session -2 role of treasury in budgetary control of the state regional training institute, ranchi...

Session -2Session -2Role of Treasury in Budgetary Role of Treasury in Budgetary

Control of the StateControl of the State

Regional Training Institute, RanchiRegional Training Institute, RanchiStructured Training Courseware on Structured Training Courseware on

Treasury InspectionTreasury Inspection

RTI Ranchi – Structured Courseware on Treasury Inspection – Slide 2/2

Learning ObjectivesLearning Objectives

At the end of this session, the participants At the end of this session, the participants will be familiar withwill be familiar with– The budgetary control processes of the State The budgetary control processes of the State

GovernmentGovernment– The role of the Treasury in budgetary controlThe role of the Treasury in budgetary control


BudgetBudget

Annual Financial Statement presented to Annual Financial Statement presented to State LegislatureState Legislature– Review of public finances of previous year, Review of public finances of previous year,

including actual receipts and expenditureincluding actual receipts and expenditure– Estimates of receipts and expenditure of Estimates of receipts and expenditure of

following yearfollowing year– Proposals for meeting requirements of following Proposals for meeting requirements of following

yearyear


GrantsGrants

Budget consists of Grants for each Budget consists of Grants for each DepartmentDepartment

GrantsGrants– ChargedCharged

Expenditure not voted, because of Constitutional Expenditure not voted, because of Constitutional provisionsprovisions

– VotedVoted Expenditure, debated and voted by LegislatureExpenditure, debated and voted by Legislature


Grants (Contd.)Grants (Contd.)

Voted GrantsVoted Grants– Plan ExpenditurePlan Expenditure

Developmental projects, programmes and schemesDevelopmental projects, programmes and schemes

– Non-Plan ExpenditureNon-Plan Expenditure Generally of a recurring/ revenue natureGenerally of a recurring/ revenue nature Considered less productive than Plan ExpenditureConsidered less productive than Plan Expenditure


Allotment OrdersAllotment Orders

Grants sub-divided by HOD amongst Disbursing Grants sub-divided by HOD amongst Disbursing Officers through Allotment OrdersOfficers through Allotment Orders– Breakdown by Major Head, Minor Head, Detailed Head Breakdown by Major Head, Minor Head, Detailed Head

etc.etc.

Allotment Orders sent to Treasury Officer and AG, Allotment Orders sent to Treasury Officer and AG, to ensure thatto ensure that– Expenditure is only against allotmentExpenditure is only against allotment– Progressive expenditure, by account head, remains Progressive expenditure, by account head, remains

within allotmentwithin allotment


Allotment Orders (Contd.)Allotment Orders (Contd.)

Allotment Orders entered by TO in Allotment Allotment Orders entered by TO in Allotment RegisterRegister– To be checked while passing billsTo be checked while passing bills

Allotment Orders entered by AG in Appropriation Allotment Orders entered by AG in Appropriation RegistersRegisters– To watch progressive expenditure on monthly basisTo watch progressive expenditure on monthly basis– Issue of warning slips in case ofIssue of warning slips in case of

Expenditure exceeding allotmentExpenditure exceeding allotment Rush of expenditureRush of expenditure


Supplementary GrantsSupplementary Grants

Presented by Government and passed by Presented by Government and passed by LegislatureLegislature– Additional requirement of fundsAdditional requirement of funds

Distributed through Allotment Orders to Distributed through Allotment Orders to DDOsDDOs


Re-appropriation OrdersRe-appropriation Orders

Transfer of allotments betweenTransfer of allotments between– DDOsDDOs– Account HeadsAccount Heads

Transfer between Grants not permittedTransfer between Grants not permitted– Requires legislative approvalRequires legislative approval


SurrendersSurrenders

DDO to surrender excess funds through DDO to surrender excess funds through Surrender Orders to HODSurrender Orders to HOD– Well before end of yearWell before end of year– Can be re-appropriated to other Drawing Can be re-appropriated to other Drawing

OfficersOfficers Funds surrendered late, or not surrendered Funds surrendered late, or not surrendered

at allat all– Grant not fully utilisedGrant not fully utilised– Savings/ Lapse of FundsSavings/ Lapse of Funds


