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Financial Management & PAO Regulations 2021 (Office Governance) Solved Questions & Notes (2026) - Apex Rankers

Public Administration & Governance > Office Governance > Financial Management & PAO Regulations 2021

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Financial Management & PAO Regulations 2021

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Q. 1 Office Governance
Difficulty: Easy (1 Mark)
Under the 'Financial Management and Powers of Principal Accounting Officers Regulations, 2021', who is designated as the Principal Accounting Officer (PAO) for a Ministry or Division?
A
The Secretary of the Ministry or Division (or head of independent constitutional department)
✓ Correct
B
The Federal Minister for Finance
C
The Accountant General Pakistan Revenues
D
The Auditor General of Pakistan
💡 Step-by-Step Explanation & Concept Rationale
Regulation 3 of the PAO Regulations 2021 designates the Secretary to the Government of Pakistan in charge of a Division (or executive head of autonomous department) as the Principal Accounting Officer (PAO).
Q. 2 Office Governance
Difficulty: Medium (1 Mark)
What is the primary role of the 'Chief Finance and Accounts Officer' (CFAO) under the PAO Regulations 2021?
A
To act as the in-house financial advisor to the Principal Accounting Officer, assisting in budget formulation, expenditure management, financial reconciliation, and internal controls
✓ Correct
B
To conduct external statutory audits of the ministry
C
To serve as personal security officer to the minister
D
To collect municipal parking fees
💡 Step-by-Step Explanation & Concept Rationale
Under Regulation 6, the Chief Finance and Accounts Officer (CFAO, BS-19/20) heads the Finance and Accounts Wing of each Ministry, serving as the dedicated internal financial expert assisting the PAO.
Q. 3 Office Governance
Difficulty: Easy (1 Mark)
Under Regulation 4 of the PAO Regulations 2021, which of the following is a fundamental responsibility of the Principal Accounting Officer?
A
Ensuring that public funds allocated to the Ministry are spent in accordance with rules, financial propriety is observed, and appearing before the Public Accounts Committee (PAC) to answer audit observations
✓ Correct
B
Signing foreign military defense pacts unilaterally
C
Appointing judges to the High Courts
D
Printing paper currency at the State Bank
💡 Step-by-Step Explanation & Concept Rationale
The PAO is personally responsible for the regularity and propriety of all expenditure incurred by his department, internal audit oversight, timely budget reconciliation, and defending the accounts before the PAC.
Q. 4 Office Governance
Difficulty: Medium (1 Mark)
Under the PAO Regulations 2021, the Principal Accounting Officer is assisted in evaluating internal risk, compliance, and systems by the:
A
Head of Internal Audit (HIA), who reports directly to the PAO
✓ Correct
B
External private detective agencies
C
Local municipal police inspector
D
Commercial bank branch manager
💡 Step-by-Step Explanation & Concept Rationale
Regulation 9 creates an independent Internal Audit function headed by the Head of Internal Audit (HIA), providing objective assurance directly to the PAO on risk management and governance.
Q. 5 Office Governance
Difficulty: Medium (1 Mark)
Under the PAO Regulations 2021, what must a Principal Accounting Officer do if he anticipates savings in the sanctioned budgetary grants of his Division?
A
Surrender the anticipated savings to the Finance Division well before the close of the financial year (by the prescribed date, typically 31st March)
✓ Correct
B
Distribute the cash as bonuses among favorite staff members
C
Conceal the savings in secret commercial bank accounts
D
Spend the money recklessly on luxury cars before June 30
💡 Step-by-Step Explanation & Concept Rationale
Under Regulation 11, PAOs must conduct periodic reviews and formally surrender all anticipated unspent savings to the Finance Division by the prescribed cutoff date, preventing year-end rush of expenditure.
Q. 6 Office Governance
Difficulty: Easy (1 Mark)
Under Rule 10 of the General Financial Rules (GFR), what are the 'Fundamental Principles of Financial Propriety'?
