Capacity Building of Accounts and Internal Audit Staff 26 th Review Meeting of State FCs- Chandigarh (6 August 2010

1. Capacity Building of Accounts and Internal Audit Staff26th Review Meeting of State FCs- Chandigarh (6 August 2010)

2. Capacity Building • Capacity building for financial Management • Integral part for effective and efficient functioning of Financial Management Unit. • Needs to be continuous and customized. • Subjects covered – • Planning • Budgeting including financial norms. • Accounting • Fund flow arrangements • Financial reporting • Internal Audit • Annual Audit • Procurement

3. Capacity Building • Continuous capacity building is necessary to equip finance and internal audit staff with sufficient knowledge of the area of their work. • This would enable the staff to carry out the work more efficiently and systematically. • Minimum 5 days training is mandatory in a year. • This may be given at a stretch or staggered. • Desirable to provide 5 days training at a stretch to all new recruits. • Training to existing staff may be staggered. • Identification of resource persons is most important at State, District and sub-district level.

4. Capacity Building

5. Capacity Building • Training Content • Separate training content for different targets group at different levels: • VEC/School • Cluster • Block • District Project Office • State Project Office • Tailor made training content for different spending entities at different levels.

6. Capacity Building • Training Content • Needs to develop a training content covering: • Planning • Budgeting including financial norms • Accounting including double entry system • Fund flow arrangements • Financial reporting • Internal Control and Internal Audit • Auditing • Procurement procedure • Include exercises on the above subjects and its solutions • Case studies on Accounting and procurement.

7. Capacity Building • Develop Training Content covering: • Planning • Objectives of planning, • identification of planning teams, • participatory planning process, • interaction with community and targets groups, • consultative meetings, • information need and collection of information, • data analysis and its utilization in the plans, • steps in planning, • situational analysis, • state and district profile, • state and district plans, • education profile, • problem and need identification, • goals and target setting and • need based planning.

8. Capacity Building • Develop Training Content covering: • Budgeting • Preparation of annual work plan and budget, • financial norms under SSA, • NPEGEL and KGBV and clarifications issued thereof, • progress overview, • spillover activities, • appraisal of the plan, • approval of the plans by the Project Approval Board, • budget calendar.

9. Capacity Building • Develop Training Content covering: • Accounting • General Financial Rules, • delegation of financial powers, • duties and responsibilities of Drawing and Disbursing Officer (DDO), • double entry method based on mercantile system of accounting, • maintenance of books of accounts and registers, • advances, • norms for regulating advances, • advance register, • monitoring of advances, • account head, • maintenance of cash book, • journal,

10. Capacity Building • Develop Training Content covering: • Accounting • ledger, • correction of errors, • bank reconciliation, • staffing structure in Finance and Accounts and Internal Audit, • capacity building of accounts and audit staff, • control of expenditure, • re-appropriation of funds, • salary bills and other claims, • travelling allowance.

11. Capacity Building • Develop Training Content covering: • Office expenses • Stationery, • recurring contingent and miscellaneous costs, • postage, • POL, • hiring of vehicles, • maintenance of vehicles/equipment, • purchase of office furniture/equipment, • telephone/fax/internet, • consumables etc.

12. Capacity Building • Develop Training Content covering: • Funds flow arrangements • Funds of the State Implementing Society, • procedure for release of funds, • flow of funds, • opening of bank accounts, • e-transfer of funds and • interest.

13. Capacity Building • Develop Training Content covering: • Financial Reporting • Preparation of quarterly fund flow and cash forecast statement, • quarterly progress statement, • treating advances as expenditure, • release of funds to the districts, • district wise expenditure statement, • Financial Performance and • Status on financial indicators

14. Capacity Building • Develop Training Content covering: • Internal control • Supervision and monitoring, • concurrent financial review and monitoring by GOI, • indicators for financial management checks by GOI. • Internal Audit • Arrangement for internal audit, • scope of internal audit, • coverage, • report writing and follow up action on internal audit objections/observations.

15. Capacity Building • Develop Training Content covering: • Internal control • Supervision and monitoring, • concurrent financial review and monitoring by GOI, • indicators for financial management checks by GOI. • Internal Audit • Arrangement for internal audit, • scope of internal audit, • coverage, • report writing and follow up action on internal audit objections/observations.

16. Capacity Building • Develop Training Content covering: • Auditing • Statutory audit by Chartered Accountant firm, • selection CA firms, • scope of audit, • coverage, • audit of VECs receiving more than Rs. 1 lakh per year in a cycle of three years, • utilization certificate, • submission of audit report by due date, • preparation of annual financial statements, • balance sheet, • income and expenditure account, • receipt & payment account, • annual report, • statutory audit calendar and • pursuance of audit objections.

17. Capacity Building • Develop Training Content covering: • Procurement procedure • Levels of procurement, • preparation of procurement plan, • various methods of procurement- • open tender, • limited tender, • single tender, • without tender and • civil works by community participation, • financial ceiling prescribed for each method of procurement, • preparation of standard bidding documents, • various steps involved in tendering process,

18. Capacity Building • Develop Training Content covering: • Procurement procedure • negotiation, • repeat orders, • rejection of all tenders, • service contracts, • selection of non-government organizations, • contract management and documentation, • post review of contracts by Government of India, • mis-procurement and • complaint handling mechanism.

19. Capacity Building • Develop Training Content covering: • Procedural lapses • Various observations made by Institute of Public Auditors of India (IPAI), • Observations made by statutory auditors on SSA accounts. • Observations made by review teams.

20. Status of Capacity Building – Finance & Accounts staff2009-10

21. Capacity Building • Capacity building for 2010-11 • The training provided in 2009-10 was not encouraging in many States. • States need to provide more focus in the current year. • Sufficient budget provision made in the current year’s budget under the general head of capacity building or specifically under capacity building of Finance and Accounts Staff in some States. • States to plan this activity at all levels in a more vigorous manner.

22. Thank You