DRUG REGULATORY AUTHORITY OF PAKISTAN ACCOUNTING PROCEDURE AND FINANCIAL RULES, 2015
[Gazette of Pakistan, Extraordinary, Part-II, 11th March, 2015]
S.R.O. 213 (I)/2015, dated 9.3.2015.–In exercise of the powers conferred by Section 23 read with Section 19 and sub-section (2) of Section 22 of the Drug Regulatory Authority of Pakistan Act, 2012 (XXI of 2012), the Drug Regulatory Authority of Pakistan, with the prior approval of the Federal Government, is pleased to make the following rules, namely:–
1. Short title and commencement.–(1) These rules may be called the Drug Regulatory Authority of Pakistan Accounting Procedure and Financial Rules, 2015.
(2) They shall come into force at once.
2. Definitions.–In these Rules, unless there is anything repugnant in the subject or context,–
(a) “Act” means the Drug Regulatory Authority of Pakistan Act, 2012 (XXI of 2012);
(b) “Authority” means the Drug Regulatory Authority of Pakistan established under Section 3 of the Act;
(c) “civil servant” means a civil servant as defined in the Civil Servants Act, 1973 (LXXI of 1973);
(d) “Central Research Fund (CRF)” means the central research fund collected under clause (b) of sub-section (1) of Section 12 of the Drugs Act, 1976 (XXXI of 1976), and maintained by the Authority under Section 19 of the Act;
(e) “employee of the Authority” means an officer or official appointed under Section 14 of the Act and all employees of the Drug Control Administration, its sub-offices and its laboratories of the earstwhile Ministry of Health who opt to be included in the Authority under clause (b) of sub-section (5) of Section 15 of the Act;
(f) “Fund” means the Drug Regulatory Authority of Pakistan Fund created under Section 19 of the Act; and
(g) “Policy Board” means the Policy Board of the Authority constituted under Section 9 of the Act.
3. General.–(1) The accounts of the Authority shall be maintained on double entry system in accordance with the generally accepted accounting principles.
(2) The financial statements of the Authority shall be prepared in accordance with the approved accounting standards as applicable in Pakistan and in the manner as prescribed in Annex-A.
(3) All financial transactions shall be recorded in the respective head of account as specified in the chart of accounts of the Authority in Annex-B.
(4) The Director Budget and Accounts may change or create new accounting code in the chart of accounts with description for any new account.
(5) In case, the Authority shifts to Enterprise Resource Planning (ERP), the new chart of accounts may replace the existing chart of accounts, if required.
4. Drug Regulatory Authority of Pakistan Fund.–(1) The Fund which shall vest in the Authority.
(2) The Fund shall be utilized by the Authority to meet its expenses and charges properly incurred in connection with the carrying out of its functions and duties assigned or transferred to it under the Act, including but not limited to the payment of salaries and other remuneration to the CEO, Director, members of the different Boards, employees, experts, consultants and advisers of the Authority.
(3) The Fund shall be financed from the following sources namely:–
i. grant-in-aid in terms of salaries and retirement benefits of the existing staff to be provided by the Federal Government;
ii. donations and endowments;
iii. grants and loans by the Federal Government or a Provincial Government;
iv. loans and grants from the national and international agencies received by the Federal Government and Provincial Governments to finance the function of the Authority;
v. charges and fees collected by the Authority to recover the costs of regulated activities under the Act;
vi. proceeds of any investments made by the Authority;
vii. proceeds from any other service rendered by the Authority, including Inspection Services, foreign or local, or sale of any publication; and
viii. Central Research Fund collected from the pharmaceutical industry.
(4) Grant in aid from Federal Government shall be kept in Assignment Account lapsable on 30th June of every year. Assignment Account shall be operated as per procedure approved by Controller General of Accounts or Finance Division.
(5) Receipts from various sources shall be deposited in the designated bank accounts of the Authority.
(6) No person shall be authorized to receive cash on behalf of the Authority.
(7) Any demand draft, bank draft, pay order, cheque, etc. in the name of Authority shall be deposited forthwith in the designated bank account of the Authority.
(8) At the end of each financial year, the balance sheet shall be prepared and any un-spent remaining amount of the Fund shall be securely invested only in Government schemes in order to achieve self-sufficiency of the Authority.
(9) Assessment of the surplus funds and their investment shall be made in accordance with the mechanism given in the investment policy in Annex-C.
