FINANCIAL MANAGEMENT- An Introduction -

Resource Person׃ L.M. Pandey

The administration of the University including its financial administration, is for the purpose of subserving the needs of teaching, research and learning. This purpose should throughout be borne in mind, and duplication and delays avoided.

Efficient financial administration of the University calls for a coordinated working of all its component units. The need of all concerned to work in a spirit of co-operation and in a co-ordinated manner, need, therefore, hardly be emphasised.

An officer required by Statutes or Ordinances, or other person approved by the Board of Management or any other competent authority to act for it, is to be responsible for the proper collection and application of funds at the disposal of a Division, School Centre/ Unit or other institution.

In exercising this responsibility, the Head of a Division, School Centre/ Unit or other Institution must keep in mind the rules intended to ensure optimal use of the resources of the University and to safeguard University funds against injudicious spending, wastage, misuse or misappropriation, etc.

All transactions involving the taking and giving of cash, stores, other properties, rights, privileges and concessions, which have monetary value, should be brought to account at once under proper head. Every University officer is personally responsible for the money which passes through his hands and for the proper record of receipts and payments in the prescribed accounts as well as for the correctness of the accounts in every respect.

The financial records and accounts of the University shall be maintained separately for each Accounts Year.

All financial records and books of accounts and registers shall be properly bound. No records or account shall be prepared on loose sheets or in loosely bound volumes.

Receipt of Money

• It is the duty of the Division responsible for realisation of any particular type of dues to ensure that the dues of the University are correctly & promptly assessed, collected and deposited into the University accounts under the proper head.

• The Head of Division should undertake a series of surprise checks throughout the financial year to satisfy himself that the University dues are being recovered within a reasonable time and that cash has been correctly accounted for.

• The sums received on behalf of the University shall forthwith be paid into the Bank in full and appropriation of departmental receipts towards expenditure shall be prohibited.

• Moneys which are not University dues or the deposit of which in the custody of the University has not been authorised under any rules or orders shall not be accepted. Private cash or accounts of the staff shall not be mixed up with the University cash or account under any circumstances.

• No officer shall incur expenditure or enter into any liability involving expenditure or transfer of moneys or investment of deposit from University account or deposit from University account unless such expenditure or transfer has been sanctioned by general or special orders by the competent authority.

Expenditure and Payment of Money

General Principles ׃

• That there should be provision of funds authorised by competent authority fixing the limits within which expenditure can be incurred.

• That the expenditure incurred should conform to the relevant provisions of the Act, Statutes, Ordinances, and Regulations and Rules framed by the various authorities of the University.

• That there should exist sanction, either general or special, accorded by the competent authority, authorising the particular item of expenditure. It must be clearly understood that mere budget provision does not automatically carry with it any authority to incur the expenditure, for which prior and formal sanction of the competent authority must invariably be obtained before incurring it. The budget provision simply indicates the limit up to which expenditure is permissible under any head of account.

• No officer of the University to whom financial powers have been delegated shall incur any expenditure which involves or is likely to involve, at a later date, expenditure beyond his power of sanction.

• No money should be drawn from the Bank unless it is required for immediate disbursement.

Standards of Financial Propriety

• Every officer shall exercise the same vigilance in respect of expenditure incurred from the University moneys as a person of ordinary prudence would exercise in spending his own money.

• The expenditure should not be prima facie more than what the occasion demands.

• No authority should exercise its powers of sanctioning expenditure to pass an order which will be directly or indirectly to its own advantage.

• University moneys should not be utilised for the benefit of a particular person or a section of the people, unless:

1) a claim for the amount could be enforced in a court of law, or

2) the expenditure is in pursuance of a recognised policy or custom.

• The amount of allowances granted to meet expenditure of a particular type should be so regulated that the allowance are not on the whole a source of profit to the recipients.

Control of Expenditure• Each Head of Division is responsible for

enforcing financial order and strict economy at every step. He is responsible for observance of all relevant financial rules and regulations both by his own office and by his subordinate officers and for guarding against wastage and loss of University money and property and shall further see that the prescribed checks against them are effectively applied.

• A Head of Division must see not only that the total expenditure is kept within the limits of the authorised appropriation but also that the funds allotted are expended in the interest of the University and only upon the objects for which the money was provided. In order to exercise a proper control, he should maintain detailed up-to-date accounts not only of what has actually been spent from an appropriation but also what commitments and liabilities have been incurred against it.

He must be in a position to assume before the Finance Committee/ Board of Management complete responsibility for expenditure and to explain or to justify any instance of excess or financial irregularity that may be brought to notice.

THANKS