To Joint Staff Organisation/Authorities

FP/20135/HQ IDS/2350/2006/D(GS-I) Government of India Ministry of Defence New Delhi

dated 8th Sep 2006

DELEGATION OF FINANCIAL POWERS TO JOINT STAFF ORGANISATION/AUTHORITIES

1. I am directed to convey the sanction of the President to the delegation of financial powers to the Joint Staff Authorities as contained in the Annexures to this letter.

2. The delegated financial powers in respect of the authorities specified in the Annexures/Schedules will supersede the powers laid down in respect of the authority for the specified purpose in Annexures to MoD letter PL/3221/NHQ/4459/D (N-IV) dated 23 Dec 03 subsequently amplified by MoD letter IC/1027/32/IDS/5843/2001 dated 23 Nov 2001 to cater for Joint Staff. Any delegated powers conferred by regulations other than Financial Regulations or Government or Services Instructions will remain in force. The delegated financial powers to the CFAs are to be read in conjunction with the financial instructions and orders issued by the three Services in the form of Army Instructions/Orders, Naval Instructions/Orders and Air Force Instructions/Orders and SOPs for any clarification or reference, until issuance of Joint Staff Orders/SOPs. Powers conferred for Projects specifically sanctioned by the Government will also continue to be operative for the duration of such projects and these would be applicable for the Joint Staff organisations/Inter-service organisations under HQ IDS.

3. DIPAC and ADGSI will continue to exercise the existing Special delegated powers to facilitate functioning due to their role & function in addition to the powers delegated vide this letter.

4. The exercise of the financial powers will be governed by existing orders and instructions, as amended by the Government from time to time, and instructions/guidelines contained in the enclosed Enclosure 1 as also those given in Remarks in the Annexures at Enclosure 2. The procurement policy to be followed by the Joint Staff Organisation and certain key areas that require close monitoring are placed at Enclosure 3. Standard Operating Procedures (SOPs) relating to the exercise of the financial powers as issued and amended from time to time will be strictly followed. However, where SOPs conflict with Govt Rules / Instructions, the latter will prevail. Cases not covered by the delegated financial powers will be referred for sanction of the Ministry of Defence. 5. The expenditure in exercise of financial powers contained in the Annexures 1 to 5 will be debited to Major Head 2077 (N) and Minor Head 112 (Joint Staff) i.e. the expenditure covered by the delegated financial powers relates to Revenue Expenditure of the Joint Staff. The expenditure towards Capital Budget covered by the delegated financial powers at Annexure 6 will be debited to Major Head 4076 (Capital outlay for Defence Services), Minor Head 104 (Joint Staff). The exercise of the financial powers is also subject to availability of funds in the sanctioned budgetary allotment under the relevant head.

6. The delegation of financial powers for Capital procurements is to be exercised as per the procedures laid down in DPP 2005, as amended from time to time. The Competent authority to accord various stage approvals as per DPP procedure and the composition of Contract Negotiation Committees will be laid down separately by HQ IDS with the approval of MoD.

7. All purchases exceeding Rs five lakhs in value will be made on the advice of the Tender Purchase Committee to be constituted by the CFA and will include the IFA or his rep as a member. The composition of the TPCs in conformity with the foregoing will be as specified in relevant SOPs/Orders/Instructions/DPM 2005. Further, the TPC/ PNC will only be a recommendatory body for procurements, which will be sanctioned at the next higher level by the CFAs, with the concurrence of the IFA.

8. The requirement of Purchase committee does not apply to procurement of equipment/items made against DG S&D Rate Contracts or Rate Contracts finalized by the nominated Joint Staff authorities under their delegated powers. All CFAs delegated financial powers to incur expenditure as indicated in the Annexures will be Direct Demanding Officers for placement of orders against DGS&D rate contract to the extent of the respective financial powers and in respect of the items for which the financial powers have been delegated.

9. Purchase of goods upto the value of Rs 15,000/- (Rupees Fifteen thousand only) on each occasion may be made without inviting quotations or bids on the basis of a certificate to be recorded by the competent authority in terms of Rule 145 of GFR 2005.

10. Powers delegated to specified Joint Staff Authorities for exercise during war, hostilities and special operations with consultation of IFAs will become operative only on the issue of a Govt order declaring such a situation or ordering of a Special Operation by the Joint Staff HQ/HQ IDS, inter alia indicating the overall ceiling of funds for this purpose.

11. In the case of import purchases under various Annexures (Capital and Revenue) separate approval for release of FFE will not be required and release of FFE will only be noted at Budget Section of HQ IDS after expenditure angle approval for the purchase has been granted by the CFA.

