Accounting & Financing in po 1.6

Accounting network of Post Offices Postal Account office Responsible for incorporating account of all HOs in circle Head Post Office Supplies cash, stamp, IPOs, certificates, passbooks, recpt bks Consolidation of account of subordinate offices Sub Post Office SO is placed in account with HO Branch Post Office Having limited powers of Saving Bank and Booking of postal articles Can be directly under Sub Office which is called its Account Office Submits its Daily A/C to Head Post Office Submits Daily Account to its account office i.e. SO Sub account branch of account office monitors its functioning Consolidate the transactions of BO also into its accounts Submits returns and accounts to concerned PAO 1.6

ACCOUNTING NETWORK PAO HO SO BO 1.6

Receipt and opening of BO Bag at AO Mail PA receives bags from various sources Hands over BO bag to treasurer Treasurer examines the condition, opens it in the presence of Sub Account PA Gives acquittance for cash bag in BO daily account Returns all documents to Sub account PA Rule No 68 & 69 of PO Manual Volume VI Part-III 1.6

Receipt and opening of BO Bag at AO Sub Account PA to: - Examine if all the documents are correctly received - Distributes the contents to respective branches. 1.6 Rule No 68 & 69 of PO Manual Volume VI Part-III

Distribution of contents Description of articles Unpaid station article, if any Paid station articles Other unregd.articles Regd.and VP articles Handed over to- SPM Delivery PA Sorting PA Registration PA 1.6 Rule No 68 & 69 of PO Manual Volume VI Part-III

Distribution of contents Parcel and VP parcel MO s booked(for re-booking) MO s paid vouchers Parcel PA MO issue PA MO Paid PA 1.6 Rule No 68 & 69 of PO Manual Volume VI Part-III

Distribution of contents SBPA SPM Retained by SAC PA SB/RD/TD vouchers and documents Acquittance rolls BO daily account 1.6 Rule No 68 & 69 of PO Manual Volume VI Part-III

Exercise 1 Exercise 2 1.6

Checking of BO Daily A/C Should ensure that— Cash from BO acknowledged by treasurer Cash remitted to BO taken into account Date stamp impression Opening balance is correct The account tallies with documents such as MO issue, MO paid, SB deposit etc. Details of closing balance agrees with account Cash and stamps retained within the limits Signature of BPM 1.6 Rule No 68 of PO Manual Volume VI Part-III

Rule No 73 & 74 of PO Manual Volume VI Part-III BO SUMMARY A consolidation of BO daily account at AO Maintained by AO, having BOs One line for each BO Transactions posted - Opening balance - Receipts - Total of Receipts - Payments - Total of payments - Closing balance - Transit 1.6 Rule No 73 & 74 of PO Manual Volume VI Part-III

Index to Branch Office receipt Maintained by Account Office. Whenever Branch Office receipt is used by Branch Office it is noted against the name of Branch Office under corresponding date It is maintained in prescribed format month wise. Account Office to watch continuity of receipts used by Branch Office. 1.6 Rule No 71 of PO Manual Volume VI Part-III

Index to Branch Office receipt Particulars of receipt books supplied to Branch Office should be noted against the name of Branch Office under corresponding date Similarly, Index to Branch Office receipt is to be maintained for other type of receipt books used by Branch Post Master. Viz.SB26, TRC, RPLI, SB28 etc. 1.6 Rule No 71 of PO Manual Volume VI Part-III

Purpose of preparing BO Slip To acknowledge the closing balance of BO for previous day w.r.t BO summary To invoice accountable articles/Money orders/documents to BO’s To Advice remittance, if any; - Cash - Stamps To Instruct BPM about irregularities if any Rule No 27 & 63of PO Manual Volume VI Part-III 1.6 PPT 7.1.20

Preparation Of BO Slip… Prepared by SA PA at AO Prepared in duplicate by carbonic process Particulars of other accountable articles, MOs, MO receipt after booking, RLs, RPs, SB documents etc. are invoiced 1.6 Rule No 27 & 63of PO Manual Volume VI Part-III

Preparation Of BO Slip… Sub accounts PA to enter weight of cash bag & invoice the same in BO slip Treasurer to initial remittance entries SA PA to sign and date stamp 1.6

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Procedure for closing of cash bag Obtains the orders of SPM/PM for remittance on reverse of BODA Shows the order to treasurer & obtains his initials Completes all the entries in the BO slip, except weight of cash bag 1.6

