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Public Financial Management & General Financial Rules (GFR) (Public Administration) Solved Questions & Notes (2026) - Apex Rankers

Public Administration & Governance > Public Administration > Public Financial Management & General Financial Rules (GFR)

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Public Financial Management & General Financial Rules (GFR)

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Q. 1 Public Administration
Difficulty: easy (1 Mark)
What are the 'General Financial Rules' (GFR) of the Federal Government of Pakistan?
A
An insurance policy covering government buildings against fire
B
A list of income tax rates published for individual citizens
C
The statutory codification of rules, orders, and executive instructions governing the financial transactions, budget management, public expenditure, procurement, and accounting procedures of all Federal Ministries and Departments
✓ Correct
D
A private banking agreement signed with commercial banks
💡 Step-by-Step Explanation & Concept Rationale
GFR Volumes I and II form the fundamental financial operating manual regulating all financial commitments, custody of public funds, contracts, and stores in the Federal Government.
Q. 2 Public Administration
Difficulty: easy (1 Mark)
What is the foremost 'Principle of Financial Propriety' laid down in Rule 10 of the General Financial Rules (GFR)?
A
Every public officer is expected to exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money
✓ Correct
B
Award contracts to personal friends and business associates
C
Spend the entire allocated budget as quickly as possible without receipts
D
Ignore financial rules during the month of June each year
💡 Step-by-Step Explanation & Concept Rationale
Rule 10(1) of GFR establishes the universal fiduciary standard of prudence that every public servant must uphold when committing or disbursing state treasury funds.
Q. 3 Public Administration
Difficulty: easy (1 Mark)
According to the Principles of Financial Propriety (GFR Rule 10), when may a public officer exercise powers of sanctioning expenditure that directly or indirectly benefits themselves?
A
During national public holidays only
B
If approved orally by a subordinate colleague
C
Whenever the officer needs extra personal cash for travel
D
Under NO circumstances whatsoever (no authority may pass an order that will be directly or indirectly to its own advantage)
✓ Correct
💡 Step-by-Step Explanation & Concept Rationale
GFR Rule 10(3) strictly prohibits any public authority from sanctioning expenditure, allowances, or contracts that confer direct or indirect personal financial benefits onto itself.
Q. 4 Public Administration
Difficulty: medium (1 Mark)
Under GFR Rule 10, what is the rule regarding the sanctioning of allowances (e.g., traveling or conveyance allowance)?
A
The amount of allowances granted to an officer must be so regulated that the allowance is NOT on the whole a source of profit to the recipient
✓ Correct
B
Allowances should be maximized to double the officer's monthly salary
C
Allowances can be claimed without performing any official travel
D
Allowances must be paid exclusively in foreign currency
💡 Step-by-Step Explanation & Concept Rationale
Allowances are strictly compensatory in nature (reimbursing actual legitimate out-of-pocket expenses incurred in public service) and must never become an avenue for personal enrichment.
Q. 5 Public Administration
Difficulty: easy (1 Mark)
Who is designated as the 'Principal Accounting Officer' (PAO) for a Federal Ministry or Division under the Public Financial Management (PFM) Act, 2019?
A
The Governor of the State Bank of Pakistan
B
The Auditor General of Pakistan
C
The Chief Justice of Pakistan
D
The Secretary of the Ministry/Division
✓ Correct
💡 Step-by-Step Explanation & Concept Rationale
The Secretary of the Ministry/Division is the Principal Accounting Officer (PAO), personally accountable to the Public Accounts Committee (PAC) for financial propriety, budget execution, and internal controls.
Q. 6 Public Administration
Difficulty: medium (1 Mark)
What are the core statutory responsibilities of the Principal Accounting Officer (PAO) under the PFM Act 2019?
A
Ensuring that public funds allocated to the Ministry are spent strictly in accordance with approved budget, maintaining sound internal controls, preventing irregular expenditure, managing assets, and answering audit observations before the PAC
✓ Correct
B
Commanding federal law enforcement operations in districts
C
Managing private commercial bank accounts for personal investments
D
Drafting criminal penal codes for the Supreme Court
💡 Step-by-Step Explanation & Concept Rationale
The PAO holds ultimate fiduciary accountability for the regularity, legality, and propriety of all financial transactions within the ministry's administrative portfolio.
Q. 7 Public Administration
Difficulty: easy (1 Mark)
Who is a 'Drawing and Disbursing Officer' (DDO) in government financial administration?
