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F.Ne. 5{6)r’L& 02006
Government of India
Ministry of Finance
Department of Expenditure
New Delhi, dated the June 1, 2006
Subject : Scheme of ‘Integrated Financial Adviser‘
Under the existing scheme of Budgetary and Financiai Control and Delegation of Powcrs
outiined by this Ministry vide OM No.10(29)—E.C00rdf?3 dated 6th October, 197'5 and
subsequent instructions in this regard, the Ministries have an Financial Adviser who is
responsible both to the administrative Ministry and the Ministry of Finance. With his assistance,
administrative Ministries freely exercise the enhanced powers delegated to them and, outside the
scope of the delegations, he functions under the guidelines of the Finance Minisuy.
2. After the introduction of the scheme, the Indian economy has matured and we are
attempting to keep pace with the fast growing economies of the world. Therefore, it is imperative
that our systems match the needs of a fast growing economy. The role of Financial Adviser
assumes great importance in such a Scenario and the scheme has been redefined in this context.
The redefined Charter for Financial Adviser annexed to this memorandum outlines the features of
the Revised Scheme of Integrated Financial Adviser.
3. This comes into force with immediate effect. _
(Adarsh Kishore)
Finance Secretaryr and Secretary(Expenditnre}
1. Cabinet Secretary
2. Principal Secretary to the Prime Minister of indie
3. AILSecretaJ-ies to the Government of India (By name)
4. All PM (By name)
5. All Heads of Public Sector Enterprises
W I emu-P
Nslm tam [q (3;) n wipes y stem?» is 1n

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S.No. Contents Page
1. Introduction “ 2-3
II. Role of Financial Advisers 4-10
III. Involvement in Key Process of Ministries 11-12
IV. Reporting System 13
V. Roles and Responsibilities of CCAS/CAs 14—15
VI. Interaction between Ministry of Finance and FAs 16
VII. Capacity Building 17-18
ANNEX-I : Copy of OM No.10(29)—E.Coord/73 dated 19-21
6.10.1975 indicating the functions of Integrated
Financial Advisor alongwith the modalities for
ANNEX-II : Provisions under DFPR indicating duties 22-23
and responsibilities of the Financial Adviser.

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Intr i n
The Scheme of Integrated Financial Adviser currently operates in
accordance with Office Memorandum No. 10(29)-E-Coord/73 dated
6.10.1975 issued by the Department of Expenditure, Ministry of
Finance. The scheme provides that the Financial Adviser would be
responsible both to the Administrative Ministry and to the Ministry of
Finance. The scheme also briefly indicates the functions of the
Integrated Financial Adviser alongwith the modalities for functioning. A
copy of the OM is appended (ANNEX-1).
2. The last thirty years since introduction of this scheme have seen
the Indian economy grow from a less developed stage to one of the
fastest growing economies of the world. This growth has been the
result of well structured economic reforms and conscious policy
decisions. The last two decades have witnessed a plethora of reforms in
monetary and fiscal management of the country. We have now reached
a stage from where further progress requires a renewed effort. The
second-generation reforms are throwing up complex challenges which,
inter alia, call for a re-look at some of the institutionalized financial
management systems.
3. The institution of Financial Adviser (FA) occupies a unique position
in the functioning of Government of India. Having served well till now,
time has come for it to be brought in sync with the fast changing socio-
economic scenario and attendant attitudes, processes and systems in,
the Governmental functioning. It is necessary that the role, authority as
well as accountability of the Financial Advisers be redefined and codified
in unambiguous terms, and their capacity enhanced to meet the
emerging challenges. Ministry of Finance has internally reviewed the
scheme in this context, and the concept of redefined the charter for the
Financial Advisers, as outlined in the ensuing paragraphs.

