DDR HeadsRTI Allahabad1 Debt, Deposit and Remittance Heads of Accounts

DDR HeadsRTI Allahabad2 Session Overview Transactions under DDRs have an important impact on Government Accounts. Transactions under the Debt Heads, where the Government is the debtor, impact not only the current year’s Government Accounts but also Government Accounts in future when the Government has to repay the debts. Similarly, the transactions under the Deposit Heads impact not only the current year’s Accounts but also Government Accounts in future years when the deposits are due for repayment or are withdrawn by the depositor.

DDR HeadsRTI Allahabad3 Session Overview Remittance Heads are only adjusting heads for temporary parking of transactions till their eventual clearance, like a remittance of cash from treasury ‘A’ to treasury ‘B’ will be parked under Remittance Head ‘Cash Remittance between Treasuries’, the debit and credit of which will get adjusted when treasury accounts from both Treasury ‘A’ and ‘B’ are received and adjusted in the Accountant General’s Office.

DDR HeadsRTI Allahabad4 Session Overview The transactions under DDR Heads also impact the balances under these heads. Since balances under these heads may impact more than one year’s account, it is important for the Accounts Office to maintain running balances of these heads. For this purpose, each Accounts Office maintains a ledger for Debt, Deposit, Suspense and Remittance Heads of Accounts, i.e., those heads, balances in respect of which are carried forward from year to year. It is an important function of the Accounts Office to review these balances periodically.

DDR HeadsRTI Allahabad5 Session Overview In this session we will discuss accounting of transactions under the Debt, Deposit and Remittance Heads and check exercised in Accounts Offices to ensure accuracy of balances under these heads.

DDR HeadsRTI Allahabad6 Learning objective At the end of this session, the learner will be able to define the Debt, Deposit and Remittance transactions, and their treatment and accounting procedure in Government Accounts.

DDR HeadsRTI Allahabad7 DDR transactions Transactions relating to Debt and Deposits comprise receipts and payments in respect of which Government becomes liable to repay the moneys received or has a claim to recover amounts paid together with repayment of the former and recoveries of the latter. Remittances embrace all transactions which are taken to merely adjusting heads of amounts, the debits or credits under which are eventually cleared by a corresponding credit or debit either within the same or in another circle of accounting.

DDR HeadsRTI Allahabad8 Sectors in Public Account Sectors in Public Account are the same on both Receipts and Payment sides. These Sectors are: I-Small Savings, Provident Funds, etc; J-Reserve Funds; K-Deposits and Advances; L-Suspense and Miscellaneous; M-Remittances; N-Cash Balances.

DDR HeadsRTI Allahabad9 Suspense Heads If the correct classification of transactions is not known, when it occurs, it is temporarily put under suspense pending adjustment under the correct head after ascertaining the correct classification.

DDR HeadsRTI Allahabad10 Major Heads The major heads in Public Account are assigned the code numbers from 8001 to The minor heads are also given code numbers as per the List of Major and Minor Heads of Account.

DDR HeadsRTI Allahabad11 Closing Balances In Government Accounts, the balances under Revenue Receipt Heads, Capital Receipt Heads, Revenue Expenditure Heads, Capital Expenditure Heads, Inter-State Settlement Head, Transfers to Contingency Fund Head, Sinking Fund-Appropriation for Reduction or Avoidance of Debt, Miscellaneous Government Account Head at the end of the year are not carried forward to the next year’s account but are closed to Government Account.

DDR HeadsRTI Allahabad12 Closing Balances On the other hand, the balances under Public Debt, Loans and Advances Head in the Consolidated Fund and the balances under different heads of account in the Public Account all close to a balance and not to Government Account.

DDR HeadsRTI Allahabad13 DDR Heads The balances under the above heads are either credit balances or debit balances. If there are credit balances, they represent liabilities of the Government (i.e. something has been received to be repaid later) and if they are debit balances they represent assets of the Government (i.e. some thing has been paid out from Government account and has to be recovered in future).

DDR HeadsRTI Allahabad14 Small Savings, Provident Funds, etc The accuracy of balances under Provident Funds and other small savings schemes is to be assured. This is done by reconciliation in stages as under:

DDR HeadsRTI Allahabad15 Small Savings, Provident Funds, etc The Total of Provident Fund deductions in each salary bill or otherwise deposited in bank/treasury is agreed with the deduction schedules attached with the salary bill or treasury challans. Individual deductions shown in the salary is agreed with the individual amount shown in the deduction schedule. The postings in the individual ledger account from the deduction schedules are individually checked.

