Finance (Works & Projects) Department STUDY MATERIAL WORKS
1. Chapter 1 - Organisational Set Up 2. Chapter 2 - Budget-ramchander goud 3. Chapter 3 WORKS 1. Scrutiny of Estimates WORKS 2. Scrutiny of Agreements WORKS 3. Execution of Public Works WORKS 4. Scrutiny of Work Bills WORKS 5. Works in Forest Department WORKS Annexure-I Check Slip for Work Bills WORKS Annexure-II Model of Note on Work Bills WORKS- 2A-EPC 4. Chapter 4 – Payment Procedures 5. Chapter 6 - Audit
Chapter-I CHAPTER – I ORGANISATIONAL SETUP DEVOLUTION RULES Sub-section (I) of Section 45 (a) of the Government of India Act reads:- 45 –A (I) Provision may be made by rules under this Act:- (a) for classification of subjects in relation to the functions of the Government, as Central and State subjects, for the purpose of distinguishing the functions of the State Governments and State Legislatures from the functions of the President and Parliament; (b) for the devolution of the authority in respect of the State subjects to State Governments, and for the allocation of revenues or other money to those Governments (c) for transfer from among the State subjects, of subjects to the (c) for the use under the authority of the President of the agency of the State Governments in relation to Central subjects, in so far as such agency may be found to be convenient, and for determining the financial conditions of such agency; and (d)administration of the Governor acting with the Ministers appointed under this Act , and for allocation of revenues or moneys for the purpose of such administration. TERMINOLOGY 3. Administrative Approval This term denotes the formal acceptance, by the administrative department concerned, of the proposals for incurring any expenditure in the Public Works Department on a work initiated by, or connected with, the requirements of such administrative department. It is, in effect, an order to the Public Works Department to execute certain specified works at a stated sum to meet the administrative needs of the department requiring the work 64. Technical Sanction This name is given to the order of competent authority sanctioning a properly detailed estimate of the cost of a work of construction or repair proposed to be carried out in the Public Works Department. Ordinarily such sanction can only be accorded by the Government in the Public Works Department or by such authorities of the department to whom the power has been delegated by the Government. Sanction accorded to a work by any other department of Government is regarded merely as an administrative approval of the work.
Chapter-I 69. Works The term ‘work’ when by itself, is used in a comprehensive sense, and applies not only to work of construction or repair, but also to other individual objects of expenditure, connected with the supply, repair and carriage of tools and plant, the supply or manufacture of other stores, or the operations of a workshop. 4. Advance Payment Advance payment means a payment made on a running account to a piece-work contractor for the work done by him but not measured – vide paragraph 313. All intermediate payments made in the case of contracts based on the lump sum tender system as defined in A.P Detailed Standard Specifications are also treated as advance payment – vide paragraph 303 (c). 42. On Account Payment or Payment on Account On Account payment or payment on Account means a payment made, on a running account to a contractor in respect of work done or supplies made by him and duly measured. Such a payment may or may not be for the full value of work or supplies. If it is an intermediate payment, it is subject to the final settlement of the running account on the completion of the contract for the work or supplies 30. Intermediate Payment Intermediate Payment is a term applied to a disbursement of any kind on a running account, not being the final payment. It includes an “advance payment” an an “on account payment (other than the final payment on a running account)” or a combination of these. 24. Final Payment Final Payment means the last payment on a running account made to a contractor on the completion or determination of his contract and in full settlement of the account. 52. Recoverable Payment Recoverable Payment means the payment made on behalf of a contractor which does not represent value creditable or payable to him for work done or supplies made by him and have therefore to be made good to government by an equivalent cash recovery or short payment of dues.
Chapter-I 12. Contract and Contractor The term contract, as used in this Code, means any kind of undertaking, written or verbal, express or implied, by a person, not being a Government servant, or by a syndicate or firm, for the construction, maintenance or repairs of one or more works, for the supply of materials, or for the performance of any service in connection with the execution of works or the supply of materials. The term Contractor means a person, syndicate or form that has made such an undertaking, but often its use is restricted to contractors for the execution of works or for services in connection therewith. 9. Book Transfer This term is applied to the process whereby financial transactions which do not involve the giving or receiving of Cash, or of Stock materials, are brought to account. Such transactions may either affect the book of a single accounting officer, or they may involve operation on the books of more than one accounting officer, whose accounts are ultimately incorporated in the accounts of Government. They usually represent liabilities and assets of Government brought to account either by way of settlement or otherwise, but they may also represent corrections and amendments made in Cash, Stock, or Book Transfer tractions previously taken into account. 18. Direct and Indirect Charges Direct Charges as distinguished from “Indirect Charges” are applied to those charges pertaining to a work, project or job, which are directly incurred for its execution and are included in the regular accounts of it. Indirect Charges are incidental to a work, project, and workshop job or manufacture job, but which are not incurred directly and solely in connection therewith and thus cannot be directly taken into such detailed accounts of it as are incorporated in the regular accounts of the expenditure of the department. 49. Rate In estimates of cost, contracts, contractor’s bills and vouchers generally, rate means the consideration allowed for each unit of work, supply or other service. Except in the case of lump sum contracts, every bill or other demand for payment should, as far as possible, set forth the unit rate at which the payment is to be made.
Chapter-I . Appropriation An amount required to meet a charge on the Consolidated Fund of the state in accordance with the provisions of the Constitution. INTRODUCTION This chapter is intended to briefly introduce the hierarchy, administrative and executive functions of the officers and other staff of Works Accounts, Irrigation, Roads & Buildings, Public Health, Panchayatraj and Forest Departments. This chapter is intended to briefly introduce the hierarchy, administrative and executive functions of the officers and other staff of Works Accounts, Irrigation, Roads & Buildings, Public Health, Panchayatraj and Forest Departments. The Pay & Accounts Office of Works Accounts Department functions as pre- check cum Treasury Office in respect of offices under its payment jurisdiction. The objective of this department is to relieve the executive officers from office work so as to enable them to utilize their skills in the fieldwork and also to regulate payments as per rules, duly maintaining accounts, and avoid possible objections from statutory audit. The hierarchy is as noted below. HIERARCHY HON’BLE MINISTER FOR FINANCE PRINCIPAL SECRETARY (W&P) DIRECTOR OF WORKS ACCOUNTS JOINT DIRECTOR OF WORKS ACCOUNTS PAY&ACCOUNTS OFFICER/ASSISTANT PAY&ACCOUNTS OFFICER DIVISIONAL ACCOUNTS OFFICER (WORKS) Gr.I/Gr.II SUPERINTENDENT
Chapter-I The overall administrative control at first level over the works accounts organization vests with the Principal Secretary (W&P) Finance Department. The Officers from the cadre of Director of Works Accounts to PAO/APAO are under his administrative control. The Divisional Accounts Officers Gr. II & I are under the administrative control of the Director of Works Accounts. The Superintendents and other sub-ordinate staff are under the administrative control of the Joint Director Of Works Accounts. A Minister heads each P.W.Department and the executive head of the department in respect of P.W.D is the Engineer-in-Chief of the concerned department. In respect of Forest department the executive head is the Principal Chief Conservator of Forests. Usually a senior most Engineer-in-Chief is in charge of administration of the concerned department and other Engineers-in-Chief, or Chief Engineers are allocated different subjects such as Major, Medium, and Minor Irrigation independently to each of them in Similarly in R&B Department subjects like Roads, Buildings, and National Highways are allocated to different E-in-Cs/CEs. The same procedure is followed in Public Health and Panchayatraj also. Thus the executive head of the department is the E-in-C/CE under whom different Superintending Engineers work. The organizational flow chart is as follows. ENGINEER-IN-CHIEF SUPERINTENDING ENGINEER EXECUTIVE ENGINEER DEPUTY EXECUTIVE ENGINEER ASSISTANT EXECUTIVE ENGINEER/ASSISTANT ENGINEER WORKCHARGED ESTABLISHMENT FUNCTIONS The broad functions of various officers indicated above are as described below. CHIEF ENNGINEERS: - (i) Administrative approval up to certain limits. (ii) Highest Technical Sanctioning Authority (iii) Preparation of Budget for his department. (iv) Inspection of works of specified value for according Technical Sanction. (v) Can modify specifications in A.P.S.S except preliminary specifications. (vi) Approval of Observed Data where standard data is not applicable. (vii) Responsible for structural designs. (viii) Can accept tenders up to prescribed limits.