A
A private contractor who receives payment checks
B
An architect who draws project blueprints
C
An external consultant who audits company tax returns
D
A gazetted public officer formally authorized and designated by the PAO/Head of Department to draw funds from the Public Treasury and make authorized disbursements on behalf of the government
✓ Correct
💡 Step-by-Step Explanation & Concept Rationale
DDOs hold specific financial powers to sign bills, issue checks, draw cash, maintain bill registers, and ensure all payments have valid sanction and supporting vouchers.
Q. 8 Public Administration
Difficulty: medium (1 Mark)
What is the 'Public Financial Management (PFM) Act, 2019' designed to achieve in Pakistan?
A
To establish a modern, transparent, and disciplined public financial management system, institute a Single Treasury Account (TSA), regulate budget execution, strengthen internal controls, and enforce financial accountability
✓ Correct
B
To privatize all federal government hospitals and schools
C
To eliminate all pensions for retired civil servants
D
To abolish the Federal Board of Revenue
💡 Step-by-Step Explanation & Concept Rationale
Enacted in 2019, the PFM Act modernized Pakistan's public finance architecture, standardizing budget formulation, cash management, and fiscal risk disclosure.
Q. 9 Public Administration
Difficulty: medium (1 Mark)
What is a 'Treasury Single Account' (TSA) mandated by the PFM Act 2019?
A
A single bank account owned by the Prime Minister
B
A consolidated bank account (or linked structure of accounts) maintained at the State Bank of Pakistan through which the government transacts all its receipts and payments, eliminating commercial bank idle cash balances
✓ Correct
C
A credit card issued to all government officers
D
A savings account used for employee holiday loans
💡 Step-by-Step Explanation & Concept Rationale
TSA provides complete centralized visibility of sovereign cash balances at the State Bank of Pakistan, preventing ministries from parking billions of unspent public rupees in private commercial banks.
Q. 10 Public Administration
Difficulty: medium (1 Mark)
What is the role of the 'Chief Finance and Accounts Officer' (CFAO) established in each Federal Ministry under the PFM reforms?
A
To serve as the private secretary to the Federal Minister
B
To provide specialized, independent financial advice to the Principal Accounting Officer (PAO), supervise budget preparation, monitor expenditure, oversee internal audit, and ensure compliance with GFR and PFM rules
✓ Correct
C
To conduct physical construction work on highway projects
D
To manage media public relations and press briefings
💡 Step-by-Step Explanation & Concept Rationale
CFAOs replaced the former external Financial Advisor scheme, institutionalizing dedicated professional financial and accounting advice directly within each ministry.
Q. 11 Public Administration
Difficulty: medium (1 Mark)
What is 'Medium Term Budgetary Framework' (MTBF) in national budgeting?
A
A system where budget numbers are kept secret from Parliament
B
A short-term loan taken from commercial pawnshops
C
A multi-year rolling budget framework (typically 3 years) that links annual budget allocations directly to strategic sectoral policies, measurable outputs, and medium-term macroeconomic fiscal ceilings
✓ Correct
D
A budget formulated exclusively for a single month
💡 Step-by-Step Explanation & Concept Rationale
MTBF shifts public budgeting from rigid historical incrementalism to strategic, performance-based multi-year planning with defined performance indicators (KPIs).
Q. 12 Public Administration
Difficulty: easy (1 Mark)
What is the 'Budget Call Circular' (BCC) issued by the Ministry of Finance?
A
A newspaper advertisement announcing new government jobs
B
A notice terminating all temporary government employees
C
An urgent phone call inviting ministers to a cabinet dinner
D
The official annual directive that initiates the national budget formulation process, providing macroeconomic assumptions, budget preparation guidelines, forms, and indicative budget ceilings to all ministries
✓ Correct
💡 Step-by-Step Explanation & Concept Rationale
Issued around October/November each year, the BCC instructs Principal Accounting Officers on formulating their Budget Estimates and Revised Estimates for the upcoming fiscal year.
Q. 13 Public Administration
Difficulty: medium (1 Mark)
What are 'Budget Estimates' (BE) vs 'Revised Estimates' (RE) in government accounting?