SavingsSavings

Adverse comments from AG and LegislatureAdverse comments from AG and Legislature State Govt. required to provide explanations State Govt. required to provide explanations

for savingsfor savings– Explanations included in Appropriation Explanations included in Appropriation

AccountsAccounts


Allotment RegisterAllotment Register

Allotment Orders from HODs entered into a Allotment Orders from HODs entered into a DDO-wise Allotment RegisterDDO-wise Allotment Register– Full account classificationFull account classification– To be presented along with every billTo be presented along with every bill

TO to check that allotted funds are available TO to check that allotted funds are available for paymentfor payment


Passing of Bills – Checks by TOPassing of Bills – Checks by TO

Bill in proper formatBill in proper format Full account classificationFull account classification

– To be checkedTo be checked Allotment column filled inAllotment column filled in Bills accompanied by copy of Allotment Bills accompanied by copy of Allotment

OrderOrder Accuracy of BillsAccuracy of Bills Genuineness of DDO’s signatureGenuineness of DDO’s signature


Letter of Credit MechanismLetter of Credit Mechanism

Introduced by Bihar Government in 1983 for Introduced by Bihar Government in 1983 for cheque-drawing officerscheque-drawing officers

Allotment break-up, approved by SE/CE and Allotment break-up, approved by SE/CE and communicated to Treasury Officercommunicated to Treasury Officer– PurchasesPurchases– Payment to work-charged staffPayment to work-charged staff– Work contingenciesWork contingencies– Payment to contractorsPayment to contractors– Other paymentsOther payments


LOC Mechanism (Contd.)LOC Mechanism (Contd.)

Treasury’s LOC Register in three formsTreasury’s LOC Register in three forms– Form I – Register of AllotmentsForm I – Register of Allotments– Form II – Register of LOCs issued to Sub-Form II – Register of LOCs issued to Sub-

TreasuryTreasury– Form III – Register of LOCs and Progressive Form III – Register of LOCs and Progressive

ExpenditureExpenditure Cheques to be honoured only within LOC Cheques to be honoured only within LOC

limitslimits LOC lapses at the end of the yearLOC lapses at the end of the year


LOC Mechanism (Contd.)LOC Mechanism (Contd.)

Cheques drawn, but not encashed within Cheques drawn, but not encashed within financial year, to be cancelledfinancial year, to be cancelled– Fresh cheque issued from next year’s allotmentFresh cheque issued from next year’s allotment

LOC amount cannot be drawn at one go, LOC amount cannot be drawn at one go, and placed in a separate drawing amountand placed in a separate drawing amount

Assignments by CE on quarterly basisAssignments by CE on quarterly basis


Accounting for PW ChequesAccounting for PW Cheques

Cheques issued by XEN and encashedCheques issued by XEN and encashed– Accounted under 8782 -00-102- PW Accounted under 8782 -00-102- PW

Remittances – Head II PW ChequesRemittances – Head II PW Cheques– Entered in a separate registerEntered in a separate register

Monthly division-wise statement of cheques Monthly division-wise statement of cheques encashed sent to AGencashed sent to AG


Accounting for PW Cheques Accounting for PW Cheques (Contd.)(Contd.)

Monthly Certificate of Treasury Issues (CTI) Monthly Certificate of Treasury Issues (CTI) to Divisional Officerto Divisional Officer– Details of encashed cheques relating to the Details of encashed cheques relating to the

DivisionDivision– Division can prepare statement of cheques not Division can prepare statement of cheques not

encashedencashed

Passbook for reconciliation of Treasury Passbook for reconciliation of Treasury figures and Divisional Figuresfigures and Divisional Figures


Accounting for PW Cheques Accounting for PW Cheques (Contd.)(Contd.)

Similar procedure for Forest DivisionsSimilar procedure for Forest Divisions For Remittances, TO submits a monthly For Remittances, TO submits a monthly

Certificate of Treasury Remittances (CTR) Certificate of Treasury Remittances (CTR) to the concerned Forest Divisionto the concerned Forest Division– Details of Forest Remittances into TreasuryDetails of Forest Remittances into Treasury

session -2 role of treasury in budgetary control of the state regional training institute, ranchi...

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