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: Observations: • All the States framed the provisions imposing limitations/ conditions for drawal of AC bills and submission of DC Bills • However, sending of DC bills is poor and huge number of AC bills awaiting pairing off with DC bills in AsG office. • Question may arise that when the DDOs certifying while drawing AC bills that the DC bills against earlier AC bills have been sent to COs for counter signature and transmission to AsG for record, how the AC bills in AsG’s office remain un-paired?

3. AC-DC BillsItem No. 5 (a): Abstract Contingent Bills - Purposes and provisions related to submission of Detailed contingent bills: Observations: • Perhaps the monitoring mechanism does not function properly and to the extend of requirement . • It may be mainly because of the fact that the bill passing authority [Treasury] is not involved in watching of receipt of DC bills, rather allows the bills on mere certificates.

4. 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. Drawing of third [3rd] AC Bills shall be allowed only after receipt of DC bills for the 1st AC Bills or within 3 months time limit which ever is earlier.

5. 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 namely ‘Diet charges of prisons, patients’, ‘Expenses towards Elections’, ‘Expenses in connection with Child Development Project-nutrition’, ‘Fodder charges to Animals, Birds’ and ‘expenses in connection with Natural Calamities / Disasters and Disaster Mitigation programmes may be made as 6[six] months. Drawing of 3rd AC bills shall be allowed after submission of DC bills against 1st AC bill or within 6 months time limit which ever is earlier.

6. 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[KD-2] • The colour for DC bills may be introduced across the states for easy identification and to avoid dislocation/mixing with other vouchers.

7. AC-DC BillsItem No. 5 (a): Abstract Contingent Bills - Purposes and provisions related to submission of Detailed contingent bills: Suggestions: • 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. • 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.

8. 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

9. Classification of Central SchemesItem No. 5 (b): Classification of Central Schemes across State budgets and tracking expenditure in the accounts Observations: • Since the concept /system is newly introduced and all are dependant on other Agencies / State Government to have the required inputs and expenditure details, all the AsG are preparing the CPSMS report as per the direction of Headquarters office. • In some states, the Plan Budget Link document and Concordant Tables and scheme codifications have not been done. In some states, such reports, already done, in incomplete shape.

10. Classification of Central SchemesItem No. 5 (b): Classification of Central Schemes across State budgets and tracking expenditure in the accounts Observations: • In most of the states, the CPSMS report is being prepared outside the VLC Package and by putting the expenditure details taken from VLC Data base, i.e, not directly tracking the expenditure details from VLC Data base. • The reports sent are not in complete shape as these lack depiction of actual expenditure details of funds transferred outside budget to Government controlled implementing agencies/Government Autonomous bodies like DRDA, NREGA, NRHM, SSA etc/Non-government organizations. As such the reports do not fulfill the requirements of the planning/Finance Commission and other funding agencies.

11. 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, 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.

12. 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. • The logic/format/approach adopted by Orissa office in the CPSMS module which has been integrated with the VLC Package may be adopted in all the AsG and develop a separate module for CPSMS and integrate with VLC Data base.

13. Grants-in-AidItem 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 Observations: • As observed from the information collected and the summary of interaction had by the team deputed to different offices, classification of receipt and tracking expenditure differs from office to office. • The task is co-related with the item No. 5(b) and the commonalities and variances are almost all same as enumerated against the above item.

14. 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 received from the GOI and tracking expenditure in the accounts - Suggestions: • As indicated in item 5(b), if the logic/approach/format of CPSMS module of Orissa office is adopted in all the offices, classification of GIA from GOI and tracking expenditure in the accounts can be achieved. • As suggested at item 5(b), the State government may be approached for sending the details of expenditure incurred by the institutions/state authorities against GOI grants transferred to implementing agencies outside State Budget whose expenditure details are not available in the accounts of AsG • On availability of such details the same can also be incorporated in the CPSMS module to generate comprehensive reports.

15. 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: • Similarly GIA sanctioned by the States and tracking of expenditure in accounts could also be achieved through linking the drawal with the sanction database in the VLC System. • For the purpose, all the offices have to develop a sanction database where all sanctions issued by States towards GIA required to be captured. • If the sanction database developed and integrated with VLC Package, while compiling of GIA vouchers the expenditure against each sanction could be recorded/linked in the sanction base.

