NRHM Guidelines on Fund Flows and Banking Arrangements

1. NRHM Guidelines on Fund Flows and Banking Arrangements National NRHM Meeting Mussoorie 29th to 31st May 2007 Dr. Somil Nagpal, ICASMBBS, MHA, MBA, F.I.I.I.Central TB DivisionMinistry of Health & Family WelfareNew Delhi

2. NRHM: Background behind Integration of Societies • NRHM envisages integration/ merger of individual Health/ FW/ Disease control societies, and creation of integrated health societies at state and district levels. • There should be individual Program Committees under the State or District Health Society, which could have similar structure as the erstwhile disease control societies, and the Member Secretary of this Programme Committee (or Joint Secretary of Health Society) should be the State/ District Programme Officers.

3. NRHM Guidelines on Fund Flows: Circular • Guidelines on financial accounting, auditing, fund flow and banking arrangements as approved by Empowered Programme Committee of NRHM were issued on 14th December 2006 and are effective from 1st April 2007 and will be reviewed after a period of 6 months based on the feedback from the Programme Divisions and from the States Please refer to the first section of the Course Material Volume II (Red Booklet)

4. NRHM Guidelines on Fund Flows (contd) • Consolidated State PIP to have the following sections: • A: RCH • B: Additionalities under NRHM • C: Immunization • D: RNTCP • E: NVBDCP • F: Other NDCPs • G: Inter-sectoral issues. • There could be a change of Bank/ Branch, as State or District Health Society would prefer having accounts in one branch. However, after the transition, there should be a single bank account for components A, B and C, and separate savings account for each of the NDCPs as provided in their respective Financial Guidelines. • For NDCPs, State Health Societies will continue to send SOEs, UCs, relevant portion of Audit reports to the respective Programme Divisions in addition to the FMG, MOHFW, GoI.

5. State PMSUs • Programme Management Support Units (PMSU) at State and District levels would support not only RCH but the entire gamut of activities under NRHM. They will play an important supportive role in managing bank accounts, financial accounting and auditing of accounts. • Financial personnel in various programmes to be made part of a larger FMG at the state level, though they will continue to be located within their programme divisions and handle responsibilities within the programme divisions and reporting to the respective programme officers.

6. NRHM Guidelines on Fund Flows : Expenditure Sanctions • GOI will shortly issue detailed generic guidelines on delegation of administrative and financial powers at each implementation level in the SHS and DHS. It will prescribe substantive delegation of powers to the State Programme Officers and District Programme Officers. A report of the committee has been accepted by the Ministry and formal guidelines will be issued after due approvals and incorporating feedback from states. • The Guidelines clearly provide for a delinking of the file approval and sanction process, and the cheque signing process. While file approvals will continue to take place as per delegation of powers, sanctions will be issued by Programme Divisions, and cheque signing will be delinked, as discussed later. • Each State Programme Officer looking after individual National Disease Control Programmes will process the files for making expenditure under their respective programmes as in the existing system, based on the delegated powers.

7. Expenditure Sanctions (contd) • If the expenditure is within their own powers, they may issue the sanction letter at their own level. However, if the instant expenditure is beyond their delegated powers, they will submit the files to the concerned authorities for taking required approvals. • After approval, the Programme Division would issue sanction letters, a copy of which will be marked to the State PMSUs. • Payments would be channelled through the State PMSUs, and the prescribed timelines (two working days) will need to be adhered by the PMSUs. • Fund releases to District Health Societies from State level will be made directly to their respective accounts for the specific components, i.e., to the account for A/B/C, D, E, F.1 and so on.

8. NRHM Guidelines on Fund Flows (contd): Cheques • Three Joint Signatories for signing cheques have been notified at the State level: (i) the Mission Director (in whatever capacity s/he is in the SHS); (ii) a member from the State PMSU (either the State Finance Manager or the State Accounts Manager or the State Programme Manager); and (iii) the in-charge of the Programme Division at the State level (State Programme Officer). (The authority of an in-charge of a Programme Division to sign a cheque/ authorise electronic transfer of funds would be linked to his/her own programme/ sub-account).

9. Cheques (contd.) • District level signatories: • the CMO/CDMO/CS/CMHO (in whatever capacity s/he may be in the DHS); • a member from the District PMSU (preferably the District Accounts Manager or District Programme Manager) and • District Programme Officer (DTO, DMO, DLO etc). • Of these, two signatories would be sufficient with the provision that the member of the PMSU must be a signatory.

10. Accounting and Reporting • All accounting for all programmes is the responsibility of the FMG at the state level (This includes finance and accounting staff of all programmes). • All SoEs, UCs, ARs to be send to Central FMG. In case of NDCPs, the same will also be sent to the respective programme divisions at state and central level, as per the requirement/ guidelines of specific programmes. • Similar functions will also be performed by district FMG. The district FMG will also liaise with the block programme manager and block accountant.

11. NRHM Guidelines on Fund Flows (contd): Audit • Single (Common) Auditor would be appointed for the SHS and DHS from the list of auditors provided by GOI. This Auditor will be for all the programmes under NRHM at the SHS and DHS level. Therefore, selection of auditor for NRHM will be one time process, which will take care of the entire programme. • The Auditor may bring out separate detailed part-reports or annexures (schedules containing cash flow details) for each of the programmes, as per the specific guidelines of the programmes. Each chapter or part-report (for each programmes) can be sent separately as and when they are complete so that the releases under those programmes are not withheld or delayed due to non-receipt of audit report. • In addition to these individual part-reports, the auditor would furnish a complete audit report of SHS and DHS, which would contain separate chapters for various programmes.

12. Changes Expected in Delegation of Administrative and Financial Powers • Based on the committee report accepted by MoHFW and circulated to states in May 2007. • Substantial delegation of powers proposed to Program Officers and CMOs at district level, to minimize need for case-to-case DM/Collector approvals. Monitoring by DM/Collector to be through monthly Health Society meetings. (Cheque signing is already delinked from approvals as per order dt 14.12.06)

13. Changes Expected in Delegation of Administrative and Financial Powers (contd) • It has also been recommended that files for monthly remuneration payments can be done at the level of the Program Officer without sending it to CMO or DM/Collector. Only annual review at the time of renewal, and initial appointment, to need approvals of higher authorities. • Financial powers ranging from Rs 5000 to Rs 25000 per case (depending on type of activity) are proposed to be delegated for sanction at level of Program Officer without sending file to CMO or DM Similar delegation also proposed at state level.

14. Thanks. Dr. Somil Nagpal mail@somilnagpal.com