(10) All penalties and fines recovered by the Authority shall be credited to the Federal Consolidated Fund and not to the Fund of the Authority.
5. Budget.–(1) The Authority shall, in respect of each financial year prepare, on such date as may be determined, a statement of the estimated receipts and expenditure, including the revised and estimated budgets, requirements of grant-in-aid from Federal Government, and foreign exchange for the next financial year for consideration and approval of the Policy Board.
(2) The budget shall be prepared on incremental basis.
(3) Any foreign exchange requirements within the overall annual approved budget by the Policy Board shall be sent to Federal Government for appropriate provision and allocation.
(4) It shall not be necessary for the Authority to take prior approval from the Government to spend money from its own generated funds, and shall practice financial freedom as the Policy Board deem fit for furtherance of its functions.
(5) The budget shall be divided among the following cost or fund centers to ensure effective financial control:–
(i) Headquarters at Islamabad.
(ii) Federal Inspectorate of Drugs, Islamabad.
(iii) Central Drug Testing Laboratory, Karachi.
(iv) National Control Laboratory for Biologicals, Islamabad.
(v) Federal Drug Surveillance Laboratory, Islamabad.
(vi) Drug Regulatory Authority of Pakistan Sub-Office, Lahore.
(vii) Drug Regulatory Authority of Pakistan Sub-Office, Karachi.
(viii) Drug Regulatory Authority of Pakistan Sub-Office, Peshawar.
(ix) Drug Regulatory Authority of Pakistan Sub-Office, Quetta.
(x) Any other sub-office as approved by the Policy Board.
(6) The Chief Executive Officer (CEO) shall have the power to authorize expenditure provided for in the budget in accordance with the rules and regulations.
(7) The CEO shall have the power to re-appropriate funds within the approved budget.
(8) The CEO may delegate his powers to appropriate levels of management subject to such conditions as he may deem fit.
(9) The CEO shall not, except with the prior approval of the Policy Board in each case or unless already approved in the budget duly itemized, allow expenditure on items of civil works, or capital expenditure on office or laboratories equipments or automobiles.
6. Operation of bank accounts.–(1) Bank accounts of the Authority shall be opened with any scheduled bank or financial institution with the concurrence of Ministry of Finance.
(2) Bank accounts shall be operated by any two of the authorized signatories jointly among signatories authorized by the Authority.
(3) Subject to concurrence by the Ministry of Finance, Directors or Additional Directors at provincial capital offices and laboratories may also be authorized to open and operate bank accounts for official transactions with the approval of the Authority.
(4) The Directors or Additional Directors or Deputy Directors may be declared as DDOs. Bank accounts shall be jointly operated by the Director or Additional Director with another BPS 18 Officer and the Accounts Officer or Assistant Director (B & A) or Deputy Director (B & A).
(5) The two signatories authorized to operate the account should comprise of one officer each from the executive and from the Budget and Accounts Division. The powers of the Directors and Additional Directors shall be defined in the Authority's Delegation of Administrative and Financial Powers.
7. Expenditure.–(1) Financial concurrence prior to the sanction of the expenditure for carrying out functions of the Authority shall be obtained as prescribed in the Delegation of Administrative and Financial Powers.
(2) The expenditure shall be incurred against specific budgetary allocation and amount released.
(3) Re-appropriation of funds released in main account heads or sub-heads can only be made with the concurrence of the Chief Executive Officer.
(4) Items involving cost below the financial limit for petty purchases prescribed under the Public Procurement Rules, 2004 may be purchased without collecting quotations.
(5) The officer shall conduct proper market survey and collect spot quotations and purchase the items at lowest available rates.
(6) The officer making the purchases shall certify that the purchase was made at the lowest rates available in the market on the back of the bill.
(7) Expenditure on procurement of petty purchases as prescribed under the Public Procurement Rules, 2004 may be made through temporary advance to an officer of not less than BPS-17 or equivalent.
(8) For procurement exceeding financial limit for petty purchases as prescribed under the Public Procurement Rules, 2004 and up to financial limit approved by the Policy Board in accordance with the Public Procurement Rules, 2004, limited sealed quotations may be called.
(9) The quotations shall be opened by three officers including a representative of Budget and Accounts Division.
(10) A comparative statement shall be prepared and after approval of the competent authority an order shall be placed on the lowest bidder.
