FINANCIAL MANAGEMENT IN NEERANCHAL PROJECT VIGYAN BHAWAN,DT 11.01.14

1. FINANCIAL MANAGEMENT IN NEERANCHAL PROJECTVIGYAN BHAWAN,DT 11.01.14 Department of Land Resources, MoRD

2. Contents • Introduction • Objectives • Financing Plan • Funding Pattern • Component wise cost Break-up • IUFR • Budget & Fund Flow system • Accounting Procedures • Audit • Internal Control System • Books of Accounts & Records • Staffing & Capacity Building • Implementation of CPSMS

3. Introduction • Neeranchal National Watershed project is assisted by World Bank(IDA) and implemented by Department of Land Resources, Ministry of Rural Development, Government of India. • Project Duration -6 years starting from 2014-15. • Expected effective date- June 2014 • Project will be implemetned in 8 selected states i.e, Andhra Pradesh, Odisha, Jharkhand,Chhatisgarh, Madhya Pradesh, Maharastra, Gujrat & Rajasthan.

4. Objectives • Strengthen fiscal and financial management at all levels. • Ensure uniformity in accounting across all locations of the Project • To provide timely and reliable financial information to different stake holders. • To ensure the project funds are utilized for the purpose for which it was intended for.

5. Financing Plan

6. Funding Pattern • World bank will not provide any advance towards project expenditure. • Eligible Expenditures of project are to be reimbursed on quarterly basis based on the IUFR.

7. What is eligible expenditure? • Eligible expenditures are those expenditures for which Government and WB have agreed upon in the legal documents and are mentioned in the Cost table and these are spent as per the Project Implementation Plan(PIP)

8. Component wise Cost Break-up

9. Interim Unaudited Financial Report(IUFR) • IUFR is a very important financial reporting format in which each state has to report their financial progress. • The report has to be submitted within 30 days of the completion of quarter to DoLR ,Project implementation Unit(PIU). • The IUFR format for states are :

10. Budget & Fund Flow System • Approved % of the total approved work plan(AWP) of the project for any financial year will be budgeted in the budget line of DoLR , MoRD. • Similarly approved % of the total AWP will be budgeted in the state budgets of 8 states as a separate budget line for Neeranchal Project. • The Fund flow pattern of the project will be like:

11. Accounting Procedure at SLNA • The following general principles for accounting will be applicable for all SLNAs: • Cash Basis • Double entry Method • Accounts may be maintained preferably in Tally. • Only Actual expenditure will be reported in IUFR. No advance will be shown as expenditure

12. Contd. • Separate Bank accounts are to be opened for Neeranchal Project at state & district level.(preferably in same bank). • Delegation of Financial Powers and Financial Rules will be as per the SLNA administrative/financial rules. • SLNA,WCDC,(WDT,WC if required) will be treated as different accounting centers and separate accounting records are to be maintained.

13. Contd. • All funds released by the state to the district and block level units will be treated as inter unit transfers until expenditures are incurred at these levels. • Interest earned from the project fund will be treated as grant and will be spent for the purpose of Project purposes. • No depreciation on Assets.

14. Audit • External Audit : Annually • Auditor Selection: Practicing CA firms empanelled by C&AG as per the WB procurement procedure. • Audit ToR & Report: As per the ToR & format agreed with the WB. • Audit Report to be submitted by 15th September for each F.Y by SLNA.

15. Internal Audit • Half yearly. • Auditor Selection: Practising CA firms empanelled by C&AG as per the WB procurement procedure. • Audit ToR : As per the ToR agreed with the WB. • Audit Report to be submitted to management & PIU, DoLR.

16. Internal Control System • Preparation of BRS on Monthly Basis • Preparation of Monthly Receipts & Payments Statements • Submission of Requisition Form for seeking funds • Monthly reconciliation of payments with expenditures • Monthly Review of Financial Progress against Annual Budget • Monthly Analysis of Advances • Monthly analysis of Statutory payments • Numbering of assets and physical verification

17. Books of Accounts & Records • Cash Book • General Ledger • Journal Book • Cheque Issue Register • Fixed Asset Register • Audit objections register • Advance Register/Ledger • Budget Control Register • Payment Vouchers(Cash & Bank) • Receipt Vouchers(Cash & Bank) • Journal Vouchers • File opening register • Dak (Letters Issue/receipt) Registers

18. Staffing & Capacity Building • Dedicated FM cell with staff of requisite qualifications and experience will be created at SLNA and WCDC level to strengthen the FM arrangement of on going IWMP. • Adequate hand hold training & capacity building will be imparted to the FM staffs.

19. Implementation of CPSMS • CPSMS can be implemented instantly at 8 Neeranchal states as chart of accounts is prepared. Hence registration and expenditure filing is possible in these states for neeranchal transactions • For IWMP states: Only Registration at present.

20. THANK YOU B.P.Behura FM Expert - Neeranchal