1 / 64

Revised Accounting Classification Structure of Government Accounts for Union and States

This overview discusses the evolution of accounting classification structure for government accounts, the need for change, the proposed structure, benefits, and implementation.

ruthvela
Download Presentation

Revised Accounting Classification Structure of Government Accounts for Union and States

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Revised Accounting Classification Structure of Government Accounts for Union and States H.K.Srivastav Director (Budget)

  2. Overview • Evolution of Accounting Classification • Existing Classification Structure • Need for change • Proposed structure • Benefits • Implementation

  3. Overview.. • At the Outset • Proposed structure vis-à-vis use in capturing the accounting data • Alignment with International system : GFS and COFOG • Receipt classification to be shifted to Economic category

  4. In a nut shell • A multi-dimensional structure • Logical coding • Uniqueness/Standardisation in coding • Customised to the existing framework

  5. Evolution of Accounting Codes

  6. Evolution of Accounting Codes..2

  7. Existing system • Three types of information are captured: (i) Functions and Sub- Functions (ii) Programmes/Schemes/Sub-schemes (iii) Objects of Expenditure -

  8. Emerging requirements for new sets of Accounting Information • Information by ‘Administrative Units’ • Information by ‘Heads of Development’ • Information by ‘Programmes and schemes’ • Information by ‘Recipients’ • Information by ‘Policy thrust areas of Government’ • Information by ‘ Geographical location of Public spending’

  9. Need for ‘Multi-dimensional Accounting Classification system’ • Administrative unit • Function • Programme cum scheme • Recipient • Target • Economic • Geographic

  10. Need for Change… • Effectiveness as a policy tool, control and monitoring mechanism. • Lack of concordance with Plan heads of development. • Major Heads do not reflect functional character of expenditures. • Opaqueness in transfers to states and UTs govt. under 3601 and 3602. • Lack of standardization of scheme classification: Same scheme appearing at several places with different codes.

  11. Need for change….. • Schemes not captured uniformly at one level -some classified at sub-head level some other at Minor head level • No distinction between a Programme and a Scheme. Difficulties in monitoring of Scheme expenditure • Breakup of central transfers into constituent flows such as Finance Commission grants, Normal Central Assistance, Additional Central Assistance, Special Central Assistance etc. not available

  12. Need for change….. • Incapable of handling special requirements of gender budgeting, i.e budgeting for SC/ST. NER,etc.- No direct way to capture • Extremely cumbersome aggregation of information. Illustration Information spread all across DDG Revenue-Capital-Loan-3601-2552

  13. Major Works Loans Existing Classification

  14. Existing Classification Structure Government Accounts Public Account (8001 to 8999) Consolidated Fund Contingency Fund (8000) Revenue Section Small Savings Capital Section Deposits & Advances Expenditure Reserve Funds Receipts (0001 to 1999) Receipts Suspense & Misc. Remittances Tax Revenue General Services Cash Balance Non Tax Revenue Social Services Grants in Aid & Contributions Economic Services Grants in Aid & Contributions Expenditure (2000 to 3999) Public Debt Loans & Advances General Services Social Services Economic services Grants in Aid & Contributions

  15. Existing Classification Structure • A 6-tier hierarchical structure • Major Head representing a major function of the government (4) • Sub-Major Head representing a sub-function (2) • Minor Head representing a pramme (3) • Sub Head representing a scheme (2) • Detailed Head representing a sub-scheme (2) • Object Head representing the economic type of expenditure. (2)

  16. Existing Classification Structure …...4

  17. Development of the Proposed Structure

  18. Proposed Structure

  19. Administrative segment… • Who is responsible for Public spending ? • Currently Grant No. loosely captures the organisational element but not captured through accounts. • Development of “Administrative Segment”. Provides for capturing the three tiers of the administrative hierarchy

  20. Administrative Segment • The idea is to attribute each budget line to an administrative entity responsible for spending money to enforce administrative responsibility and accountability for Public expenditure • The segment developed for all Civil Ministries with standard codes for each level of the segment.

  21. Function segment.. • Reorganisation of current ‘Functional’ segment. “For establishing concordance between Functional accounting heads and Plan heads of Development” • Sectors and Sub-sectors assigned numeric codes and brought into accounting framework. • The code for ‘Functions’ includes identifiers of Sectors and Sub-sectors.

  22. Function segment

  23. Function Segment.. • To classify functions of government • Has two levels represented by Major heads and Sub-major Heads

  24. Function Segment…3 • Reorganisation of existing heads Sub-major heads elevated to major head levels Superficial functional heads dropped • logical linkage between codes for sectors/subsectors and subsequent Major Heads and concordance with Plan heads of development : Use of functional heads as an effective tool for Sectoral analysis and macro level planning which is vetted by the Planning Commission.

  25. Function segment….. • 1 – General Services • 2 - Defence services • 3 - Social Services • 4 and 5 – Economic Services

  26. Examples : Major heads coding

  27. Examples : Major heads coding

  28. Programme segment • Information by ‘Programmes and Schemes’. • ‘Programme cum Scheme segment’. • To classify all Programmes and Plan and Non-plan Schemes/Sub-schemes of the Government.

  29. Programme segment… • A programme could be defined as a set of activities (schemes) that are required to achieve a defined objective. • Equivalent to ‘ Minor head level’ of the current system • Includes Plan and Non-plan items both • Shall be developed by suitable grouping of schemes to be done by Budget Division.

