Bihar Gazette, 29 September 2010

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अधिसूचना

5 जुलाई 2010

सं0 5प/वि0-1-08/2009/पं0रा0/4868—बिहार पंचायत राज अधिनियम, 2006 की घारा-30, 58 एवं 85 के तहत राज्य के ग्राम पंचायतों, पंचायत समितियों एवं जिला परिषदों द्वारा भारत के नियंत्रक एवं महालेखापरीक्षक तथा पंचायती राज मंत्राालय, भारत सरकार द्वारा निर्घारित संलग्न मॉडल एकाउन्टिंग सिस्टम प्रपत्र में 1 अप्रील 2010 से लेखा संधारण किया जायेगा।

बिहार-राज्यपाल के आदेश से,

(ह0) अस्पष्ट,

सरकार के सचिव। 2 (cid:18)बहार गजट (असाधारण), 29 िसत-बर 2010 ACCOUNTING STRUCTURE (FORMATS, GUIDELINES AND LIST OF CODES) FOR PANCHAYATI RAJ INSTITUTIONS, COMPTROLLER AND AUDITOR GENERAL OF INDIA AND MINISTRY OF PANCHAYATI RAJ, GOVERNMENT OF INDIA

PANCHAYATI RAJ INSTITUTIONS GUIDELINES FOR PREPARATION OF RECEIPTS & PAYMENT ACCOUNTS

Introduction Based on the recommendations of the Eleventh Finance Commission, for exercising proper control and securing better accountability, the formats for the preparation of budget & accounts and database on finances of PRIs were prescribed by C&AG in 2002. These formats were further simplified in 2007 for easy adoption at grass root level. The Technical Committee on Budget and Accounting Standards for PRIs in the meeting held on 4 th August 2008 co-chaired by Secretary, Ministry of Panchayati Raj, Govt. of India and Deputy Comptroller and Auditor General (LB), considered the need for developing simple but robust format of accounts and constituted a Sub-Committee co-chaired by Director General (LB) and Principal Secretary, Panchayati Raj Department , Govt. of Gujarat, for the purpose. The sub-committee included the members from Ministry of Panchayati Raj, Govt. of India, Planning Commission, Ministry of Finance, Representative from Govt. of West Bengal , Uttar Pradesh, Andhra Pradesh and representatives from Controller General of Accounts (CGA) and National Informatics Centre(NIC). Director(LB) was the member secretary of the Sub-Committee. The mandate of the Technical committee to the sub-committee inter alia include to prescribe simple but robust accounting system for PRIs, comprehensible to the elected representatives and functionaries of PRIs and facilitates generation of financial reports through Information and Communication Technology.

The Sub-Committee in the meeting held on 5 th December 2008, entrusted the preparation of Simplified Accounting System to the Member Secretary of the Sub Committee and desired that the draft format of accounts be circulated among members of the sub-committee, for suggestion. The simplified accounting formats for PRIs have been prepared and circulated among the members of the Sub-Committee by 5 th January 2009 and the committee in the meeting held on 15 th January 2009 approved the Draft Simplified Format Accounts for PRIs. The Technical Committee on Budget and Accounting Standards for PRIs in the meeting held on 29 th January 2009 approved the Simplified format of accounts for PRIs. 2. Salient features of the simplified format of accounts The first four-digit classification in the simplified system is the major head represent function enumerated in the 11 th Schedule of the Constitution. The second three-digit classification is the minor head represent the programme/unit of expenditure. However under few major Heads (2851,2406,2403,2211,2205 and 2202) the minor head represents the function due to clubbing of function enumerated in the Eleventh Schedule of the Constitution. The third tier two-digit (00 to 99) is the object head which represent the object item of expenditure. Two-digit standardized object head has been recommended for most commonly used items of expenditure as detailed in para 7.A. PRIs may open separate object head as per requirements under each minor head. Similarly, object head under receipts head may be opened as per requirement. Wherever required the minor head '800-Other Receipts' may be opened under the receipts head and '800-Other Expenditure' under expenditure head. For better planning, monitoring and decision making, the central schemes have been given distinct two-digit sub-heads. Considering the number of state schemes and diversity among the states, two-digit Alpha- numeric sub-heads may be operated for state schemes. The two- digit standardised object heads may be operated for accounting the scheme requirements as per guidelines. Details are given at para 7.B.

For assigned revenue from State/Central Govt. minor head '901-Share of net proceeds assigned to Panchayats' has been opened under relevant receipts Major Heads.

