Transcript BOOK KEEPING & NEW BUDGET & ACCOUNTING FORMATS …

MAINTENANCE OF
ACCOUNTS IN PANCHAYAT
RAJ INSTITUTIONS IN A.P.
Recommendations of EFC
Separate demand head be created in state budget for
transfer of funds to local bodies
Separate Minor Heads be created for transfer of funds
to each category of local bodies
Separate format be prescribed for preparation of
Budget & keeping of accounts to ensure uniformity in
Central, State & Local Body Accounts
These formats should be amenable to Computerisation
C & AG to prescribe the accounting formats
Recommendations of C & AG
17 Accounting Formats have been prescribed by
C&AG which are common for all the PRIs.
Of this, 16 are for keeping accounts and 1 for
preparing budget
Classification of transaction structured on a
function - cum – programme basis to provide
uniformity at all 3 tiers of Government.
LCFPA is given to classify the transactions.
Addition & deletion of Major/Minor heads will be
done only with the approval of State AG.
Adoption of New formats for PRIs
Government AP issued orders in G.O.Ms.
No.172 PR(Acct.I), Dt:16.05.05 adopting
these new formats by PRIs
Except these 17 forms, the others registers/
forms will continue to be maintained in the
existing proforma
Mandatory Minor Heads
A separate demand XXXI is created in State
Budget for transfer of funds to PRIs.
The following Minor Heads are operated to
transfer funds to PRIs by various
Departments
Assistance to Zilla Parishads – code 196
Assistance to Block Panchayats –code 197
Assistance to Gram Panchayats – code 198
Classification of Transactions
For Expenditure 4 tier classification
Major Head
Sub Major Head
Minor Head
Object Head
For Receipt 3 tier classification
Major Head
Sub Major Head
Minor Head
Classification & Codification
Code
2202 – Major Head (Function)
01- Sub Major Head (SubFunction)
053- Minor Head
(Programme/Schemes/
Activity)
Description
General Education
Elementary Education
Maintenance of Buildings
27- Object Head
Repairs to School Building
(Purpose of Expenditure)
Classification of Grants
All Grant receipts are shown under Major
Head 1601 – Grants –in-aid.
The Minor Head corresponds to program
Minor Heads in the section “Expenditure
Heads (Rev. Acct)”, to which the assistance
relates are to be adopted.
Alpha numerical codes to show the source
of grant.
Classification of Grants
A
B
C
D
E
F
G
H
- Government of India grant
- State Non-Plan grant
- State Finance Commission grant
- State Plan grant
- Central Finance Commission grant
- MP Lads
- MLA Lads
- Schemes funded by Panchayats own sources
Accounting of Grants
Example – Receipts
1601
-Grants – in – Aid/Assistance from State/Centre
702
-Minor Irrigation
B 04
- State Non-Plan Grant
Payments
2702
01
102
27
-Minor Irrigation
-Surface water
-Lift Irrigation scheme
-Minor Works – Repairs & Maintenance
Effects of
EFC Recommendations in A.P.
The EFC recommendations are to
operationalise the constitutional provisions
The PR accounts are to be maintained on
the lines of Government Accounts
Common account formats are prescribed for
all the 3 PRIs.
All the revenues of PRIs are constituted into
panchayat fund on the lines of
consolidated fund of the state
Effects of
EFC Recommendations
The expenditure from Panchayat fund is
classified functionally
Due to uniform minor heads the total
quantum of funds devolved through state
budget to each PRI can be known
Due to functional classification of
expenditure the number of functions
transferred and expenditure thereon can be
known from PR accounts
Over view of Budget &
Accounting Formats
Receipts & Payments accounts are prepared in
two parts.
Part – I - Panchayat fund - Comprising of all
receipts & expenditure
Part – II - Deposit & Advances -comprising of
Deposits & Advances and remittances.
Distinction between Revenue & Capital
Receipt & Payment Accounts contains columns
for budget estimates of the current year, previous
year accounts and reporting years account.