Procedure for closing of cash… Treasurer notes orders of PM on daily account Take correct cash and close it in cash bag Seals cash bag with treasury seal and hands over to SA PA for weighing. SAC watches closing of cash bag by treasurer 1.6

Procedure for closing of cash bag… Weighs cash bag in the presence of treasurer & notes weight on label of cash bag and both copies of BO slip Obtains initials of Treasurer on both copies of BO slip Puts documents and cash bag (by treasurer)inside BO bag , closes it & seals it & transfer to Treasurer for safe custody 1.6

Procedure for closing of cash… Observes SA PA weighing cash bag Initial entry of remittance & weight of cash bag in BO slip Keep cash bag inside BO bag Keep sealed BO bag in his custody till despatch 1.6

Preparation of Sub Office Daily Account As per list & vouchers of various branches SPM prepares SO Account SO Daily account is prepared w.r.t SO Account by SPM Previous day’s closing balance is taken as opening balance for the day Receipts & Payments taken as per Sub Office Account Rule No:29 of Postal manual Volume : VI Part -II

Preparation of Sub Office Daily Account Closing balance written in words & figures Details of closing balance, particulars of authorized balances & liabilities noted Reason for retention of excess cash should be noted Reason for cash below minimum & for excess stamps should be noted Particulars of cash and stamp remittances received & made should be noted Rule No:29 of Postal manual Volume : VI Part -II 1.6

Preparation of Sub Office Daily Account Particulars of document sent should be noted on reverse side Requirement of Stamps, Cash noted in the remark column Signed by joint custodian and SPM Impressed with Name stamp & date stamp Rule No:29 of Postal manual Volume : VI Part -II 1.6

Serious irregularities in SO Daily Account Date stamp of office impressed with wrong type fixed. Total of closing balance not written both words and figures Cash retained excess without liability Reason for retaining cash excess/short Amount due from BO differs with reference to actual figures in the BODAs Authorized balance shown wrongly 1.6

Serious irregularities in SO Daily Account… Authorized BO aggregate balance shown wrongly. ECB SO ECB not prepared BO ECB not prepared No.assigned to ECB differs Red ink entry particulars wanting on the day of account ending 1.6

Serious irregularities in SO Daily Account… Remittance Particulars of remittance not furnished Particulars of remittance furnished wrongly Receipts of special carrier is wanting Balance of initial credit/additional credit wanting Particulars of cheque against which cash drawn from bank wanting 1.6

Serious irregularities in SO Daily Account… Wrong calculation of interest in NSC/KVP discharge. Will follow vouchers Daily account is prepared by other than SPM Signature of SPM/Joint custodian is wanting. 1.6

Exercise 3 1.6

Cash Management 1.6

Excess Cash Balance Memo (E C B) 1.6

MAB and CMAB MAB: Authorised balance of cash and postage stamps of a post office, issued by Divisional Superintendent CMAB: Consolidate list of MAB of SOs under a HO and BOs under a SO, issued by Divisional Superintendent 1.6

Excess Cash Balance Memo Whenever Cash balance is kept in excess of authorized minimum cash balance SPMs have to note amount of liabilities in their Daily account Whenever Cash balance is kept in excess of authorized maximum cash balance in addition to above action SPMs to prepare ECB in PA-20 and submit to HO 1.6

Excess Cash Balance Memo… SPMs of status LSG and above need not prepare this ECB memo This is one of the preventive measures to avoid commission of frauds in Sub Offices and BOs ECB contains two parts 1. ECB for Sub Office 2. ECB for Branch Offices 1.6

It contains following information ECB for Sub Office Whenever SO Cash balance is kept in excess of authorized maximum cash balance SPMs to prepare ECB It contains following information Authorized Cash balances Cash balance held on that particular day Excess cash held Explanation for excess retention of cash 1.6

Any other reason for excess retention of cash ECB for Sub Office… SPM to furnish details of MO, Savings Bank/ Savings Certificates, Acquittance rolls by referring basic records of office The particulars of late collections, late receipt of remittance from other offices to be furnished Any other reason for excess retention of cash 1.6

ECB memo should be given monthly serial number and signed and stamped ECB for Sub Office…. ECB memo should be given monthly serial number and signed and stamped 1.6

