Model Accounting Overview

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					                       Simplified Accounting
                         Structure for PRIs

Overview of Model Accounting
    System for Panchayats

               Government of Orissa
             Panchayati Raj Department
Why Model Accounting System ?

 • One of the item of e-PRI (Mission Mode Project
   [MMP] under National e-Governance Plan

 • Recommendations of C & AG and MoPR.

 • TFC incentives Grant
       Performance based Grant Conditions
        for getting Rs.897 crores

 • IT Infrastructure
   All Block Panchayats computerised : 11th FCA

   All Gram Panchayats computerised : 12th FCA

 • Manpower
   Qualified I T professionals : 11th FCA/ 12th FCA

 • e-Connection
   All Block Panchayats connected : GRAMSAT

   Additional Connectivity : BSNL VPN
 PAMIS Accounting Software
  Implemented as a trial version in ZP/BP for
   maintenance of Accounts
  Advantages of the application
    » Follows double-entry accounting system
    » Daily transactions can be captured
    » Can be customised as per accounting requirements
  Shortcoming in the application
    » No Standard Budget Head concept
    » Standalone version
    » Lack of security in the data-storage
    » Not in the public domain.
    » Can’t be integrated with NREGSoft, PlanPlus, AwasSoft
      at National Level.
Rational for PRIASoft
 • Based on Standard Head of Accounts

 • Complies to C& AG formats

 • Standard formats(8) prescribed by C&AG
   for al level of PRIs

 • Web based software application developed
   by NIC at National Level.
Need of Standardised Formats

 • Preparation of Budget.
 • Analysis of Expenditure.
 • Maintenance of Accounts.
 • Self disclosure of financial transactions.
 • Reporting for Auditing.
What is New?

 3-Tier Classification: Simple, robust, and
  easy to use.

 Generation of Financial Reports through

 2-Part Accounts:

   Part-I: Receipts & Expenditure

   Part-II: PFs, Loans, Deposits, Advances, etc.
3-Tier classification
             • Major Head: 4 digit
1st tier     • Relates to ‘Functions’ given in 11th Schedule
             • 23 Major Heads

             • Minor Head: 3 digit
2nd   tier
             • Programes/ Unit within ‘Functions’

             • Object Head: 2 digit
3rd   tier
             • Activity (Item of Receipt/ Expenditure)
   Part-I –Panchayat Fund
Receipts                          Payments
Revenue Receipts (0-1)            Revenue Expenditure (2-3)
   - Tax Receipts                    -2049 Interest payment
          *Taxes on Profession,      -2059 Maintenance of
             Land revenue, etc         Community Assets, etc

    -Non-Tax Receipts
      * Interest eared, etc
Capital Receipts (4000)        Capital Expenditure (4-5)
   -Other Receipts (800)
    -Loan Section
  CAG of India                                       9/17/2012
    - Provident fund & Pension
 Part-II –Provident fund & etc
Receipts (7000-8999)             Payments (7000-8999)

Loan Section                     Loan Section
   -Loan Section-7610               -Loan Section-7610
Pension & Provident Section      Pension & Provident Section
   - Provident fund & Pension       - Provident fund & Pension
   (8009)                           (8009)
Insurance & Pension Section      Insurance & Pension Section
    -Insurance (8011)               -Insurance (8011)
Deposits & Advance Section       Deposits & Advance Section
    -Civil Deposits (8443)          -Civil Deposits (8443)
    -Civil Advances (8550)          -Civil Advances (8550)
Suspense Account                 Suspense Account
    - Suspense Accounts (8658)
  CAG of India
                                    - Suspense Accounts (8658)
 Exception to 3-Tier
 • Central Schemes assigned 2-digit sub-heads & State
   Scheme Alpha-numeric 2-digit subhead:

Receipts                               Payments
1601- Grants in aid                    2210-Health and Sanitation

    101-Grants from GOI                   101-Primary Health
                15- NRHM                      15-NRHM
                 796-Tribal Sub-plan              02-wages
                 789-SC Sub-plan                   (object head)
 CAG of India    700-Normal Plan                             9/17/2012
Structure of Budget Head

 Three layer Budget Head for receipt of
   – First 4-digit classification - major head
     represent function
   – Second 3-digit classification - minor head
     represent the programme of expenditure.
   – Third 2-digit subhead only for schemes
     when it exits.
Structure of Budget Head

 Four layer Budget Head for expenditure
   – First 4-digit classification - major head
     represent function

   – Second 3-digit classification - minor head
     represent the programme of expenditure.

