ITEM NUMBERS 5 (a) TO 5 (d)

1. STUDY OF TREASURY RULES, GFRS, GOVERNMENT ORDERS ETC. OF THE UNION AND STATES TO IDENTIFY COMMONALITIES AND VARIANCES AND TO SUGGEST BEST PRACTICES ITEM NUMBERS 5 (a) TO 5 (d)

2. AC-DC BillsItem No. 5 (a): Abstract Contingent Bills - Purposes and provisions related to submission of Detailed contingent bills: Suggestions: • The maximum time limit for submission of DC bills against the AC Bills drawn may be made as 3 [three] months uniformly across the states. • Some of the DDOs may draw more than one AC bill in a month. During certain contingencies the DDO may require more than 3 AC bills in a particular calendar month. Hence the proposals could be that, further AC bills should not be honored, if the AC bills drawn two months prior to current month are pending for want of DC bill. • Ex. In January 2011, 5 AC bills are drawn. On 1st April 2011, no AC bill that was drawn in January should be outstanding against that DDO, to honor further AC bills.

3. AC-DC BillsItem No. 5 (a): Abstract Contingent Bills - Purposes and provisions related to submission of Detailed contingent bills: Suggestions: • The time limit for submission of DC Bills in respect of transactions of special nature such as ‘Expenses towards Elections’, ‘Expenses in connection with Child Development Project-nutrition’, ‘expenses in connection with Natural Calamities / Disasters’, etc may be made as 6 [six] months. • Certain uniform items could be identified. • Over and above the items identified there should also be flexibility at local level on state specific activities with mutual consultation by the Govt. concerned with local AG.

4. AC-DC BillsItem No. 5 (a): Abstract Contingent Bills - Purposes and provisions related to submission of Detailed contingent bills: Suggestions: • To enforce the effective monitoring mechanism the procedure adopted in West Bengal ie., maintenance of watch register at Treasuries level, sending of DC bills to AG office by Treasuries after collection / receipt from COs/DDOs, issue of quarterly pending statements to DDOs/COs for submission of pending bills may be introduced /implemented across the states. • In States where the treasuries are computerized the pairing could be done at the treasuries in the system itself automatically, as done in Karnataka. This prevents further drawl of AC bills.

5. AC-DC BillsItem No. 5 (a): Abstract Contingent Bills - Purposes and provisions related to submission of Detailed contingent bills: Suggestions: • The colour for DC bills may be introduced across the states for easy identification and to avoid dislocation/mixing with other vouchers. • The drawals of AC Bills and submission of DC bills should be made in prescribed forms only. • To implement the above, AsG should take up the matter with the State authorities for amendment of respective paras/rules of Treasury rules/codes and other related procedures/orders suitably.

6. AC-DC BillsItem No. 5 (a): Abstract Contingent Bills - Purposes and provisions related to submission of Detailed contingent bills: Suggestions: • For ensuring better monitoring of position of AC-DC bills at AsG level, suitable MIS reports like Department / Grant-wise, Major Head-wise, Treasury-wise, CO-wise, Year-wise and object-wise pendency status may be developed and integrated with VLC package.

7. AC-DC BillsItem No. 5 (a): Abstract Contingent Bills - Purposes and provisions related to submission of Detailed contingent bills: Suggestions: • The AsG should review the position six monthly and take up the pendancy position with the COs/Treasuries with copies to Directorate of Treasuries and Accounts / Inspection and Administrative Department for early submission of the pending bills. • The pendancy position may be taken up with Finance Department of the respective states with copies to Administrative Department on annual basis. • Suitable review meetings on the issue on annual basis may be taken up at higher level where pendency of AC-DC bills is mounting

8. AC-DC BillsItem No. 5 (a): Abstract Contingent Bills - Purposes and provisions related to submission of Detailed contingent bills: Suggestions: • The problem of very old pending AC bills (which are outstanding for several decades) • The information and records are not available/traceable • What is the Solution?????? • As one time measure may be a cut of date – say 2005 be fixed by the headquarters. • The AC Bills pending prior to that period may be brought to the notice of the CCO concerned with all the available details. • The same could be dropped from pursuance on the responsibility of the CCO/Govt. under intimation/concurrence and on the responsibility of the Finance Department/Govt. • The above should be linked to assurance from the Govt. that hereafter stringent action for not rendering DC bills in stipulated time would be initiated against the defaulters.

9. AC-DC BillsItem No. 5 (a): Abstract Contingent Bills - Purposes and provisions related to submission of Detailed contingent bills: Suggestions: • Financial limits for drawing, if any. • No uniform limits could be laid and it would be State specific • However, the State Govt. may be asked to lay down limits for CCO and Finance Department for general items. For specific items the limit could be more/no financial limits (for ex. Elections). • The discretion may be allowed for State Govt. in this regard, may be in consultation/concurrence with local AG.