(11) Purchases exceeding financial limits approved by the Policy Board in accordance with the Public Procurement Rules, 2004, as per sub-rule (8), shall be made after inviting tenders or bids either through placing on the Public Procurement Regulatory Authority's website or through print media as prescribed under the Public Procurement Rules, 2004.
(12) The specification for items to be procured shall be generalized to allow the participation of maximum bidders. The Public Procurement Rules, 2004 rules shall be followed in all types of procurement cases.
8. Payments.–(1) All payments supported by Payment vouchers shall be made by a crossed cheque except the cash payments allowed under the Income Tax Ordinance, 2001 (XLIX of 2001).
(2) Payment vouchers shall be properly filled in with voucher number, date, cheque number, name of payee, account head number, particulars of payment, bill number and amount in figures and words.
(3) Income tax at source shall be deducted in accordance with Income Tax Ordinance, 2001 (XLIX of 2001).
(4) For internal control, a voucher shall be prepared after cent percent checking of these supporting documents, and verification of all additions and subtraction in the bill.
(5) The voucher shall then be checked or audited by an officer and shall be validated by another officer.
(6) Cashier shall not be allowed to sign a voucher.
(7) All relevant documents including following shall be attached with the payment voucher for payment against supplies:–
(i) Original invoice or bill of the supplier.
(ii) Supply order.
(iii) Inspection report.
(iv) Store receipt note.
(v) Approval of the competent authority.
(8) Payment pertaining to Headquarter’s expenditures shall be made by the Budget and Accounts Division.
(9) Director (Admn, HR & Logistics) shall be provided an imprest advance for defraying petty, emergent and contingent expenditures at Headquarter in accordance with his financial powers.
(10) Additional Directors or Incharge sub-offices and laboratories may be provided imprest advance for defraying petty, emergent and contingent expenditures at sub-offices and laboratories in accordance with their financial powers.
(11) The limit of imprest shall be subject to review after one year on the basis of petty expenditures incurred. The actual amount of one year divided by 24 shall be fixed as imprest money.
(12) Once the payment has been made, the invoice or bill of the supplier shall be stamped as “PAID”.
(13) Payments of salaries shall be made on the basis of pay authority issued by the Budget and Accounts Division.
(14) Taxes, utility bills, rent etc. shall be paid on the basis of actual and on due date.
9. GP Fund and Retirement benefits of civil servants.–(1) GP Fund and retirement matters of all those employees of Drugs Control Administration who opt to continue in as civil servants shall be maintained by the office of Accountant General of Pakistan Revenues.
(2) Subscriptions deducted from salaries of the civil servants working in the Authority shall be deposited as per Federal Government Rules.
(3) Payments with respect to pension contribution of civil servants shall be made by the Authority as per Federal Government Rules.
10. Maintenance of General Provident Fund (GP Fund).–(1) GP Fund accounts of the employees shall be centrally maintained at the Authority Headquarters under the supervision of Trustees of the GP Fund.
(2) Trustees of the GP Fund shall be appointed by the Federal Government and at least two trustees shall be among the employees of the Authority.
(3) All GP Fund payments including advances shall be approved at the Headquarters level.
(4) For payments from the GP Fund, authority shall be issued to the concerned DDO for disbursement to the individual.
(5) A separate GP Fund bank account shall be operated at the Headquarters level.
(6) Contributions from employees shall be deposited in a separate bank account. GP Fund contributions of at sub-offices level staff shall be transferred to this account immediately after closing monthly account, if any.
(7) Expected receipts and payments shall be synchronized and available balances in the fund shall be invested in Government securities.
(8) Subscriptions to be deducted from salaries of employees of the Authority shall be equal to Federal Government employees and procedure with respect to advances from the GP Fund shall also be as per Federal Government Rules.
Explanation.–Since the terms and condition of service of all officers and staff employed in the Drug Regulatory Authority of Pakistan, before the commencement of this Act shall not be varied to their disadvantage as provided in the Act, the Authority has to pay interest at the Government announced rates on the GP Fund balances of employees who opted to be included in the Authority.
11. Maintenance of Pension Endowment Fund.–(1) Employees of the Authority shall be entitled to pension or gratuity at par with the Federal Government employees.
(2) A separate fund shall be established for the purpose of pension of employees of the Authority and it shall be recognized under the Income Tax Ordinance, 2001 (XLIX of 2001).