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4. The overarching concept in redefining the charter for Financial
Advisers is that Financial Advisers are meant to assist in the
achievement of objectives/goals of their respective Administrative
Ministries, as approved by the competent authority; and that they must
commit themselves to facilitate implementation of the approved
programmes, with due financial prudence, to ensure that monies
allocated are spent on time, in the prescribed manner, to achieve the
intended outcomes defined in measurable and monitorable terms.
Assisting Administrative Ministries in ensuring ‘value for mon_el' would
be a key objective for Financial Advisers, with emphasis on improving
the quality of expenditure and requisite systemic improvements /
capacity building for this purpose. It may also be reiterated that FAs
represent the Ministry of Finance in regard to all financial matters.
5. The more complex responsibilities envisaged for FAs must be
accompanied by corresponding authority and capacity. It would,
therefore, be necessary to ensure that FAs are suitably empowered, and
appropriate measures are taken for capacity building both institutionally
and individually. The organizational resources, structure and processes
themselves may need to be augmented / modified, and LT. enabled
systems, latest financial management practices, knowledge
management structures etc. put in place.

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Rglg gf Financial Agvisgrs
6. The role of Financial Adviser is now conceived to be akin to the
role of the Chief Financial Officer in a corporate structure, with specific
responsibilities for ensuring fiscal prudence and sound financial
management. They would bring requisite financial expertise, and overall
perspective of financial management of the Government, as enunciated
by the Ministry of Finance, in rendering professional advice to the
Secretaries of the Administrative Ministries on all matters which have
financial implications.
7. The role of Financial Adviser will be crucial for successful planning
and implementation of various schemes and projects. Value for money
will be the most important parameter in evaluating such schemes and
projects. Therefore, It is imperative that outlay for a scheme is
intrinsically linked with the Outcome Budget and Performance Budget.
8. In rendering their advice, the Financial Advisers would be
expected to accord priority to macro management with a view to help in
achieving the outcomes set by the Ministries as goals for themselves.
These macro issues could include schematic appraisal and concept
functions, revenue management, subsidy management, fiscal resource
transferissues, defining and evaluating outcomes besides maintaining
and safeguarding the budgetary integrity, etc. FAs would also be
expected to look at the total picture of resources for the sectors in which
they are functioning, and assist the Secretaries of the Administrative
Ministries in moving towards greater resource mobilization, including in
terms of enabling policy and regulatory framework to attract private
sector funds. FAs would in no case be assigned any routine
administrative functions of the Ministry.

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Appendix 2 of DFPR is an indicator of overall expanse of duties
and responsibilities of the Financial Adviser (ANNEX-II). However,
following are some of the specific tasks which the FAs would be
responsible for :
Budget formulation: FAs would continue to be responsible for
budget formulation. They would bring in more analytical inputs
into the budget formulation process, for improved budgeting and
facilitating moving from ‘itemized’ to ‘budgetary’ control of
expenditure. The present system relies largely on previous year's
programme allocations and continuing commitments, without any
real evaluation and expenditure analysis. FAs would now
increasingly be required to assist the Administrative Ministries /
Departments in moving towards zero based budgeting, and assist
in better inter se programme prioritization/ allocation within the
indicated budgetary ceilings, based on analysis of expenditure
profiles of each programme/sub-programme and information on
cost centres / drivers; assessment of output, outcome and
performance; and status of the projects/ programmes (e.g.
priority to last mile projects). Chief Controllers of Accounts /
Controllers of Accounts (CCAs / CAs) will support them in this Q
function. Such an analysis at the time of initial budget formulation
should, over a period of time, help in enforcing hard budget
constraints and reducing reliance on supplementaries. As the FAs’
internal budgetary exercise becomes more rigorous, their
involvement in MoF's’budgetary processes will increase.
Outcome Budget: Administrative Ministries will now be required
to prepare their respective ‘outcome budgets' by late March each
year, on the basis of the ‘Annual Financial Statement’ presented
in the Parliament in February. The ‘outcome budget’ would reflect
the outlays in terms of outcomes, defined in measurable and
monitorable terms. Reasonability of budget estimates, vis—a-vis
the intended outcomes, will be ensured through specific
appreciation of the unit costs of outcomes/deIivew. Major
schemes should have built-in provision for their evaluation by