10. Classification of Central SchemesItem No. 5 (b): Classification of Central Schemes across State budgets and tracking expenditure in the accounts Suggestions: • All the AsG shall take up the matter of codification of schemes in Budget Documents and preparation of Plan Budget Link Document with the respective states and complete the work within the time frame. • Respective State Governments may be asked to mention the scheme source of CP/CSP of GOI where provision is made under different schemes nomenclatures in the Plan Budget Link Document.

11. Classification of Central SchemesItem No. 5 (b): Classification of Central Schemes across State budgets and tracking expenditure in the accounts Suggestions: • Pending incorporation of the changes and codification in Budget/Plan-Budget link document, AsG may do in-house codification and generate concordant table directly from VLC – however, yields limited benefit. • The logic/format/approach adopted by Orissa office/Karnataka Office in the CPSMS module which has been integrated with in the VLC Package for generation of Concordant Table may be adopted in all the AsG office and develop a separate module for CPSMS and integrate with VLC Data base.

12. Classification of Central SchemesItem No. 5 (b): Classification of Central Schemes across State budgets and tracking expenditure in the accounts Suggestions: • The Process/logic adopted in VLC of Karnataka Office is; • One time steps (to be modified if necessary for additions/deletions once in a year or as when necessary) • First Step: Codification of Plan Schemes (SP/CP/CSS) • Second Step: Linking of GOI Code to MH 1601 in Master • Third Step: Linking of MH 1601 to Expenditure Classifications in Master

13. Classification of Central SchemesItem No. 5 (b): Classification of Central Schemes across State budgets and tracking expenditure in the accounts Suggestions: • Monthly steps • First Step: Download and migration of CGA/RBI data into VLC database • Second Step: Linking (i.e. from List of Values - LOV) Sanction Details at the time of clearance of suspense raised against MH 1601. • Third Step: Process and Generation of Report. • The Report contains the GOI scheme code/name, previous year GOI releases and Expenditure, Current year GOI releases and sanctions details (both as per CGA & AG) and the Expenditure with breakup The Detailed Process

14. Classification of Central SchemesItem No. 5 (b): Classification of Central Schemes across State budgets and tracking expenditure in the accounts Suggestions: • Not withstanding in-house generation of concordant table through codification in AG office, there are certain inherent problems in the whole system; • At present no one to one linkage between GOI scheme and State Scheme • There is no one to one linkage between releases in a year and expenditure in year (i.e. the releases might have been in - say current year, but the expenditure may spread to several years)

15. Classification of Central SchemesItem No. 5 (b): Classification of Central Schemes across State budgets and tracking expenditure in the accounts Suggestions: • It is not possible (in the present Annual Accounts set up) to know what is Opening Balance, Current Year Releases, Expenditure to the end of the Financial Year and CB. • This would be possible only through subsidiary accounting by capturing the relevant information for each scheme through appropriate linkage between GOI scheme and State Scheme continuously. • Hence, Codification in State Budget and Plan-Budget Linkage coupled with subsidiary accounts can only solve the purpose.

16. Classification of Central SchemesItem No. 5 (b): Classification of Central Schemes across State budgets and tracking expenditure in the accounts Suggestions: • Requires uniform codification and CGA may come out with necessary structure in LMMH (if required with an additional tier) or any other alternative system. • In recent visit to Karnataka, the CGA discussed issues such as – Mapping GOI Schemes with State Schemes, Standardization of Heads of Account, Multi-dimensional classification, 7th Segment/tier in Classification Structure, etc.

17. Classification of Central SchemesItem No. 5 (b): Classification of Central Schemes across State budgets and tracking expenditure in the accounts Suggestions: • Respective administrative/Finance Department of the State may be requested by the AsG for preparing of expenditure details incurred by the Government implementing agencies/Govt. autonomous bodies like DRDA, NREGA, NRHM, SSA etc and send such details quarterly to AsG for incorporation of the same into the CPSMS reports. • In the state of Karnataka the Govt. is proposing a new software package E-Khajane-II, where they are proposing to capture all the details of receipts (i.e. direct releases to PRI/ULB/AB/Societies from GOI or others) and expenditure through web enabled mechanism.