Chapter-I (ix) Re-appropriation of funds up to prescribed limits. (x) Extension of time up to 6 months with liquidated damages in EPC works (xi) Project profile and basic parameters approval for EPC works costing more than Rs.50 lakhs but up to Rs.200 lakhs. SUPERINTENDING ENGINEERS: - (i) Administrative Approval up to certain limits. (ii) Technical Sanction up to certain limits. (iii) Preparation of Budget for his Circle. (iv) Inspection of works of specified value for according Technical Sanction. (v) Can accept Tenders up to prescribed limits. (vi) Highest Agreement concluding authority. (vii) Head of the administrative unit in the department. (viii) Can sanction photographic charges. (ix) Has to check measure the works costing more than Rs.50 lakhs. (x) Appointing authority for work-charged establishment for skilled class III and above. (xi) Responsible for realization of revenue. (xii) “Employer” in EPC contracts (xiii) Project profile and basic parameters approval for EPC works costing up to Rs.50 lakhs. EXECUTIVE ENGINEERS: - (i) Administrative Approval up to certain limits. (ii) Technical sanction up to certain limits. (iii) Preparation of Budget for his Division. (iv) Inspection of works of specified value for according Technical Sanction. (v) Can accept Tenders up to prescribed limits. (vi) Can conclude agreements up to Rs.10 lakhs plus excess that can be passed by him over the T.S subject to the limits powers of technical sanction. (vii) Has to check measure the works costing Rs.5 lakhs and above. (viii) Appointing authority for work-charged establishment up to skilled class IV. (ix) Has to inspect the buildings of specified value annually. (x) Has to prevent encroachment of vacant lands. (xi) Has to assess the revenue to be realized in the division. (xii) Has to maintain the initial accounts in the division properly without falling into arrears. (xiii) Has to inspect, report, and suggest measures for preservation of historical monuments. (xiv) Highest quality control authority vide clause 27 © of P.S to A.P.S.S (xv) Engineer-in-Charge in EPC works
Chapter-I DIVISIONAL ACCOUNTS OFFICER (WORKS): - (i) Internal Checker charged with the responsibility of applying certain preliminary checks to vouchers, initial accounts etc., (ii) Financial Assistant and Advisor to the Executive Engineer, in all matters relating to accounts and Budget matters, and operation financial rules generally. (iii) Custodian of Original Agreements. (iv) Has to conduct test check of tender comparative statements, as a representative of Finance Department. (v) Has to review the measurement books. (vi) Has to ensure provisions in the estimates as per rules in respect of those sanctioned at division level. (vii) Has to ensure conditions in the agreements to be in conformity with the rules in respect of those concluded at division level. (viii) Is personally responsible for realization of all anticipated credits in the estimates for works and realization of revenue in the division. (ix) Has to inspect the accounts of the sub-divisional offices annually. (x) Manager of office establishment of a divisional office, though his position is analogous to that of a sub-divisional officer. DEPUTY EXECUTIVE ENGINEERS: - (i) Can accord Technical Sanction up to Rs.2 lakhs in P.R Department and up to Rs.10, 000 in Irrigation department. (ii) Can call for tenders and conclude agreements up to prescribed limits. (iii) Inspection of works up to prescribed value for according Technical Sanctions. (iv) Primary Check Measuring Officer of the department and he has to invariably check measure all the works to an extent of 30 % without which payment cannot be released. (v) Has to inspect the buildings of specified value annually. (vi) Has to personally enter the rates provided for in the agreements in the abstract of work bills. (vii) Has to ensure execution of works as per specification provided for in the agreements. ASSISTANT EXECUTIVE ENGINEERS/ASSISTANT ENGINEERS:- (i) Can accord Technical Sanction to estimates up to Rs.25, 000 in P.R.Department. (ii) Primary Officer for recording of measurements of works done in his charge. (iii) Has to inspect the buildings of specified value annually. (iv) Has to ensure execution of works as per specifications provided for in the agreements.
Chapter-I . ACTIVITIES (a) IRRIGATION: - Construction and maintenance of Major, Medium, and Minor Irrigation Schemes are classified according to the acreage covered under each category and are executed as per the fixed norms. Major Irrigation Schemes are also designed as multipurpose to include Generation of hydro-electricity, Watershed development, Ecological demands, Prevention of Silting of Reservoirs, Drinking water needs etc., (b) ROADS & BUILDINGS: - Construction and maintenance of Bridges, Causeways, Culverts and structures on all types of roads. Construction and maintenance of National Highways, State Highways, and District and other roads in the state. Construction and maintenance of Public Buildings etc., (c) PUBLIC HEALTH: - Construction and maintenance of Urban water supply projects, Sanitation Schemes such as sewerage treatment plants, Desalination projects, Underground drainage schemes and other municipal engineering works. (d) PANCHAYATRAJ: - The activities included in all the above departments in rural areas and which do not fall within the purview of the first three categories as per the norms prescribed. (e) REVENUE DEPARTMENT: - In respect of major irrigation projects, separate land acquisition units are established under the supervision of a Special Collector. The hierarchy is usually as follows. SPECIAL COLLECTOR SPECIAL DEPUTY COLLECTOR TAHASILDAR/M.R.O The Special Collector arranges for acquisition of land in accordance with Land Acquisition Act as requisitioned by the Project officers by following prescribed procedures as per law. The Special Deputy Collector is the DDO in account with the PAO/APAO who has limited cheques drawing powers and renders cashbook abstracts every month to the PAO/APAO in respect of payments released by him towards land compensation. REHABILITATION: - In respect of Major Irrigation projects, the displaced persons on account of acquisition of land are rehabilitated by showing them alternative accommodation and means of livelihood duly developing all the amenities available in community life. For this purpose a Rehabilitation Officer is specially appointed who is a
Chapter-I DDO with the PAO/APAO. He also has limited cheques drawing powers and renders cashbook abstracts to the PAOS/APAOs periodically. PUBLIC WORKS EXECUTED BY CIVIL OFFICERS AND CORPORATIONS Construction and repair works in non-PW engineering departments without engineering wing will be done by the (R&B)/PANCHYATRAJ departments. The HOD gets the BRO who will distribute it among the DDOs under his control under intimation to the DOWA. The DOWA will authorize concerned PAOs/APAOs for honoring the claims made by the assigned executing agencies. All prescribed provisions of PAO’s organization shall be followed by these departments. (G.O. Ms.No.278 dated22-9-06) Similarly payment control in respect of works executed in corporations and autonomous bodies under the A.P.state government has been brought under the PAO’s organization vide G.O Ms.No. 297 dated 10-10-2006. The assigned executing agencies shall follow all prescribed procedures, guidelines and provisions of various codes/manuals, GOs, conditions of agreements and present claims to the PAOs(W&P) concerned. FOREST DEPARTMENT: - The Forest department takes care of the conservation of Reserve forests and Wild life owing to inundation in back waters of huge reservoirs of major irrigation projects. They are given temporary advances in the shape of cheques that render detailed accounts after execution of works entrusted to their charge. HIERARCHY IN FOREST DEPARTMENT The payment functions of the Forest Department is also entrusted to the Pay & Accounts organization with effect from 1-8-2005 on regular basis on par with other engineering Departments except for the works of Vana Samrakshana Samithis, and Echo development committee works (govt.memo.no.2107/FRIII/07 dated 17-8-07) where they are authorized to incur expenditure and submit cash-book abstracts. to the PAOs for adjustment. The hierarchy of the officers is as follows. PRINCIPAL CHIEF CONSERVATOR OF FORESTS CHIEF CONSERVATOR OF FORESTS CONSERVATOR OF FORESTS DEPUTY CONSERVATOR/DIVISIONAL FOREST OFFICER SUB-DIVISIONAL FOREST OFFICERS
Chapter-I FOREST RANGE OFFICERS FOREST SECTION OFFICER FOREST BEAT OFFICER ASSISTANT BEAT OFFICER FUNCTIONS 1. The Principal Chief Conservator of Forests is the Head of the Department and is in charge of overall operations of conservation of forests, wild life management and social forestry in the entire state. He is also the administrative head of the entire department and technical advisor to the State in Forest matters. He is the highest technical sanctioning authority. He is assisted in the office by Chief Conservators of forests, Conservators of Forests, Dy.Conservators of Forests, Assistant Conservators of Forests, Chief Accounts Officer, Accounts Officers, Gazetted Assistant (Technical) and Gazetted Assistant (Non-Technical). 2. The Chief Conservator of Forests would assist the PCCF in technical and administrative work. All policy matters would be routed through him apart from the subjects allotted to him. This is an Office Post and he is also expected to tour in the state as per tour program approved by the PCCF. He has to inspect works and other developmental programs. 3. The Conservator of Forests is the administrative head of forest or special circles and responsible for general direction and supervision of works, control of expenditure, sales and supplies and general management of forests (a) He is immediate sub-ordinate to the PCCF and the CCF. (b) He regulates the Budget allotment in his circle. (c) He conducts annual inspection of each division in his charge. (d) Responsible for perpetration of working plans. (e) CF in charge of research will document the results and keep track of the laboratory to field condition studies of the research programs. (f) CF in charge of Wild Life is responsible for National Parks, Wild Life sanctuaries and zoos under his control. (g) CF in charge of Extension and Education would plan for in-service training of different cadres of forest officers 4. The Divisional Forest Officers are responsible for general management and protection of forests in their divisions. (a) He exercises direct control over forest establishment in his division. (b) Responsible for discipline of Forest, Protective and Ministerial establishment in the division.