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independent agencies, which may be appointed by the
Administrative Ministries and / or Planning Commission / MoF. FAs
would be actively involved in the preparation of outcome budgets.
They would also assist the Administrative Ministries in clear
definition of measurable and monitorable outcomes with specified
deliverables; setting up appropriate appraisal, implementation /
delivery, monitoring and evaluation systems; and ensuring actual
achievement of the intended outcomes.
Performance Budget: Administrative Ministries will also be
required to prepare their respective ‘performance budgets’ by late
March each year, indicating the ‘outcome’ of the ‘Outcome
Budget’ of the previous fiscal year at least upto December end.
Thus, while Annual Financial Statement and Outcome Budget
would be for the ensuing financial year, the Performance Budget
would present the picture of actual achievements / performance
for the financial year gone by. FAs would be actively involved in,
and coordinate under the overall direction of the Secretaries
concerned, the preparation of performance budgets for their
Formulation, Outcome Budget and Performance Budget must link
respective Administrative Ministries. In essence,
present, future and past in an integrated manner.
FRBM related tasks:— The Fiscal Responsibility and Budget
Management Act requires the Government to place disclosure
statements before Parliament alongwith the Annual Financial
CCAs / CAs as heads of
the Accounts wing shall render their professional expertise in the
Statement and the Demands for Grants.
functioning of financial management system. FAs would be
responsible for preparation of these statements in respect of their
Ministry / Department for incorporation in the consolidated
statements compiled by the Ministry of Finance for the
Government as a whole. FAs would also provide requisite
information and material as input for FM’s quarterly review of
fiscal situation to be presented to the Parliament.

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Expenditure and cash management:-FAs would continue to be
responsible for expenditure management and cash management.
MoF's initiatives for better expenditure management through
sophisticated exchequer control mechanisms would also be
supported by FAs with improved cash management, through
monitoring of monthly cash flows effectively in the context of cash
expenditure/commitments to be agreed to mutually between the
would help tighten the system of receipts and payments
MoF and the Ministries / PSUs / Autonomous institutions.
monitoring, and secure greater convergence of revenue inflow and
expenditure outflows, so that borrowing and thus debt charges
can be minimized. FAs would also ensure that release of funds to
State Governments / other agencies is linked to the scheme-wise
/ project-wise utilization certificate and audited expenditure of
previous years. Utilization certificates should reflect outcomes, or
at least the physical outputs. FAs will also ensure that unspent
balances with the State Governments and other agencies are not
transferred to Public Accounts; and in case such transfer is
permitted, these should be duly audited. The expenditure ,
management function would also be closely linked to the ‘outcome
budget’. CCAs / CAs will support FAs in the discharge of these
Project / programme formulation, appraisal, monitoring
and evaluation: Rigorous / effective project / programmev
formulation, appraisal, monitoring and evaluation are vital for
high quality investment decisions and successful / timely delivery
of intended outcomes. The Administrative Joint Secretaries have
to take the lead role in project / programme formulation,
FAs should take the lead in
ensuring high quality appraisal and evaluation with requisite
implementation and monitoring.
rigour. MoF have issued clear guidelines in this regard, which
need to be adhered to scrupulously.

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Screening of proposals: FAs would be responsible for examining
and forwarding all proposals, which need to be referred to any
Department in the Ministry of Finance.
Leveraging of non-budgetary resources for sectoral
development: FAs would assist the Administrative Ministries in
evolving strategies for optimizing private sector investment and
in the sector,
Public-Private Partnership through enabling
policies/schemes and appropriate regulatory framework,
formulating projects for external funding, and taking innovative
measures for leveraging of non-budgetary resources for sectoral
development. In addition, the present role of FAs in assessment
and leveraging of IEBR for investment programmes of the Public
Sector Undertakings will continue.
Non-tax receipts: Non-tax receipts have assumed greater
significance in the context of the need to limit fiscal and revenue
deficits, as mandated by the Fiscal Responsibility and Budget
Management (FRBM) Act. An optimum non-tax receipt budget
'would, therefore, be prepared by FAs, in consultation with the
Administrative Divisions. FAs would,
review the various non-tax revenue receipts under control of the
thereafter, periodically
Ministry/Department to which they are assigned, in the context of
market trends and other sectoral developments. FAs would need
to act as a catalyst in moving towards a regime in which the user
charges recover the cost of service fully or substantially, as per
the Government policy in this regard, and in case of only partial
recovery to ensure that the subsidy element is clearly quantified.
In the case of rent, licence fees, royalties, profit share and
dividends, the duties of FAs would include conducting periodical
giving their
recommendations regarding the reasonableness of return to the
reviews, and considered comments and
Government on the deployed public resources. CCAs / CAs shall
assist FAs in relation to estimation and flow of non-tax revenue