DDR HeadsRTI Allahabad16 Small Savings, Provident Funds, etc The total of the monthly postings of credits/debits in the individual ledger accounts, disbursing officer-wise, is agreed with the total of credits/debits under the Provident Fund in the accounts of the month. After the end of the year, interest is calculated for each ledger account, the total of credits of interest posted in each ledger account is agreed with the total amount credited to the Provident Fund Head in the accounts of the year by debit to the interest head of account.

DDR HeadsRTI Allahabad17 Small Savings, Provident Funds, etc The total of the closing balance at the end of the year in individual ledger accounts is agreed with the balances under the Provident Fund Head in the accounts of the year. The closing balances at the year end in individual small savings or provident fund accounts are communicated to the individual account holders for their confirmation of balances or for them to indicate variations/ differences, if any.

DDR HeadsRTI Allahabad18 Reserve Funds Government can create Reserve Funds for specific purposes by setting aside certain amounts out of the Consolidated Fund for those purposes in the budget and the moneys in these funds are committed to the specified purposes and can be applied to the said purpose. There are some Reserve Funds, which bear interest, and others which do not bear interest.

DDR HeadsRTI Allahabad19 Reserve Funds Reserve Funds created out of transfers from commercial concerns of the Government bear interest. Government pays interest on the balances in Reserve Funds bearing interest. These funds are supposed to close annually with credit balances, i.e. the funds should have some balances which are payable by Government. Any debit balances in these funds are to be investigated to ascertain and rectify any misclassification in accounts or any over- adjustment of expenditure to be met on the specified purposes from the said fund.

DDR HeadsRTI Allahabad20 Reserve Funds Non-interest bearing funds are created by budgetary allocations from the service head concerned in the Consolidated Fund. They are intended to be used for the purposes for which they are created. The expenditure on such purposes is duly provided for and accounted under the relevant head of account in the Consolidated Fund and expenditure to the extent met from the Reserve Fund is shown under the same head of account as ‘deduct expenditure met from ---- Reserve Funds’. Thus, allocations from the Consolidated Fund to the Reserve Funds and also the expenditure met from these funds come under the purview of Parliamentary Control.

DDR HeadsRTI Allahabad21 Deposits and Advances Deposits are also of two types, those bearing interest and those not bearing interest. Interest bearing deposits are generally those from public or from commercial organizations. The interest on these deposits is charged to the Interest Head in the Consolidated Fund. The surplus balances available under the Deposits are used by Government to meet its fiscal requirements.

DDR HeadsRTI Allahabad22 Deposits and Advances The balances under the deposits are payable back to the depositors’ concerned and detailed accounts (individual accounts) of deposits are maintained either by the departments themselves or by the Accounts Office. There should be credit balances under the Deposit Heads. Any debit balances under the head indicate possible misclassification of transactions or overpayments of deposits.

DDR HeadsRTI Allahabad23 Deposits and Advances Non-interest bearing deposits, like Civil/Criminal Court Deposits, Security Deposits, etc., do not bear any interest. These deposits heads have credit balances. Any debit balances in the heads indicate possible misclassification of transactions or overpayments, which need to be investigated. Advances are moneys paid by Government, which are recoverable. Advance Head close with a debit balances, any credit balance indicating possible misclassification of transactions.

DDR HeadsRTI Allahabad24 Suspense and Miscellaneous Under suspense heads are recorded all such transactions as are ultimately removed either by payment or recovery in cash or by book adjustments. Use of suspense heads for provisional adjustment of transactions ultimately adjusted under ordinary revenue and service head should be avoided as far as possible. Transactions under suspense heads should be scrutinized to see that:

DDR HeadsRTI Allahabad25 Suspense and Miscellaneous the unadjusted balances under these heads continue to represent bonafide assets or liabilities of Government capable of being realized or settled as the case may be; and satisfactory action towards such realization or settlement is being taken by officers responsible therefor.

DDR HeadsRTI Allahabad26 Suspense and Miscellaneous All balances under suspense heads must be reviewed at short intervals to ensure that no item remains unadjusted longer than is reasonably necessary to bring about its clearance in the ordinary course with due regard to the rules applicable to each case.

