Engineering Stores Accountal (MATERIAL MANAGEMENT)

1. EngineeringStores Accountal (MATERIAL MANAGEMENT) D. G. JOSHI. DFM IRICEN PUNE.

2. STORES EXPENDITUREUP TO 31.03.2012. Rs. 31359 cr.Revenue: Rs. 8302 Cr.Constn. : Rs. 993 Cr.Fuel : Rs. 10273 Cr.R. Stock : Rs. 11791 Cr. D. G. JOSHI. DFM IRICEN PUNE.

3. FROM ABOVE, MANAGEMENT OF STORES IS VERY IMPORTANT. D. G. JOSHI. DFM IRICEN PUNE.

4. Being a vast organisation, to meet day to day requirement of maint.& operation as also of material for various manufacturing operations, Railway has to maintain adequate stocks besides arranging timely procurement of stores for works. D. G. JOSHI. DFM IRICEN PUNE.

5. Introduction • IR have separate Stores Organisation with Asso.Finance & accounts entrusted with the stupenduous tasks of D. G. JOSHI. DFM IRICEN PUNE.

6. Introduction …… • Procuring materials and spares at most economical costs • Efficient maint.of stocks including control over inventory • Working on an efficient system of financial scrutiny and accountal • Verification of physical balances. D. G. JOSHI. DFM IRICEN PUNE.

7. Oraganisational structure D. G. JOSHI. DFM IRICEN PUNE.

8. CLASSIFICATION ALL STORES ARE BROADLY DIVIDED INTO • STOCK AND NON STOCK ITEMS • STOCK ITEMS ARE FURTHER DIVIDED INTO ORDINARY STORES AND EMERGENCY STORES D. G. JOSHI. DFM IRICEN PUNE.

9. STOCK ITEM “ Ordinary stores” • Items for which there is a regular turn over, caused by constant demand and which are stocked by the stores Deptt in depots, and “Emergency stores “ • Items which do not ordinarily wear out or require renewal but have to be kept in stock to meet emergencies also items which are not readily obtainable. D. G. JOSHI. DFM IRICEN PUNE.

10. Classification of stores Non stock items • All the items of stores other than Ordinary stores and emergency stores which are not purchased for stock purpose are known as Non-stock items. Special stores • Stores require for works and other special purpose i.e. other than for “operation or ordinary maintainence and repairs”. Such stores are directly dispatched to the consignee . D. G. JOSHI. DFM IRICEN PUNE.

11. Classification of stores Surplus stores • Items which have not been issued from stock for consumption for a period of 24 months owing to • Obsolescence i.e change in design or specfn. • Unanticipated fall in consumption • Return of large no. of stores by consuming departments are known as Surplus Stores. D. G. JOSHI. DFM IRICEN PUNE.

12. Surplus stores Moveable surplus • Items of stores which have not been issued for a period of 24 months but for which it is anticipated that these will be utilised in near future are known as Moveable Surplus. Dead surplus • Items not issued for 24 months and also not likely to be utilised on the Railways within the next two years are termed as Dead Surplus It is necessary to dispose off these quickly to reduce further lock up of capital and avoid unnecessary accumulation of inventory. Note: Qtys. Of ordinary stores in excess of 40 % of the annual issues are normally taken as “ Over Stock “ D. G. JOSHI. DFM IRICEN PUNE.

13. Minima & Maxima For all the items of ordinary stores the min. and max. limit is laid for stores purpose. Ordinary stores should not be allowed to fall below the minimum level and not to exceed maximum. The maximum should not exceed twice the min.prescribed for an article which represents average consumption per week * No.of weeks required to obtain the same. D. G. JOSHI. DFM IRICEN PUNE.

14. Issue Ticket All the materials required by the shops/depots for the day to day requirements is requisitioned through issue tickets made in duplicate duly signed by the concerned SE/SSE. Custody stores Store required in connection with construction work and capital or revenue programme, though the value such store is charged off to final head of account but the material is kept in safe custody within stores depot till such time it is reqd. for actual consumption. D. G. JOSHI. DFM IRICEN PUNE.

15. Returned stores All stores which are no more required on line, w/shops are returned to the nearest stores depot through advice note. Prepared in 6 foils. 3 to stores depot with material, 1 officecopy, 01 to SAB to watch accountal and 01 to divisional office to link the credit to be received. Pricing of Monthly returns Based on the category of stores like new,second hand, or unserviceable(scrap) pricing of such stores is done by stores accounts branch on receipt of abstract of allocation for journal entries. D. G. JOSHI. DFM IRICEN PUNE.