The Accounts have to be kept in two parts, Part I to record transactions of all receipts and expenditure relating to Panchayat Fund and Part II to record transactions relating to provident funds, loans, deposits and advances etc, with close to balances. 3. Functions as per Eleventh Schedule and corresponding Major Head All the 29 functions listed in the Eleventh Schedule of the Constitution are classified under 23 major heads. Besides, Major Head '2049- Interest Payments', '2071- Pension and Other Retirement Benefits' and '2515- Panchayati Raj Programmes' along With relevant receipts and capital Major Heads were opened to facilitate the PRIs to account their activities. Details of Functions and corresponding Major Heads are as follows :

* New Major Head '2206 - Market and Fairs' along with the relevant Receipts and Capital Major Heads has been prescribed since large number of transactions under market and fairs takes place at PRI level. 4. Accounting of other Transactions In addition, Panchayats may also operate the following separate major heads to record all transactions (Receipts and Payments/Disbursement) under Loans, Pension & Provident Fund, Insurance and Pension Fund, Deposit and Advances and Civil Advance, depending upon the requirement :

7610- Loans to Panchayat Employees 8011- Insurance and Pension Fund 8550- Civil Advances 8009 – Provident Fund 8443 – Civil Deposit

To record all unclassified transactions not immediately booked under the respective functional major heads due to lack of detail/proper classification in the challen/cheque/voucher, Panchayats may operate '8658-Suspense Accounts'. Panchayat may operate other major heads of accounts to record transactions of each additional function devolved subsequently to the Panchayats by the State Government. The State Government may inform operation of the new major heads to the Pr.Accountant General /Accountant General (Audit) and Accountant General (A&E) of the respective States. Accounting Procedure : (a) The accounts are prepared on cash basis i.e. a transaction is only recorded when cash is received or paid.

(b) Period of accounts is a financial year. A financial year is defined as a period of 12 months ending 31st March in any year.

6 (cid:18)बहार गजट (असाधारण), 29 िसत-बर 2010 (c) Daily transactions shall be recorded in Cash Book. The receipts shall be recorded on receipts side and payments on payments side. Every day the cash book shall be closed and Closing Balance worked out would then form the Opening Balance for next day. Classification/head of account for each transaction shall be clearly mentioned.

(d) Every day the details of transactions as recorded in the cash book should be transferred to either Register of Receipts if the transaction is receipts or to Register of Payments if it is payment under the respective heads of account.

(e) At the end of the month the bank reconciliation and treasury reconciliation should be completed and it should be ensured that all differences between cash book and bank and treasury balances are rectified. If any differences are noticed the corrections should be made then and there in the Register of Receipts and Register of Payments. At the end of the month totals in Register of Receipts and Register of Payments can be struck. This would give the total expenditure under each head of account for the month. Where PRIs and Bank/Treasury are computerized, online reconciliation with Bank/Treasury may be followed.

(f) At the end of each month the totals of Receipts and Payments (upto object head level) are to be posted to the Monthly Receipts and Payment Account.

(g) The monthly figure is added to previous month's progressive total and the figures up to the end of the current month can be worked out in the Consolidated Abstract.

(h) At the end of the year the progressive figure to the end of March can be worked out in the Annual Receipts and Payment Account.

(i) After closing of March Accounts, Reconciliation of Receipts and Expenditure figures with the Departments (online, where facility is available) should be carried out to detect any misclassification and to clear the unclassified transaction booked in the Suspense accounts and all transactions appearing as Transfer entries. The final progressive figure under each head be worked upto the end of March which completes the accounting process for that year.

(j) Receipts and Payment account is prepared on the basis of figures in the Consolidated Abstract.

(k) The Budget of PRIs for the year may be prepared by adopting the classification prescribed in the Receipts and Payment Account/ List of Codes for functions, programmes and activities prescribed.

(l) On the basis of these formats, the State Government may formulate Budgeting/Accounting rules and manuals for keeping of budget/accounts for Panchayati Raj Institutions in consultation with the State Accountants General.

(m) Refund of revenues/re-imbursement of expenditure of the current year is to be accounted as reduction of receipts/expenditure.

(n) Bank/Treasury Reconciliation Statements. Register of Receivable and Payable, Register of Movable and Immovable property, Register of Inventory, Register of Demand, Collection and Balance form integral part of the annual accounts. Maintenance of these register would help in subsequent switch over to the modified accrual system of accounting.

6. Simplified Procedures for Transfer Entries Transfer entries are passed to rectify misclassification of transaction in accounts and to facilitate eventual accounting under final heads of account. The procedure of transfer entries can pose difficulties in grassroots level organizations where the accounting systems are in a relatively nascent stage and may not have such intricacies and complexities requiring sophisticated degree of knowledge and skills as is expected in higher tiers of government.

