School Administration · Financial Rules

School Financial Management & Audit Basics

Four high-yield concepts for transparent handling of public money, assets, grants and audit observations.

Weightage: 2 Questions

Core Concepts

Concept 01 · GFR Rule 47

Maintenance of the Cash Book

Core principle: The Cash Book is the most critical primary financial record in a school. It must show every receipt and payment on the exact date it occurs, ensuring absolute transparency of public funds.

Key facts

Daily closing: Write up the Cash Book daily; strike and verify balances at the end of each day.
Attestation: The Head of Office—such as the Principal or Vice-Principal—must verify the totaling and physically sign or attest it regularly.
No erasures: Erasures, overwriting and correction fluid (whitener) are strictly prohibited. Cross out an incorrect entry cleanly while keeping it legible, write the correct entry above it, and have the Head of Office initial and date the correction.

Concept 02 · GFR Rules 211 & 213

Inventory and Stock Registers

Core principle: A school must keep distinct, accurate registers for all physical assets bought with government funds—to track utility, prevent pilferage, and calculate depreciation or write-offs.

Key facts

Consumables Register: For items exhausted through use—chalk, printer ink, stationery and laboratory chemicals.
Non-Consumables (Dead Stock) Register: For permanent or semi-permanent assets—desks, computers, laboratory microscopes and library books.
Physical verification: Verify all non-consumable goods and library books at least once every year.
Discrepancies: Report shortages or damage found during annual verification immediately to the competent authority for investigation.

Concept 03 · GFR Rule 238

Utilisation Certificates (UC)

Core principle: A UC is the formal statutory declaration that a Grant-in-Aid has been completely utilised for the exact, specific purpose for which it was sanctioned.

Key facts

Submission timeline: Submit strictly within 12 months of the close of the financial year in which the grant was released.
Prescribed format: Usually Form GFR 12-A.
Blocking rule: If a previous UC is pending, the sanctioning authority withholds further or subsequent grants until the backlog is cleared.

Concept 04 · Audit Control

Audit Basics and Audit Paras

Core principle: Schools undergo mandatory financial audits for compliance with the GFR, financial propriety and transparency. Audit observations—called “Paras”—must be resolved.

Key facts

Internal audit: Conducted by the Pay & Accounts Office (PAO) or the Directorate of Education (DoE) internal audit wing as a preventive check.
External/statutory audit: Conducted by the Comptroller and Auditor General (CAG) of India.
Audit Paras: For each irregularity raised, the Head of Office must submit a compliance reply and take corrective action so the Para is settled or dropped promptly.

Quick Reference

School Financial Documents

Document / Process	Primary Purpose	Key Administrative Rule
Cash Book	Records all daily receipts and payments of public money.	Must be closed daily; no erasures or whitener permitted.
Consumables Register	Tracks items used up, such as stationery and chemicals.	Balances are reduced as items are issued or consumed.
Dead Stock Register	Tracks permanent physical assets, such as furniture and computers.	Physical verification is mandatory at least once a year.
Utilisation Certificate (UC)	Certifies that a grant was spent for its sanctioned purpose.	Submit within 12 months of the financial year's end.
Audit Para	Formal auditor observation about a financial irregularity.	Must be officially replied to and settled by the Head of Office.