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Tax Expenditure:-FAs would also monitor tax expenditures, i.e.,
the revenue foregone by Government on account of various
This is
expenditure constitute a significant part of overall Government
exemptions and concessions. important since tax
spending. Within the administrative Ministry, such proposals
should be
routed through the Financial Advisers before
Monitoring of assets and liabilities: Each Ministry must have a
comprehensive record of its assets and liabilities. FAs would cause
appropriate action for initial building up of such records and their
on-going updation, as also for the maintenance and optimum
utilization of the assets. Government guarantees should also be
monitored. estate
in Ministries with significant real
assets/property (land, buildings etc.) will cause a critical analysis
of their utilization, including review of property encroached upon,
property involved in disputes/court cases etc., and also be the
catalyst to ensure necessary action for their availability and fullest
utilization. The progress would be regularly reviewed, and
corrective action taken on an on-going basis.
(xii) Accounts and Audit: FAs would be kept informed about the
overall quality of maintenance of departmental accounts by their
respective CCAs / CAs. FAs would also regularly review the
progress of internal audit and action taken thereon, so as to make
it an important tool for financial management. Action taken on
audit paras may also be monitored on a regular basis.
(xiii)Procurement and contracts: Significant amount of monies are
spent by Government on procurements and contracts. FAs would
be required to set up strong internal systems to ensure due
diligence and strict observance of MoF’s guidelines in this regard.
(The guidelines are being revised, and new guidelines are
expected to be issued shortly).

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(xiv)Financial Management Systems: FAs would periodically review
the financial management of the various programmes / projects
of the Ministry from the systems point of view, and take
appropriate action for making the financial management systems
more effective.
Nominee Director on Boards of Public Sector Undertaking:
Financial Advisers are often Government’s nominee Directors on
Boards of Public Sector Undertakings (PSUs). This role assumes
increasingly more important dimensions with the greater
autonomy being granted to PSUs. FAs would need to bring strong
requisite expertise to bear on all major issues considered by the
Boards. Separate guidelines will be issued regarding the
nomination and functioning of FAs as Directors of Boards of PSUs,
in consultation with the Department of Public Enterprises.
Use of technology : Increased use of technology as an advanced
tool, especially communications and information technology,
'should be encouraged not only in his division but also in the
domain of Ministries / Departments with the view to ensure better
utilization of resources available with the Government and
improve delivery of public services to achieve the intended
results. Economy, efficiency and effectiveness would be the
guiding principles.

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Involvement in Key Processes of Ministries
10. It is important that FAs are fully involved in the key processes /
activities of Administrative Ministries which have clear economic and
financial dimensions. Administrative Ministries shall, therefore,
invariably involve FAs in all such activities and decision making
processes which would, inter alia, include the following but may not be
limited to:-
o Formulation of annual/S—year plans, and other important
consultations with Planning Commission like mid-term appraisal.
0 Preparation of ‘outcome budget’, ‘performance budget’ and
evaluation of actual outcomes.
0 All proposals for consideration of CNE / SFC / EFC / PIB / Cabinet
/ Cabinet Sub-Committees, or otherwise referred to the Ministry
of Finance. '
- Externally aided projects, and other strategies to encourage larger
resource mobilization for the sector, including through Public
Private Partnership (PPP), appropriate regulatory structures etc.
0 Policy / programme formulation and other major decisions, to
facilitate proper appreciation of the consequential financial
11. Ministry of Finance has been increasingly moving towards macro
management of issues, and delegating more powers to the
Administrative Ministries. This delegation is reviewed periodically and is
suitably enhanced as and when required. As such, the Financial
Advisers have adequate financial powers. Exercise of these powers, and
necessary financial analysis, may require the FAs to call for relevant
records / reports / files relating to various decisions, contracts etc. FAs’
involvement would, therefore, specifically include the right of access to
all records, reports, audits, revieWs, documents, papers,
recommendations or other material which are the property of the
Ministry/Department, or which are available to the Ministry/Department,

