A:
If the case is as you have mentioned above, this transaction is not permissible, because
the accountant is not entitled to use the money entrusted to him by the department. The accountant is a trustee who should not use what he is entrusted with. Moreover, the extra amount he demands from the borrower is not lawful for him, since it is paid in return for impermissible work, i.e. lending people's money without their permission. Also, he is not permitted to take the extra amount if he lends it from his own money, because the increase (Part No. 23; Page No. 478) put as a condition on the loan is obvious Riba (usury/interest) which is prohibited by the texts of the Qur'an and Sunnah. It is obligatory upon the accountant to guard the money entrusted to him until he returns it to its owner. Similarly, it is not permissible for the employee to borrow from that money since the creditor does not own that money, nor is he given permission to use it. Both of them must repent to Allah and avoid doing this again.May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.