Chapter-I of The AP Financial Code Volume -1

Chapter-I of The AP Financial Code Volume-1. The Chapter -1 of the AP Financial Code Volume-1 contains the Introduction Part which is consists of General, Receipts Expenditure accounts and Articles 1-5 in it. Details of the Chapter-I of the APFC Volume-1 is given below.
Description Articles
General 1
Receipts 2
Expenditure 3-4
Accounts 5

Chapter-I of The AP Financial Code Volume-1


ARTICLE 1. The Government’s financial transactions, like those of every person or body, fall into the two broad classes of receipts and disbursements. The Government’s receipts comprise the ordinary revenues derived from taxes, duties, fees, fines and similar items of current Government income and also receipts that are of a deposit or banking nature, including repayments of loans and advances. The Government’s disbursements comprise expenditure out of the ordinary revenues, capital expenditure and also payments that are of a banking nature, including loans, advances and repayments of deposits.

ARTICLE 2. Every Government servant who is entrusted with the duty of collecting any revenues due to the Government should assess the demands carefully and collect the revenues promptly. He should maintain proper accounts of the collections, watch the progress of collections against the total demand and take prompt steps to collect all arrears, if, inspite of taking all possible steps, some arrears still remain uncollected and he is satisfied that any portion of them is quite irrecoverable, he should apply at once to the competent authority for sanction to write off the irrecoverable arrears, The principles apply equally to the recovery of loans and advances made by the Government.

  • ARTICLE 3. No Government servant may incur any item of expenditure from public funds unless the following two conditions are both satisfied :
  • (a) the expenditure must have been sanctioned by a general or special order of the authority competent to sanction such expenditure ; and
  • (b) sufficient funds must have been provided for the expenditure in the Appropriation Act(s) for the current financial year or by a reappropriation of funds sanctioned by the authority competent to sanction such a reappropriation.
  • The two conditions are independent and it is not sufficient for only one of them to be satisfied. A Government servant must always be sure that both of the conditions are satisfied before he incurs any expenditure from public funds.
  • Further, every Government servant who incurs or authorises the incurring of any expenditure from public funds should see that it does not contravene the following principles, which are known as the standards of Financial propriety
  • (1) The expenditure should not be prima facie more than the occasion demands. Every Government servant is expected to exercise the same diligence and care in respect of all expenditure from public moneys under his control as a person of ordinary prudence would exercise in respect of the expenditure of his own money.
  • (2) No Government servant should exercise his powers of sanctioning expenditure so as to pass an order directly to his own advantage.
  • (3) Public moneys should not be utilized for the benefit of a particular person or section of the community unless —
  • (i) the amount of the expenditure involved is insignificant, or
  • (ii) a claim for the amount would be enforced in a court of law, or
  • (iii) the expenditure is in pursuance of a recognised policy or custom.
  • (4) The amount of any allowance, such as a village allowance, granted to meet expenditure of a particular type, should be so regulated that it is not, on the whole, a source of profit to the recipient.
(Govt. Memo.No. 1119/44/TFR/A2/91-2, Fin. & Plg., Dt. 30-3-1991) 
  • The Pay & Accounts Officer, Hyderabad is informed that when Art. 3 and 38 of A.P.F.C. Vol. I precludes the use of personal/private money for Government/public purpose, the question of reimbursement does not arise, when such expenditure is not authorised by the competent authority, in terms of Chapters I & IV of A.P. Financial Code.
Pay & Accounts Officer, is therefore, requested not to entertain such claims, when they are not supported by rectification orders of the Government.

ARTICLE 4. It is the duty of every Government servant not merely to observe complete integrity in financial matters, but also to be constantly watchful to see that the best possible value is obtained for all public funds spent by him or under his control and to guard scrupulously against every kind of wasteful expenditure from public funds.

ARTICLE 5. Every Government servant should see that proper accounts are maintained for all Government financial transactions with which he is concerned and render accurately and promptly all such accounts and returns relating to them as may have been prescribed by the Government, the Accountant-General or the competent departmental authorities. He should check the accounts as frequently as possible in order to see that his subordinates do not commit fraud, misappropriation or any other irregularity. The Government will hold him personally responsible for any loss that may be found to be due to any neglect of the duties laid upon him by the provisions of this code and the other Financial Codes issued by the Government (see also Chapter XII). The fact that a Government servant has been misled or deceived by a subordinate will in no way mitigate his personal responsibility, since every Government servant should be familiar with the financial rules laid down by the Government and exercise a specially strict and close control over his subordinates, in regard to the use of public funds and the maintenance of proper accounts.