MAINTENANCE OF ACCOUNTS IN PANCHAYAT RAJ INSTITUTIONS IN A.P. - PowerPoint PPT Presentation

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MAINTENANCE OF ACCOUNTS IN PANCHAYAT RAJ INSTITUTIONS IN A.P.

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MAINTENANCE OF ACCOUNTS IN PANCHAYAT RAJ INSTITUTIONS IN A.P.

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  1. MAINTENANCE OF ACCOUNTS IN PANCHAYAT RAJ INSTITUTIONS IN A.P.

  2. Recommendations of EFC • Separate demand head be created in state budget for transfer of funds to local bodies • Separate Minor Heads be created for transfer of funds to each category of local bodies • Separate format be prescribed for preparation of Budget & keeping of accounts to ensure uniformity in Central, State & Local Body Accounts • These formats should be amenable to Computerisation • C & AG to prescribe the accounting formats

  3. Recommendations of C & AG • 17 Accounting Formats have been prescribed by C&AG which are common for all the PRIs. • Of this, 16 are for keeping accounts and 1 for preparing budget • Classification of transaction structured on a function - cum – programme basis to provide uniformity at all 3 tiers of Government. • LCFPA is given to classify the transactions. • Addition & deletion of Major/Minor heads will be done only with the approval of State AG.

  4. Adoption of New formats for PRIs • Government AP issued orders in G.O.Ms. No.172 PR(Acct.I), Dt:16.05.05 adopting these new formats by PRIs • Except these 17 forms, the others registers/ forms will continue to be maintained in the existing proforma

  5. Mandatory Minor Heads • A separate demand XXXI is created in State Budget for transfer of funds to PRIs. • The following Minor Heads are operated to transfer funds to PRIs by various Departments • Assistance to Zilla Parishads – code 196 • Assistance to Block Panchayats –code 197 • Assistance to Gram Panchayats – code 198

  6. Classification of Transactions • For Expenditure 4 tier classification • Major Head • Sub Major Head • Minor Head • Object Head • For Receipt 3 tier classification • Major Head • Sub Major Head • Minor Head

  7. Classification & Codification

  8. Classification of Grants • All Grant receipts are shown under Major Head 1601 – Grants –in-aid. • The Minor Head corresponds to program Minor Heads in the section “Expenditure Heads (Rev. Acct)”, to which the assistance relates are to be adopted. • Alpha numerical codes to show the source of grant.

  9. Classification of Grants • A - Government of India grant • B - State Non-Plan grant • C - State Finance Commission grant • D - State Plan grant • E - Central Finance Commission grant • F - MP Lads • G - MLA Lads • H - Schemes funded by Panchayats own sources

  10. Accounting of Grants • Example – Receipts 1601 -Grants – in – Aid/Assistance from State/Centre 702 -Minor Irrigation B 04 - State Non-Plan Grant • Payments 2702 -Minor Irrigation 01 -Surface water 102 -Lift Irrigation scheme 27 -Minor Works – Repairs & Maintenance

  11. Effects of EFC Recommendations in A.P. • The EFC recommendations are to operationalise the constitutional provisions • The PR accounts are to be maintained on the lines of Government Accounts • Common account formats are prescribed for all the 3 PRIs. • All the revenues of PRIs are constituted into panchayat fund on the lines of consolidated fund of the state

  12. Effects of EFC Recommendations • The expenditure from Panchayat fund is classified functionally • Due to uniform minor heads the total quantum of funds devolved through state budget to each PRI can be known • Due to functional classification of expenditure the number of functions transferred and expenditure thereon can be known from PR accounts

  13. Over view of Budget & Accounting Formats • Receipts & Payments accounts are prepared in two parts. • Part – I - Panchayat fund - Comprising of all receipts & expenditure • Part – II - Deposit & Advances -comprising of Deposits & Advances and remittances. • Distinction between Revenue & Capital • Receipt & Payment Accounts contains columns for budget estimates of the current year, previous year accounts and reporting years account.

  14. Over view of Budget & Accounting Formats • Annual R&P accounts supported by four additional disclosure statements items : • Statement of Capital Expenditure – (Form-2) • Statement of Receivable & Payables– (Form-3) • Statement of balances under Deposits & Advances & Loans – (Form-4) • Statement of Provident Funds, investments etc. – (Form-5)

  15. Single Cash Book • Only one main cash book is to be maintained for panchayat fund • However, in case of multiple funds, subsidiary cash books can be maintained to facilitate reconciliation

  16. Over view of Budget & Accounting Formats • The detailed estimates are divided into different heads of expenditure (Functions/ Programme/ Activities etc.) • Format consists of columns for last year actual BE, RE & BE for next year • The Budget is prepared only in part-I (Panchayat fund) • Classification of receipts & expenditure is uniform for both account & budget.

  17. Features of New Accounting System • Each PRI is an accounting entity • The accounting policies of PRIs are same as that of State Government • The main feature of new accounting system is integration between accounting and budgeting • Accounts are kept on cash basis • The codification covers all activities under 29 subjects listed in 11th schedule • Accessible to Computerization and consolidation. • The Annual Account facilities to compare the institutions actual performance against the forecast in the Annual Plan & Budget

  18. Features of New Accounting System • Recoveries of payment are taken as reduction in expenditure • In case of funds are transferred from ZP to MP/GP for schemes, the transfers are shown as deduct receipts • Money received which is not revenue of PRIs is accounted for in deposit account.

  19. Features of New Accounting System • The new accounting system secure internal control on Receipts & Expenditure. • Facilitate introduction of performance audit • Help in analysis of Expenditure / activities under MIS • Budget expenditure (Amounts drawn from treasury) and PAO expenditure for ZP works is also captured in the Accounts.

  20. Transition Issues - 1 • Capacity Building –training to lower tiers at the District & Mandal level. • Printing & dissemination of Budget & Accounts Formats with codes. • Arrears of Accounts to be prepared in new formats • Changes in relevant Act& Rules • Computerization of Accounts. • Creation of computerized database • Development of Accounting manuals • Changes related to computerized process • Training of State Audit staff on new system

  21. Transition Issues – 2 • Computerization of Accounts • Hardware • Software • Training • Maintenance • Creation of computerized database • Integration of Accounts software & Audit Software

  22. DIFFERENCE BETWEEN OLD AND NEW ACCOUNTS

  23. DIFFERENCE BETWEEN OLD AND NEW ACCOUNTS

  24. DIFFERENCE BETWEEN OLD AND NEW ACCOUNTS

  25. THANK YOU