Chapter-I (c) Arranges for regeneration, improvement, exploitation and protection of forests according to sanctioned working plans. (d) Conducts sales, enter into contracts and supply timber and other forest produce to other departments and to the public. (e) Controls the expenditure and realizes the revenue in the division. (f) Deals with forest offences in the division. (g) Check measures all forest works as per delegation of powers in force. (h) Ensures posting of plantation journals, Control books and control journals up to date in the division. (i) Conducts surprise checks of range offices in his division. (j) Should test-check stock of timber and other forest produce in the depot. Conducts annual inspection of Range Offices. 5. Sub-Divisional Forest Officer is immediate sub-ordinate to the DFO and assists him in inspection and supervision of works. (a) He inspects Range Offices and Depots in his Sub-Division. (b) Carries out inspection of beats and reports to the DFO. (c) Deals with the forest offences either booked by him or by the FRO. 6. FRO is responsible for the property in his range and for custody and condition of all government property in his charge. (a) Responsible for execution of works with the help of FSOs and Guards. (b) Collection and crediting of forest revenue. (c) Supervision of sub-ordinate staff. (d) Investigation of forest offences. (e) Execution of sanctioned works. (f) Posting of works registers etc., (g) Should invariably ware the uniform. (h) Should submit weekly diaries. (i) Preparation of annual plan operations. (j) Inspection of beats. 7. A Section Officer or Dy.Ranger or Forester is directly responsible to the FRO. (a) Supervises the work of Forest Guards and Watchers. (b) Ensure that the beat Guards maintain the boundary lines and boundary marks of forest blocks and prevent illicit felling and encroachment in the beats. (c) Assists the Range officer in execution of works. (d) Submits the preliminary Offence Report in respect of forest offences. (e) Should submit weekly diaries to the Range Officer. (f) Should invariably ware the uniform.
Chapter-I 8. The Forest Guard should know the boundaries of his beat and prevent any encroachment, fire or injury to his beat due to any other cause. (a) Should petrol the forests constantly to prevent forest offences. (b) Should maintain boundary lines. (c) Should cut creepers and climbers during his perambulation in the forests. (d) Should keep the name boards and signboards in good condition. (e) Should check the forest produce in transit. (f) Should carry out silvicultural work. (g) Should ware uniform. The general functions of various officers are only dealt with in this chapter. The detailed delegations of powers are discussed in scrutiny of work bills chapter.
Chapter-II CHAPTER-II B U D G E T AND FLOW OF FUNDS The following are the codes to be thoroughly gone to have effective control over financial transaction and preparation of BUDGET. 1. Andhra Pradesh Budget Manual. 2. Andhra Pradesh Account Code Vol.I. 3. Andhra Pradesh financial Code Vol.I. 4. Constitution of India. In addition to these codes, the Government will be issuing orders as and when changes are required. BUDGET IS THE PRE-DICIPLINE ON PUBLIC SPENDING AND AUDIT IS THE POST- DISCIPLINE. BUDGET:- Under Article 202 of the constitution of India a statement of the estimated receipts and expenditure of the state for each financial year has to be laid before the LEGISLATURE. This statement is known as the ANNUAL FINANCIAL STATEMENT or BUDGET. It consist of the following main divisions namely. I. Consolidated Fund of the state. II. Contingency Fund of the state. III. Public Account of the State. I. CONSOLIDATED FUND OF THE STATE: The consolidated Fund of the state is formed out of all Revenues received by the Government of the state, all loans raised by the Government by the issue of treasury bills, loans or ways and means advances and all moneys received by the Government in re-payment of loans. 1
Chapter-II The transactions relating to the consolidated fund are accounted for in three different sections viz., (a) Revenue Account. (b) Capital Account. (c) Loan Account. The Revenue Account is the Account of the current income and expenditure of the state. The income is derived mainly from Taxes and duties, fees for services rendered, Fines and penalties, Revenue from Government estates such as Forest and other miscellaneous items. The capital amount is the account of expenditure of capital nature such as the construction of buildings Irrigation Project works etc., such expenditure is met from sources other than current Revenue. The loan account is the amount of Public debt incurred and discharged and of loans and advances made by the State Government to local bodies, cultivators and others and recovered from them. II. CONTINGENCY FUND OF THE STATE Contingency Fund of the State has been constituted by the Andhra Pradesh Contingency fund amendment Act 1957 and subsequent amendments in pursuance of Article 267 (2) of the Constitution of India. It is in the nature of an imprest. The Contingency Fund is intended to provide advances for meeting unforeseen expenditure arising in the course of a year, pending Authorization of such expenditure by Law to be passed by the State Legislature under Article 205 or 206 of the constitution of India. 2
Chapter-II III. PUBLIC ACCOUNT OF THE STATE: The Public Account of the state pertains to all Public moneys received by or on behalf of the state Government which are not creditable to consolidated fund of the state. 1. Provident funds. 2. Reserve Funds. 3. Deposits & Advances. 4. Suspense and Miscellaneous. 5. Remittances. 6. Cash balance. The accounts relating to provident funds, Reserve Funds, deposits and advances, record transactions in respect of which the Government Act as bankers receiving amounts which they after words repay and paying out, amounts which they subsequently recover the suspense, miscellaneous and remittance amounts, comprise nearly of adjusting heads, and all entries under them are cleared eventually by adjustment under Final Heads. 1. BUDGET YEAR:- Means the Financial year commencing on the 1st April and ending with the 31st March for which the Budget will be prepared. 2. REVISED BUDGET ESTIMATE:- Revised estimate for the current year will be prepared based on the probable receipts and disbursements under each head for the remaining eight months with reference to the actual transactions recorded for the first four months of that year for which complete accounts have become available along with Budget Estimate for the ensuing financial year will be prepared. 3
Chapter-II 3. F.M.S:- Final Modification Statements will be prepared based on the actual expenditure up to December and requirement for the rest of the year. 4. DEFECIT BUDGET The Budget proposal, which indicates the expenditure more than receipts, is termed as DEFECIT BUDGET. 5. PERFORMANCE BUDGETING:- Budget which exhibits not only the money but also the Physical Targets is a “ Performance Budget.” 6. ZERO-BASED BUDGETING:- It is to start from Zero Base and view all activities and priorities a fresh and create a new and better setup of allocations for the ensuing Budget year. 7. APPROPRIATION:- The amount provided in the Budget Estimate for a unit of appropriation or the part of that amount placed at the disposal of a Disbursing Officer. 8. SAVING OR EXCESS OVER THE FINAL APPROPRIATION:- 15TH February has been fixed as the last date of submission to the Government by the Controlling Officer of application for surrender of saving in appropriation and for re- appropriations and supplementary appropriations. 4
Chapter-II 9. REAPPROPRIATIONS:- Re-appropriations of Funds from one Head to another has to be regulated as ordered by the Government from time to time Vide Government of Andhra Pradesh Financial (BG.I) Dept., Memo.No:16560-A/763/BG-I/A1/2005, Dt: 21-6-2005. 10. NUMBER STATEMENT:- The Statement in the prescribed form giving particulars of Posts in each permanent and temporary establishment, the sanctioned monthly pay that will be drawn on ensuing 1st of April and the number of officers, their rate of Pay for which provision is made in the Budget estimate shall be given for each category of employees. Based on the number Statement, Estimated Budget for Establishment will be prepared.( Number of vacancies for more than six months to be ignored) such details may be incorporated. Normally every year necessary instructions will be received from the Government / Head of the Department for preparation of Number Statement by the Head of the offices (DDOs). 11. APPROPRIATION ACCOUNTS:- The Final appropriations and expenditure in the year under each Head of appropriations within the several grants will be shown in the detailed “Appropriations Accounts,” prepared by the Accountant General, Andhra Pradesh, Hyderabad after the close of the financial year and it will be sent to the Government of Andhra Pradesh for its review and for discussion in the state Assembly. 12. DISBURSING OFFICER(D.D.O):- A Government Officer who draws money from the Treasury/Pay & Accounts Officer on bills and disburses. 5