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and which relate to programmes and operations with respect to which
that Ministry/Department calls for accounts, data and reports.
12. FAs would be consulted in all cases relating to the exercise of the
delegated financial powers. While normally FAs' advice would be
expected to be adhered to, there could be instances / cases in which the
Administrative Ministries feel that there are valid reasons for some
modification / deviation. In such rare instances, Secretaries of
Administrative Ministries can exercise their power to overrule FAs’
advice by an order in writing.

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Reporting Systems
13. FAs will be required to prepare an ‘Annual Finance Report’, which
would be a factual report indicating the operational aspects of financial
management of the Department/Ministry, including information on the
resource requirement, pattern of expenditure with reference to outlay /
budget, opening and closing unspent balances, opening and closing
position of utilization certificates, position of non-tax revenue (user
charges, dividends etc.) with reference to previous year, FRBM related
activities etc, and suggestions for improvement.
14. FAs would also be required to furnish an ‘Annual Outcomes and
Systems Report’, which would give factual information regarding the
outcomes achieved vis-a-vis intended (as per Outcome Budget), policy
and systems changes / improvements and action-taken / results-
achieved in regard to those aspects of FA’s role which are not included
in the Annual Financial Report.
15. ‘Annual Financial Report’ and ‘Annual Outcomes and Systems
Report’ would be factual reports to be submitted to Secretary
(Expenditure), through the Secretary of the Administrative Ministry, by
June 30 of the next financial year. The ‘Annual Financial Report’ would
be prepared on the basis of the information contained in the provisional
accounts released by the Controller General of Accounts in the month of
May. The structure of the reports will be intimated separately.
16. In addition to the above, FAs would be mandatorily required to
send disclosure statements concurrently to the Secretary of the
Administrative Ministry and Secretary (Expenditure) whenever there are
deviations from, or violation of, the provisions in paras 13-15 above.
They may also be required to send any other information / report
periodically, or as sought from time to time. ,

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Rgleg and rggggngibilitigs 9f CCA§ 1 CA
17. As the overarching concept now adopted is that the Financial
Advisers are meant to assist in the achievement of objectives / goals of
their respective administrative ministries it follows that the role of Chief
Controller of Accounts (CCAs) / Controller of Accounts (CAs) should
undergo a parallel change as the basic accounting and financial inputs
for the Financial Advisers come from the CCAs / CAs. In the last three
decades the role of CCAs / CAs has undergone subtle, unrecorded
changes that need to be formally spelt out and institutionalized in
precise and unambiguous terms. Not only do the accounts wings
operating under CCAs / CAs need to catalyze changes in existing system
protocols in order to synergise and integrate all interrelated aspects with
the changing paradigm of financial management they in turn need to be
strengthened and empowered to effectively cope with the changed
demands made on them.
18. While the CCAs / CAs as head of the accounts wing, under overall
superintendence and control of Financial Advisers, discharge their
duties and responsibilities within the ambit of their respective
administrative ministries lending their professional expertise to provide
Accounting and Accountability support.
19. The spectrum of work for which CCAs / CAs will be responsible, in
the revised outcome driven financial and accounting regime, are
enumerated below:-
(i) Receipts, Payments and Accounts:
u Accurate and timely payments in conformity with prescribed rules
and regulations.
0 Timely realization of receipts.
o Timely and accurate compilation and consolidation of monthly and
annual accounts.