12. CVC guidelines issued from time to time on purchase/ procurements/ other financial dealings by Central Govt Departments will be strictly complied with while processing cases in exercise of the delegated financial powers. 13. The financial powers to be exercised with consultation of CDA/IFA shall be exercised by authorities of Joint Staff/ Inter-service organisations in consultation with the IFAs. The authorities at lower formations would exercise “with consultation” powers in consultation with accredited PCsDA/CsDA/ officers specified by CGDA till dedicated IFAs are available and the requisite structure for rendition of financial advice is created.

14. Financial advice/consultation will be provided in writing and will be based on regular noting on file. However, in cases of extreme urgency, where time does not permit floating of regular files, decision could be taken in meetings/discussions for which detailed deliberations/minutes will be recorded. Proper briefing papers with the approval of CFA will be made available to the CDA/IFA sufficiently in advance of the meeting/discussions. All such cases should be followed up immediately by regular noting on file where the decisions taken during meetings/discussions will be recorded and financial advice recorded in writing. With a view to avoid or reduce cross-noting and back references, the proposals initiated on files should be comprehensive and self contained and include all relevant facts and data pertaining to the case. The administrative authorities are required to make available any information, data or documents relevant to the case as asked for by the CDA/IFA for rendition of financial advice in the proper perspective.

15. Conflict Resolution/Difference of Opinion: - Conflict resolution mechanism as envisaged in the IFA system recognizes the position of the CFA as the ultimate decision maker. The mechanism for the purpose shall be as follows: -

(a) Individual CFA. In case of disagreement with the IFA, the CFA can overrule IFA and send a report to the next higher CFA as well as the IFA giving intimation along with reasons for overruling the financial advice. In such a situation, it would be open to the IFA to take up matter with higher IFA and CFA or drop it.

(b) Committee CFA. In the case of Committee CFAs, detailed minutes will be recorded leading upto the final decision. Accordingly, there would be no necessity for specific overruling of IFA in writing in the event of difference of opinion with the IFA.

16. The financial powers contained in the Annexures are in respect of each transaction and may cover procurement of one or more items within the financial powers specified. Further the purchase orders will not be split up in order to bring them within the delegated financial powers of a lower CFA. The exercise of the financial powers is also subject to availability of funds in the sanctioned budgetary allotment under the relevant Budget Head.

17. A periodic review of the working of the enhanced delegation of financial powers both in the Services and the MoD will be carried out by the MoD (Fin) annually to ensure: -

(a) Appropriate linkage between the budget and improvement in targets / operational efficiency envisaged. (b) Restricting the number of Single Tender and PAC cases sanctioned under delegated powers of Services to exceptional circumstances in tune with recommendations made by the Standing Committee on Defence (2005) in Para 7.5 of its Sixth Report.

(c) Ensure that the elaborate checks and balances as envisaged in the guidelines being followed.

18. The financial powers contained in the Annexures will take effect from the date of issue of this letter. However, in respect of powers for ‘Write off of Losses’ and ‘Regularisation of Audit Objections’ given in Annexure 4, as applicable, the cases / objections outstanding as on date of issue of this letter may be settled under the financial powers conferred herein. Regularisation will be subject to the rendition of an audit report by the concerned CDA to the CFA as per existing norms.

19. This issues with the concurrence of Ministry of Defence (Fin) vide their U.O No. 5694/Addl FA (M) dated 30 Aug 06.

Yours faithfully,

Sd*/- (MV Vijayan) Desk Officer Encls :- 1 - Detailed guidelines for exercise of delegated financial powers. 2 - Annexure 1 to 8 on delegation of financial powers. Annexure 1 - Delegated powers of the CISC/C-in-C SFC Annexure 2 - Delegated powers of the Commands & lower formations Annexure 3 - Delegated powers as per Army Schedules. Annexure 4 - Delegated powers towards losses etc. Annexure 5 - Delegated powers on Works Annexure 6 - Delegated powers Capital Head. Annexure 7 - Delegated powers during period preparatory to War, Hostilities or when special operations are ordered. Annexure 8 - Powers for signing contracts. 3 Key area of Monitoring.

Copy of the above forwarded to: - The Chairman COSC The Chief of the Army Staff The Chief of the Naval Staff The Chief of the Air Staff The Director of Audit, Defence Services, New Delhi The Sr. Dy Director of Audit, Defence Services, Mumbai The Controller General of Defence Accounts, New Delhi The Controller of Defence Accounts (IDS), (with a copy signed in ink) The Integrated Financial Advisor (IDS ) - 2 copies All CsDA (Joint Staff) All Joint Secy in MoD All Addl FAs and JSs in MoD (Fin) PPS to FA (DS) PPS to Spl Secy (ACG) SO to Def Secy PPS to Addl Secy (P)/Addl Secy (J) All IFAs (Joint Staff Orgs) All Joint Staff Organisations All PSOs at HQ IDS