Chapter-II 13. ESTIMATING OFFICER:- The Officer who is primarily responsible for preparing the estimates of receipts or expenditure in the form prescribed by the Government for submission through the usual channel to the Government. 14. SUBORDINATE CONTROLLING OFFICER:- An Intermediate Controlling Officer immediately Subordinate to a Chief Controlling Officer. 15. CHIEF CONTROLLING OFFICER:- The Head of the Department who submits the Estimates pertaining to his Department direct to the Government (i.e., concerned Department in the Secretariat). All the Departments duly verifying the Budget Estimate will pass on the same to the finance department. The finance will consolidate the entire Budget Estimate and present to Assembly for its approval. Every Chief Controlling Officer should watch the progress of Expenditure continuously and for this purpose he should require the Disbursing Officers to report the figures of actual expenditure every month with reference to Budget allotments. For this purpose expenditure figures are to be reconciled with the Treasury Figures by the DDO., 16. METHOD OF WATCHING ACTUALS:- A Chief Controlling Officer has to watch the expenditure under each unit of appropriation to keep within the appropriation. Salaries of permanent establishments should be watched for the State as a whole. 6
Chapter-II COMPILATION 17. TREASURY/PAO:- The payments will be compiled and posted in the prescribed Proforma and furnished to the Accountant General, Andhra Pradesh, Hyderabad duly marking a copy to the next Higher Authority every month. 18. RECONSILIATION OF FIGURES BY THE CHIEF CONTROLLING OFFICER (Head of the Department):- The Chief Controlling Officer should consolidate his own expenditure figures along with the Subordinate Controlling Officers figures and get the figures reconciled from the Accountant General Office figures every month to have effective control over the Budget and expenditure. 19. ACCOUNTANT GENERAL :: A.P.:: HYDERABAD:- The Accountant General, Andhra Pradesh, Hyderabad will compile the receipts and expenditure of all the Departments of the state Government and furnish the figures to the Government. 20. CHARGED:- It is an inevitable payment which does not require approval of the Legislative Assembly. However the Assembly can discuss the Budget provisions. Pay and Allowances of : Example:- 1. Supreme Court Chief Justice & Other Judges. 2. High Court Chief Justice & Judges. 3. President and Vice President of India etc., 4. Governors of States. 5. Speakers of Lok Sabha and Assembly. 6. Decretal accounts. 7. L.A. Payments etc., 7
Chapter-II 21. VOTED:- The Budget has to be approved by the Legislative Assembly. 22. OVER DRAFT:- Drawing the amounts from the Reserve Bank of India over and above the available amount by the State Government will be termed as Over-draft. 23. PLAN:- The Allocation under Plan normally will be spent on creation, acquisition or improving the existing assets. 24. NON-PLAN:- The Non-Plan is a recurring expenditure spent on day today expenditure including salaries, maintenance of buildings irrigation Tanks, Office expenses etc., 25. PLANNING COMMISSION:- The Planning Commission was setup in 1950. The Prime Minister is the Chairman of the Commission, Minister of Finance and other Ministers of Economic Ministers are the Members. The Functions of the Commission is to formulate. “ FIVE YEAR PLANS,” for Economic and Social Development of the Country. 8
Chapter-II 26. NATIONAL DEVELOPMENT COUNCIL:- The National Development Council was formed in 1952. It consists of Prime Minister and all Chief Ministers. Union Cabinet Ministers and Administrators of the Union Territories. 27. FUNCTIONS:- To mobilize the resources of the National in support of the Plans, to promote Common Economic Policies in all vital spheres and to ensure the balanced and rapid development of all parts of the country. 28. FINANCE COMMISSION:- The Finance Commission will be appointed by the President of India. It consists of a Chairman and Four other members. The members should have wide experience in financial matters and Administration. It decides the percentage of distribution of Net Proceeds of Taxes ( Income Tax and Excise Duties) between the States. 29. PUBLIC ACCOUNTS COMMITTTEES:- The Committee on Public Accounts is a Committee of the Legislative Assembly. Its primary function is to scrutinize the reports of the Comptroller and Auditor General of India relating to the Annual Appropriation of the State and Audit paras. 30. HEAD OF ACCOUNT:- ( CODIFICATION) The Head of Accounts are assigned to each Department with distinct number. The Head of Accounts are also assigned separately for expenditure and receipts to facilitate identification of the departments’ expenditure and for reconciliation of the accounts. The revised object Heads have been standardized Vide Go.Ms.No:664 Fin(B.G.I) Dept., dated: 27-10-2001 effective from 1-4-2002. 9
Chapter-II The coding pattern is that first digit in the Major heads under Receipts head is either 0 or 1 and the first digit of corresponding Revenue expenditure Heads, Capital Heads on Loans and Advances are derived by adding the number 2 to the first digit in each of the major heads of account. The illustration is as follows:- Sl.No Function Major Head Code Number Expenditure Loans and Heads Advances 1 Medical and Receipts Heads Expenditure Capital Account. 2 Public Health. Revenue Account Heads Revenue Account. Road Transport Account 6210 0210 4210 2210 7055 5055 1055 3055 Under the scheme of codification, the ‘receipt major heads’ are assigned the block of consecutive serial numbers 0020 to 1999 and ‘expenditure major heads’ on revenue account from 2110 to 3909. The only capital receipt major heads on capital accounts are assigned code numbers from 6010 to 6100. The ‘major heads under loans and advances’ etc., are allotted code numbers 6101 to 7909. The only major head ‘Contingency Fund’ under part II has the Code No:8000. The major heads in part III Public Account are given code numbers 8001 to 8999 both for receipts and payments. 10
Chapter-II STATEMENT - I The Government transactions are classified under seven tiers:- (1) & (2) : Sectors and Sub-Sectors indicate group of functions. (3) & (4) : Major Heads and Sub-Major Heads represent individual functions. (5) : Minor Heads represent programmes. ( 6 ) : Sub-Heads and Group Sub-Heads represent Schemes. ( 7 ) : Sub-Heads and Group Sub-heads represent object classification. They are the primary units of appropriate meant for item-wise control over expenditure on each Scheme or activity or organization in terms of inputs such as 'Salaries,' \"Office Expenditure.\" Thus for example the complete classification of charge towards to pay an officer employed for prevention and control of malaria in a District Office in the Public Health Department would be as follows:- Sector : B.SOCIAL SERVICES. Sub-Sector : ( b ) Health and Family Welfare. Major-Head : 2210 Medical and Public Health Sub-Major -Head : 06 Public Health. Minor - Head : 101 - Prevention & Control of diseases Sub-Head : Control of Malaria - 03 District Offices 001 Direction and Administration. Detailed: 010 Salaries - 011 Pay . 11
Chapter-II STATEMENT - II S.S.T : : Schedule of Setlement with Treasury. C.T.I. : : Consolidated Treasury issues. C.T.R. : : Consolidated Treasury Receipts. Every Drawing and Disbursing Officer has to reconcile his receipts and expenditure transacted in his office with those available in the Treasury/Pay & Accounts Officer every month to avoid mis-classification ans watch for the actual expenditure. 12
S T A T E M E N T - III Chapter-II APPROVAL OF Secretariat ( Fin. & Plg.) STATE LEGISLATIVE ASSEMBLY Secretariat Secretariat (Concerned ( Fin. & Plg.) Department) Secretariat Head of the (Concerned Department Department) Regional Head of the Office. Department Regional Office. D.D.O. D.D.O. 13
Chapter-II PROCESS OF BUDGET 14
134 Chapter-V CHAPTER-V COMPILATION OF ACCOUNTS 1. 0. MONTHLY ACCOUNT 1.1 The monthly Account is a statement of receipts and payments made during a month. The receipts are listed on the left hand side and the charges are listed on the right hand side. The monthly Account is compiled from the classification noted on the vouchers and TEOs. Therefore, utmost care should be excercised in pre-check section while passing the bills or adjusting TEOs to note the correct classification on the vouchers or TEOs. The classification should strictly conform to the Budget Manual such as Major Head, Minor Head including Sub Minor Head if any, Group Head, Sub Head, Detailed Head and Sub Detailed Head. In short 7 tier classification to facilitate administrative and accounting control. 2.0 ORGANISATION OF WORK 2.1 The compilation work is automated except for works abstracts, schedule of works expenditure, SST and control statements. Therefore a portion of work is to be done manually. 2.2 In respect of major projects compilation is done weekly though the expenditure figures are transmitted to the Government online daily. The first week covers the transactions from 1st to 7th, second week from 8th to 15th, third week from 16th to 23rd, and fourth week from 24th to last working day of the month. 2.3 The Cashier should transmit all the vouchers to the compiler in a transit register duly certifying that he has sent all the vouchers. The compiler should verify that he has received all the vouchers and acknowledge in the transit register to the effect that he has received all the vouchers entered in the transit register. 2.4 The TEO register along with the abstracts duly tallied are sent to compilation section once in a week which in effect constitute subsidiary classified abstracts and are incorporated in the account.
