Cannons/Standards of Financial Propriety

Cannons/Standards of Financial Propriety 

In exercise of their financial powers, the sanctioning authority must pay due attention to the following principles –

i) The expenditure should not prima facie be more than the occasion demands and that every Government should exercise the same vigilance in respect of expenditures incurred from public money as a person of ordinary prudence, would exercise in respect of expenditure of his own money.
ii) No authority should exercise its powers of sanctioning expenditure to pass an order, which will be directly or indirectly to its own advantage.
iii) Public money should not be utilized for the benefit of a particular person or section of a community unless –
a) The amount of expenditure involved is insignificant.
b) A claim for the amount could be enforced in a court of law.
c) The expenditure is in pursuance of recognized policy or custom.

iv) The amount of allowances such as travelling allowance granted to meet expenditure of a particular type should be so regulated that the allowance are not on a whole a source of profit to the recipient.



Despite of best efforts by the Station staff, the items/amount which could not be realized/ collected by the staff at the close of the month for which the Balance Sheet indicate closing items are otherwise known as Station outstanding.

The Station Master is personally held responsible for keeping a proper account of such items as also timely clearance. The following items will generally constitute Station outstanding.

1) Floating cash - Since this sum has been provided by the Adm. to enable the Stn for daily transactions no action is generally called for from Station Master to clear this item until either the money is withdrawn or the Stn is closed for traffic.



Station Balance Sheet is a statement of Account prepared by Station Master in the duly prescribed proforma and under prescribed Heads of Accounts showing the liabilities accrued at Stn. on account of sale of Transport services. The Stn. B/Sheet will have two sides. Left hand side is known as debit side where as Right Hand Side is known as credit side. All such items will be shown on the debit side for which SM is responsible to recover the charges for rendering of different types of services. In short, debit side will show the liability of Station Master for recovery of charges. Credit side will show the mode of clearance liability either by means of cash, cash vouchers or any other authorised voucher. The debit side and credit side of Balance Sheet should be equal in amount. But in practice generally total of debit side will be more than the



Investment Planning and Works Programme Section


Investment decisions relating to the creation, acquisition and replacement of assets on the Railways are processed through the annual “Works, Machinery and Rolling Stock Programme”. Instructions regarding the preparation of the Machinery and Rolling Stock Programme are contained in Chapter XV of the Indian Railway Code of Mechanical Department (Workshops). On the basis of the estimate of the Plan funds requirement for the ensuing year, the Railway Board lay down the financial limits (see para 609) under various plan heads (refer to Appendix I) within which the Railway Administrations are required to make out


Rules of Allocation

A careful and well-placed analysis of all expenditure and receipt is most necessary to effective financial control. It is the primary object of any accounting classification. It is necessary to secure uniformity of
accounting to render suitable comparison between the accounts of different railways. It also helps in preparation of budget and estimates. The labor spent in the classification will be of no use if accounts office fails to maintain proper record as per prescribed classification or if the executive omits to review periodically with the assistance of such record of earning and expenditure for which they are responsible.


Financial Rules


Introduction and definition: -

Budget is a statement of the estimated annual receipts and expenditure both on capital as well as revenue transactions of an organization. It is a process of planning and reviewing the activities of an organization. Railways being a Govt. of India department, receipts and payments of the system were use to be merged in the General Budget of the Govt. of India. As a result of the recommendations of the “ACWORTH COMMITTEE” during 1920-21, it was decided to separate the finances of Railways from General Finances with the objects of securing stability for General revenues and to strengthen the Railways finances. This is generally known as “Separation Convention of 1924”. Since then the Railway Budget is submitted in advance of the General budget.


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