16. 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 Observations: • As observed from the LMMH and summary of interaction that the deputed teams had with different offices, apart from the booking of receipt under 1601 and booking expenditure under respective functional Major Heads in LMMH 3604, all the states are making budget provision and booking expenditure under respective functional Major Heads as provided in LMMH.

17. 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 Observations: • However in some cases the expenditure is being booked other than the prescribed minor heads i.e., from 191to 198 • Perhaps it is being followed because it facilitates generation of expenditure data under different sub-schemes like SCSP(minor head-‘796’) Normal (other minor heads) and it helps to meet the requirements of revised formats of Finance Accounts • Further it is also observed that GIA transactions are booked under capital heads of accounts though the assets created from the funds provided are owned by concerned grantee agencies. Perhaps it is being done to avoid Revenue deficit.

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 Item No. 5 (c) (i): Study prescribed classification structure (given in the (LMMH) and actual practices in across States Suggestions: • The respective State Government may be advised suitably to avoid /stop making budget provision and drawal of GIA under GIA under capital major heads • In view of information required to be depicted in the revised format of Finance Accounts, the GIA bill format may be prescribed to mention the details as in Annexure-II

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 Item No. 5 (c) (ii): Study of completeness of sanction orders issued Observations: The copies of sanction orders and extract of Treasury rules collected/made available were reviewed (KD-6 and KD-7) • It is observed that though there is no prescribed format but the GIA sanctions are in speaking order with stipulations like drawal head of account, grantee institute name, conditions for submission of UC etc. • AG (A&E), Bihar and Pr.AG (A&E), West Bengal have recently addressed this point to State Govt. with a request to standardize format for sanction of GIA including some essential details (KD-8)

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 Item No. 5 (c) (ii): Study of completeness of sanction orders issued Observations: • Further it is observed that maintenance of sanction for capturing/recording by the States is yet to be materialized. • Development of such sanction database in Orissa is in progress.

21. 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: • Since the sanction database of State GIA sanctions has relevance for generation of necessary reports and also requirement for Formats of Finance Accounts, all the AsG should take necessary steps to develop such a database and integrate with VLC Package. • Like AG (A&E), Bihar and Pr.AG (A&E), West Bengal, all other AsG may take up the issue with respective State Government for incorporation of required points in the GIA sanction issued (KD-8)

22. 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 Observations: • Through all the states laid provisions in the relevant rules for submission of UCs for GIA amount drawn, the format/certificates prescribed is not suiting to the present computerized accounting system. • In the computerized accounting environment UCs without details, nothing of the same against the amount drawn is treated as incomplete.

23. 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: • Like the Orissa and Maharashtra all the States may exempt the submission of UCs for salary grants. Condition for the same should be stipulated in the sanction order itself. • The VLC shall provide “condition flag” in the VLC package for capturing such requirements in the data base. • A format for submission of UCs may be introduced across the states as detailed in Annexure-III.

24. 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) (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: • Thirteenth Finance Commission has indicated in their report that High Level Monitoring Committee headed by the Chief Secretary should review the utilization of Central Grants on the quarterly basis and take corrective measures to ensure proper utilization of funds. As such all the states should ensure such control mechanisms. • To implement the above all AsG should take up the issues with the respective Finance Departments of the States indicating the requirements and their importance.

25. 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) (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: • For ensuring better monitoring of position of UCs wanting at AsG level, suitable MIS reports like Department/Grant-wise, Major head-wise, CO-wise and Year-wise pendency status may be developed and integrated with VLC package. • The AsG should review the position six monthly and take up the pendency position with the COs with copies to Administrative Departments for early submission of the pending UCs. The pendency position may be taken up with the Finance Departments of the respective states with copies to the Administrative Departments on annual basis.

26. 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) (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: • Suitable review meetings on the issue on annual basis maybe taken up at higher level where pendency of UCs is mounting.

27. 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) (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: • Suitable review meetings on the issue on annual basis maybe taken up at higher level where pendency of UCs is mounting.

28. 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.

29. THANK YOU