Stores GFR | Chapter 8 | General Financial Rules of Bangladesh

Stores GFR

Chapter 8

General Financial Rules of Bangladesh

Stores GFR | Chapter 8 | General Financial Rules of Bangladesh

Stores GFR | Chapter 8

INTRODUCTORY

148. The chapter contains the general rules applicable to all departments, regarding stores required for use in the public service. Detailed rules and instructions relating to the various departments, e.g., the Defence, Railways, Posts and Telegraph, Public Works, Directorate of Supply and Inspection , Survey of Bangladesh, Stationery and Printing, and other departments responsible for or concerned in large purchases, manufactures or consumption of stores, are contained in the departmental regulations relating to the departments concerned.

Note: The term ‘stores’ used in this chapter applies generally to all articles and materials purchased or otherwise acquired for the use of Government, including not only expendable and issuable articles in use or accumulated for specific purposes, but also articles of dead stock of the nature of plant, machinery, instruments, furniture, equipment, fixtures, etc.

149. Expenditure on stores incurred in the civil departments is included under expenditure on supplies & services and repairs & maintenance (except where it is treated otherwise, e.g., stores relating to development projects and works), and subject to what is provided in the following rules, is governed generally by the rules which apply to such expenditure.

II- PURCHASE AND ACQUISITION OF STORES
AUTHORITIES COMPETENT TO PURCHASE STORES

150. Subject to any special rule or order applying to any particular department, an authority which is competent to incur expenditure on supplies & services and repairs & maintenance may sanction the purchase of stores required for use in the public service in accordance with the provisions contained in the following paras. Such purchases are also subject to the usual restrictions regarding the existence of necessary appropriation and to any monetary limits and other conditions prescribed generally or in regard to specific articles or classes of articles.

The powers of subordinate authorities in the matter of purchase of stores both for non- development and development purposes are laid down in the Delegation of Financial Powers issued by the Government from time to time under Para 41, 42 and 43.

Special powers delegated to purchasing officers of the Directorate of Supply and Inspection, Defence, Railways, Post and Telegraph Departments, Public Works Departments, Controller of Printing & Stationery etc. are laid down in the respective departmental regulations.

 

RULES AND INSTRUCTIONS GOVERNING
THE PURCHASE OF STORES

151. Save as provided below, all purchases of stores for use in the public service should be regulated in strict conformity with the detailed rules and instructions contained in the respective departmental regulations.

(i) Manual of Office Procedure (Purchase), compiled by the Department of Supply and Inspection, Ministry of Commerce in consultation with the Finance Division, should be generally followed mutatis mutandis by all public sector purchase organisations.

(ii) For procurement of goods and works financed under project aid the Guidelines issued by the Economic Relations Division on May 26, 1992 (ERD/Coordination 1/Misc-013) should be followed. Procurement financed under project aid is also governed by the provisions of aid agreements and the procurement procedures of the relevant development partners. In cases of inconsistencies between the provisions of the guidelines and those provided in the aid agreements or by the development partners, the provisions of the latter will prevail unless modified or relaxed.

(iii) Special Rules relating to the purchase of stationery and printing stores, including office machinery and appliances etc., as contained in Appendix 6 would be followed.

(iv) The procurement of stores required on mobilisation or during the continuance of military operations will be regulated by special rules and orders issued by Government in this behalf.

152. Purchases must be made in the most economical manner in accordance with the definite requirement of the public service. Stores should not be purchased in small quantities. Periodical indents should be prepared and as many articles as possible obtained by means of such indents. At the same time, care should be taken not to purchase stores much in advance of actual requirements, if such purchase is likely to prove unprofitable to Government.

Where scales of consumption or limits of stores have been laid down by competent authority, the officer ordering a supply should certify on the purchase order that the prescribed scales or limits are not exceeded.

153. Purchase Orders should not be split up to avoid the necessity for obtaining the sanction of higher authority required with reference to the total amount of the orders.

154. (1) All indents should state clearly and accurately the grant and the classification code to which the cost of the stores is debitable, the amount of appropriation provided and an estimate of cost of each item. The indents should be prepared in such form and in accordance with such general or special instructions as may be issued by Government in this behalf.

(2) Indents should not be sent out so late in the financial year that they cannot possibly be complied with and paid for within that year.

 

RECEIPT OF STORES

155. All materials received should be examined, counted, measured or weighed as the case may be, when delivery is taken, and they should be taken in charge by a responsible Government officer who should see that the quantities are correct and their quality good, and record a certificate to that effect. The officer receiving the stores should also be required to give a certificate that he has actually received the materials and recorded them in the appropriate stock register.

ISSUE OF STORES

156. When materials are issued from stock for departmental use, manufacture, sale, etc., the officer in charge of the stores should see that an indent in the prescribed form has been made by a properly authorised person, examine it carefully with reference to the orders or instructions for the issue of stores and sign it, after making suitable alterations under his dated initials in the description and quality of material, if he is unable to comply with the requisition in full.

