Personal Ledger Account PLA Policy dt 16.12.1992

Personal Ledger Account PLA Policy dt 16.12.1992

OFFICE MEMORANDUM

Subject: Personal Ledger Account

I am directed to refer to the subject cited above, and to state that the operation of various Personal Ledger Accounts, opened in the Provincial Section of Accounts, and maintained in the District Accounts offices/Treasury Offices in the Punjab has been under review for some time.

2.  Notwithstanding clear provisions of rules and instructions on the subject, and a number of supplementary guidelines issued by the Finance Department, from time to time, clearly specifying areas whereunder Personal Ledger Account could be lawfully operated, without mis-use and deviation from the established principles, numerous incidents continue to come to the notice of the Finance Department shewing un-authorized channeling funds from the Personal Ledger Account. The situation not only grossly contravenes the provision of rules regarding Personal Ledger Accounts, but also adversely affects the resource position of the Province.

3. I am further directed to say, that while serious attention of all concerned is once again invited to the existing provisions of rules and instructions issued to-date for strict compliance, it has been decided after consultation with the Accountant General, Punjab, to circulate the requisite rules/ instructions in a consolidated form, with explanatory notes, for information and ready guidance of the operators of the Personal Ledger Accounts, and to obviate all chances of contravention of rules through any excuse or mis-interpretation thereof.

4. The contents of this circular are by no way exhaustive, and do not relieve the operator of the PLA of any of his/her responsibility in the matter regarding PLAE, not covered in this circular.

I, PREVIEW OF PERSONAL LEDGER ACCOUNTS:

(a) Withdrawals from Personal Ledger Accounts are made through cheques drawn by authorized officers. While passing the cheques the concerned Treasury Officer/District Accounts Officers are only required to see that balance is available in the Personal Ledger Account. Payments are thus made without any pre audit check. This procedure for withdrawals from Personal Ledger Accounts by cheques does not in any way authorize departure from the rules relating to , sanction and incurrence of expenditure. As such all expenditure out of Personal Ledger Accounts should be incurred strictly in accordance with the relevant rules and regulations, besides, all prerequisites as necessary in respect of bills drawn from the A.G. Punjab/District Accounts Office be fulfilled before any cheque. is drawn from Personal Ledger Account and disbursement made therefrom.

All connecting record of each transaction like quotations, bills/vouchers should be made available to the concerned authorities for scrutiny as and when required besides submitting it to the audit.
(FD’s letter No. FD(FR)VI-7/87, dated 11-4-1989).

II. OPERATION OF PERSONAL LEDGER ACCOUNTS:
(a) OPENING OF ACCOUNTS:

Personal Ledger Accounts are exclusively sanctioned by the Finance Department on the recommendations of concerned administrative departments under rule 12.16 and 12.17 of Punjab Financial Rules, Volume-I. Every Personal Ledger Account is for a specific purpose, and is only operatable at a designated Treasury/District Accounts Office. Funds for any other purpose may not be credited to the PLA except with the prior permission of the Finance Department. A specimen of the sanction order is appended. Information from Sr. No. (I-V) of para 1 is required to be provided by the respective operator of the account.

(b) MAINTENANCE OF ACCOUNTS:

The maintenance of accounts regarding Personal Ledger Accounts is regulated by Rules 12.18-18 ibid. Furthermore, the operators of PLAs are required to maintain pass books in Form PFR 25 under Rule 12.19 ibid, which has to be reconciled every month with the Treasury Officer/District Accounts Officer who is required to authenticate the pass book after reconciliation under Rule 12.20 ibid. The pass book shall remain in the personal custody of the Administrator/Operator of the Personal Ledger Account.

NOTE:

The Finance Department circulates a list of Personal Ledger Accounts maintained in the Punjab in the month of July every year.

III. CHEQUE BOOKS:
(a) ISSUANCE OF CHEQUE BOOKS:

Personal Ledger Accounts are operated through specially prescribed cheque books which are issued to the designated operators of the accounts from the District Accounts Office/Treasury on requisition from the respective book as per P.F.R. Vol-1. Not more than one cheque book is supplied on a single requisition. The local formalities under Rules 4.13 and 4.14 of the Punjab Subsidiary Treasury Rules regulate the use of cheques which must be strictly observed by operators of Personal Ledger Accounts.

(b) VALIDITY OF CHEQUES:

As per Rule 2.16 of the PFR-Volume-I a cheque remains current for three months only after the month of its issue. Furthermore, the payment order reached in the office of the Treasury Officer/District Accounts Officer by the end of one month after the expiry of its validity as per Subsidiary Treasury Rules, provided the date on the cheque itself, before the expiry of the cheque itself.

NOTE: Cheques issue for those PLAs which lapse with the close of financial year shall remain valid for three months only after the month of issue OR up to and for 30th June whichever is earlier, and the payment order recorded thereon by the DAO/TO shall be also valid for one month or up to 30th June of that year whichever is earlier. Accordingly, the proceeds of the cheques shall have to be collected by the payee on or before 30th June of the particular year.

