Advances to contractors

F.M.V. 209.

158. Advances to contractors are as a rule prohibited, and every endeavour should be made to maintain a system under which no payments are made except for work actually done. Exceptions are, however, permitted in the following cases:

(a) Cases in which, in the interest of works, it is absolutely necessary to make petty advances. In such cases advances up to Rs.50 may be allowed by range officers and up to Rs.100 by divisional officers.

(b) In all other cases only with the sanction of the Local Government, who may, in exceptional circumstances, authorize such advances as may be deemed indispensable, taking the necessary precautions for securing government against loss and for preventing the system from becoming general or continuing longer than is absolutely essential.

159. The amount advanced should be charged in the cash-book under the suspense head "Work advances", subordinate to "B—Conservancy and works" or "65—Capital outlay on Forests", the entry being supported by an acknowledgement by the payee in form no. 18 (E-21). When recovered (wholly or partially) from the contractor either by work done or in cash, the amount recovered should be credited in the cash-book under "Work advances, the numbers and dates of the items in which the advances so recovered were originally charged being quoted in the entry on the debtor side. If the recovery is for the value of the work done, such value should simultaneously be charged per contra to the appropriate head of accounts classification (paragraph 22) in the cash-book, and the charge supported by a voucher (detailing the work done and the rates) which should be signed by the contractor in token of the correctness of the credit given in his ledger account (paragraph 189) and completed as a payment voucher in other respects (paragraphs 137 and 138).

F.A.C. 46.

NOTE—Payments "on account" and part payments, for works under paragraphs 138—141 are not treated as advances for the purposes of this paragraph and paragraph 158.

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