A
Four cardinal standards requiring that public money be spent with the same vigilance as a person of ordinary prudence would exercise over his own money, expenditure not exceeding the occasion, no authority benefiting itself, and no individual benefiting without claim
✓ Correct
B
Rules for maximizing personal corporate profit
C
Guidelines for writing poetry in official notes
D
Rules for decorating government conference rooms
💡 Step-by-Step Explanation & Concept Rationale
Rule 10 of GFR lays down the four Canons of Financial Propriety that every public officer spending public funds must uphold under penalty of personal surcharge.
Q. 7 Office Governance
Difficulty: Easy (1 Mark)
Under GFR, what is a 'Permanent Advance' (or Imprest)?
A
A fixed sum of money provided to a designated Drawing and Disbursing Officer (DDO) to meet petty, emergent day-to-day office expenses before drawing formal bills
✓ Correct
B
A permanent housing loan given to civil servants
C
An advance payment for purchasing military jet fighters
D
The lifetime pension paid to a retired officer
💡 Step-by-Step Explanation & Concept Rationale
An Imprest (Permanent Advance) is maintained by a DDO to meet petty contingent charges (tea, minor repairs, postage) that cannot wait for regular treasury billing, recouped periodically by submitting paid vouchers.
Q. 8 Office Governance
Difficulty: Easy (1 Mark)
In government financial administration, what is a 'Drawing and Disbursing Officer' (DDO)?
A
A gazetted officer authorized to sign and submit bills and draw money from the treasury/AGPR for disbursement on behalf of the department
✓ Correct
B
An artist employed to draw architectural blueprints
C
A commercial banker cashing personal cheques
D
A tax collector in a municipal fruit market
💡 Step-by-Step Explanation & Concept Rationale
A DDO is an officer officially declared by the PAO/Ministry to draw bills from the accounts office/AGPR, receive government funds, and make authorized disbursements while maintaining the Cash Book.
Q. 9 Office Governance
Difficulty: Easy (1 Mark)
Under GFR and Treasury Rules, in which primary accounting record must every single cash receipt and cash disbursement be entered chronologically as it occurs?
A
The Cash Book
✓ Correct
B
The Section Diary
C
The Precedent Book
D
The Movement Register
💡 Step-by-Step Explanation & Concept Rationale
Under GFR Rule 13, all monetary transactions must be entered in the Cash Book as soon as they occur, totaled and verified daily, with the DDO signing the monthly physical cash verification certificate.
Q. 10 Office Governance
Difficulty: Easy (1 Mark)
Under GFR, what are 'Contingent Charges' (Contingencies)?
A
Incidental and operational running expenses incurred for the management of an office (e.g. utilities, stationery, fuel, postage, office maintenance, rent)
✓ Correct
B
The salaries of regular permanent officers
C
Emergency military deployment expenditures
D
Foreign debt repayments to the IMF
💡 Step-by-Step Explanation & Concept Rationale
Contingencies include all incidental operational expenses other than salaries, allowances, and major development works, needed for the day-to-day functioning of an office.
Q. 11 Office Governance
Difficulty: Medium (1 Mark)
Under GFR Rule 20, what is the mandatory obligation of an officer regarding any loss of public money, departmental revenue, or property caused by fraud, embezzlement, or theft?
A
He must report the loss immediately to the next higher authority, the Principal Accounting Officer, and the statutory audit officer (AGP)
✓ Correct
B
He should conceal the loss to preserve the office reputation
C
He should write off the loss from petty cash without recording
D
He must file an insurance claim after five years
💡 Step-by-Step Explanation & Concept Rationale
Rule 20 mandates immediate formal reporting of any defalcation, embezzlement, loss, or theft of public money/store to the higher departmental authority and to the Director General Audit.
Q. 12 Office Governance
Difficulty: Medium (1 Mark)
Under the Delegation of Financial Powers, what does the 'Write-Off of Losses' mean?
A
The formal sanction by a competent authority to strike off irrecoverable losses of public money, stores, or unserviceable goods from the accounts book
✓ Correct
B
Writing notes in pencil on financial vouchers
C
Deleting computer accounting records without permission
D
Canceling parliamentary tax legislation
💡 Step-by-Step Explanation & Concept Rationale
Write-off is the statutory authorization by a designated authority (within financial thresholds) to expunge irrecoverable losses, book value of obsolete/damaged stores, or uncollectible dues after formal inquiry.
