Session 14

1. Session 14 RTI,Allahabad

2. Learning Objective At the end of session, the participants should understand the manual system and function of accounting in various wing of AG(A&E) Offices. RTI,Allahabad

3. Session Overview Before implementing the Voucher Level Computerization, the various accounting functions of the AG (A&E) offices were by and large done manually. However, there are some computers and software which supports the system like in Report wing, General Provident Fund etc, but these systems are on a piecemeal basis with no proper interfacing between them. If we require a particular report on a parameter, it requires lot of time and manpower with no guarantee of data integrity and its correctness. RTI,Allahabad

4. Contd…. For the purpose of smooth functioning of AG (A&E) offices the various functions were distributed to different wing depending on its nature. In this category the major wing of AG (A&E) offices were Treasury Accounts Wing, Public Works Department, Book Section, Account Current Section, Budget and Appropriation, Loans, Deposits and GPF wing. The instructor to explain the important functions of the different wings of accounts to the participants. The relevant rules and manuals are not the preview of the session which itself may be explained in separate course. RTI,Allahabad

5. Course Structure: To understand the manual system of accounting before VLC. To understand the function of accounting in various wing of AG(A&E) Offices. Impact of the VLC System Exercise 14.1 and Group discussion. RTI,Allahabad

6. Existing System (before computerization) Before Voucher Level Computerization to the office of AG (A&E), by and large the process is manual which is time consuming and requires maintaining bulky and voluminous registers. However, there are some standalone systems running to support various activities. But these systems are on a piecemeal basis with no proper interfacing between them. RTI,Allahabad

7. Major functions of various wings of AG(A&E) 1. Treasury Compilation The Treasuries render accounts to their respective AG (A&E) offices. The Compilation General section prepares the detailed book part – I incorporating all the transactions of the respective area treasuries and then the vouchers are sent to the DC sections for compilation of the accounts. The DC sections initially enter the vouchers in the compilation book and later they are taken to the Classified abstracts and Consolidatedabstracts,which show the transactions from the treasuries and also the transactions intimated by the Accounts Officers. The DC sections take the Accounts of the service heads to the final head of account and clear the DAA suspense raised by the treasury sections. RTI,Allahabad

8. 2. Book Section • The main function of the book section is to prepare the general civil account of the state for the month in detailed book part II. This is further posted in the abstracts of Major head totals, which gives the receipts or expenditure with respect to the concerned Major heads and the progressive totals from April to the end of the month. From this the civil account of the State is prepared and despatched to the Finance Department of the respective states. • This section also provides material for preparation of budget estimates to the State Government. RTI,Allahabad

9. 3.Public Works And Forest Accounts Every month, individual PW & Irrigation department divisions compile information relating to receipts and expenditures and send these monthly accounts to AG Office in two parts:   Part - I, the compiled accounts, comprising of ·Major head (MH) wise abstract for revenue and capital Major heads (receipts and expenditure) as well as debt, deposit and remittances (DDR). i.e. summary · Classified abstract up to detail head for expenditure MHs · Classified abstract up to detail head for receipt MHs RTI,Allahabad

10. Part - II, comprises of schedule dockets and vouchers, which are supporting documents to the compiled statements given in Part - I • Vouchers related to Establishment expenditures like tours and travel, stationery, salary etc. incurred by various works divisions are received from treasuries. The monthly civil accounts, appropriation account and annualfinance account related to PW & Irrigation are prepared based on these. RTI,Allahabad

11. 4.Forest Accounts Compilation Forest divisions receipts and payments transactions, for works as well as establishment, are incurred and paid for by the divisions themselves. Forest division sends compiled accounts and supporting documents to the AG similar to the PW & Irrigation divisions. The monthly civil accounts, appropriation account and annualfinance account related to Forest Division are prepared based on these. RTI,Allahabad

12. 5.Reconciliation  The reconciliation procedure followed in the Accountant General’s Office generally involves comparison of the accounting records internally generated (by the STOs /TOs, PAOs etc) against the records of an external agency (like RBI, divisions etc) and arrive at an agreement. The various reconciliations that are done are: • Reserve bank deposit (RBD) reconciliation • Currency chest transfer (CCT) reconciliation • Deposits (Other than RBD) reconciliation • State Government department reconciliation • PWD and Forest remittances and cheques reconciliation RTI,Allahabad

13. 6.Accounts Current Section  Account Current Section deals with Settlement of Accounts arising out of transactions between the State Government and • Central Government (different Ministries including Railways, Defence, and P&T) • Other State Governments of the Indian Union • Different RBI Branches • Project PAOs in the State RTI,Allahabad