16. Tools and Plants maintenance • A scale of Tools and Plant is fixed for each gang under the PWI or IOW, the cost of which is charged off finally and a T&P register is maintained accordingly. After the close of the financial year the same should be sent to Divl.office for test check . • Proper accounts of T&P issued for use of subordinates of sub divn or temp. lent to contractor is to be kept by maintaining register detailing the date of issue, return, description and name of borrower and review on completion of work to be carried out for prompt recovery of the same. D. G. JOSHI. DFM IRICEN PUNE.

17. Adjustments • Adjustments are necessary for liquidation of liabilities not payable in cash or realisation of outstanding credits e.g. freight bills, w/shop bill, Rly.printing press, ballast train charges, DR received from other Rlys/deptt. for stores supplied or services rendered through advice note. • Transfer of DR/Cr originally borne against suspense head to proper works through issue of stores from stock, transfer of material from one work to another. • Adjustment memo is to be prepared by the subordinate and acceptance to be obtained before raising the debit through accounts. D. G. JOSHI. DFM IRICEN PUNE.

18. Duties of AEN w.r.t. stores. • Stores accounatal. • Stores obtained for specific work (MAS). • Disposal of surplus and obsolete stores. D. G. JOSHI. DFM IRICEN PUNE.

19. Inspection of Office and Stores of Inspectors • The Assistant Engineer shall carry out an inspection of each inspector’s Office and Stores at least once a year. When checking stores, he should pay particular attention to the imprest and its distribution, Engineering indicators, protection equipment and important items in stores. (b)The Assistant Engineer shall carry out inspection once in six months of all the small machines including light duty (Chinese type) tampers under the charge of the Inspectors for proper upkeep and good running condition by PWIs. D. G. JOSHI. DFM IRICEN PUNE.

20. EngineeringStores Accountal Engineering department handles large quantities of stores which is grouped as below:-- Imprest Store – P.Way material - Other than P.Way-Surplus stores/Reserve store in case of other than P.way materials- Charged off stores. D. G. JOSHI. DFM IRICEN PUNE.

21. Imprest Stores :Materials obtained, not for specific works but as standing advance except consumable stores such as jute, cotton waste oil etc.- Imprest stores should be kept segregated from all other stores.- Materials issued from imprest stores, should be recouped as soon after the issue as possible. - Imprest stores shall normally not permitted to be transferred from one depot to another accept in case of emergency. D. G. JOSHI. DFM IRICEN PUNE.

22. Surplus Stores : Comprises stores which are surplus to requirements & include materials released from renewals & replacements etc. Disposal of surplus stores shall be arranged by the Divisional Engineer either by transferring to other users or to stores department for disposal. D. G. JOSHI. DFM IRICEN PUNE.

23. LIABILITY REGISTERLiability RegistersMaintenance of liability registers for stock items to record the liabilities entered into as and when the orders are placed on the suppliers/contractors or indents are placed on the procurement agencies and watch the liquidation of such liabilities. D. G. JOSHI. DFM IRICEN PUNE.

24. Accounts & returns of imprest and surplus stores :Quantities accounts showing the daily receipts, issues & balances should be maintained by stock holder (E-1414)- Day books : All actual receipts & issues of imprest & surplus stores, in the first instance, be entered by the subordinate in separate note books chronologically. (Form E-1416). D. G. JOSHI. DFM IRICEN PUNE.

25. Separate returns showing receipts, issues and balances of all items stores operated on during the month should be submitted by stock holder to divisional office through ADEN (E-1417). D. G. JOSHI. DFM IRICEN PUNE.

26. Check of monthly stores returns:In the divisional office, the imprest and surplus stores accounts (Form E-1417) received from the depot holders should be checked to see:(i)Opening & closing balance of previous statement.(ii) All receipts correctly posted.(iii) All issues correctly posted.(iv) Inter-alia transaction are correct & matching.(v) In case of imprest stores, same has not exceeded than the sanctioned without proper authority. D. G. JOSHI. DFM IRICEN PUNE.

27. Departmental stock verification of stores balances: • Divisional engineer should arrange approximately one sixth of the stock under each stock holder is to be verified by actual count each month so that the whole divisional stock is verified atleast once in every six months. This verification should be in addition to stock verification by A/c’s department. D. G. JOSHI. DFM IRICEN PUNE.

