technical support group, edcil, new delhi financial management steps towards responsive accounting...

Technical Support Group, EdCIL, New Delhi

FINANCIAL MANAGEMENT

Steps towards Responsive Accounting

under SSAPresentation for

31st Quarterly Review Meeting of Finance

ControllersBy : U.K. Verma, Consultant(FM)

RESPONSIVE ACCOUNTING UNDER SSA


Government Accounting Vs Accounting under SSAGOVERNMENT

ACCOUNTING RULES, 1990

Rule – 19The accounts of Government are based, in the main, on the Single Entry SystemRule – 22With the exception of such book adjustments as may be authorized by these rules or by any general or special orders issued by the Central Government on the advice of the Comptroller and Auditor General of India, the transactions in Government accounts shall represent the actual cash receipts and disbursements during a financial year as distinguished from amounts due to or by Government during the same period.

FINANCIAL MANAGEMENT

& PROCCUREMENT MANUAL - SSA

Para - 51Complete accounts in respect of the monetary transactions of the State Implementation Society in the Headquarters Office as well as in the Subordinate Offices shall be maintained in the same manner as required in a State Government Office. However, the “Double Entry Method based on Mercantile System” of accounting shall be followed under SSA.



Uniform Accounting System not followed in all states. Some states still follow Cash basis of Accounting instead of Accrual basis as prescribed in FMP Manual;

Closing balance of unspent grant from last year not brought forward in the Income & Expenditure Account by some states whereas being taken in other cases;

Statutory Provisions under the Income Tax Act, 1961, EPF (MP) Act,1952, VAT etc. are not properly complied with.

Exp. in respect of previous year and even year before previous year have been taken in the Income & Exp. A/c

Separate set of books of accounts in respect of SSA, NPEGEL & KGBV are not maintained.

Realization against sale of old fixed assets are fully credited to the Income & Expenditure A/c without giving effect to the Fixed Assets Schedules



No Schedule /details of Cash & Bank Balance, Outstanding advances / liabilities forming part of Balance Sheet or Activity wise expenditure under any component has been annexed with annual accounts

The Balance Sheet shows no fixed assets as on the date by some of the SIS ;

Receipt of unspent balance from sub-district level / SMCs / VECs or amount not related with SSA funds have been credited in the Income & Expenditure Account under Miscellaneous / Other Receipts

Figures shown in the Utilization Certificate / Consolidated Annual Financial Statements / FMRs , Receipt & Payment Account are not in agreement with each other.

Expenditure for the year under different head(s) exceeds the budgetary provisions of the year;

Operation of multiple Bank Accounts under SSA / NPEGEL & KGBV



Books of Accounts are kept opened even after 9-12 months after close of the financial year which should be closed on or before 30th June every year after making necessary adjustments and incorporating the same in the books.

Bank Reconciliation Statement not prepared properly and un-presented Cheques appearing in the Bank reconciliation statements not considered to be properly treated either for transferring in state cheques or expenditures to be written back in the books of accounts. Interest / Bank Charges appearing in the BRS not accounted for

Outstanding Advances not reconciled, confirmed and poor progresses in adjustments ;

Procedural lapses in procurement procedures like Non publication of tenders in required manner, Non – evaluation of responsiveness of the technical and financial bids, awarding the works without prior approval of the Purchase Committee and settlements of claim without quality certifications;



Accounting Principles : Most of the SIS’s Audit Reports reveals non-adherence of Accounting principles and inconsistencies & un-uniformity in Accounting System at State, district and sub-district level ; Maintenance of Books of Accounts : Non-Maintenance or improper maintenance of books of accounts; Bank Accounts & Bank Reconciliation : Operation of multiple bank accounts , non-preparation of Bank Reconciliation Statements ; unidentified debits and/or credits appearing in BRS, non-incorporation of due adjustment entries; Outstanding Advances : Non-availability of age wise / name wise details of outstanding advances; Charging advances as expenditure in accounts, unconfirmed outstanding balances and long pendency of adjustment of advances; Statutory Provisions : Non-deduction of TDS, non-deposit of TDS deducted in time, non-issuance of TDS Certificates and non-filing of Returns and incorrect accounting of TDS