(3) Trustees of the fund shall be appointed by the Federal Government and at least two trustees shall be among the employees of the Authority.
(4) The Authority shall make regular appropriations from its resources on the basis of actuarial calculations and it shall be deposited in a separate bank account.
(5) Expected receipts and payments shall be synchronized and available balances in the fund shall be invested in Government securities. The interest income to the fund shall reduce financial burden on the Authority in terms of its contribution towards the fund on account of pension payments.
(6) At the time of retirement or death of an employee, a notification to this effect shall be issued by the HR Division at Headquarters. The concerned employee shall collect pension application from the retired person or entitled member of the family and prepare pension paper on the prescribed format and submit to the Director (Admn, HR & Logistics) at Headquarters.
(7) On receipt of the pension papers the HR Division shall scrutinize and refer the complete case to Budget and Accounts Division for audit and payment.
(8) The Budget and Accounts Division shall check or audit the pension claim with the relevant record and prepare audit report showing amount of gross pension commutation or gratuity and net pension. Calculation of gratuity, pension or commutation shall be made as per prescribed rules.
12. Benevolent Fund and Group Insurance.–(1) Subscriptions with respect to benevolent fund and group insurance shall be deducted from the pay of employees of the Authority and civil servants at the rates specified in the Federal Government Employees Benevolent Fund and Group Insurance Act and paid to the Board of Trustees on monthly basis.
(2) In case of non-gazetted officials insurance premia shall be paid by the Authority to the Board of Trustees of the fund as per Federal Government Rules.
13. Preparation of books of account.–(1) In accordance with the budgetary head of accounts, all payments shall be recorded in the ledger and subsidiary ledgers.
(2) The following books of accounts shall be maintained for accounting record:–
(i) General ledger including separate account for each bank account
(ii) Petty cash book
(3) The following subsidiary registers or records shall also be maintained:
(i) Separate pay order register or record for payment of salaries to officers and staff.
(ii) House rent subsidiary payment record register or record.
(iii) Indoor medical payments register.
(iv) Utility bill payment register or record showing period (month) amount, meter reading etc.
(v) Rent payments register or record.
(vi) Suppliers register or record.
(vii) Contingency payments register.
(viii) Repair and maintenance register with respect to each type of fixed asset, i.e. individual building and equipment wise etc.
(ix) Maintenance of vehicles shall be recorded in their respective logbook and invariably be audited after every two months.
(x) Assets register or record (non consumable items).
(xi) Stocks register or record (consumable items).
(xii) Investments register or record.
(xiii) Register for advances to employees.
(xiv) Register for advances to contractors/supplier.
(xv) Check books register.
(xvi) Bank credit vouchers record.
14. Deposit of Deductions.–(1) Income tax deducted at source shall be deposited in the Government treasury as prescribed under the Income Tax Ordinance, 2001 (XLIX of 2001).
(2) The DDO shall ensure that income tax at source is deducted from all types of payments (if comes under taxable limits) in accordance with the rates prescribed in the Income Tax Ordinance, 2001 (XLIX of 2001).
(3) Schedule of deductions from salaries showing name and designation of employee and detail of his each type of deduction including G.P. Fund, Benevolent Fund etc. shall be sent to the Budget and Accounts Division by 5th of every month.
(4) The amount against G.P. Fund contributions shall be deposited in the central General Provident Fund Account.
15. Writing of Bank Book and Cash Book.–(1) Entries in the bank book and cash book shall be made immediately on making of payments through cheque or cash respectively. These books shall be balanced daily and be written clearly without overwriting. However, in case an error occurs, the same shall be crossed by drawing a line and correct entry be made over dated signature of DDO.
(2) The bank book shall never go overdrawn.
(3) Cheques shall be issued only if there is sufficient bank balance as per bank book. The checking of cash book shall be done by an officer other than DDO on 3rd working day of every month or on the day of receipt of Bank Statement whichever is earlier.
(4) Bank balance as per ledger shall be reconciled with the bank statement on monthly basis and bank reconciliation statements shall be prepared by 5th working day of every month. Imprest amount shall be checked with cash book balance.
(5) The cash balances shall be kept in an iron safe. The iron safe shall have two keys one with the cashier and other with DDO so that opening of iron safe is permitted in their presence.