A
There is no difference between the two terms
B
Budget Estimates are the projected revenues and expenditures formulated for the upcoming next financial year; Revised Estimates are the updated, realistic estimates of expenditures and receipts for the CURRENT ongoing financial year based on actual trends
✓ Correct
C
BE is for foreign loans; RE is for domestic taxes
D
BE is prepared by private firms; RE is prepared by the Prime Minister
💡 Step-by-Step Explanation & Concept Rationale
During mid-year budget review, ministries submit Revised Estimates (RE) reflecting actual expenditure incurred during the first 6 months and anticipated spending for the remaining half-year.
Q. 14 Public Administration
Difficulty: easy (1 Mark)
What is a 'Supplementary Grant' in public financial administration?
A
An additional budget appropriation sanctioned by the government during the course of a financial year when the original approved budget under a specific grant is found insufficient to meet unforeseen or enhanced expenditure
✓ Correct
B
A scholarship awarded to children of civil servants
C
A loan granted by the World Bank for private corporations
D
A foreign aid gift presented by a visiting foreign diplomat
💡 Step-by-Step Explanation & Concept Rationale
When unexpected emergencies or policy decisions exceed sanctioned grants, the Ministry of Finance issues Supplementary Grants, which are formally laid before the National Assembly for ex-post approval.
Q. 15 Public Administration
Difficulty: medium (1 Mark)
What is a 'Technical Supplementary Grant' (TSG)?
A
A grant that requires no documentation or accounting vouchers
B
A grant used exclusively for buying engineering software
C
A grant awarded to technical polytechnic colleges
D
A supplementary grant that involves NO addition to total government expenditure, formed by surrendering equivalent funds from one budget grant and reallocating them to another grant facing a deficit
✓ Correct
💡 Step-by-Step Explanation & Concept Rationale
A Technical Supplementary Grant is fiscally neutral (net impact = zero) because it is fully funded through corresponding budgetary surrenders elsewhere.
Q. 16 Public Administration
Difficulty: medium (1 Mark)
What is 'Re-appropriation' of funds in government budgeting?
A
The transfer of budgeted funds from one Primary/Secondary Unit of Appropriation to another unit within the SAME sanctioned grant, authorized by the competent financial authority under DFPR rules
✓ Correct
B
Transferring funds to a private commercial corporation
C
Refunding unspent taxes directly to citizens
D
Printing new currency notes to pay off budget deficits
💡 Step-by-Step Explanation & Concept Rationale
Re-appropriation allows operational flexibility to cover deficits in one expenditure head by utilizing validated operational savings in another head within the same ministry grant.
Q. 17 Public Administration
Difficulty: hard (1 Mark)
Under Federal Financial Rules, which of the following Re-appropriations is STRICTLY PROHIBITED without the express concurrence of the Finance Division?
A
Re-appropriation of funds from a Development Budget Grant to a Non-Development (Current/Operational) Budget Grant
✓ Correct
B
Re-appropriation between office machinery repair heads
C
Re-appropriation between two office stationery sub-heads
D
Re-appropriation between office utility electricity and gas bills
💡 Step-by-Step Explanation & Concept Rationale
Development capital funds cannot be diverted to finance recurrent operational expenses or salaries, nor can funds be re-appropriated to create new posts or introduce new services without Finance Division approval.
Q. 18 Public Administration
Difficulty: easy (1 Mark)
What is 'Appropriation Act' passed by the National Assembly under Article 83 of the Constitution?
A
An act establishing national sports stadiums
B
An act declaring war against foreign nations
C
The sovereign statutory act of Parliament that legally authorizes the government to withdraw and spend specified sums of money from the Federal Consolidated Fund for the services of the financial year
✓ Correct
D
An act regulating the behavior of police officers
💡 Step-by-Step Explanation & Concept Rationale
Under the Constitution, not a single rupee can be withdrawn from the Federal Consolidated Fund without express legal authority granted via the Annual Appropriation Act (the Budget).
Q. 19 Public Administration
Difficulty: easy (1 Mark)
What constitutes the 'Federal Consolidated Fund' (FCF) under Article 78 of the Constitution of Pakistan?
A
Money held in private commercial bank accounts of ministers
B
All revenues received by the Federal Government, all loans raised by that Government, and all moneys received by it in repayment of any loan
✓ Correct
C
Donations collected by charitable non-profit NGOs
D
The pension funds of private corporate companies
💡 Step-by-Step Explanation & Concept Rationale
The Federal Consolidated Fund is the sovereign national treasury account; all state taxes, customs duties, non-tax revenues, and sovereign borrowings flow directly into the FCF.