Creation of Liabilities & Timely settlement : creation of un-confirmed and un-ascertained liabilities in accounts;

Procurement procedures : Procedural lapses in the procurements;

Internal Control Mechanism & internal Audit : In-adequate and lack of effective internal control mechanism; internal audit system not in commensurate with size of funds , non-existence of concurrent internal audit system, non-compliance of internal audit reports in timely manner before finalization of annual accounts;


Remedial Strategies

FM Assessment Tools

Special Drive for Advance Adjustment

Format designed for reporting of actual status of Accounts to MHRD on key issues. Status to be scrutinized for issue & need based remedial supportive action by MHRD / TSG


Intensive Training & Capacity Building

Central Team of MHRD Officials & TSG consultants constituted to visit SISs having bulk outstanding advances to review and sensitize Civil Work and Accounts functionaries of state / district level offices

Intensive 2-days Accounts Training by MHRD Official & TSG Consultants to State and District Level Accounts Personnel on key issues with a view to develop some Mater Trainer for imparting further training at district / sub-district level

SISs yet to submit the Status Report

Team Visited Bihar & Jharkhand – Reported adj.– Jharkhand 550 Cr. & Bihar –

2400 Cr. (approx)

Two Regional Trainings at Maharastra (110 Persons )&

Kerala (73 persons)



FM Status Assessment Tool : In the prescribed format each SIS has to submit it existing status on following parameters : 1.General Profile;2.Accounting System;3. Books of Accounts;4. Status of Bank Accounts;5. Status of Bank Reconciliation Statements;6. Internal Audit System;7. External Audit;8. Outstanding Advances;9. Staff Strength and Capacity Building; and 10. Status of Annual Reports

Format for Assessment Tool firstly shared with State Finance Controllers in 30th Quarterly Review Meeting and after incorporating the suggestions received, sent to States vide AS (SE) letter dated 2nd September 2011 . States yet to respond on it.



Strategies Two visits of Central Team comprising Mr. Arun Sharma, and Mr. Sushil Kumar from MHRD and TSG Consultants from Civil Works and Financial Management unit ; Meeting with SIS and DPO’s Civil Works & Accounts functionaries; Pending Advance disbursed up to 2009-10 targeted ; Provisions made for adjustment of advance to the extent actually utilised for the Works under progress with full transparency Time bond target fixed for adjustment ; Continuous monitoring of the progresses and feed back from MHRD;

Outcomes in Bihar Reported Adjustment of Rs. 2000 Crores in first stage and further Rs. 400 cr. – Total approximately 2,400 Crore against the total outstanding balance of Rs. 3800 Cr. Approx.

In Jharkhand – reported adjustment Rs. 550 Crore against total outstanding balance of Rs. 950 Crore;

Major portion of reported adjustments relates to Civil Works



Intensive Training for Capacity Building TSG in Role of “Trainer”

Five 2-days Regional Trainings planned on Financial Management for the purpose of capacity building of Accounts Personnel of SPO/DPOs in view to develop some of them as “Master Trainer” who could not only tackle the chronic financial management issues but also to impart further training to district and sub-district level accounts personnel.

Western Region

Southern Region

EasternRegion

N. E.Region

Northern Region

Pune (Maharstr

a)

Trichoor (Kerala)

Patna (Bihar)

Guwahati

(Assam)

Pachkula (Haryana

)Gujrat , Rajasthan, Madhya Pradesh, Maharastra, Goa, Dam. & Diu , D & N. Hav., Lakshadweep

Kerala, Andhra Pradesh, Tamil Tadu, Puducherry, Karnataka, A&N Islsland,

Bihar, Jharkhand, Chhattisgarh, West Bengal , Orissa

Assam, Tripura, Nagaland, Meghalaya, Manipur, Arunachal Pradesh , Sikkim

Haryana, Punjab, Chandigarh, Delhi, Himachal Pradesh J & K, Uttarakhand, Uttar Pradesh