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Efficient service delivery to the Ministry / Department by the
banking system.
- Adherence to prescribed accounting standards, rules and
Timely, accurate, comprehensive, relevant and useful Financial
Internal Audit / Performance Audit
The Internal Audit Wings working under the control and
supervision of the CCAs / CAs shall assist the Financial Advisers in the
appraisal, monitoring and evaluation of individual schemes.
beyond the narrow myopic confines of compliance / regulatory audit
Internal Audit would focus on:
Assessment of adequacy and effectiveness of Internal controls in
general , and soundness of financial systems and reliability of
financial and accounting reports in particular;
Identification andwmonitoring of risk factors (including those
contained in the Outcome Budget);
Critical assessment of economy, efficiency, and effectiveness of
service delivery mechanism to ensure value for money; and
Providing an effective monitoring system to facilitate and course
Other financial management activities :
Budget formulation including the ' Outcome' and ' Performance
Expenditure and Cash Management.
Estimation and flow of non-tax revenue receipts.
Monitoring of Assets and Liabilities.
Disclosure and reporting requirementsVUnderiri-TRBM Act.
m "5/4. “My. £2. .

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Interaction between MoF and FAs
20. The system of interaction between the MoF and FAs would be
institutionalized to facilitate better two way communication and
development of shared perspectives on financial issues. The
Administrative Ministries would be clustered in three groups for this
purpose, viz. economic / infrastructure sector, social sector and other
Ministries. Secretary (Expenditure) would be meeting the FAs of each of
these groups once in a quarter. These interactions will provide a forum
to share the vision, priorities and concerns with the FAs who, in turn,
would get an opportunity to apprise MoF about their activities, important
developments and problems.
21. The quarterly interactions between the FAs and Secretary
(Expenditure) would inter alia, cover the following areas:-
- Implementation / compliance of decisions taken in FM's quarterly
0 Discharge of responsibilities detailed in .this charter, specifically
the functions defined in para 8 above.
- Initiatives taken as a catalyst for policy formulation/review and
systems’ improvements in the concerned Ministries.
0 Identification of points for action on emerging sectoral issues,
including potential opportunities within the sector/Ministry.
- Major proposals / projects currently in different stages of
preparation / approval by the Administrative Ministries, for the
consideration of CNE / EFC / PIB / Cabinet / Cabinet Sub—
22. The interactions could also be used for reviewing progress on
MoF’s specific priorities, as also those outlined in the Budget. Specific
agenda items may also be developed for FM’s quarterly meetings with
FAs, on the basis of these monthly interactions.

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23. The Integrated Finance Division may require strengthening in
some Ministries for assisting the Financial Adviser in his redefined role.
Such strengthening may include need for using information technology,
setting up knowledge management structures, building requisite data
bases, networking with relevant institutions / expert bodies etc. It may
also require changes in the various decision making processes, conflict
resolution, problem solving, programme/project formulation / appraisal,
monitoring, evaluation etc., and delegation by FAs within their own
divisions. The staff/ officers would also require specialized training for
rendering better professional advice. In addition, consultants may be
required for specific tasks from time to time.
24. At the beginning of each Financial Year, the Financial Advisers
should review the existing expertise, structure and processes of the
Integrated Finance Division (IFD) under their respective charges, to
assess / evaluate it’s strengths, weaknesses and potential for
development. In doing so, the expertise available in the set-up of CCAs
/ P&AOs would need to be fully taken into account. FAs would also need
to clearly assess the expertise, knowledge, skills and equipment
(computers / internet etc.) required for effective functioning of the IFD.
On the basis of this analysis, FAs would formulate by June 30, each
year, specific time bound Action Plans for such organizational
strengthening and changes as may be required. They would also need to
put in place a strategy for further development of requisite skills etc.,
through training of existing staff and their replacement by suitably
qualified personnel, wherever necessary. Creation of posts may be
avoided while strengthening / restructuring the IFDs. Instead,
proposals for engaging consultants for a limited time, under GFR 2005,
may be sent for approval of Secretary (Expenditure), through the
Secretary of the Administrative Ministry, if considered absolutely
essential. An ‘IFD Manual' would be prepared in due course, to facilitate
more effective functioning of the Integrated Finance Divisions.

