Department of Expenditure Issues New Guidelines to Prevent Excess Payments to Government Employees – Mandatory Pay Audit and Pension Verification
# Department of Expenditure Issues Guidelines to Prevent Wrongful or Excess Payments to Government Employees
The Ministry of Finance, Department of Expenditure, Government of India, has issued an Office Memorandum prescribing measures to prevent wrongful or excess payments made to Government servants and to strengthen internal controls relating to pay fixation, service verification and retirement benefits.
The Office Memorandum, bearing No. **09/01/2026-E.III(A)(5270509)**, was issued on **29 September 2026** from Kartavya Bhawan-I, New Delhi.
## Background of the Office Memorandum
The Department of Expenditure referred to the Department of Personnel and Training (DoPT) Office Memorandum dated 2 March 2016, issued in pursuance of the judgment of the Hon’ble Supreme Court in *State of Punjab & Others v. Rafiq Masih (White Washer)*.
The Department noted that a large number of proposals are received seeking waiver of recovery of excess payments made to Government employees, particularly due to incorrect pay fixation, grant of increments and ACP/MACP benefits.
In several cases, such excess payments are detected only when employees are nearing retirement or within one year of retirement, creating difficulties in recovering the amounts under the applicable instructions.
To address this issue, the Department of Expenditure, in consultation with the Controller General of Accounts (CGA), has prescribed measures to strengthen internal controls and ensure timely settlement of retirement benefits.
## Key Instructions for Ministries and Departments
The Office Memorandum advises all Ministries, Departments, attached and subordinate offices to implement the following measures:
### 1. Audit of Pay Fixation Orders
All pay fixation orders issued on account of promotion, ACP/MACP, financial upgradation, increments or any other revision of pay must be audited by the Internal Audit Wing and/or the concerned Pay and Accounts Office.
Such audits must be completed within three months of the issue of the order or by the end of the financial year, whichever is later. Regular promotion orders may be marked to the Departmentalised Accounts Organisation in the Ministry.
### 2. Periodic Verification of Qualifying Service
The qualifying service of every Government servant must be verified periodically in accordance with Rule 30 of the CCS (Pension) Rules, 2021. Any omissions or discrepancies identified in service records must be rectified promptly.
### 3. Priority Review of Employees Nearing Retirement
For Government servants due to retire within the next four years, all pay fixation orders, financial upgradations, service books, qualifying service and emoluments must be comprehensively reviewed immediately on priority, in accordance with the DoPT Office Memorandum dated 3 October 2022.
### 4. Verification Before Processing Pension Papers
The Head of Office must ensure strict compliance with Rule 57 of the CCS (Pension) Rules, 2021, by completing the verification of service records, qualifying service, emoluments and other pension-related records before initiating and forwarding pension papers to the Accounts Office.
### 5. Immediate Rectification of Audit Deficiencies
Any deficiencies identified during internal audit or verification must be rectified immediately. Appropriate corrective measures must also be introduced to prevent similar lapses from recurring.
### 6. Monitoring Mechanism
All Ministries and Departments must establish an appropriate monitoring mechanism to ensure compliance with the prescribed instructions. The status of audits of pay fixation orders and verification of qualifying service must be reviewed periodically, particularly for employees approaching retirement.
### 7. Mandatory Audit Certificate
The Internal Audit Wing and/or the concerned Pay and Accounts Office must mandatorily issue a formal certificate confirming completion of the required audit and verification in accordance with the applicable instructions.
The concerned CCA/CA will be responsible for overseeing the entire process and issuing the certificate confirming the correctness of pay fixation.
If any discrepancy or excess payment is detected at a later stage in a pay fixation order that has already been certified, responsibility will be fixed on the concerned Pay and Accounts Office and/or CCA/CA.
### 8. Verification at the Time of Retirement
A similar comprehensive validation and formal certificate must be mandatorily carried out by the Internal Audit Wing and/or the concerned Pay and Accounts Office during the final verification of service records and emoluments, **48 months before the date of retirement**.
If any discrepancy, omission or erroneous calculation is detected after this final clearance, administrative and financial accountability will be fixed on the concerned Pay and Accounts Office, CCA or CA responsible for verification.
### 9. No Recovery After Certificate of Correctness of Pay
The memorandum further provides that, upon issuance of the Certificate of Correctness of Pay, no recovery of any nature may be effected from the employee in respect of the period covered by the certificate.
Any loss to the exchequer arising from a wrong fixation of pay may instead be recovered from the office that approved the issuance of the certificate.
## Responsibility of Administrative and Accounts Authorities
The instructions emphasize accountability at every stage of pay fixation, audit and pension processing. Ministries and Departments are expected to ensure that discrepancies are identified and corrected well before retirement, reducing the possibility of excess payments being detected at the final stage of an employee’s service.
The Office Memorandum has been issued with the approval of the competent authority and addressed to all Secretaries and Financial Advisers of Ministries and Departments.
**Reference:** Government of India, Ministry of Finance, Department of Expenditure, Office Memorandum No. 09/01/2026-E.III(A)(5270509), dated 29 September 2026.