14. Continued… Two procedures are adopted to settle these accounts: · By sending advices to the CAS, RBI, Nagpur to increase or decrease the balance of one Government concerned per contra decrease or increase of another Government, with reference to the vouchers, Schedules or other particulars of Inter Governmental transactions. This procedure is usually applicable to those circles that have accounts with RBI, Nagpur (like State Governments other than those of J & K, Goa, and Sikkim, Ministries of Central Government, etc.) RTI,Allahabad

15. Continued… By actual cash settlement through Cheques/DDs being exchanged between the accounting circles concerned. The amounts are kept initially under ‘Suspense Head’ and pending the same till the realization of Cheques/DDs. This procedure is usually applicable to those circles that do not have accounts with RBI, Nagpur (like P & T, Defence, Railways, State Governments of J & K, and Sikkim, Union Territory of Pondicherry, Central PAO, and State PAOs). RTI,Allahabad

16. 7. Budgets and Appropriations • Under Article 149 of the Constitution of India, the CAG has to prepare the appropriation accounts for the Central Government, each State Government and the Government of each of the Union territories. These consist of accounts of expenditure (both voted and charged) of the government for each financial year compared with the accounts of the voted grants and charged appropriations for the different purposes as specified in the schedules appended to the appropriation acts passed by the legislatures. This examination of audit of expenditure against all provision of funds is known as appropriation audit. RTI,Allahabad

17. Continued.. This comprises- • Audit of expenditure against grant / appropriation • Audit of expenditure against each of the head fixed as a unit of appropriation under a grant or appropriation against the allotment therefor. RTI,Allahabad

18. 8. Loans The State Governments sanction loans and advances to the following under various heads of accounts for various purposes. • Loans to Institutions like autonomous bodies, local bodies etc., • Loans to Government servants/ All India Service officers. To watch the repayment of the principal and interest of these loans and advances and also to effect the reconciliation with ledger figures (booked figures) subsidiary loan register and broad sheets are maintained in the loans sections of the AG's offices. RTI,Allahabad

19. 9. Deposits Transactions relating debts, deposits and advances are handled here. These comprise receipts and payments in respect of which Government becomes liable to repay the monies received or has claim to recover the amount together with repayment of former (debt and deposit) and recoveries of the latter while transacting public business. Government receives monies as deposits from public bodies or members of public. In some cases the Government itself sets apart sums from current revenues to be accumulated on a fund for spending on specified objects. RTI,Allahabad

20. Continued… The work in deposits comprises- • Maintenance of broad sheets for various deposits and advance heads and allied work. • List of Payments check. • Compilation of the accounts received and generation of statements. • PLA, their operation, authorisation and balances. • Issue of authorisation for refund of lapsed deposits. RTI,Allahabad

21. The main modules of the VLC system are: • Treasury Compilation • Book • Public Works Accounts Compilation • Forest Accounts Compilation • Reconciliation • Account Current • Budget & Appropriations • Loans RTI,Allahabad

22. Continued… • Deposits • MIS • Historical Data & Trend Analysis • Audit Enquiries • System Security • Interfaces • Master Data • Finance Accounts RTI,Allahabad

23. User Characterstics • Users of this system will be mainly from the sections of the Office of Principal Account General (Audit) / Accountant General(A&E). As certain amount of computerisation already exists (although on a piecemeal basis) some of the users are familiar with and frequently access the system for information. The VLC system is user friendly . • Reports on Classified abstract, Consolidated abstract for all MHs, Detail Book Part I & II (receipt/ payment & DDR heads), Monthly Appropriation Accounts, Monthly Civil Accounts & Broad Sheet for HBA/MCA/ Other Conveyance would be parameterized to suppress printing of any of the existing columns as desired. RTI,Allahabad

24. Assumptions • Populating the database with the required master / operation / performance data will be outside the purview of the system. • All outputs will be given in English language only, except the Monthly Civil Accounts, Annual Finance Statements, Annual Appropriation Statements, Classified Abstract, Consolidated Abstract and the Budget Estimates which will be in English and Hindi both (report Titles & Headers and the Account Head descriptions). RTI,Allahabad

25. Limitations • In case of Public Works & Forest accounts the VLC system will perform compilation from the compiled accounts rendered by the respective divisions and not from the vouchers. • GPF details of High court judges (Registers etc.,) is out of scope and will be maintained by the GPF package. • GPF functionality is developed separately in U.P RTI,Allahabad

26. Impact of the System • Efficiency and effectiveness of Voucher Processing has been improved. • Effective decision making is possible at various levels due to accurate and timely information produced by VLC. • Mechanism of Monitoring expenditure incurred by various departments against the budget has been improved. RTI,Allahabad

27. Continued… • Reconciliation of accounts has been speeded up. • Auditing is performed more efficiently. • Offers on-line query facility. • With the growth in number vouchers and data, the load on the system will increase with time. Oracle based system offers scalability and hence takes care of increased data volumes. RTI,Allahabad