Instances: (i) On receipt of account from treasuries all the transaction initially kept under DAA Suspense. During compilation of treasury account, if vouchers are found missing in respected bundles, are kept under OB Suspense. The amount kept under OB Suspense simultaneously cleared and finally transferred to relevant head of account on receipt of details of missing vouchers from concerned department/treasury through transfer entry screens, provided in VLC package as under:- DDR HeadsRTI Allahabad27

Screenshot Capturing Transfer Entry DDR HeadsRTI Allahabad28

(ii) On receipt of account from RBI all the transaction initially kept under Central Administrative Office (HQ) Suspense. The amount kept under abovementioned Suspense are simultaneously cleared and finally transferred to relevant head of account on receipt of detailed information/sanction orders/ GOs from concerned ministries etc. through transfer entry screens, provided in VLC package as above. DDR HeadsRTI Allahabad29

DDR HeadsRTI Allahabad30 Verification of balances Besides bringing the transaction to account in the year of their occurrence, in case of payments subject to recovery, the Accountant General should watch that the debtor regularly repays the moneys.

DDR HeadsRTI Allahabad31 Verification of balances The accounts of the year are not complete until the balances in the ledger under the Debt and Deposit Heads and the outstandings under the Remittance Heads have been reviewed and duly verified.

DDR HeadsRTI Allahabad32 Remittance Check Register Maintained to watch remittances between: –Treasuries; –Treasuries and currency Chests; –Reconcile the debits and credits appearing in one treasury/cash chest and those appearing in the corresponding treasury/cash chest; –Reconcile the figures with the RBI figures.

DDR HeadsRTI Allahabad33 Borrowings The Union can raise money by borrowing upon the security of the Consolidated Fund of India within such limits, if any, as may from time to time be fixed by Act of Parliament. Similarly, a State may borrow within the territory of India upon the security of the Consolidated Fund of the State within such limits, if any, as may from time to time, be fixed by the Act of the Legislature of the State.

DDR HeadsRTI Allahabad34 Borrowings It is an important duty of the Accountant General (A&E) to see that borrowings of a State Government are so regulated as not to exceed the limits fixed by the Legislature and that the conditions laid down by or under any Act of Parliament are duly observed in respect of a loan granted by the Government of India to a State or guaranteed by it.

DDR HeadsRTI Allahabad35 Borrowings In the case of loans raised by a State which can be done only within the territory of India or obtained by it from the Government of India, it should be watched that any conditions imposed by the latter Government in giving consent to raise a loan or in giving a guarantee in respect of a loan are duly complied with by the State Government are followed.

DDR HeadsRTI Allahabad36 Borrowings In relation to borrowings it should be seen that the proceeds of loans are properly brought to account. It should also be seen whether adequate arrangements are made by Government for authorization of debt particularly in cases where borrowed moneys are utilized on objects or works which cannot be regarded as productive and should bring to notice instances in which amortization is ignored or appears to be prima facie inadequate.

DDR HeadsRTI Allahabad37 Investments Accountant General should keep a watch over investment of funds forming part of the Public Account of the State. It should be seen that the investments made on account of any regularly constituted Sinking or other fund administered by the Government are of the category authorized by the statutory provisions by which the fund is governed. When there is no governing statutory provision of instrument, proper authority for the investment should be called for.

DDR HeadsRTI Allahabad38 Investments This principle also applies to investment of Cash Balances of State Government. The Accountant General should promptly take up with the Government any of the investments which he considers to be unauthorized, irregular or unsound. Any ascertained losses connected with investments on unusual depreciation in the market price of any investment should also be reported to Government in a suitable manner with such comments as the Accountant General may think fit.

DDR HeadsRTI Allahabad39 Contingent Liabilities on account of Guarantees Under the Constitution, the Union and States are empowered to give guarantees in respect of loans raised by others within such limits as may be fixed from time to time by law. Such guarantees constitute contingent liabilities of Government and it is an essential duty of the Accountant General (A&E) to keep a close watch over the guarantees given by the State to see that:

DDR HeadsRTI Allahabad40 Contingent Liabilities on account of Guarantees limits prescribed by the Legislature are not exceeded. total amount of such guarantees as also the amount of guarantees invoked during the year should be mentioned in the report on the accounts of the State. that any general or special orders issued by the Government for levying a commission for giving a guarantee are duly observed.

DDR HeadsRTI Allahabad41 Sinking Funds Created for redemption of loans raised by the Government; Accountant General should satisfy himself that credits to these funds are in accordance with the undertakings given by Government and set forth in the prospectus of the loans and that payments are eventually utilized for the purpose for which the funds themselves were created.