Q. 13 Office Governance
Difficulty: Medium (1 Mark)
Under the PAO Regulations 2021, can a Principal Accounting Officer re-appropriate funds from a 'Development' grant to a 'Non-Development' (Current) grant?
A
No, re-appropriation from Development to Current budget is strictly prohibited
✓ Correct
B
Yes, the PAO can do so at his sole discretion at any time
C
Yes, if approved by a junior clerk
D
Only during the last week of June
💡 Step-by-Step Explanation & Concept Rationale
Under Regulation 12, funds voted for developmental projects cannot be re-appropriated to meet operating/current expenses, preserving development investments.
Q. 14 Office Governance
Difficulty: Hard (1 Mark)
Under GFR, which type of contingent bill requires the prior signature/approval of a controlling officer before payment is released by the accounts office?
A
Countersigned Contingent Bill
✓ Correct
B
Fully Vouched Contingent Bill
C
Petty Cash Slip
D
Bank Deposit Slip
💡 Step-by-Step Explanation & Concept Rationale
Countersigned contingent bills require the formal scrutiny and countersignature of the designated Controlling Officer (verifying necessity and rate reasonableness) prior to payment.
Q. 15 Office Governance
Difficulty: Easy (1 Mark)
In public financial management, what does 'Reconciliation of Accounts' between a Ministry and the AGPR entail?
A
Monthly comparison and verification of departmental expenditure figures maintained in the DDO's registers against the figures booked in the ledgers of the AGPR
✓ Correct
B
Reconciling political disputes between coalition partners
C
Settling private marital alimony between spouses
D
Merging federal accounts with commercial bank reserves
💡 Step-by-Step Explanation & Concept Rationale
Monthly reconciliation ensures that departmental DDO records match the centralized AGPR accounting ledger, detecting misclassifications, duplicate billing, and unauthorized debits.
Q. 16 Office Governance
Difficulty: Easy (1 Mark)
Under Rule 151 of the General Financial Rules (GFR), physical verification of all government stores, stock, and inventory must be conducted:
A
At least once a year, by an independent officer other than the custodian of the stores
✓ Correct
B
Once every fifty years
C
Only when a major fire occurs
D
By the storekeeper himself without witnesses
💡 Step-by-Step Explanation & Concept Rationale
Rule 151 mandates annual physical stock verification of all stores by an independent officer who is not the custodian or storekeeper, submitting a certificate to the controlling authority.
Q. 17 Office Governance
Difficulty: Medium (1 Mark)
Under GFR Rule 274, cashiers, storekeepers, and other public servants entrusted with the handling of cash or stores are required to:
A
Furnish a cash security deposit or fidelity guarantee bond from an approved insurance company
✓ Correct
B
Surrender their personal passport to the ministry
C
Work without annual earned leave
D
Purchase personal company shares
💡 Step-by-Step Explanation & Concept Rationale
GFR Rule 274 requires that every official entrusted with the custody of public money or stores must furnish adequate security or a fidelity bond to protect the state against fraud or embezzlement.
Q. 18 Office Governance
Difficulty: Hard (1 Mark)
In public works and infrastructure execution under GFR, what is the distinction between 'Administrative Approval' and 'Technical Sanction'?
A
Administrative Approval is the formal acceptance of the project and financial commitment by the administrative ministry; Technical Sanction is the approval of the detailed design, engineering drawings, and structural estimates by the technical engineering authority
✓ Correct
B
Administrative approval is given by engineers; Technical sanction is given by accountants
C
Technical sanction is required only for military projects
D
Both are identical terms with no legal difference
💡 Step-by-Step Explanation & Concept Rationale
Administrative Approval is the executive concurrence to incur expenditure on a project; Technical Sanction (TS) certifies that structural drawings and cost estimates are technically sound and accurate.