  30. Programme cum Scheme Segment..2 • Connotation of the term ‘scheme’. • Not only the development (Plan/Non-plan) schemes of government but also the receipt and Public account transactions.

  31. Programme cum scheme…. • Unique 4 digit code has been assigned to each scheme. If same scheme is operated for `Receipts’, `Plan’ and `Non-plan’, etc. its 4 digit will remain same. • Use of Identifiers results into uniqueness of scheme codes for various levels of governments.

  32. Programme cum Scheme Segment…. • Scheme Type • Standardisation and uniqueness of Scheme codes. Aggregation of schemewise information Linking expenditures to Transfers Trails from Union govt to lowest levels • Effective monitoring of implementation of schemes by all levels of governance

  33. Scheme type

  34. Scheme… • All the schemes with standard codes and identifiers have been fitted under suitable Major & Sub-major heads. ‘Compendium of Accounting Classification Codes’ (New LMMHA)

  35. Recipient Segment…. • Who are the recipients of Public money for delivering services/ execution of programmes and scheme ? • Development of ‘Recipient’ Segment’. • Classifies external agencies and entities that receive public funds as instruments and channels of public delivery

  36. Recipient Segmet • Only to be used in the case of transfer payments such as subsidies, grants, contributions, investments, loans etc. • Recipient Type • Unique code to each recipient unit. • It would be possible to compile information on allocation of resources to each such agency under different schemes and heads.

  37. Target segment… • Accounting information by major policy thrust of Public spending • Development of ‘Target segment’ to identify expenditures targeted at special policy objectives. • At present four such requirements are identified such as Women Centric Expenditure, SCs, STs and BPL population. combination of targeted expenditure can be used to indicate suitable policy thrust objectives.

  38. Economic Segment • The current object classification has been developed into a full-fledged 3 tier Financial classification . • The existing Object head classification superimposed with 2 higher categories and sub-categories.

  39. Economic Segment • To cover all types of transactions : • Receipts, • Expenditure, • Public account. • Revenue and Capital categories

  40. Economic Segment… • List of Categories & Sub Categories:

  41. List of categories & sub-categories..

  42. List of categories & sub-categories

  43. List of categories & sub-categories

  44. Geographic segment…. • Information by geographical location of Public spending? • Development of ‘Geographical’ segment. • A 4 tier classification to capture the geographic location of expenditure by classifying them as per the political divisions of the country.

  45. Report on the revision of LMMHA PART-II: ‘Compendium of Accounting Classification Codes’ Main part : Major/Sub-Major and Programme cum Scheme Annexures : All other segments along with their codes

  46. Budget Presentation… • Shift in parliamentary control on Budget • Macro and Micro level control • Flexibility to Ministries in micro management and execution of budget

  47. Budget Presentation

  48. 17 Ministry of Health & Family Welfare (Ministry) 1 17 Department of Health & Family Welfare (Deptt) 171 14 Directorate General of Health Service (Office) 17114 3302 Urban Health Services (MH) Allopathy (Sub MH) 17114 3302 01 Programme 17114 330201 000 17114 330201 000 81001 Direction and Administration (Non-plan Scheme) 17114 Headquarters Establishment (Sub-scheme) 330201 00081001 01 Recipient 17114 330201 0008100101 00000000 Target 330201 0008100101 00000000 000 17114 17114 330201 Revenue Expenditure (Eco. Cat) 0008100101 00000000 000 3 330201 00000000 000 3 1 Employees Compensation(Sub Cat) 17114 0008100101 17114 330201 0008100101 00000000 000 31 1 Salaries(Object)

  49. 330201 0008100101 00000000 Wages 000 17114 31 2 OTA 000 31 17114 330201 0008100101 00000000 3 Travel Expenses (Sub-Cat) 17114 330201 33 0008100101 00000000 000 000 Domestic TE 17114 1 330201 0008100101 33 00000000 Foreign TE 33 000 17114 330201 0008100101 00000000 2 17114 330201 00000000 000 0008100101 Goods & Services for Office Management (Sub-Cat) 34 17114 330201 Office Equipment 0008100101 00000000 1 000 34 000 330201 2 00000000 34 17114 0008100101 Office Expenses 17114 000 330201 0000000000000 0008100101 00000000 342 14 49 5 6 10 = 3 3 8

  50. 17 Ministry of Health & Family Welfare (Ministry) Department of AIDS Control (Deptt) 17 4 National AIDS Control Orgnisation (Office) 174 02 Public Health (MH) 17114 3303 (Sub MH) 17114 3302 00 Programme 17114 330201 000 National AIDS Control Programme (Centrally Sponsored Scheme) 17114 330201 000 21628 Grants under NACP (Gen. Comp.) (Sub-scheme) 330201 03 17114 00021628 State AIDS Control Societies (Recipient) 17114 330201 0008100101 21000012 Target 17114 330201 0008100101 00000000 000 Revenue Expenditure (Eco. Cat) 17114 330201 0008100101 00000000 000 4 4 3 330201 Grants-in-aid(Sub Cat) 17114 0008100101 00000000 000 17114 330201 0008100101 00000000 000 43 1 Grants to Sub-national Governments ….(Object)

More Related