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25. An institutionalized system would be set up by the Department of
Expenditure for organizing periodical workshops, seminars and training
for Financial Advisers and their officers, and for helping FAs in
preparation of induction material for different level of functionaries
working under them. At the beginning of each Financial Year, not later
than June 30, the Financial Advisers should indicate to the Department
of Expenditure, the training needs of their respective IFDs, areas where
they want opportunities for their own capacity development, and
assistance required to facilitate meeting of these needs. Basic skill
upgradation areas could include Government accounting, commercial
accounting, project appraisal, financial analysis, corporate governance
etc. Policy related and sector-specific training could include public
private partnership, contract management, negotiation, risk
management, mergers and acquisitions etc.
26. FAs would be the nodal points within their respective Ministries for
all activities relating to Plan, Budget and Programme / Project
evaluations. As such, any units in the Ministry currently looking after the
functions of undertaking evaluations, preparing Annual / Five Year Plans
etc. should function under the overall supervision and control of the
Financial Adviser.
27. Over a period of time, the enhanced capacity and expertise of
IFDs, coupled with increased delegation of purely routine financial
activities to the Administrative Divisions of the Ministries, would enable
FAs to take on a more active macro-management role. This will also
significantly enhance FAs’ role in, and value-addition to, the budgetary
management and project/ programme appraisal processes. FAs would
also be expected to build-up an appropriate system of networking with
Financial Advisers of autonomous organizations and institutions within
their respective sectors, which are receiving budgetary support, to
ensure optimum utilization of their resources.

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F.No. 10(29)-E.Coordf73
Government of India
Ministry of Finance
Department of Expenditure
New Delhi, the 6th October, 1975.
Office Memorandum
Subject : Scheme of ’Integrated’ Financial Adviser
Under the existing scheme of budgetary and financial control and delegation of powers
to Ministries as introduced vide this Ministry's OM No. 10(3)-E.Coord/67 dated 18th October,
1968, the Ministries have an Internal Financial Adviser, who is in charge of their Budget and
Accounts Section and is required to be consulted in all cases of exercise of delegated financial
powers and an "associate" Financial Adviser based in the Department of Expenditure, who is
required to be consulted in matters falling outside the delegated field. The 'associate‘ Financial
Adviser is attached to a group of Ministries. In pursuance of the policy of to delegate enhanced
financial powers to the administrative Ministries to match their responsibilities and to improve
their competence in the field of financial management by developing appropriate internal
attitudes and skills, this question whether the functions of the 'associate‘ Financial Adviser and
the Internal Financial Adviser could, with advantage be integrated in a single official, forming
part of the administrative Ministry, has been under consideration. It has been felt that Ministry
in a larger measure than at present to enable him to play a more effective and constructive role
in its developmental activities and should bring his financial expertise to bear in assisting the
Secretary of the administrative Ministry and other senior officers in the planning,
programming, budgeting, monitoring and evaluation, functions of the Ministry. A scheme of
'Integrated‘ Financial Adviser has accordingly been drawn up in consultation with Department
of Personnel & Administrative Reforms, the salient features of which are outlined in the
2. In the new scheme, the Financial Adviser will be responsible both to the administrative
Ministry and to the Ministry of Finance. With the assistance, the administrative Ministry will
be able to feely exercise the enhanced powers delegated under the Department of Expenditure
OM No. F.10(l3)-E.Coord/75 dated 10th April, 1975 and outside the scope of the delegations,
he will function under the general guidance of the Finance Ministry. He will assist in budget
formulation, scrutiny of projects and programmes for approval by the Ministry of finance and
post-budget vigilance to ensure that there are neither considerable shortfalls in expenditure nor
unforeseen excesses for which provision has not been made either in the original budget or in
the revised estimates. The close association of Integrated Financial Adviser and his staff with
the formulation and implementation of all proposals involving expenditure should facilitate the
more effective discharge of the Financial Adviser's responsibility. It is cardinal to the working
of the new scheme that the Financial Adviser should be associated with the formulation of
schemes from the initial stages. The Financial Adviser will also be responsible for preparation
of the Ministry's performance budget and monitoring of progress of schemes against the
budget. The maintenance of an efficient accounting system is necessary for this purpose.