropriations must be authorized by the Finance Department (EC-I or EC-II branches).
Rule 13 (Reappropriation in Works Department): Similar to Rule 12, this is also suspended. All such powers are exercised solely by the Finance Department.
Rule 14 (Communication of Orders): All reappropriation orders must be communicated to the Accountant General and the Finance Department immediately upon being passed and must be in a prescribed form.
Modernization and the E-Proposal System
E-Proposal System: While the 2006 rules required triplicate paper forms, the current electronic system allows for any number of copies. Some departments still request paper forms due to "old habits dying hard."
The "Dead Dog" Analogy: The speaker describes a specific rule—that Finance will not sanction reappropriation received after March 15—as a "dog that barks but does not bite." While all departments should process requests by March 15, emergencies allow for reappropriation to be sanctioned as late as March 31, as it is still within the financial year.
Creation and Abolition of Posts
Authority: No post can be created without being recommended by a screening committee and receiving specific approval from Finance EC. This department is the final authority for sanctioning posts, though they may consult the Personnel or Finance PR departments.
Subordinate Authority Limits: Authorities other than Finance EC-II cannot create or abolish permanent posts, add to a permanent service, or vary the rate of pay and allowances.
General Restrictions for Creation:
Budget Provision: There must be adequate budget provision within the existing head of account.
Quantum of Work: Creation must be justified by the actual workload. It cannot be based on comparisons to other departments (e.g., "Printing and Stationery wants three LDs because the Cooperation department has three").
Duration: Temporary posts usually do not exceed months and do not extend beyond the last day of the financial year.
The Retention Timing Logic:
Retention orders typically run from March 1 to February 28/29.
Financial Reason: The salary for March is paid in April (the next financial year), while the salary for February is paid in March (the current financial year). By ending the retention in February, the salaries are confined to a single financial year.
Grants-in-Aid, Loans, and Scholarships
Delegated Power: Departments have full power to sanction or renew grants-in-aid, scholarships, and stipends, provided specific conditions are met.
Conditions for Sanctioning:
The grant must follow rules or schemes previously consented to by the Finance Department.
The sanction order must explicitly state which rule or guideline is being followed.
Financial Rules: Appendix 14 of the Meghalaya Financial Rules regarding the audit and accounting of grants must be strictly observed.
Interest Rates: For government loans, the rate of interest must be approved by the Finance EA (Economic Affairs) department; administrative departments cannot set these rates themselves.
Questions & Discussion
Question (ACF Regularization): "Why are there times when ACF is converted to supplementary demand?"
Answer: ACF is an advance that must be returned. The Supplementary Demand is the mechanism to return money from the actual head of account to the ACF head to replenish it.
Question (Political Appointments and Staffing): Regarding staff for chairmen/co-chairmen of various boards (Agriculture, Horticulture, etc.).
Answer: These appointments are usually linkable to a specific department. Staff requirements are typically met from the existing strength of the department or from "deputation reserves" (leave reserve, training reserve, etc.). While it may not affect massive departments, it can impact the performance of smaller departments with limited staff.