SPM to furnish explanation for retention of excess cash by each BOs ECB for Branch Offices Whenever total of CBs of all BOs is more than authorized BO aggregate balances , ECB for Branch Offices to be prepared SPM to furnish explanation for retention of excess cash by each BOs 1.6

ECB for Sub Office… SPM to furnish SPM to sign the ECB Cash held, amount of liability of those BOs which are responsible for excess retention of cash w.r.t BO daily account and mention his remarks of justification or otherwise SPM to sign the ECB 1.6

Whether ECBs are properly serial numbered Action on ECB A watch should be kept at HO whether ECBs are being prepared by SPMs wherever justified Whether ECBs are properly serial numbered HPM to check SO ECB memo w.r.t basic records of HO maintained in respective branches and pass his remarks whether explanation is satisfactory or otherwise 1.6

Action on ECB…. HPM to check BO ECB w.r.t BO daily accounts and satisfy himself that remarks of SPM against each BO is justified or other wise. HPM to pass his remarks and sign. All ECBs are stitched in a bundle stamped and submitted to Divisional Office on following day. 1.6

ECB is finally filed at Divisional Office. Action on ECB…. In DO ECB is scrutinized by Divisional Supdt. Or Asst.Supdt daily and pass his remarks as to whether it should be got enquired through concerned sub divisional IPs ECB is finally filed at Divisional Office. 1.6

Other important documents and records at HO SO Summary Treasurer cash book HO Summary HO Cash book & PM’s Balance sheet Monthly cash account 1.6

SAPA prepares SO slip to dispatch to SOs SO Summary SO Summary is maintained by HO Sub Account PA on par with BO summary that we have discussed already in two parts viz, Part I Part II SAPA prepares SO slip to dispatch to SOs 1.6

Preparation of SO Slip (PA-3) Sub Account PA in HO prepares SO slip - Enters all documents - Enters closing balance - Includes all contents Sub Account PA shows to treasurer, the orders of PM for remittance Treasurer closes cash bag as discussed earlier Sub Account PA closes account bag 1.6 Rule No 18 of PO Manual Volume VI Part-III

Treasurer’s Cash Book- Form ACG 2 Shows entry of cash, stamps and cheques Maintained in the treasury Treasurer should make all entries Make entries as and when transactions occur Number transactions serially 1.6

Treasurer’s Cash Book- Form ACG 2 Entry of book transfers not to be made Enter the name and designation of the official with the amount Obtain acquittance both in words and figures when money is paid All payment is to be authorized by the HPM/Supervisor 1.6

Treasurer’s Cash Book- Form ACG 2 Hand over cash to official directly and not through any third person Both the side of TCB totaled for the day and balanced Closing balance be written in words Book should be signed by treasurer and HPM 1.6

Treasurer’s Cash Book- Form ACG 2 Closing balance should agree with the total “particulars of closing balance” of HO summary Draw a line below the closing entries of each day 1.6

HO Summary (ACG-1) Account of cash receipts and disbursements of HO- maintained in two parts viz, Part I Part II Balance of HO summary will comprise of; i.Cash on hand ii.Postage stamps iii.Revenue stamps iv.Other stamps v.Amount of late IMT payment which is not accounted for 1.6

Head Office Summary (ACG-1) Total of i.to iv should agree with the daily balance of the TCB Out of account cash details IPOs of all denominations, Insured articles in the safe custody, and number of account bag or sealed cash bags received To be signed both by Head Postmaster and Treasurer 1.6

Head Office Cash Book Maintained in two parts viz, Part I Part II Total of HO, SO and BO will be added together Progressive totals struck from 1st to the end of the month 1.6

HO Cash Book (Receipt) Items 1 HO As per HO summary 2 SOs as per SO summary 3 Bos as per BO summary 4 Total HO,SO,BO 5 Previous days total 6 Progr-essive total 7 Unpaid 50 10 - 60 290 350 MO issue 8500 4250 12750 30475 43225 GT 101060 50530 151590 1.6

HO Cash Book (Payment) Items 1 HO As per HO summary 2 SOs as per SO summary 3 Bos as per BO summary 4 Total HO,SO,BO 5 Previous days total 6 Progre-ssive total 7 MO paid 15520 7760 - 23280 45670 68950 BP 250 25 275 670 945 GT 84480 43465 127945 1.6