135 Chapter-V 3.0 CLASSIFIED ABSTRACT 3.1 The classified abstract are maintained division-wise/DDOwise. As per classification noted on the vouchers, the expenditure is posted under the sub- detailed heads, and detailed heads separately for debits and credits in the classified abstracts. The sub and detailed head-wise totals included in the TE abstracts should be posted in the classified abstracts. 3.2 Where the compilation is automated, the expenditure figures are posted voucher wise under respective sub and detailed heads by properly choosing the Drawing Officer, Major, Minor,Sub, Detailed and Sub-detailed heads from the Masters. The Superintendent should personally check the correctness of the voucher wise posting in the Division wise/DDO wise classified abstracts on daily basis to ensure correctness of postings from the vouchers. These daily totals are carried over to the weekly abstract registers. The classification is noted horizontally and Division/DDOs vertically. The postings in the weekly abstract registers have to be agreed with the cashbook and TE Registers. The total charges are worked as follows: i) the total of the cash column in the cashbook, total of the cheque column and total of the TEOs. ii) The total receipts will be the total of the receipt column in the cashbook plus the total of the TEOs, minus amounts accounted for as cash from Treasury. 3.3 These totals for each day are transmitted online to Government/HOD/ concerned JDWA as per the transmission facility available to each PAO/APAO. 4.0 WEEKLY CLASSIFIED ABSTRACT 4.1. The weekly classified abstracts contain two columns, one during the week and the other during the month. The monthly classified abstracts also contain two columns one during the month and the other during the year. In respect of detailed heads under the Minor Head “Suspense” debits and credits will be indicated separately. The totals under the head during the month are worked out with reference to the totals in the previous classified abstract from earlier week’s account. At the end of the month the totals during the year are worked out in the classified abstract for the month. 5.0 PREPARATION OF MONTHLY ACCOUNT
136 Chapter-V 5.1. The Monthly Account is prepared by taking the receipts on the left-hand side, and the charges on the right-hand side. In respect of remittances the head to which the receipt is credited is taken on the receipt side by debiting the remittance head 8782 on charges side, which balances the transaction for the purpose of account. Similarly the total of cheques column is taken on receipt side. The increase/decrease in cash balance is posted on the receipt/charges side, which tallies the account. 5.2 When the account does not tally, the account need not be withheld from communicating it to the appropriate authority on day fixed for its submission. The excess receipts may be taken to 8443 P.W.Deposits and excess charges if any may be debited to the head M.P.W.Advances pending adjustment later. On location of the discrepancy reverse TEO may be proposed rectifying the earlier entry. It is one of the important aspects that the closing cash balance of earlier month should be adopted as opening balance of the current month and this is invariably verified in A.Gs office as soon as they receive the account. 6.0 DISPATCH OF MONTHLY ACCOUNT TO THE ACCOUNTANT GENERAL 6.1 The Monthly Account should be sent to the Accountant General on or before 12th of the succeeding month accompanied by (i) classified abstracts (ii) abstract of progressive expenditure (iii) schedule of I.T, S.T etc., which are directly debited or credited to the final heads of accounts concerned. 6.2 The PAOs/APAOs who render accounts to the A.G directly, should also send vouchers, schedule dockets, schedules of P.W.Deposits, Revenue receipts, Suspense balances etc., as shown below, as per Para 567 of A.P.P.W.A code. (1) Extracts from registers of Revenue realized. (2) Extracts from registers of Refunds of Revenue. (3) Classified Abstracts of Expenditure. (4) Schedule Docket for Percentage Recoveries. (5) Schedule of purchases wherever applicable. (6) Schedule of MPW advances wherever applicable. (7) Schedule of Workshop suspense wherever applicable. (8) Extracts from Registers of receipts and recoveries on capital account. (9) Schedule Dockets. (10) Schedule of Debits and Credits to miscellaneous heads of accounts. (11) Schedule of Debits and Credits remittances. (12) Schedule of Settlement with Treasuries. (13) Schedule of Deposits. (14) Schedule of Deposit works
137 Chapter-V (15) Schedule of Boat Rents wherever applicable. (16) List of Accounts submitted to audit A set of Division-wise Classified Abstracts may be separately sent to the Accountant General (Audit). 7.0 SENDING SCHEDULES TO JDWA 7.1 A separate list of receipts on account of I.T, Seiginorage charges, S.T should at once be communicated to the Director of Works Accounts by all the JDWAs immediately on the day following the date fixed for closing of monthly accounts. 8.0 PREPERATION OF SCHEDULE DOCKETS 8.1 The schedule docket is prepared in form 61 (P.W.D. VI-97). A separate form is used for each work to be accounted for in the schedule of works expenditure, Form 63 (P.W.D. VI-26) or in the schedule of Deposit Works, Form 65 (P.W.D. VI-101 to 103). Each separate class of charges (including refunds of revenue), adjustment of advances drawn from contingency fund, for which a schedule in any other form has to be prepared, should be posted in a separate schedule docket form. All the transactions of a month whether plus or minus in the schedule docket are totaled separately showing the debits and credits. The schedule dockets should then be totaled and reconciled with the works abstracts. All vouchers, transfer entry orders, survey reports, and sale accounts which are required to be submitted to audit should be tagged on to the schedule dockets which should be numbered in a separate series for each month. 8.2 For percentage recoveries made on account of establishment, tools and plants, accounts and audit, and pensionary charges, a single schedule docket should be prepared in Form 62 (P.W.D98) embracing all government and non-government works on which these percentages may be levied. 9.0 SENDING MONTHLY ACCOUNT TO THE GOVERNMENT AND OTHERS 9.1. A copy of the Monthly Account together with classified abstract is sent to Government (administrative department) as well as to the Principal Secretary to Government (Works & Projects), Finance Department. A copy of the classified abstract is sent to the Superintending Engineers and Chief Engineers.