Q. 19 Office Governance
Difficulty: Easy (1 Mark)
In public works accounting under GFR, which document is used to record the daily attendance and wage payments of casual labor employed on a job?
A
Muster Roll
✓ Correct
B
Measurement Book
C
Cash Book
D
Pass Book
💡 Step-by-Step Explanation & Concept Rationale
The Muster Roll is the initial nominal record used on construction sites to record the daily attendance, days worked, wage rates, and acknowledgments of casual daily-wage laborers.
Q. 20 Office Governance
Difficulty: Easy (1 Mark)
In public works and engineering accounting, in which vital statutory register must all physical measurements of work executed by a contractor be recorded before payment?
A
Measurement Book (MB)
✓ Correct
B
Section Diary
C
Cash Book
D
Precedent Book
💡 Step-by-Step Explanation & Concept Rationale
The Measurement Book (MB) is the fundamental basis of all contractor payments in engineering and civil works, recording exact on-site measurements attested by the Sub-Divisional Officer (SDO).
Q. 21 Office Governance
Difficulty: Easy (1 Mark)
Under the General Provident Fund (Federal Services) Rules, what is the nature of the GP Fund?
A
A compulsory, interest-bearing contributory savings scheme for permanent civil servants where monthly deductions are made from salary and accumulated with interest/profit payable on retirement
✓ Correct
B
A voluntary lottery scheme
C
A commercial health insurance plan
D
A tax collected by the provincial government
💡 Step-by-Step Explanation & Concept Rationale
The GP Fund is a statutory provident fund where monthly subscriptions are deducted from civil servants' pay and refunded with accrued profit upon retirement (or earlier as non-refundable advances after age 45/50).
Q. 22 Office Governance
Difficulty: Medium (1 Mark)
Under General Provident Fund rules, a civil servant who has attained what age is permitted to draw a 'Non-Refundable Advance' from his GP Fund balance?
A
Forty-five (45) or fifty (50) years of age (or completed 15 years service)
✓ Correct
B
Eighteen years of age immediately
C
Only on the day of death
D
Seventy years
💡 Step-by-Step Explanation & Concept Rationale
Under GPF rules, a subscriber who has completed 15 years of service or reached age 45/50 can draw non-refundable advances for house building, children's marriage, or medical emergency without repayment obligation.
Q. 23 Office Governance
Difficulty: Medium (1 Mark)
Under the Public Finance Management (PFM) Act 2019, who is responsible for establishing an effective internal control and risk management framework in every public entity?
A
The Principal Accounting Officer (PAO)
✓ Correct
B
The Public Accounts Committee
C
The State Bank Governor
D
The Secretary Law
💡 Step-by-Step Explanation & Concept Rationale
Section 32 of the PFM Act 2019 places explicit statutory responsibility on the Principal Accounting Officer to design, establish, and maintain an internal control framework in the ministry.
Q. 24 Office Governance
Difficulty: Hard (1 Mark)
Under the PFM Act 2019, 'Commitment Accounting' is designed to:
A
Record financial obligations, contracts, and purchase orders at the time they are entered into, preventing ministries from overcommitting beyond authorized budgetary grants
✓ Correct
B
Record moral commitments made by politicians during election speeches
C
Track the emotional loyalty of employees
D
Record private bank overdraft facilities
💡 Step-by-Step Explanation & Concept Rationale
Commitment accounting tracks procurement contracts and orders as soon as commitments are made, ensuring uncommitted budget balances are not exceeded prior to actual billing.
Q. 25 Office Governance
Difficulty: Medium (1 Mark)
Under GFR, all vouchers for expenditure incurred must be retained by the DDO and accounts office for how many years before destruction?
A
Five (5) to ten (10) years (or until completed audit by the Auditor General, whichever is later)
✓ Correct
B
One month only
C
One hundred years
D
They must be destroyed within 24 hours
💡 Step-by-Step Explanation & Concept Rationale
Under GFR Appendix 17 (Destruction of Records), expenditure vouchers must be retained for at least 5 to 10 years and cannot be destroyed until all audit objections relating to them have been settled.
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