Postmaster’s Balance Sheet At the bottom of HO cash book balance sheet will be prepared. The object of the postmaster’s balance sheet is to work out reconciliation between the HO cash book and TCB, actual balance of SOs, BOs and transit Balance sheet will be written by Head postmaster personally and must sign the certificate at the foot 1.6

Postmaster Balance sheet 1 Opening balance 28650 2 Total receipt as per col.5 of HO cash book 151590 3 Total (1 plus 2 above) 180240 4 Total payment as per HO cash book 127945 5 Closing balance (3 minus 4) 52295 6 Deduct balance in SOs and BOs 19065 7 Net Balance of Cash and stamps in HO (5 minus 6) 33230 1.6

Details of CB in SOs & BOs 1 CB as per SO summary 16615 2 SO transit as per so summary 2450 3 CB as per BO summary - 4 BO transit as per BO summary 5 Total 19065 1.6

Submission of Cash Account to PAO 1st of each month cash account of HO for the previous month will be submitted in the prescribed form to the postal accounts office 1.6

FINANCING OF POSTOFFICES 1.6

Financing of PO-Principles Cash should be available to meet demand Not to be held in excess of demand Easy Mode of Clearance of cash Getting of cash Security arrangement In collecting office minimum kept 1.6

Financing of PO-Principles… In other offices normally minimum plus liability to be kept Liabilities exceed maximum balance, cash equal to actual liability to be kept Liabilities includes MIS interest, matured NSC/KVP can also be foreseen 1.6

Fixing of authorized balances On the basis of cash handled by an office Cash receipts Cash payments This can be arrived at by collecting four quarterly months statistics as discussed in next slides 1.6

Collection of statistics Suppose you are visiting a SO today (1.6.2013), then the statistics for the following months are collected August 2012 November 2012 February 2013 May 2013 1.6

Collection of statistics -Receipt side Total of all columns in SO account except the following Opening Balance column Cash received from cash office Book adjustment items Cheque transaction 1.6

Collection of statistics –Payment side Total of all columns in SO account except the following Cash remitted to cash office Book adjustment items Payment by cheques Closing balance column 1.6

Fixing of authorized balances…General Rule Three type of offices will be there Collecting office Paying office Office where receipt & payment equal Minimum normally average requirement + 25% Maximum normally 1.5 times of minimum 1.6

Fixing of authorized balances…other points Time required to replenish or clear cash Safety arrangements for cash Line limits for remittance Whether the office is Collecting office Paying office Both equal 1.6

Fixing of authorized balance (collecting office) Minimum cash 50% of daily average payment (Bank transaction) Daily average payment + 25% Maximum Min + {(difference betn receipts & payments) x No.of days required for remittance to remove surplus cash} 1.6

Fixing of authorized balance.(Paying office) Minimum (Daily average payment x No.of days for rem) + 25% Maximum Min + {(Daily payment-Daily receipts) x No. of days for remittance} 1.6

Fixing of authorized balances Receipts & Payments are equal Minimum Daily average pmt + {(difference between receipts & pmts) x No.of days for remittance} Maximum Min + {(difference between receipts & pmts) x No.of days for remittance} 1.6

Fixing of authorized Stamp balances SO/BO Daily average sale of PS x 15 Head Office Daily average sale x (30 + transit from CSD to HO) Daily average = (HO Sale + Supply to SOs +Supply to BOs) 1.6

Exercise- 4 1.6

Line – limits Loose cash upto Rs.2 lakhs by any departmental employee. In case of deptl. MMS with and MTS, the limit is Rs. 2 lakhs in cash bag enclosed in account bag. In case of hired MMS(exclusive MMS), the limit is Rs. 1 lakh in cash bag enclosed in account bag. ( this limit is applicable to RMS section also.) In case of weighment system, road transport, in account bag, the limit is Rs.40,000/ 1.6

Line-limits For loose conveyance of above Rs.2 lakhs, remittance should be only accompanied by police guard or private guard. These limits are applicable to branch offices, irrespective of foot, cycle or mechanised routes. 1.6

Suggestions to reduce cash handling Deposits by cheque or DD Payment by cheque Automatic transfer to POSB account Reinvestments Payments credited to POSB account TRC by cheque 1.6

Security vigilance on cash by IP MAB -Memo of Authorized Balance CMAB -Consolidated Memo of Authorized Balances MR -Monthly Report 1.6

Security vigilance on cash by IP… ECB Memo -Excess Cash Balance Memo BO Abstract and MO payment 1.6

Thank You 1.6