138 Chapter-V 10.0 SENDING CONSOLIDATED ABSTRACT 10.1 At the end of the month a copy of the consolidated abstract showing the monthly expenditure division-wise under various heads of account is sent to S.Es, C.Es and E.Es. 10.2 After compilation work is over, the compiler retains the vouchers required to be transmitted to the A.G etc., and the compiler sends all other vouchers to the record section, which shall be personally verified by the Superintendent to ensure that all vouchers required to be retained in the office are properly accounted for. The TEOS are transmitted to the record section by the pre-check section only. 11.0 SCHEDULE OF SETTLEMENT WITH TREASURIES 11.1. The schedule of settlement with treasuries is to ensure accurate accounting of payments made by the treasury in respect of cheques drawn by the PAOs/APAOs and to verify that all remittances made on behalf of the PAOs/APAOs are brought to account and to reconcile the discrepancies if any. In respect of major projects, the JDWA shall get the SST done centrally and in respect of other departments the PAOs/APAOs shall arrange for sending the SSTs to the A.G. The following details are gathered to effect settlement: (i) List of cheques drawn during the month by the PAO/APAO (ii) List of cheques encashed at the treasuries during the same month. (iii) List of challans incorporated during the month by the PAO/APAO (iv) List of challans incorporated in the treasury on behalf of the PAO/APAO 11.2 Reconciliation of cheques: - The cheque drawn statement shall be prepared treasury-wise/sub-treasury wise/bank-wise indicating the cheque number date and amount. The totals in the cheque drawn statement should be reconciled with the totals in the cheque column in the cashbook. The Treasury Officer will enter all the cheques paid by him during the month against the PAO/APAO indicating the cheque number, date and amount . The passbooks are returned with a consolidated Certificate of Treasury Issues indicating the total amount paid by the treasury during the month against the PAO/APAO
139 Chapter-V The cashed cheques as detailed in the passbook are verified individually with those noted in the cheque drawn statements and items appearing in both the statements are paired off. The remaining items as per cheque drawn statement are abstracted and included in the Schedule of Settlement with the Treasuries. Any payment included in the C.T.I but not included in the cheque drawn statement is immediately brought to the notice of the JDWA. Such items are to be thoroughly investigated. 11.3 Reconciliation of Remittances:- The remittance registers are written up treasury- wise with reference to the challans incorporated in the passbook. The treasury officer will enter all the remittances into the treasury as per his books indicating the challan number, date and amount, name of the remitter etc., and retransmit the remittances register with the certificate of Consolidated Treasury Receipt(CTR). The items are then paired off with reference to the remittances register and with those outstanding for the previous month. The items of remittances, which have been incorporated in the cashbooks of the APAOs/PAOs but do not find place in the C.T.Rs have to be investigated, since such transactions may be due to adjustment of fraudulent challans or misclassification from the accounts of the other DDOs. 11.4 The SST is separately prepared for cheques and remittances. The schedules are first prepared treasury-wise. The abstract for all the treasuries is then prepared separately for Part-I Remittances and Part-II Cheques. The total under Part-I Remittances and II Cheques as worked out in the consolidated schedule is tallied with the corresponding figures shown in the monthly account. The Schedule is then sent to Audit. 12.0 Account Current: 12.1 All inter-Departmental and inter-Governmental transactions, where a separate Accounts Officer is involved, are settled in cash by cheques or bank drafts at weekly intervals in respect of the following transactions. (i) Expenditure on schemes sharable in a prescribed ratio between two departments of same government or different governments. (ii) Expenditure on Externally Aided Projects for which the office of the JDWA compiles and sends the Account along with the vouchers to the designated authority for claiming reimbursement from CAAA. The procedure of preparation of reimbursement claims on Externally Aided Projects is separately dealt with. In respect of schemes the cost of which is initially debited to project funds, a bill of cost prepared in form PAO56 for each scheme separately together with the outward
140 Chapter-V accounts of the PAO will be sent to the A.G for settlement in cash. The Accountant General has approved this procedure. 13.0 APPROPRIATION ACCOUNTS 13.1 The JDWA has to prepare the appropriation accounts and furnish material for the preparation of finance accounts to the Accountant General as per 11-23 of PAO Manual. 14.0 PRORATA DISTRIBUTION OF ESTABLISHMENT AND T&P etc., CHARGES: 14.1 The Head of the Department will annually communicate the rate at which the establishment, tools and plant, audit and accounts and pensionary charges shall be transferred to the Capital Heads of Accounts. These adjustments are to be carried over in the accounts for March/Supplemental Accounts for March. 15.0 CHECK AGAINST APPROPRIATION 15.1 The PAOS/APAOs are primarily responsible that the expenditure on works is within the LOC authorized by the Director of Works Accounts under appropriate heads of account. Similarly in respect of establishment and contingent expenditure, the authorization of the HOD concerned duly countersigned by the Director of Works Accounts is necessary. It is a serious lapse for any PAO/APAO to admit payments in excess of appropriations authorized and such officers are liable for severe disciplinary action. Booking of expenditure to new heads of account to the heads under which there is no budget provision is strictly prohibited and any lapse on this aspect entails severe disciplinary action against the concerned. 16.0 CLOSING OF ACCOUNTS 16.1 The grant at the disposal of the chief controlling officers lapse on the last day of the financial year and therefore no payment debitable to the appropriation for that year is effected after such date under any circumstances. It facilitates closing the accounts for the year immediately after March. It is highly irregular to draw funds at the close of the financial year and keep them under deposits to avoid lapse of grant.
141 Chapter-V 17.0 RECONCILIATION 17.1 The payments made and adjustments carried out are analyzed and posted in different registers. The bills and TEOs are analyzed and posted in pre-check sections work-wise and detailed head wise for each division in work registers and deposit registers etc., Both cash and adjustment transactions are finally analyzed voucher-wise in the consolidated abstract of each division in the compilation section. 17.2 The expenditure booked during a month as exhibited in the works audit register of a division under the various detailed heads of accounts should be tallied with the figures shown in the division-wise consolidated abstract under respective detailed heads of account. On agreement of figures between works audit register and consolidated abstract, a certificate should be got recorded in the abstract page of the works audit register over the dated initials of the Superintendent (Compilation). 18.0 FINANCIAL ACCOUNTABILITY 18.1 The Government had prescribed a system of obtaining a certificate from every drawing officer monthly to the effect that he had furnished replies to the pending Audit Objections taken by the Accountant General, and that he had reconciled his expenditure with his Paying Officer to end of the previous month in the absence of which the PAOs/APAOs should not release any payments in respect of such defaulting DDOs.(The position as per latest G.O may be explained). The latest instructions on the subject are as follows as per G.O. Ms. No. 285 Dt. 15-10- 2005. 1. Asset management is to be done as per G.O. Ms.No 667 (TFRII) Dept. Dt.11-10-2004. Half-yearly report should be submitted by the DDOs to the CO, and by the CO to the CCO, by the CCO to the Government in Finance Department in the prescribed formats. 2. All the CCOs and the DDOs shall ensure that all bank accounts opened without Government permission are closed immediately. 3. All the DDOs and CCOs have to take suitable action to minimize the withdrawal of cash exceeding Rs. One Lakh in view of the banking cash transaction tax at 0.1 %. Security is also to be taken from the cashiers. 4. Instructions issued in G.O Ms.No 507 Dt. 10-04-2002 are to be scrupulously followed in respect of reconciliation of expenditure with treasuries, submission of utilization certificates, response to audit observations, AC/DC bills and monthly expenditure statements.
143 Chapter-VI CHAPTER VI AUDIT STATUTARY AUDIT BY THE ACCOUNTANT GENERAL As laid down in the Constitution of India, the Accountant General (Comptroller and Auditor General of India ) is empowered to conduct Post Audit of Receipts and Expenditure of the State Government Offices which operates the government fund ( Article 149 to 150 of Constitution of India). Normally, Accountant General will conduct Annual Inspection of the each office. The Programme of Inspection and the Records required are communicated to the concerned officers well in Advance to enable them to keep the records up to date and to present to the Audit during the inspection period. The concerned officers are also expected to prepare the suitable replies to the earlier Audit paras. These replies also will be verified during the inspection. The total Grant released and the expenditure incurred against such grant will also be verified during Local Inspections. The short fall in expenditure or excess will also be commented upon. The Accountant General Audit Party during Scrutiny, if they notice any objectionable transaction, it will be pointed out and the same will be informed to the Head of the Office, through half margin-slip. The Head of the office is expected to rectify the omission and furnish reply in writing duly producing the concerned records for verification to the Audit Party.
144 Chapter-VI Depending on the financial irregularity the objections will be classified in to the following three categories. 1. Test Audit Note (TAN). 2. Inspection Report (Inspection Report). PART – A PART – B 3. Draft Para. 1. TEST AUDIT NOTE: ( TAN):- Test Audit Note will contain Minor Irregularities and procedural deviation. Normally, the procedural deviations and Minor Financial Commitments will be included in this note. These objections will have to be attended by the Head of the office and presented to the next Audit Party for verification and dropping the objections. 2. INSPECTION REPORT:- The Audit Objections (Mainly financially irregularities) will be pointed out during the inspection period and the replies to these objections are expected to be furnished before last date of the inspection. On the last date of the Inspection the Accountant General Audit Party will finalize the report, objection wise, duly assigning the Para numbers. In this report there will be two categories of objections ie., PART – A :- Major irregularities.