IV. WITHDRAWALS FROM THE PERSONAL LEDGER ACCOUNTS:

The general policy governing the withdrawals from PLAS are contained in Rule 4.132 of the Punjab. Subsidiary Treasury Rules, Moreover, the principles and instructions relating to expenditure, as contained in Rule 2.10 of the PFR-71-I are also fully applied to the withdrawals from the PLAs. Special attention is invited to Rule 2.10(b)(5) of the Rule ibid, whereunder any money should NOT be drawn from the treasury unless it is raised for immediate disbursement. It is, therefore, clear that all PLAs maintained by Government departments are only operable from the respective DAO/Treasury, and that no amount, howsoever small, should be placed in any personal account of the operates etc. in any commercial bank or a development financial institution, as required by Rule 9 of the Punjab Treasury Rules.

As an exception to this policy, locals are allowed to maintain a certain percentage of their PLA balance in Commercial Banks, or a DFI for which detailed instructions stand issued by the Finance Department vide No. DP (FD)1/1-20, dated 14-11-1972, subsequently clarified vide No. FD(W8M) (DP)-1-1/85 dated 15-9-1985, whereunder it is explicitly stated that autonomous and large local bodies are only allowed to keep working balances equal to one month’s requirements with the Commercial banks, while the surplus funds, over and above the limits of approved working balance have to be kept in the PLA in the Government Treasury/ DAOS, as required under Rule 12 47(b) of PFR-Vol-1.

(b) As an exception to the above provision, certain autonomous/Local bodies, whose resources accrue almost entirely from own source, may keep surplus funds in Post offices, either in a saving account, or fixed deposit, or under the profit-on-profit bonus scheme, in addition to existing option of keeping funds in the PLAs.

(c) The surplus funds which emanate from Government grant-in-aid shall invariably be kept in the Personal Ledger Accounts at the Government Treasury without exception. No funds shall ever be kept in a Commercial Bank or in PLI, except with the explicit permission of Finance Department. Funds ought to be invariably ensured, that the said funds shall only be spent on the purpose for which they stand originally granted/ sanctioned.

(d) Fixation of working balances by local councils and Autonomous Bodies: In order to facilitate the financial operations of the Local Councils and Autonomous Bodies, the Government vide its letter No. W&M-DF(FD) 1-1/78, dated 31-12-1988 has allowed working balances, if such organizations to be fixed @8% of the total budgets of their own financial year. A reference to the Finance Department in this regard will no longer be required.

(e) The list of approved banks and financial institutions which have been authorized to receive/ accept the approved working balance of the Local Bodies/Autonomous Bodies stand circulated vide F,D’s letter No. DP (FD)1(2)/89, dated 25-10-89, and letter of same number dated 11-5-1992.

(f) Payments of definite/accrued liability should directly be made to the concerned persons/parties/ companies by issuing a PLA cheque in their name, Self cheques should only be issued for drawing amount for, recoupment of approved working balance, wherefrom petty expenditure pertaining to day to day running of the organization may only be incurred. Such cheques should contain a certificate to the effect that the amount is being drawn for the recoupment of working balance only. The available balance should be clearly indicated along with the certificate.

V. LAFSEAFILITY OF PERSONAL LEDGER ACCOUNT:

Generally, all Personal Ledger Accounts of the Government department are lapse able at the close of the financial year, unless otherwise stated in the sanction for the particular personal Ledger Account.

As a general policy the following factors determine the criteria as to the lapse ability of the Personal Ledger Account or otherwise:

• Source of funding the Personal Ledger Account.
• Nature and purpose for which Personal Ledger Account was opened.
• Name of person or department operating Personal Ledger Account.

Non-Governmental funds of international agencies, Autonomous Bodies etc. kept in the Personal Ledger Account are non- lapsable.

The following principle will be applicable for deciding whether or not a Personal Ledger Account should lapse at the end of a financial year:

(i) If the source of funding is not the Government budget i.e. Personal Ledger Account contains non- Governmental funds, then the balance would not lapse on 30th June, notwithstanding whether the fund is operated by a Government servant on a private person.

The balance would, however, lapse in this ease if it is so stated in the purpose of opening the fund. 

(ii) If the source of funding is Government budget, the balance con 30th June will lapse, except if the purpose of fund is to finance operation of a non- Governmental organization notwithstanding whether the operator of Personal Ledger Account is a Govern servant or a private person (e.g. official of a local body, corporation etc.)

NOTE: Detailed instructions regarding lapseability of grants/PLAs stand already circulated by the Finance Department vide No. SO(TT)6(2)/89, dated 30-9-1989;

VI.  WEEDING OUT OF PERSONAL LEDGER ACCOUNTS:

It has been observed that a number of PLAs opened from time to time remain inoperative, and that no transactions are undertaken for considerable periods. Consequently, the number of PLAs have enormously increased over the years due to accumulation of such PLAs. It has, therefore, been decided to weed out such PLAs for keeping their numbers within reasonable limits for proper monitoring and management. As such, all PLAs wherein one transaction is undertaken for a period of one year or more shall be considered as closed. However, in case these are to be revived, specific requests from the separator/ administrative department would be required.

VII. AUDIT OF PERSONAL LEDGER ACCOUNTS:

The Personal Ledger Accounts shall be subject to Statutory Post Audit by the Pakistan Audit Department in accordance with the rules.