Over view of Budget &
Accounting Formats
Annual R&P accounts supported by four
additional disclosure statements items :
Statement of Capital Expenditure – (Form-2)
Statement of Receivable & Payables– (Form-3)
Statement of balances under Deposits &
Advances & Loans – (Form-4)
Statement of Provident Funds, investments etc.
– (Form-5)
Single Cash Book
Only one main cash book is to be
maintained for panchayat fund
However, in case of multiple funds,
subsidiary cash books can be maintained to
facilitate reconciliation
Over view of Budget &
Accounting Formats
The detailed estimates are divided into different
heads of expenditure (Functions/ Programme/
Activities etc.)
Format consists of columns for last year actual
BE, RE & BE for next year
The Budget is prepared only in part-I (Panchayat
fund)
Classification of receipts & expenditure is uniform
for both account & budget.
Features of New Accounting System
Each PRI is an accounting entity
The accounting policies of PRIs are same as that
of State Government
The main feature of new accounting system is
integration between accounting and budgeting
Accounts are kept on cash basis
The codification covers all activities under 29
subjects listed in 11th schedule
Accessible to Computerization and consolidation.
The Annual Account facilities to compare the
institutions actual performance against the
forecast in the Annual Plan & Budget
Features of New Accounting System
Recoveries of payment are taken as
reduction in expenditure
In case of funds are transferred from ZP to
MP/GP for schemes, the transfers are shown
as deduct receipts
Money received which is not revenue of
PRIs is accounted for in deposit account.
Features of New Accounting System
The new accounting system secure internal
control on Receipts & Expenditure.
Facilitate introduction of performance audit
Help in analysis of Expenditure / activities
under MIS
Budget expenditure (Amounts drawn from
treasury) and PAO expenditure for ZP
works is also captured in the Accounts.
Transition Issues - 1
Capacity Building –training to lower tiers at the
District & Mandal level.
Printing & dissemination of Budget & Accounts
Formats with codes.
Arrears of Accounts to be prepared in new formats
Changes in relevant Act& Rules
Computerization of Accounts.
Creation of computerized database
Development of Accounting manuals
Changes related to computerized process
Training of State Audit staff on new system
Transition Issues – 2
Computerization of Accounts
Hardware
Software
Training
Maintenance
Creation of computerized database
Integration of Accounts software & Audit
Software
DIFFERENCE BETWEEN OLD AND NEW
ACCOUNTS
OLD FORMS
NEW FORMS
Receipt & expenditure was
classified under
Sec-I (Non development)
Sec-II (Development)
Receipts & Expenditure
classified under Revenue &
Capital
Multiple cash books
Recoveries are shown as
receipt
Single cash book
Recoveries shown as
reduction of expenditure
Transfer of funds shown as
expenditure
Transfer funds shown as
deduction of receipts
DIFFERENCE BETWEEN OLD AND NEW
ACCOUNTS
OLD FORMS
NEW FORMS
Funds directly drawn from
treasury (other than grants)
were not brought to accounts
Funds drawn under Minor
Heads 196 / 197 / 198 to be
incorporated in the accounts
There was provision to show
the EMF under General fund
account
The Non development grant
were shown under sec-I and
Development grants sec-II of
the annual account
EMF have to be worked out
separately and enclosed to the
Accounts as an annexure
All the grants development
and non development are
shown under 1601 grant- in aid only.
DIFFERENCE BETWEEN OLD AND NEW
ACCOUNTS
OLD FORMS
NEW FORMS
The deposit and advances
Deposits and advance
were shown as receipts under account is prepared
sec-II development
separately under part-II of
annual account
Receipts & expenditures was Receipts & expenditures are
classified as non development classified as revenue and
and development
capital
Expenditure linked to the
source of receipt
Expenditure linked to the
functions
No uniformity in forms and
registers
Common formats for all the
PRIs