145 Chapter-VI PART – B :- Other irregularities. PART- A :- Normally, serious violation of Codal provisions and major financial irregularities will be included in this part. There is every possibility of committing such irregularities in other offices. PART – B:- Other Financial irregularities will be included in this part. The entire report will be discussed with the Head of the Office on the Last day of the Inspection. During this discussion, if convincing reply is furnished the paras can be dropped. During the discussion the earlier pending paras also will reviewed. Wherever, suitable reply is received it will be recommended by the Audit officer for dropping the para by the Accountant General. After finalization of the Inspection report, the same will be communicated to the concerned Head of the Department and the concerned office for furnishing the replies with in one month from the date of receipt of the Report. The process will continue till paras are dropped. DRAFT PARA:- (To be included in the Comptroller and Audit General Report) The major irregularities which could not be convincingly replied by the Department and consequently could not be settled by the Accountant General may be termed as Draft Para and reported to the Comptroller and Audit General. These Department-wise reports will be communicated to the concerned Department of the Secretariat. After proper scrutiny, if the objections sustains, it will be included in the draft para Report.
146 Chapter-VI The Committee on Public Accounts consists of Chairman and 15 members ( M.L.As.,) it verifies the reports of Comptroller and Audit General relating to the Annual Appropriation Accounts and Audit Report. These Comptroller and Audit General Reports will be discussed in the Public Accounts Committee. The concerned Secretary, Head of the Department will represent on behalf of the Department. The Public Accounts Committee members will review the objections and give their recommendations. These recommendations will be communicated to the concerned Departments for taking action immediately. The Department should furnish Action Taken Report (ATR). EFFICIENCY – CUM – PERFORMANCE AUDIT:- ( E.C.P.A.):- In the Accountant Generals office there will be a separate Audit Section called Efficiency-Cum-Performance Audit. The objections normally suggest the Defective investigation of the Projects, non- remunerative Schemes etc., This is an highly skilled review of the Schemes/ Projects. The result of Performance Audit on Efficiency-Cum- Performance should instantly lead to an over all approval of the progress and efficiency of plan expenditure of a Project or a Development as a whole. The E.C.P.A. (Efficiency –Cum-Performance Audit) is an independent assessment to the extent to which an organization, operates efficiently and effectively with due regard to contemplated goals to the Public Accounts Committee for review and comments. In conclusion, the Post Audit is meant to bring to the notice of the concerned officers the irregularities, which can be avoided at the initial stage and acts as guidance for future transactions.
147 Chapter-VI 2. INTERNAL AUDIT 1. As per the Procedure prevailing, the Head of the Department/Regional offices should conduct Internal Audit of all the Sub-ordinate offices every year for extending proper guidance in maintenance of Accounts and other related records, so that the financial irregularities are minimized and there should not be any scope for Accountant General to point out the irregularities. Further, the Major portion of the original records namely the initial accounts and other books on which the claims are based is retained in the office where they originate. To satisfy himself about the accuracy of the data on which claims etc., are based, the Pay and Accounts Officer on behalf of the Director of Accounts will have to inspect the offices with a view to check the initial records. The scope of inspection should generally be similar to that conducted by officers of the Audit Department (Vide Govt. Memorandum No: 9884-A/59-1, dt: 28-11-1959.). 2. On receipt side the Revenue recovery and its remittance is also to be properly verified. The PWD/Forest Departmental officers are expected to maintain proper Financial Registers as laid down in their Departmental codes. The Pay and Accounts Officer is not expected nearly to confine him to the routine check and inspection work. He should avail himself of the opportunity to assist the Departmental officer and Accountants with his advice in the matter affecting accounts, budget etc., or the financial regularity of transactions. However, the Pay and Accounts Officer should confine primarily with the accuracy of accounts and regularity of financial procedure and not with departmental Administration.
148 Chapter-VI 3. The Internal Audit should also take care of pending Accountant General, I.R. Paras, Test Audit Note, Draft paras and Action Taken Report ( ATR) and earlier pre-check reports. As far as possible each irregularity should be discussed at length with the concerned officers of the Department and the rectifications if any to be attended. 4. Normally, the Pay and Accounts Officer should conduct the inspections of all the Engineering divisions. During these inspections the Registers and records, which are not expected to be presented to the Pay and Accounts Officer along with the bills are to be verified. Specially, the grant and LOC registers and other initial records. The Loan recovery registers are also to be properly verified. So that, the entire amount of Advance and interest is properly recovered and adjusted. The Computerized Accounting System in detail with reference to the latest classification is to be discussed with the concerned staff, so that, the correct classification can be expected from the staff. The importance of reconciliation of both expenditure and receipts with the Pay and Accounts Officers office should also be explained to the concerned staff. The inspection reports should be prepared in three parts . PART-I:- (A) INTRODUCTORY:- Brief description of the activities of the division/office, the period covered by the inspection, the month of Test check and names of officers in- charge during the period covered by inspection. (B) OUTSTAINDING OBJECTIONS FROM PREVIOUS REPORTS IN BRIEF:-
149 Chapter-VI All the previous inspection reports should be carefully seen and the latest position in respect of each para indicated. The object is that the latest report should be exhaustive covering all the important objections raised so-far. ( C) SCHEDULE OF PERSISTENT IRREGULARITIES:- Important documents not produced for scrutiny at the time of inspection should also be listed out as a last Para under this part. PART-II:- All-important irregularities should be included in this part under suitable Headings. PART-III:- This part will deal with the minor irregularities. Instructions of an advisory nature for improvement in the maintenance accounts records may also be included in this part. NOTE:- The use of words such as fraud or embezzlement which de-note crime should be avoided unless it has already been proved. 3. INTERNAL TEST CHECK In every Joint Director (Works and Accounts) Office, there will be a section to look-after the Internal Test Check of the important matters and to scrutinize cases referred to the Joint Director (Works and Accounts). It will be under the Direct Control of Joint Director (Works and Accounts).
150 Chapter-VI The main aim of I.T.C.:- “To suggest improvements in procedure wherever necessary with Higher Audit point of view.” The following items of work are entrusted to the section:- 1. Scrutiny of estimates Rs.10.00 Lakhs and above. 2. Scrutiny of Agreements of 10.00 Lakhs and above, Supplemental Agreement Rs.5.00 Lakhs and above and comparison of rates. 3. Post review of vouchers above Rs.5.00 Lakhs. 4. Review of measurement books. 5. Scrutiny of orders of general nature issued by Govt.of A.P. 6. Post review of payments of bills of contractors at 40% and 80% stage in respect of agreements of Rs.50.00 Lakhs and above and 80% stage in respect of agreements from 10.00 Lakhs to 50.00 Lakhs. 7. Maintenance of stock files.( Subject-wise). 8. All estimates sanctioned by the Chief Engineers after necessary scrutiny by the Pay and Accounts Officer/Asst. Pay and Accounts Officer, should be sent to the Internal Test Check section with the remarks of Pay and Accounts Officer. The estimates should be scrutinized in the ITC. Section from Higher Audit point of view. 9. PROJECT ESTIMATES REGISTER:- The estimates sanctioned by the Chief Engineer and Superintending Engineer should be posted individually in the Register. In respect of the Estimates sanctioned by the Executive Engineers only, the total under each detailed Head should be posted. Against each provision the expenditure should be posted monthly and visa vis statement should be prepared to watch the expenditure against the provision. Whenever the expenditure exceeds, revised estimate to be called for.
151 Chapter-VI The Register should be closed and submitted to the Joint Director every month. The list of estimates sanctioned/received from the Chief Engineers / Superintending Engineers every month should be checked with the posting in the Project estimate Register and working estimates, if any, should be called for. A consolidated Register of expenditure should also be maintained in the section. The expenditure figures may be got monthly posted by the compilation section. 10. SECRUTINY OF AGREEMENTS:- The Agreements above Rs.10.00 Lakhs and all supplemental agreements above 5.00 Lakhs should be scrutinized and entered in the Internal Test Check Register. In case the bill at 40% and 80% stage happens to be a final bill or the final bill is received in Pay and Accounts Officers office, even before the value of work done under such agreement reaches 40% and 80% stages, such final bills should be sent by the Pay and Accounts Officer to the Joint Director with their remarks for pre-check before payment instead of post check. (CHAPTER – XIII OF PAY AND ACCOUNTS OFFICER (WORKS) ACCOUNTS MANNUAL).