To simplify the accounting process further, it is proposed that Transfer Entries may not7 (cid:18)बहार गजट (असाधारण), 29 िसत-बर 2010 be required for those tiers of PRIs where the number of transactions are less and corrections if any can be carried out manually by striking down the wrong entry with red ink and inserting the correct entry in the cash book as well as Register of Receipts and Payments and if required in the Monthly and Annual Accounts.

If the mistakes are noticed after closure of the monthly accounts and before closure of annual accounts, it can be rectified as detailed here under. Example 1: A sum of Rs.1000/- being Property Tax collected in the month of June 2008 has been misclassified as Entertainment Tax. The mistake is noticed after the closure of Monthly Accounts in the month of December 2008. Solution: Minus Credit under MH 0045-101 (to be deducted) is posted in Register of Receipts and a small note recorded indicating the reason for the minus credit. Credit is given under MH 0035-101 in Register of Receipts and a small note indicating the reason for the plus credit is recorded. This has to be done in the month in which the error/misclassification is noticed and rectified (December 2008). Example 2: A sum of Rs.9000 for the month of November 2008 towards payment of overtime allowance to Primary School Teachers of Education Department was misclassified as office Expenditure of Primary Health Centre of Health Department. This mistake is noticed after the closure of Monthly Accounts of November 2008. Solution: Minus Debit (to be deducted from the expenditure of the head) is to be posted in the Register of Payments against the 2210-101-08 and a small note recorded indicating the reason for the minus debit. Similarly a contra debit is given in the Register of Payments against the 2202-101-03 and a small note recorded indicating the reason for the contra debit. This has to be done in the current month in which the error/misclassification is noticed and rectified. If mistakes are noticed after closure of annual accounts No need to change annual accounts but to have a true picture of revenue receipts and revenue expenditure, 'a note of error' will be made in the Annual Accounts against the Head where the error was committed. If any receipts on account of error/misclassification occurs the same will be taken into cash book with a small note and becomes part of the current balance. If misclassification occurs in scheme expenditure and noticed after the closure of annual accounts: If the mistake is noticed after the Annual Accounts are closed and the items of expenditure are related to different schemes under Revenue/Capital Heads, the progressive figures have to be changed by '+' and '-'entries against the heads concerned in order to arrive the correct figures if the schemes are continued further next financial year following the procedure explained in above categories. 7. A. LIST OF STANDARD OBJECT HEADS

(01) Salaries (1) (02) Wages (03) Overtime Allowance (04) Pensionary charges (05) Honoraria (06) Medical treatment (07) Travel Expenses (08) Office Expenses (2) (09) Rent, Rates and Taxes (10) Audit Fee (11) Printing (12) Other Administrative Expenses (13) Supplies and Materials (14) Petrol/Diesel8 (cid:18)बहार गजट (असाधारण), 29 िसत-बर 2010 (15) Advertising and Publicity

(16) Other Contractual Services (17) Grants – in – aid (18) Contributions (19) Subsidies (20) Share of taxes / duties (21) Motor Vehicles/hiring charges (22) Machinery and Equipment (23) Major Works (24) Write off / losses (25) Deduct recoveries (26) Maintenance (80) Other Expenditure

Note: (1) Items to be included in this object head are (i) Pay of officers, (ii) Dearness pay of officers, (iii) Dearness Allowance of Officers, (iv) Pay of establishment, (v) Dearness pay of establishment, (vi) Dearness Allowance of establishment, (vii) Bonus , (viii) Interim relief, (ix) Other allowances (CCA, HRA & other fixed allowances), (x) Children education allowances,(xi) LTC, (xii) Transport allowance.

Note: (2) Items to be included in this object head are (i) Local purchase of stationery, (ii) Liveries,(iii) Telephone & trunk calls, (iv) Furniture,(v) Service postage stamps,(vi) Purchase of books and publications, (vii) Office expenses and miscellaneous ,(viii) Staff car,(ix) Water cooler,(x) Typewriter, (xi) Purchase of accounting machine, (xii) Charges paid to the State Government for Police Guards,(xiii) Hot and cold weather charges,(xiv) Electricity & water charges,(xv) Purchase of photo copier,(xvi) Purchase of computer & laser printer.