16. Safe Handling of Cheque Book.–(1) Crossed or “Accounts Payee Only” Cheque Book shall be received from the bank and entered in the Cheque Book receipt register by mentioning Sr. No…………….to Sr. No……………Safe custody of the Cheque Book is the responsibility of the concerned DDO and this shall be kept in the iron safe.
(2) Cheque on the basis of approved voucher shall be written by the Accounts Officer or Assistant Director (B & A) / Deputy Director (B & A) only.
17. Preparation and Submission of Cash Accounts.–Cash account shall be prepared in accordance with the budgetary release and chart of accounts showing main head of accounts, sub-heads and submit to Director Budget and Accounts at Headquarters on 5th working day of every month. The following documents must be attached with the cash account:–
(i) Statement showing both bank and cash opening balance less payment during the month and likewise closing balance.
(ii) Bank statement.
(iii) Bank reconciliation statement.
(iv) Outstanding temporary advances list. The list must show the names of the concerned official and date when advance was drawn.
(v) Outstanding TA and DA advances.
(vi) Original Vouchers.
18. Loans.–(1) Subject to availability of the Funds for this purpose and subject to such conditions as it may consider proper, the competent authority may grant any one or more of the following categories of loans to an employee or a civil servant or a Director appointed on regular basis having more than ten years service on his application in writing for the grant of such loan:–
(i) Loan for purchase of a motor car, motor cycle or scooter (maximum for 2 times in entire service).
(ii) Loan for purchase of a house, flat, apartment or for house building (maximum for 2 times in entire service).
(2) The terms and conditions and procedure for sanction and recovery of loans are laid down in annex-D.
19. Central Research Fund (CRF).–(1) In this rule:–
(i) “Committee” means the Committee of experts constituted under the Drugs (Research) Rules, 1978;
(ii) “Chairman” means the Chairman of the Committee;
(iii) “Member” means Member, permanent or co-opted of the Committee;
(iv) “Secretary” Means Secretary of the Committee; and
(v) “investigator” means a person engaged in the investigation, research, development or evaluation of a drug on his own initiative or under the sponsorship of any other person or an institution;
(vi) “recipient” means a person or an institution who or which receives aid from the Fund; “sponsor” means a person, firm, an establishment or institution promoting research on a drug.
(2) CRF shall be administrated and utilized on the advice or recommendation of the Committee for the following purposes and objectives:–
i. Conducting basic and operational research, development or evaluation of drugs either by the Authority itself or through a research institution working under its control or among investigators or institutions for such purposes subject to such conditions as may be specified;
ii. Post marketing surveillance, evaluation and monitoring of safety, efficacy and quality of registered drugs and inactive materials including the clinical and toxicological studies.
iii. to meet capital or recurring expenses of research proposals or projects and strengthening the existing facilities of drug research and development, duly recommended by the Committee and approved by the Authority.
iv. Establishing a technical unit in the Authority, for evaluation and monitoring of the Research proposals and development projects and management of CRF.
v. Establishment and upgradation of Drug Research and Testing Laboratories.
vi. Engagement of investigators and evaluators for research and research projects.
vii. Any other activity related to research, development and evaluation of drugs as may be recommended by the Committee.
(3) CRF bank account shall be operated by any two of the signatories jointly authorized by the Authority.
(4) The sources of CRF shall be as follows:–
(i) Contribution by the licensed pharmaceutical companies under clause (b) of sub-section (1) of Section 12 of the Drugs Act, 1976.
(ii) Donation and endowments.
(iii) Income accruing through investment or any other legitimate source.
(4) CRF shall be applicable throughout Pakistan. The Committee shall advise or recommend utilization and disbursement keeping in view the merits and feasibility of research and development projects and for any other purposes advised or recommended by the Committee having due regards to the objectives.
(5) Contribution to CRF may be deposited by the licensed pharmaceutical companies at a scheduled bank in designated account on the prescribed bank credit voucher.
(6) The Authority shall draw up estimates for head-wise expenditure to be incurred on research, development, evaluation of drugs and management or monitoring of CRF during a financial year. The budget shall be approved by the Policy Board of the Authority.
(7) (i) Receipts already realized and credited to the head of account '3501000-Civil Deposits' and Personal Ledger Account previously maintained vide AGPR, Islamabad Letter No. TM/10-21/PL(C)/Vol. XXVI/894 dated 19-09-1985 shall, after these are reconciled with the AGPR shall be transferred to bank account of CRF maintained by the Authority.