129 Chapter-IV CHAPTER – IV PAYMENT PROCEDURES 1.0: Procedure: 1.1: The PAO / APAO placed in account with the Treasury / Bank against which the PAOs / APAOs draw cheques. The DDOs have no cheque drawing powers except in very special circumstances where they are authorized to exercise limited cheque drawing powers. The Accountant General shall issue authorization for drawing account every year to the PAO / APAO based on the sanctions for continuance of the units. The specimen signature of the PAO / APAO shall be communicated to the treasury and bank. 1.2: All payments are invariably made by means of Account payee cheques only. MICRisation of cheques of Government of Andhra Pradesh was introduced vide G.O.Ms.No.336, Finance (TFR.I) Department, dated 04-12-2006. The cheques are printed office wise, Bank Branch wise with the assigned codes viz., District code, Office code and MICR code. 1.3: The requirement of cheques pads for a year are assessed, based on previous year’s actuals and anticipated changes in the offing, and indents are placed on Government Security Press, NASIK or any Security Press by Reserve Bank of India. The cheques books as received are accounted for in the stock register in the Form PAO-32. The PAO / APAO should invariably keep the unused cheques books in his personal custody under lock and key. The cheques issued by the PAO / APAO are valid for one month only. The cheques are typed on a pinpoint typewriter and its carbon copy is taken on statement of bills paid which serves as counterfoil of the cheques also. 1.4: The passed bills along with the cheques forwarding slips prepared over the signature of the Superintendent of pre-check section are sent to the cash section in a transit register by the pre-check section and the cashier acknowledges the receipt of the same. He gives them to the cheques typist for typing the cheques. When two or more bills are payable to a single agency they are to be clubbed together and only one cheque is issued. The payments due to the contractors or suppliers attorney, and the contractor or supplier discharges the payment. When the contractor gives power of Attorney to other agency, the cheques should be drawn in the name of the original contractor only. The PAOs / APAOs cannot make any type of cash payment and hence there is no minimum limit of amount for issue of cheques.
130 Chapter-IV 1.5: The cheques are then attached to the passed bills. The cashier verifies the correctness of the cheques as to the name of the payee, amount payable etc., and records the protective endorsement across the cheques in red ink by one rupee higher than the cheque amount. 2.0: Cash Book: 2.1: The cash book as adopted in a P.W. Division is used in PAOs Office also. The receipts are recorded on left-hand side and the charges on the right-hand side. The columns provided on receipt side are date, voucher no, particulars of the transaction, amount and classification. The charges side provide the columns for date, voucher no, particulars of the transactions, cash, cheques no, amount classification. These columns are written up by the cashier from the passed bills and an endorsement of fact of payment along with voucher no is noted both on the bill form and the measurement book. 2.2: The date column is to be filled with the actual date of writing the cash book. While incorporating the challans remitted on previous dates the earlier date is noted in the denomination column showing the present date in the numerator column. The voucher number is the same as the one given on the payment side. The details of receipt side contain the source of receipt and on what account it is received. The amount column indicates the amount of receipt. The classification column should clearly indicate the detailed classification head to which the receipt is to be credited. 2.3: The charges side contains the date as the one on receipt side wherever applicable and otherwise the date of actual payment. The voucher number indicates the serial number of the passed bill being paid for that month. The voucher numbers are given every month. The details column provides as to whom the payment is being made and on what account. The original practice in PAO’s Office is to simply note that PAO bill number in this column. However it is convenient and easy for retracing a transaction to write the details of the transaction such as Est.No., Agt.No., M.B.No. and Page No. etc., The cash column contains the amount as entered in the receipt side and net amount payable is entered in the cheques column of the cash book. The classification should be detailed as per budget book. 3.0: Cheques: 3.1: The chouse along with the cash book are then placed before the PAO / APAO who will verify all the details such as name of the payee, amount payable, protective endorsement etc., and signs the cheques duly drawing a diagonal line across the pay order on the voucher and the M.B as a token of payment of that
131 Chapter-IV particular bill. The signed cheques are sent to cheques dispatch section that will issue the cheques to the persons authorized by the DDOs. The vouchers are then transmitted to the compilation section. 3.2: While signing the cheques the PAOs / APAOs have to attest each entry of receipt in classification column, every entry in cash column on charges side, and cheques column which shall be insisted by the JDWAs during their inspections. 3.3: The cashier has to arrange for dispatch of M.Bs also to the divisions concerned except those indicated by the pre-check section as required to be sent to the JDWA for post check at 40% and 80% stage. 3.4: The statement of bills paid should be got filled in at the time of signing the cheques with the initials of the PAO / APAO in the remarks of column of Form PAO 40. It is sent in duplicate to the divisions / DDOs and receipt of one copy should be watched carefully. 4.0: Valuables: 4.1: The valuables are of two categories. The first category consists of cheques, bank drafts and the second category consists of securities and bank guarantees. The cheques and bank drafts are entered in cash book first and then in the remittance register and sent to bank for realization. After realization the challan numbers are noted in the cash book on charges side. Without challan numbers any receipt should not be considered to have accrued to the credit of the Government and should not be refunded particularly in case of deposits. 4.2: Transactions connected with interest bearing securities do not pass through cash book. A register in Form PAO 43 is maintained for watching receipt and disposal of securities. The PAO / APAO should verify the securities annually in May and report the result of verification to the JDWA. 4.3 The bank guarantees are sent in original to the PAOs / APAOs for safe custody by the agreement concluding authorities. The B.G., which should be in favour of the agreement concluding authority and accepted by such authority before transmission to the PAO / APAO. He should also ascertain from the issuing bank that the bank concerned issued the said B.G. The PAO / APAO should notify the DDO / agreement concluding authority usually one month in advance for their renewal when they are likely to lose their validity within a month. The BG should always be unconditional. Extension of validity of the BG should be on a non-judicial stamped paper of appropriate value receive the personal attention of the PAO / APAO and Superintendent of cash section.
132 Chapter-IV 5.1: Permanent Receipts are issued in the following cases duly noting their number in the cash book. 1) E.M.D and F.S.D 2) Rent realized from private parties. 3) Electricity and water charges recovered from employees. 4) Services rendered in hospitals, Schools and other public institutions under the control of the project. 5) Hire charges of vehicles. 6) Sale proceeds of Stock and unserviceable materials. 7) Other miscellaneous recoveries. 8) The credits on account of deductions shall be passed on to the respective officers either through cheques or through remittances in their favour in the bank or treasury. Separate bills for each category of deduction for the amount to be passed on will be drawn in cash section and got passed by the PAO / APAO. In respect of IT, ST, GPF and APGLI etc., which are directly credited in the account of the PAO, the relevant schedules of recoveries or payments should be collected and a consolidated abstract prepared and sent to IT Department, Commercial Taxes Department, AG / AP and Director of Insurance. All these transactions are routed through a Register of miscellaneous deposits of PAO, duly carrying forward the items month to month to watch their eventual clearance. 6.0: Validity of Cheque: 6.1: If the currency of a cheque expires owing to its not being presented at the treasury / bank within the prescribed time it may be received back by the PAO / APAO who should destroy it and draw a fresh cheque in lieu of it. The fact of destruction and the number and date of fresh cheques should be recorded on the carbon copy of the daily payment sheet of the old cheque and the number and date of the old cheque that is destroyed should be entered on the carbon copy of the daily payment sheet of the new cheque. The fact of issue of new cheque should also be entered in the cash book in red ink simply by noting the cheque number in the appropriate column without mentioning the amount in the payment column. The fact of drawal of new cheque should be entered against the original entry in the cash book as well as on the cover of the old cheque pad. 6.2: In respect of lost cheques the PAO / APAO should obtain a non-payment certificate from the treasury and advise the bank not to release payment against that cheque if presented in future. Then a fresh cheque should be issued duly making the entries in the records as described in the foregoing paragraph.
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Finance (Works & Projects) Department STUDY MATERIAL WORKS