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System of Financial Control and Budgeting QUESTION #5649
Question 1
A Ministry wishes to write off an irrecoverable loss of Rs. 8 million due to a theft that discloses a defect in the system requiring orders from higher authority. Under Annex-I what is the CORRECT procedure?
  • The Ministry can write off the loss since it is below Rs. 10 million and within delegated powers
  • The Ministry cannot write off this loss under its delegated powers because the loss discloses a systemic defect requiring higher authority orders regardless of the amount✔️
  • The Financial Adviser can write off the loss since it is below Rs. 10 million
  • The Head of Department can write off up to Rs. 200000 and the balance must be referred upward
Correct Answer Explanation
Write-off powers up to Rs.10 million are available to Ministries/Divisions PROVIDED that (a) the loss does not disclose a defect of system the amendment of which requires orders of higher authority AND (b) there has not been serious negligence. Since this loss discloses a systemic defect condition (a) is not met and the write-off cannot be processed under these delegated powers regardless of the amount.