Intensive Training for Capacity Building

Salient Features of Regional Training All District & State Level Accounts Officers of the

hosting state to participate; Other Participating states to nominate five Accounts

personnel. 3 (three) of them shall invariably be from DPOs and 2 (two) from State project Office;

Keys issues identified from the States Audit Reports of preceding years;

After completion of all five Regional Trainings, the hosting states shall select at least 3 (three) persons and all other state shall nominate all three accounts personnel who have attended the training as the “Master Trainer “

All such Persons identified shall be imparted 3-days intensive Training centrally at Delhi; and

After the second phase of training, such Master Trainers shall impart further Training at District / sub-district level Accounts training



Intensive Training for Capacity Building Key Issues selected for

Training1.Training : Needs &

Importance;2.FM Action Plan &

Monthly Exp. Plan;3.Book Keeping &

Accounting under SSA-Accounting Cycle

4.Bank Reconciliation Statement;

5.Accounting of 13th FC Awards;

6.Implementation of CPSMS

7.Procurement Procedure;

8.Statutory Compliance - TDS under IT Act, 1961

9.Settlement of Audit Para

10.Adjustment of Outstanding Advances




Regional Training – Resource Book

1.Importance & Need of Training – Post Training Expectations;

2.Double Entry System of Accounting;

3.Book of Accounts under SSA – Cash Book, Ledger , Trial Balance, Receipt & Payment Account, Income & Expenditure Account & Balance Sheet.

4.Bank Accounts & Bank Reconciliation Statement

5.Statutory Provisions under Income Tax Act, 1961

6.TDS Deductions, Deposit in Govt.’s Revenue Account, Filing of E- Quarterly Returns




1st – Batch of Regional Training at Pune ( Maharastra)

Date : 10th – 11th Oct’2011

Venue : Hotel VITS , Pune

States Participated : Maharastra, Rajashthan, Madhya Pradesh, Daman & Diu, Dadar & Nagar Haveli

Not Participated : Goa Lakshadweep

Total no. of Participants : 101




2nd – Batch of Regional Training at Trichoor ( Kerala)

Date : 14th – 15th October ’2011

Venue : Joy Palace, Trichoor

States Participated : Kerala, Karnataka, Puducherry, Tamil Nadu

Not Participated :

Andhra Pradesh A & N Island

Total no. of Participants 73



Intensive Training for Capacity Building Participants Feed Back

After the Training feed back of the participants were taken in a prescribed format specially designed for Post Training Evaluation & Learning self assessment

Post Training Evaluation & Learning Self Assessment :( 0n the scale of 3 to 5 : 1=Low, 3=Medium, 5=High )

1.About 45 % Participants, on the basis of self evaluation have gained their knowledge from Low to Medium;2.About 30 % Participants gained knowledge level from medium to High3.25 % participants gained knowledge level from Low to High




After the Training feed back of the participants were taken in a prescribed format specially designed for Post Training Evaluation & Learning self assessment Will do differently in practice as a result of this Training 96 % participants would perform in better way after this training. Topics & Issues that were strength of the Training 67 % participants - Accounting , BRS, Procurement, Statutory Compliance were the strength of the training. Weaknesses of the Training 30 % participants - Communication in English, 40 % lack of Group discussions, 20 % inadequate time ; 10 % no weakness




After the Training feed back of the participants were taken in a prescribed format specially designed for Post Training Evaluation & Learning self assessment How to improve this Training 40 % participants wants this training to be imparted in their States covering all DPOs Accounts Staff; Should be conducted every year Additional Topics should be included for Training Computerized Accounting , Service & Travelling Rules7 % Preparation of AWP & B, Revised Financial Norms etc,

FINANCIAL MANAGEMENT - SSA


Thank You ….

technical support group, edcil, new delhi financial management steps towards responsive accounting...

Documents

financial year

accounts of government

government accounts

cash basis of accounting

ssatechnical support

ssagovernment accounting

respect of previous

annual accounts