Q. 20 Public Administration
Difficulty: medium (1 Mark)
What is the 'Public Account of the Federation' under Article 78(2) of the Constitution?
A
A list of citizens registered to vote in elections
B
All other public moneys received by or deposited with the Federal Government (e.g. security deposits, judicial court deposits, Provident Funds, postal savings) that do NOT form part of the Federal Consolidated Fund
✓ Correct
C
The official Twitter account of the Prime Minister
D
A public park in Islamabad maintained by the government
💡 Step-by-Step Explanation & Concept Rationale
The Public Account holds fiduciary trust funds where the government acts as a custodian (e.g. employee GPF, contractor bid securities), rather than sovereign tax revenues.
Q. 21 Public Administration
Difficulty: medium (1 Mark)
What is the difference between 'Charged Expenditure' and 'Voted Expenditure' in the Federal Budget?
A
Charged expenditure is paid in cash; Voted is paid by bank check
B
Charged Expenditure (e.g. salaries of President, Judges of Supreme Court, Chief Election Commissioner, debt servicing) is discussed in the National Assembly but NOT submitted to vote; Voted Expenditure must be voted upon and approved by the Assembly through Demands for Grants
✓ Correct
C
Charged expenditure is illegal; Voted is legal
D
Charged applies to provincial budgets; Voted applies to federal budgets
💡 Step-by-Step Explanation & Concept Rationale
Under Article 81 and 82 of the Constitution, constitutional office holders' salaries and sovereign debt repayments are 'charged' to ensure institutional independence and sovereign debt sanctity.
Q. 22 Public Administration
Difficulty: easy (1 Mark)
What is the constitutional status and independence of the 'Auditor General of Pakistan' (AGP) under Article 168 of the Constitution?
A
An independent constitutional officer appointed by the President, with security of tenure matching a Judge of the Supreme Court, removable only through the Supreme Judicial Council under Article 209
✓ Correct
B
A political minister appointed by the ruling party
C
A civil servant who can be transferred or fired by the Secretary of Finance at any time
D
A private chartered accountant hired on a one-year contract
💡 Step-by-Step Explanation & Concept Rationale
The AGP's constitutional autonomy ensures independent, fearless oversight and auditing of public expenditures across all federal, provincial, and statutory public bodies.
Q. 23 Public Administration
Difficulty: easy (1 Mark)
What are the statutory functions and powers of the Auditor General of Pakistan under Article 169 and 170 of the Constitution and the AGP Ordinance, 2001?
A
To audit all accounts of the Federation, the Provinces, and any authority or body established by the Federation or a Province, determining the scope and extent of such audit, with full statutory access to all books, vouchers, and records
✓ Correct
B
To manage police criminal investigations
C
To collect taxes from private corporations
D
To set interest rates for commercial banks
💡 Step-by-Step Explanation & Concept Rationale
The AGP holds absolute statutory authority to inspect any government office, demand financial records, and scrutinize every public financial commitment for legality, regularity, and value for money.
Q. 24 Public Administration
Difficulty: easy (1 Mark)
Under Article 171 of the Constitution of Pakistan, to whom does the Auditor General submit the Annual Audit Reports?
A
To the President (for federal accounts) and the respective Governor (for provincial accounts), who shall cause them to be laid before the National Assembly and Provincial Assemblies respectively
✓ Correct
B
To international commercial rating agencies
C
To the Supreme Court of Pakistan directly
D
To the Prime Minister privately for secret archiving
💡 Step-by-Step Explanation & Concept Rationale
Audit reports are submitted constitutionally to the head of state, who transmits them to Parliament where they are referred directly to the Public Accounts Committee (PAC).
Q. 25 Public Administration
Difficulty: easy (1 Mark)
What is a 'Compliance with Authority Audit' (Regularity Audit) conducted by the AGP?
A
A check on whether office air conditioners are working
B
An audit to verify whether public expenditures and revenues have been incurred or collected in strict accordance with the Constitution, statutory Acts, financial rules (GFR), delegated powers, and procurement regulations
✓ Correct
C
An audit of private family bank accounts of civil servants
D
An inspection of employee physical fitness and health records
💡 Step-by-Step Explanation & Concept Rationale
Regularity audit examines financial compliance: verifying that expenditure had legislative appropriation, competent administrative sanction, and valid supporting vouchers.
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