He should then prepare and sign the form of the invoice attached to the indent according to the supply actually made. The indent should be returned at once to the requisitioning officer for signature. When materials are issued, a written acknowledgement should be obtained from the person to whom they are ordered to be delivered or despatched, or from his duly authorised agent.

In case of stores issued to a contractor, the cost of which is recoverable from him, the acknowledgement should give full particulars of the materials issued, including the recovery rates and the total value chargeable to the contractor.

 

TRANSFER OF CHARGE OF STORES

157. In cases of transfers, the officer in charge of stores should see that the stores in his custody are made over correctly to his successor and a proper receipt taken from him.

Every departmental officer is bound to take over charge of departmental stores which from the death or departure of the person lately in charge or from any other cause, may be left at or near his station without adequate protection. For detailed instruction see Para 123.

 

III- CUSTODY AND ACCOUNTS OF STORES
GENERAL

158. The head of an office or any other officer entrusted with stores of any kind should take special care for arranging for their safe custody, for keeping them in good and efficient condition and for protecting them from loss, damage or deterioration. Suitable accommodation should be provided more particularly for valuable and combustible stores.

He should maintain suitable accounts and inventories and prepare correct returns in respect of the stores in his charge with a view to preventing losses through theft, accident, fraud or otherwise and to making it possible at any time to check the actual balances with the book balances and the payment to suppliers, etc.

159. The form of stock accounts mentioned in the preceding para should be determined with reference to the nature of the stores, the frequency of the transaction and the official requirements of each department or office in which they are used. The general and essential principles in accordance with which such accounts are to be kept are laid down in the following paras.

It is not, however, intended that these rules should replace the detailed store accounting rules prescribed in the departmental regulations of various departments or in any special orders which apply to any particular department, unless a competent authority has held that the existing rules are defective and should be brought into harmony with the general principles laid down below.

Where audit of the accounts of stores and stock has been undertaken by the Auditor General, the Chief Accounts Officer concerned will bring to notice cases in which there is a hiatus to be filled in by the application of these rules and in which losses to Government could have been avoided by the use of these rules.

160. Separate accounts should be kept of
(i) “Dead Stock” such as plant. machinery, furniture, equipment, fixture; and (ii) Other stores.

 

DEAD STOCK

161. An inventory of the dead stock should be maintained in all Government offices in a form prescribed by competent authority, showing the number received, the number disposed of (by transfer, sale, loss etc.), and the balance in hand for each kind of article. The instructions given below should be carefully observed by all concerned.

(i) The inventory should be priced whenever the items have to enter into the block account maintained for a Government commercial undertaking or the value of the items is necessary in order to enable Government to calculate the charge to be levied upon private persons or bodies. As regards other items, a numerical inventory would suffice except for articles costing in excess of the amount determined by the Government.

Note: For the purpose of numerical inventory, articles of a similar description such as tables, carpets, etc., should be put into separate categories, each category comprising articles of the same measurement and make and manufactured with the same metal or wood or other material.

(ii) The inventory should ordinarily be maintained at the site of the dead-stock. Whether it is desirable, in any particular case, to depart from this general principle or to maintain additional consolidated inventories elsewhere should be decided on the merits of each case.

(iii) The inventory should be checked by the competent administrative authority once a year and a certificate of the result of check recorded.

(iv) Articles of dead stock should be verified at least once a year and the result of verification recorded on the inventory. All discrepancies noticed must be properly investigated and brought to account immediately so that the inventory may present the true account.

(v) When articles of dead stock. e.g., tools and plant are lent to local bodies, contractors and others, the hire and other charges as determined under rules prescribed by competent authority should be recovered regularly.

(vi) Government libraries and museums should maintain up to date catalogues as well as prescribed stock accounts and inventories.

 

OTHER STORES

162. A reliable list, inventory or account of all stores in the custody of Government officers should be maintained, in a form prescribed by competent authority, to enable a ready verification of stores and check of accounts at any time; and transactions must be recorded in it as they occur.

Price lists, recording both quantities and values should be maintained in cases where the stores are intended to be converted into money, or where it is desired to distribute their cost over the works, items or objects on which they are actually used.

In such cases, the expenditure on stores must be charged to a appropriate classification code.

163. Purely numerical inventories, i.e., recording quantities only, will suffice for articles not costing above prescribed amount when the articles are intended solely for the service of the department keeping them and it is not desired to distribute their cost. In such cases the expenditure on stores must be charged off finally to the service concerned.

Note: In some cases it may be found necessary to show prices and measurements, etc., vide note below para. 161 (i) against some articles, say, when for facility of identification or other reason, it is desirable to distinguish costly articles from cheap articles bearing the same general description otherwise.

164. The lists, inventories or accounts of stores should in all cases be subject to such internal check as may be prescribed by competent authority, whether or not they are subject to any check by the Chief Accounts Officer concerned.

