Administrative Officer and Procurement Ethics

(a) Options available with Rajesh in the above situation:

Rajesh has several options, each with its own set of potential consequences:

• Option 1: Comply with the boss's indirect instruction and split the expenditure.
  • Action: Instruct the office to divide the Rs. 35 Lakhs purchase into smaller orders, each below Rs. 30 Lakhs, to avoid seeking sanction from the next higher authority.
  • Pros: Potentially pleases his immediate superior, possibly securing a good ACR and aiding his promotion prospects.
  • Cons: Violates General Financial Rules (GFRs) and CVC guidelines, making him liable for adverse audit observations, disciplinary action, and reputational damage. It normalizes an unethical practice.
• Option 2: Follow rules and seek sanction from the next higher authority (Rajesh's boss).
  • Action: Process the Rs. 35 Lakhs purchase as a single transaction and forward it to his immediate superior for sanction, as per GFRs.
  • Pros: Adheres to rules, upholds integrity and transparency. Protects him from audit objections.
  • Cons: Might displease his immediate superior who expected him to manage it at his level, potentially leading to a negative ACR, hindering promotion, and creating a strained working relationship.
• Option 3: Inform the boss about the rules and the risks of splitting expenditure.
  • Action: Discreetly approach his immediate superior, explain the GFRs regarding expenditure limits, the prohibition against splitting, and the potential adverse audit consequences. Suggest alternative, rule-compliant procurement methods.
  • Pros: Upholds rules, demonstrates professional courage and knowledge. Gives the boss an opportunity to correct course without direct confrontation.
  • Cons: His superior might still perceive this as insubordination or a lack of initiative, impacting Rajesh's ACR and promotion. The boss might insist on the unethical practice.
• Option 4: Escalate the matter to a higher authority or vigilance.
  • Action: If the boss insists on splitting the expenditure after being informed, Rajesh could discreetly bring the matter to the attention of the next higher authority (above his boss) or the vigilance department, documenting the communication.
  • Pros: Upholds the highest standards of integrity and adherence to rules.
  • Cons: High risk of direct confrontation, potential for retaliation ("whistleblower" retribution), and severely damaging his career, even if he is in the right. This is usually a last resort.

(b) Ethical Issues involved in this case:

The case involves several critical ethical issues that underscore the complexities faced by public servants:

• Integrity and Honesty: The practice of splitting expenditure is a direct violation of GFRs and an act of dishonesty, aiming to circumvent established financial controls. Rajesh's integrity is challenged.
• Accountability and Transparency: Circumventing financial rules reduces accountability and transparency in public procurement. Splitting purchases obfuscates the true value and nature of the transaction, making it harder to audit and scrutinize.
• Rule of Law vs. Expediency: Rajesh faces a dilemma between adhering strictly to the prescribed rules (GFRs) and acting expediently to please his boss and ensure his promotion.
• Conflict of Interest: Rajesh's personal interest in securing a good ACR and promotion clashes with his official duty to uphold financial propriety and public interest.
• Moral Courage: It requires moral courage for Rajesh to resist an unethical directive, especially when it comes from a superior who directly influences his career.
• Organizational Culture and Systemic Corruption: The mention of "common practice of splitting of expenditure" indicates a deeper systemic issue within the organization, where unethical practices have become normalized.
• Duty vs. Loyalty: Rajesh's duty is to the organization and its rules, but he also faces pressure to show loyalty to his immediate superior.
• Public Trust: Any act that undermines financial rules erodes public trust in the administration and its processes.

(c) Most appropriate option for Rajesh and why:

The most appropriate option for Rajesh would be Option 3: Inform the boss about the rules and the risks of splitting expenditure, followed by Option 2 if Option 3 is unsuccessful.

Why this is the most appropriate option:

1. Upholding Rule of Law: As a public servant, Rajesh has a fundamental duty to uphold the law and rules, particularly the GFRs which govern financial propriety. Rule 157 of the General Financial Rules (GFR) 2017 explicitly states that "A demand for goods should not be divided into small quantities to make piecemeal purchases to avoid the necessity of obtaining the sanction of higher authority required with reference to the estimated value of the total demand." Violating this would attract adverse audit comments and potential disciplinary action, as highlighted by CVC guidelines on public procurement that emphasize transparency and fair practices.
2. Protecting Organizational Interest: Splitting expenditure exposes the organization to audit objections, penalties, and reputational damage. Rajesh, as an Administrative Officer, is responsible for ensuring smooth functioning and adherence to norms. Preventing such a violation protects the organization.
3. Demonstrating Professionalism and Moral Courage: Approaching the boss (Option 3) demonstrates professionalism by educating the superior about the correct procedure and the associated risks. It shows moral courage without being overtly confrontational. This approach allows the boss an opportunity to reconsider their instruction in light of the rules, potentially saving face for both.
4. Minimizing Personal Risk (Initially): This option attempts to resolve the issue internally and amicably first. It's less confrontational than direct escalation (Option 4) and offers a chance to comply with rules while managing the superior's expectations. If the boss insists, then proceeding with Option 2 (seeking sanction) would still be a rule-compliant action.
5. Long-term Credibility: While a good ACR is important for promotion, maintaining integrity and upholding rules builds long-term credibility and a strong ethical foundation, which are invaluable for any public servant. A promotion gained through unethical means could lead to future vulnerabilities and compromise.

If the boss rejects the explanation and insists on splitting, Rajesh should proceed with Option 2: Follow rules and seek sanction from the next higher authority. He should document his communication with his immediate superior regarding the rules and the attempt to split the expenditure. This ensures he has a record of his efforts to comply with rules and resist unethical pressure. While this might lead to a negative ACR in the short term, it protects his integrity and adherence to the rule of law, which is paramount for public service.