   – Third 2-digit subhead only for schemes

   – Fourth 2-digit (00 to 99) - object head -
     represent the object item of expenditure
Major Heads
 Agriculture                    Rural Housing
 Soil and Water Conservation    Water Supply and Sanitation
 Minor Irrigation
                                 Animal Husbandry, Dairying,
 Animal Husbandry, Dairying,     Poultry and Fuel and Fodder
  Poultry and Fuel and Fodder
                                 Transportation
 Fisheries
                                 Rural Electrification
 Forestry and Minor Forest
  Produce                        Non-conventional Sources of
 Village and Small Scale         Energy
  Industries                     Poverty Alleviation
Major Heads
 Education                      Social Security and Welfare
 Technical Training and         Welfare of Scheduled Castes,
  Vocational Education            Scheduled Tribes and Other
                                  Weaker Sections
 Art, Culture and Libraries
                                 Public Distribution System
 Market and Fairs
                                 Maintenance of Community
 Health and Family Welfare       Assets
 Water Supply and Sanitation    Interest Receipts/Payment
 Women and Child Welfare        Pension and Other retirement
                                 Panchayati Raj Programmes
3-Tier Classification
• Major Heads:
  – 23 Major Heads to cover 29 functions
  – New Major Head: ‘2206 –Market and Fairs’
• Schemes:
  – Major GoI Schemes: Standardised 2-digit
  – State Schemes: 2-digit alpha-numeric subhead
• Object Heads:
  – Standardized object heads for common types of
    expenditure (27)
  – Additional object heads: can be opened by Panchayats
Standardised Sub-Heads
for Some Central Schemes
Scheme Code                      Scheme Description
 (Sub Head)
    11        Mahatma Gandhi National Rural Employment Guarantee
              Scheme (MGNREGS)
    12        Sampoorna Gramin Rozgar Yojana (SGRY)
    13        Swaranjayanti Gram Swarozgar Yojana(SGSY)
    14        Indira Awas Yojana (IAY)
    15        National Rural Health (NRHM)
    16        Accelerated Rural Water Supply Programme (ARWSP)
    17        Total Sanitation Campaign
    18        Mid Day Meal Scheme
    19        Sarva Shiksha Abhiyan
    20        Pradhan Mantri Gram Sadak Yojana (PMGSY)
    21        Integrated Watershed Management Programme
    22        Integrated Child Development Services (ICDS)
Standardised Object Head
01 Salaries (1)            11 Printing
02 Wages
                           12 Other Administrative
03 Overtime Allowance         Expenses
04 Pensionary charges      13 Supplies and Materials
05 Honoraria
                           14 Petrol/Diesel
06 Medical treatment
                           15 Advertising and Publicity
07 Travel Expenses
                           16 Other Contractual Services
08 Office Expenses (2)

09 Rent, Rates and Taxes   17 Grants – in – aid

10 Audit Fee               18 Contributions          Contd..
Standardised Object Head

  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
Items included in Salary & OE
 Salaries: includes in these object head Other Expenses (2) includes in these object head
                                            (i) Local purchase of stationery,
 (i) Pay of officers,
                                         (ii) Liveries,
 (ii) Dearness pay of officers,          (iii) Telephone & trunk calls,
 (iii) Dearness Allowance of Officers,   (iv) Furniture,
 (iv)Pay of establishment,               (v) Service postage stamps,

 (v) Dearness pay of establishment,      (vi) Purchase of books & publications,
                                         (vii) Office expenses and miscellaneous ,
 (vi) Dearness Allowance of
                                         (viii) Staff car,
                                         (ix) Water cooler,
 (vii) Bonus ,
                                         (x) Typewriter,
 (viii) Interim relief,                  (xi) Purchase of accounting machine,
 (ix) Other allowances (CCA, HRA & other (xii) Charges paid to the State Government for
      fixed allowances),                       Police Guards,
                                         (xiii) Hot and cold weather charges,
 (x) Children education allowances,
                                         (xiv) Electricity & water charges,
 (xi) LTC,
                                         (xv) Purchase of photo copier,
 (xii) Transport allowance.              (xvi) Purchase of computer & laser printer.
PART II - Other Heads
7610      Loans to Panchayat Employees
8009      Provident Fund
8011      Insurance
8443      Civil Deposit
8550      Civil Advances
8658      Suspense Accounts
4000      Capital Receipts
Capital Heads relate to Revenue Heads
Preparation of Accounts
 Budget in prescribed (new 3-tier) classification.
 Accounts : Initially accounts are to be prepared on
  cash basis.
 Built in features: Subsequent switching over to accrual
 Period of accounts : Financial year. (1st April ending
  31st March)
 Provision for all prescribed (8) Report formats.
 ICT has the key role in adopting these formats.
 Data/ Reports through IT Applications, PRIASoft
 developed by NIC
Simplified 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 as a period of 12 months
   ending 31st March in any year.
c) Daily transactions shall be recorded in Cash Book.
   – The receipts be recorded on receipts side and payments on payments
   – 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
d) Every day the details of transactions as recorded in the cash
   ‒ Transferred to Register of Receipts if the transaction is receipts
   ‒ Transferred to Register of Payments if it is payment.
Simplified Accounting Procedure:
e) Bank Reconciliation:
 At the end of the month the bank and treasury reconciliation
  should be completed.
 Differences between cash book, bank and treasury balances
  are to be rectified.
 Corrections should be made then & there in the Register of
  Receipts and Register of Payments.
 Totals in Register of Receipts and Payments can be struck
  which 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.
Data Maintenance/ 8 - Formats
1. Format I : Monthly/Annual Receipts & Payment Accounts
2. Format II : Consolidated abstract register
3. Format III : Reconciliation Statement with Bank and Treasury
4. Format IV : Statement of Receivable and Payable
5. Format V : Register of Immovable of Property
6. Format VI : Register of Movable property
7. Format VII: Inventory Register
8. Format VIII: Register of Demand, Collection and Balance

              Above formats designed to facilitate
                Switch Over to Accrual System
            Simplified Accounting
              Structure for PRIs

Thanks ….

    Government of Orissa
  Panchayati Raj Department

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