7. B. LIST OF STANDARD SUB HEADS FOR CENTRAL SCHEMES

Example to book expenditure of Central Scheme NRHM 2210 Health and Sanitation (Major Head)

101 Primary Health Centre (Minor Head)

15 NRHM (Sub-Head)

02 Wages (Object Head)

Example to book receipts of grants

Similarly, an example to book receipts of grants under various sub plans is indicated below:

1601 Grants and aid (Major Head)

101 Grants from GOI (Minor Head)

15 NRHM (Sub Head)

* Funds received under Central Scheme are allocated under three parts viz. 796 – Tribal Sub-Plan (TSP); 789 – Scheduled Caste Sub Plan (SCSP), 700 – Normal Plan. These may be booked in the accounts formats as per the example above. 8. Information and Communication Technology support Information and Communication Technology (ICT) has demonstrated the ability to improve the efficiency, accuracy and analysis of many processes. Accounting is a very important task, requiring a high degree of accuracy and security. The use of ICTs to support the accounting processes can play a very important role in easy maintenance and management of accounts. In the context of Panchayati Raj Institutions (PRIs) many of which suffer from lack of trained manpower and ability to manage complex accounting procedures, the ICTs can make the entire process of accounting simple and easy.

Ministry of Panchayati Raj (MoPR) has desired that CAG and NIC should work together to bring out the new version of PRIASoft (Panchayati Raj Institutions Accounting Software) that captures the 3-tier revised classification and generates all the reports in the formats prescribed by the sub-Committee on Budget and Accounting Standards for PRIs. Accordingly, NIC is working closely with CAG to come out with a new version of PRIASoft (PRIA Soft ver 2.0), which will have the following features: 1. The three tier accounting classification consisting of Major Heads, Minor Heads and Object Heads will be captured by the software. In addition, as defined by CAG in the revised classification, wherever Central/State scheme activities are to be captured as per the Scheme guidelines, the software will provide for accounting the scheme as a Sub-head under the respective Minor Head.

2. At the time of keying in the receipts and expenditure figures in to the system, the software will prompt the user to select the appropriate account heads from the three- tier classification. In case the expenditure is being booked under a scheme, the software will prompt the user to select the appropriate Sub-head out of the standardized scheme sub-head created. Once the receipts and expenditure entries are captured in the system, the software will automatically generate the reports in the revised formats prescribed by the CAG. Since the new format allows the user to book expenditure explicitly under sub-head provided for the scheme, scheme-wise expenditure will also be generated automatically.

3. In order to extend flexibility to states which want to retain their own existing classification relating to the schemes, the software will provide mapping of the state- specific classification to the revised classification proposed by CAG. This will enable the panchayats in those states to carry on with their ongoing accounting classification10 (cid:18)बहार गजट (असाधारण), 29 िसत-बर 2010 while at the same time enabling Government of India to view the accounting details of the PRIs as per the classification prescribed by the CAG.

4. In order to bring about accountability and transparency in the functioning of PRIs, the software will be a web-based software and all the accounting data of PRIs will be available online on a centralized system. However, in view of the lack of Internet connectivity in many PRIs, an offline version of the software will be made available. Panchayat level users can enter their account details locally and periodically update the data on the online site. This will encourage even PRIs with no Internet connectivity to use the software.

5. In view of the high security need of the accounting system, the software will provide a strong authentication mechanism and also maintain detailed audit logs of all the transactions carried out through the software.

KANWAR MANJIT SINGH Director General (Local Bodies) and Chairman/Sub-Committee.

Format - I

MONTHLY / ANNUAL RECEIPTS AND PAYMENTS ACCOUNTS

OF

Zila Parishad / Panchayat Samiti (Block / Taluk Level) / Village Panchayat .................... for the

month / year of ...................

Format of consolidated abstract

Format – II

Consolidated abstract Register of .................................... for the year of

.....................................

(In Rupees)

Format-III

Format of Monthly Reconciliation Statement

Reconciliation Statement of ……………………...……………………for the month of ………………………………..………………………………………….

Format-IV

Format of receivable and Payable

Statement of Receivable and Payable of……………………………………………………..at the end of the year………………………………………….

Format-V

Format of Immovable property

Register of Immovable Property of …………………………………………. for the year…………………………………………………….. (a) Roads

(b) Land

(c) Others

Format-VI

Format of Movable property

Register of Movable Property of …………………………………………. for the year……………………………………………………..

Format-VII

Format of Inventory register

Inventory register of …………………………………………. for the month / year……………………………………………………..

Description of items

Format-VIII

Format of Demand, Collection and balance Register of Demand, Collection and balance of …………………………………………. for the month / year of……………………………………………………..

List of Codes for Functions, Programmes and Activities of Panchayati Raj Institutions

List of codes for Functions, Programmes & Activities of Panchayati Raj Institutions

(1) This includes earnest money deposit made by tenders/contractors (2) This includes the security money realized from the contractors58 (cid:18)बहार गजट (असाधारण), 29 िसत-बर 2010 (3) This includes all class of deposits of panchayats other than savings and current accounts.

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