18. Grants-in-Aid Item No. 5 (c): Classification of Grants-in-aid received from the GOI & tracking expenditure in the accounts & Classification of Grants-in-aid given by the State Governments and tracking expenditure in the accounts Classification of Grants-in-aid given by the State Governmnent and tracking expenditure in the accounts - Suggestions: The Problem areas: • Once the GIA is drawn this is treated as final expenditure in State Govt. Accounts. To know how much GIA is released by the State Govt., the Sanction Database is not necessary as the GIA is released under specific Heads of Account. • Only very few Sanction Orders insist to render UCs to AG. • The Sanction Orders would be in huge number (about two lakh and each SO may involve many Implementing Agencies) and issued by all the departments. • Even if all Sanction Orders are received in AG, capturing the details is practically very difficult, given manpower constraints.

19. Grants-in-Aid Item No. 5 (c): Classification of Grants-in-aid received from the GOI & tracking expenditure in the accounts & Classification of Grants-in-aid given by the State Governments and tracking expenditure in the accounts Classification of Grants-in-aid given by the State Governmnent and tracking expenditure in the accounts - Suggestions: The Problem areas: • The Sanction Order on several occasions does not specify the exact purpose for which the GIA is released. The bulk of SO stop at general purpose such as ‘Block Grants’. • From the SO it is not possible to ascertain whether the GIA is given for Creation of Assets or otherwise.

20. Grants-in-Aid Item No. 5 (c): Classification of Grants-in-aid received from the GOI & tracking expenditure in the accounts & Classification of Grants-in-aid given by the State Governments and tracking expenditure in the accounts Classification of Grants-in-aid given by the State Governmnent and tracking expenditure in the accounts - Suggestions: The Problem areas: • In so far tracking of expenditure with reference to GIA released is concerned, unless all the implementing agencies (that run into thousands of implementing agencies) furnish the expenditure figures, we may not be in a position to arrive at exact expenditure against the releases. • At present the systems are not there for this sort of tracking. • E-Khajane-II is proposing for capture of the receipts and expenditure particulars from all Implementing Agencies through web enabled system.

21. Capturing the Receipts and Expenditure outside the State Budget GOI PRIs and ULBs Autonomous Bodies Societies [GOI+GOK+OWN Resources] GOI Direct Releases GOI Releases passing GOK Releases through State Budget GOK The Receipts and Expenditure figures of all schemes captured on the E-Khajane-II Web by PRIs, ULBs, Autonomous Bodies, Societies, etc. – which is going to be mandatory as per Govt. Orders. E-KHAJANE-II WEB

22. ARCHITECTURE OF KHAJANE II O/o Pr. Accountant General (A&E), Karnataka

23. Grants-in-Aid Item No. 5 (c): Classification of Grants-in-aid received from the GOI & tracking expenditure in the accounts & Classification of Grants-in-aid given by the State Governments and tracking expenditure in the accounts Item No. 5 (c) (i): Study prescribed classification structure (given in the (LMMH) and actual practices in across States Suggestions: • As per hqrs. directions all the State Govt, should be insisted for operation of separate Object Heads in Budget to classify the GIA released for creation of assets, GIA for payment of Salaries and GIA for other purposes distinctly. • This would enable to complete the column ‘creation of assets’ in Statement No. 8 as well as Appendix – IV of Finance Accounts. • Gives clear picture of how much money spent for development and could be reflected in Finance Accounts. • This simple step would achieve the intention of the purpose for which the GIA is devolved. • However, this does not give any clue of actual expenditure against the GIA released.

24. Classification of Central SchemesItem No. 5 (c): Classification of Grants-in-aid received from the GOI & tracking expenditure in the accounts & Classification of Grants-in-aid given by the State Governments and tracking expenditure in the accounts Item No. 5 (c) (ii): Study of completeness of sanction orders issued Suggestions: • State Govt. should be insisted for incorporation of full details and clear purpose in Sanction Order and classified distinctly under different Object Heads.

25. Classification of Central SchemesItem No. 5 (c): Classification of Grants-in-aid received from the GOI & tracking expenditure in the accounts & Classification of Grants-in-aid given by the State Governments and tracking expenditure in the accounts Item No. 5 (c) (iii): Provisions related to submission of Utilization Certificates: Suggest format including elements that should be captured in an UC and assertions to be included Suggestions: • It may not be possible in the present set up to obtain the UCs from all the Implementing Agencies and link to the GIA. • This would be possible only through computerized systems with web enabled periodical updating which would facilitate online tracking at periodical intervals.

26. Certification of Plan Scheme Expenditure Item No. 5 (d): Certification of Plan Scheme Expenditure by the AG (A&E): • All the offices are generating the SOE after completion of annual account in respect of plan schemes and sending the same to AsG (CA) for audit and certification. • Certification is a welcome step. But to know what exact amount is spent, there should be comprehensive system, which at present is not existing.

27. THANK YOU