28. Charged off stocks : will comprise • Consumable stocks such as cotton waste, jute, oil, grease etc. used for ordinary repairs & maintenance. • Petty stores, such as materials for patch-work repairs to buildings. • Stores obtained for specific works • Tools & Plants. D. G. JOSHI. DFM IRICEN PUNE.

29. Stores obtained for specific works -MATERIAL AT SITE ACCOUNT (M A S Account) D. G. JOSHI. DFM IRICEN PUNE.

30. We will discuss:- • Applicability, • Purpose, • Procedure, • Relevant Para of Engineering Code. D. G. JOSHI. DFM IRICEN PUNE.

31. Applicability • MAS A/C is to be maintained specific work wise for works costing :- Rs. 3 Lakhs in case of track related works and Rs. 1 Lakh in case of non-P. way works. D. G. JOSHI. DFM IRICEN PUNE.

32. Purpose of MAS A/C • To regulate purchase and ensure that only materials actually required are purchased. • Holding safe custody of materials at centralized places instead of scattering the materials at numerous sites of works till need for actual use arises. • Controlling consumption and regulate issue of materials to meet the exact and immediate requirements. D. G. JOSHI. DFM IRICEN PUNE.

33. Purpose of MAS A/C contd.. • To facilitate correct accountal so that at any given time instant information is readily available regarding the receipt, issues and the balance of the materials as per the records and affording a cross check with the actual ground balance for each work. • To facilitate the in-take of returned stores and disposal of stores surplus to actual requirements of the work. D. G. JOSHI. DFM IRICEN PUNE.

34. Procedure of maintaining MAS A/C • There are two aspects of MAS A/C. First : Numerical Ledger – Maintained at depot level. Secondly : Financial Aspect - Maintained by Executive officer of work concern. The two aspects are linked to each other by the link of monthly and quarterly returns submitted by depot holder to the executive officer. The methodology adopted in Rlys to maintain the MAS A/C and it’s final adjustments in the work registers as per Engineering code Para no. 1436 to 1455 and 1472 to 1478. D. G. JOSHI. DFM IRICEN PUNE.

35. Extract of Important Relevant Para of Engg. Code D. G. JOSHI. DFM IRICEN PUNE.

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44. PROCEDURE FOR DISPOSAL OF SURPLUS ANDOBSOLETE STORES D. G. JOSHI. DFM IRICEN PUNE.

45. Definition:- (ref. para S/2216) • Stocks beyond the ordinary requirements of the railway shall be defined as surplus stores. Purely temporary excess over immediate or estimated requirements are not really surplus, so long as they can be worked out by issues over a comparatively short period of time. Stores may be considered as really surplus to the requirements of the Railway only if they have not been issued for a long time (say 2 years). D. G. JOSHI. DFM IRICEN PUNE.

46. Surplus item can be classified as:- • Movable surplus (S/2218):- Comprises item of stores which have not been issued for a period of 2 years but which it is anticipated will be utilized in the near future and such items should be marked in the price lists. • Dead surplus (S/2219):- Comprises item of stores which have not been issued for a period of 2 years will not be utilized in the near future and such items should be marked in the price lists. Note: (S/2220) Emergency stores are not to be treated as surplus even after having not issued for 2 years . D. G. JOSHI. DFM IRICEN PUNE.

47. Contd.. • Survey committee:- Function of Survey Committee (S/2222) • Survey committee shall inspect critically the condition of stores. • That have deteriorated in value, for any reason. • Broken or damaged in transit or while in stock. • Lying in the custody of stores depot for a long period unserviceable owing to obsolescence of other causes and • Reviewed as scrap. D. G. JOSHI. DFM IRICEN PUNE.

48. Contd.. • The committee should determine after such inspection :- (S/2222) • What stores held in the depot should be treated as Dead Surplus Stores or as scrap. • What stores should be classified and rate second hand. • At what rates and values such stocks should be held in the accounts books, and • How such stores should be disposed of i.e. by sale or by issue to particular uses of particular departments etc. D. G. JOSHI. DFM IRICEN PUNE.

49. Contd.. • Composition of Survey Committee (S/2225) • To be appointed by G.M. and will consists of the heads or senior officers of consuming departments and from any department other than stores. D. G. JOSHI. DFM IRICEN PUNE.

50. Contd.. • Meetings: Above committee shall meet at a frequency not less than once in a half year and survey sheets shall be prepared in 4 copies group by group giving its recommendations. This report shall be sent for approval of COS or GM as per powers delegated. D. G. JOSHI. DFM IRICEN PUNE.