165. A physical verification of all stores should be made at least once in every year under rules prescribed by competent authority, and subject to the condition that the verification is not entrusted to a person –

(1) who is the custodian, the ledger keeper, or the accountant of the stores to be verified, or who is a nominee of, or is employed under the custodian, the ledger keeper or the accountant; or

(ii) who is not conversant with the classification, nomenclature and technique of the particular classes of stores to be verified.

The verification should never be left to low paid subordinates and, in the case of large and important stores, it should be, as far as possible, entrusted to a responsible officer who is independent of the superior executive officer in charge of the stores.

166. A certificate of verification of stores with its results should be recorded on the list, inventory or account, as the case may be, where such a verification is carried out.

167. In making a physical verification, the following instructions should invariably be observed:
(i) verification must always be made in the presence of the officer responsible for the custody of the stores or of a responsible person deputed by him;

(ii) all discrepancies noticed should be brought to account immediately, so that the stores account may represent the true state of the stores; and
(iii) shortages and damages, as well as unserviceable stores, should be reported immediately to the authority competent to write off the loss.

168. Balances of stores should not be held in excess of the requirements of a reasonable period or in excess of any prescribed maximum limit. In order to ensure the observance of this rule, a periodical inspection should be made by a responsible officer, who must submit a report of surplus and obsolete stores to the authority competent to issue stores for their disposal (See para. 172).

The inspection should, unless there be good reason to the contrary, be made six monthly in the case of perishable stores and once a year in the case of other stores. Stores remaining in stock for over a year should be considered surplus unless there is any good reason to treat them otherwise.

169. Where a priced inventory is maintained, it is essential that the values recorded therein shall not be materially in excess of the market value of the stores. The head of the department concerned must issue instructions to govern —

(i) the fixation of prices with reasonable accuracy;

(ii) the periodical review and revision of rates; and

(iii) the agency to be employed in periodical revaluation.

Note: The ‘market value of an article, for this purpose, means the cost per unit at which the article, or an article of a similar description, can be procured at a given time at the Stores Godown, from some suitable public markets.
170. All profits and losses due to revaluation, stock-taking or other causes should be duly recorded and adjusted where necessary. Formal sanction of competent authority should be obtained in respect of losses, even though no formal correction or adjustment in the accounts is involved.

171.

(1) Losses due to depreciation should be analysed, and recorded under following heads, according as they are due to
(i) normal fluctuation of market prices; (ii) fair wear and tear; (iii) lack of foresight in regulating purchases; (iv) neglect after purchase.

(2) Losses not due to depreciation should be grouped under the following heads
(i) losses due to theft or fraud; (ii) losses due to neglect; (iii) losses due to an act of God and other calamities such as fire, enemy action, etc.; (iv) anticipated losses on account of obsolescence of obsolete stores or of purchases in excess
of requirements; (v) other losses due to damage, etc.

 

SALE AND DISPOSAL OF STORES AND WRITE OFF OF STORES

172. The previous sanction of competent authority should be obtained to the writing off of all losses, deficiencies or depreciation in the value of stores in accordance with the Delegation of Financial Powers issued by the Government from time to time under Para 42.

173. Subject to any special rules or orders applicable to any particular department, stores which are reported to be obsolete, surplus or unserviceable may be disposed of by sale or otherwise under the orders of the authority competent to sanction the writing off of a loss caused by deficiencies and depreciation equivalent to their value in accordance with the Delegation of Financial Powers issued by the Government from time to time under Para 41, 42 and 43.

Each order declaring stores as unserviceable should record the full reasons for condemning them and how the condemned stores are to be disposed of i.e., whether by sale, public auction or otherwise. The head of the office should record full particulars regarding all condemned stores in suitable list from which their disposal can be watched.

Note: These instruction do not apply to the Defence, Railways, Posts and Telegraphs and other special departments whose procedure in this regard is regulated by separate orders contained in the departmental regulations.

174.

(1) Sales to private persons of stores other than those which are found to have become obsolete or unserviceable are regulated by special rules and orders applicable to particular departments. When stock materials are sold to the public or any other department or authority at their full value, a suitable percentage as determined by competent authority should be added to the book value to cover charges on account of supervision, storage and other related expenses. This addition may, however, be waived by the officer empowered to sanction the sale in the case of surplus stock which in his opinion would otherwise be unsaleable.

(2) The opium, if any, in store must be kept in treasury strong room and not elsewhere and all receipts into and issues from stock should be entered in a stock register maintained for the purpose over the initials of the treasury officer.

 

IV-AUDIT OF STORES AND STOCK ACCOUNTS

175. When audit of the accounts of stores and stock kept in any office or department is undertaken by the Auditor General, it will be conducted in accordance with the regulations embodied in Appendix 7.

V – PURCHASE FOR LOCAL BODIES

176. In the absence of special orders to the contrary the cost of all stores, purchased for Local Bodies, must be prepaid.

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