Government of Orissa Panchayati Raj Department Overview of Model Accounting System for Panchayats Simplified Accounting Structure for PRIs

Why Model Accounting System ? One of the item of e-PRI (Mission Mode Project [MMP] under National e-Governance Plan [NeGP]). Recommendations of C & AG and MoPR. TFC incentives Grant  Performance based Grant Conditions for getting Rs.897 crores

Wherewithal IT Infrastructure  All Block Panchayats computerised : 11 th FCA  All Gram Panchayats computerised : 12 th FCA Manpower  Qualified I T professionals : 11 th FCA/ 12 th FCA e-Connection  All Block Panchayats connected : GRAMSAT  Additional Connectivity : BSNL VPN

Precursor PAMIS Accounting Software  Implemented as a trial version in ZP/BP for maintenance of Accounts  Advantages of the application »Follows double-entry accounting system »Daily transactions can be captured »Can be customised as per accounting requirements  Shortcoming in the application »No Standard Budget Head concept »Standalone version »Lack of security in the data-storage »Not in the public domain. »Can’t be integrated with NREGSoft, PlanPlus, AwasSoft at National Level.

Rational for PRIASoft Based on Standard Head of Accounts Concept Complies to C& AG formats Standard formats(8) prescribed by C&AG for al level of PRIs Web based software application developed by NIC at National Level.

Need of Standardised Formats Preparation of Budget. Analysis of Expenditure. Maintenance of Accounts. Self disclosure of financial transactions. Reporting for Auditing.

What is New? 3-Tier Classification: Simple, robust, and easy to use. Generation of Financial Reports through computers 2-Part Accounts:  Part-I: Receipts & Expenditure  Part-II: PFs, Loans, Deposits, Advances, etc.

3-Tier classification Major Head: 4 digit Relates to ‘Functions’ given in 11 th Schedule 23 Major Heads 1 st tier Minor Head: 3 digit Programes/ Unit within ‘Functions’ 2 nd tier Object Head: 2 digit Activity (Item of Receipt/ Expenditure) 3 rd tier

9/6/2015 CAG of India Part-I –Panchayat Fund ReceiptsPayments Revenue Receipts (0-1)Revenue Expenditure (2-3) - Tax Receipts *Taxes on Profession, Land revenue, etc Interest payment Maintenance of Community Assets, etc -Non-Tax Receipts * Interest eared, etc Capital Receipts (4000) -Other Receipts (800) Capital Expenditure (4-5) Part-II -Loan Section - Provident fund & Pension -Insurance -Civil Deposits & Advances - Suspenses Accounts

9/6/2015 CAG of India Part-II –Provident fund & etc Receipts ( )Payments ( ) Loan Section -Loan Section-7610 Pension & Provident Section - Provident fund & Pension (8009) Insurance & Pension Section -Insurance (8011) Deposits & Advance Section -Civil Deposits (8443) -Civil Advances (8550) Suspense Account - Suspense Accounts (8658) Loan Section -Loan Section-7610 Pension & Provident Section - Provident fund & Pension (8009) Insurance & Pension Section -Insurance (8011) Deposits & Advance Section -Civil Deposits (8443) -Civil Advances (8550) Suspense Account - Suspense Accounts (8658)

9/6/2015 CAG of India Central Schemes assigned 2-digit sub-heads & State Scheme Alpha-numeric 2-digit subhead: Exception to 3-Tier ReceiptsPayments Grants in aid2210-Health and Sanitation 101-Grants from GOI 101-Primary Health Centre 15- NRHM 796-Tribal Sub-plan 789-SC Sub-plan 700-Normal Plan 02-wages (object head)

Structure of Budget Head Three layer Budget Head for receipt of Grants-in-Aid –First 4-digit classification - major head represent function –Second 3-digit classification - minor head represent the programme of expenditure. –Third 2-digit subhead only for schemes when it exits. Contd..

Structure of Budget Head Four layer Budget Head for expenditure –First 4-digit classification - major head represent function –Second 3-digit classification - minor head represent the programme of expenditure. –Third 2-digit subhead only for schemes –Fourth 2-digit (00 to 99) - object head - represent the object item of expenditure (activity).

Major Heads Agriculture Soil and Water Conservation Minor Irrigation Animal Husbandry, Dairying, Poultry and Fuel and Fodder Fisheries Forestry and Minor Forest Produce Village and Small Scale Industries Rural Housing Water Supply and Sanitation Animal Husbandry, Dairying, Poultry and Fuel and Fodder Transportation Rural Electrification Non-conventional Sources of Energy Poverty Alleviation Programme Contd..

Major Heads Education Technical Training and Vocational Education Art, Culture and Libraries Market and Fairs Health and Family Welfare Water Supply and Sanitation Women and Child Welfare Social Security and Welfare Welfare of Scheduled Castes, Scheduled Tribes and Other Weaker Sections Public Distribution System Maintenance of Community Assets Interest Receipts/Payment Pension and Other retirement benefits Panchayati Raj Programmes

3-Tier Classification Major Heads: –23 Major Heads to cover 29 functions –New Major Head: ‘2206 –Market and Fairs’ Schemes: –Major GoI Schemes: Standardised 2-digit subheads. –State Schemes: 2-digit alpha-numeric subhead Object Heads: –Standardized object heads for common types of expenditure (27) –Additional object heads: can be opened by Panchayats

Standardised Sub-Heads for Some Central Schemes Scheme Code (Sub Head) Scheme Description 11Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) 12Sampoorna Gramin Rozgar Yojana (SGRY) 13Swaranjayanti Gram Swarozgar Yojana(SGSY) 14Indira Awas Yojana (IAY) 15National Rural Health (NRHM) 16Accelerated Rural Water Supply Programme (ARWSP) 17Total Sanitation Campaign 18Mid Day Meal Scheme 19Sarva Shiksha Abhiyan 20Pradhan Mantri Gram Sadak Yojana (PMGSY) 21Integrated Watershed Management Programme 22Integrated Child Development Services (ICDS)

Standardised Object Head 01Salaries (1) 02Wages 03 Overtime Allowance 04 Pensionary charges 05 Honoraria 06 Medical treatment 07 Travel Expenses 08 Office Expenses (2) 09 Rent, Rates and Taxes 10 Audit Fee 11 Printing 12Other Administrative Expenses 13 Supplies and Materials 14 Petrol/Diesel 15 Advertising and Publicity 16 Other Contractual Services 17 Grants – in – aid 18 Contributions Contd..

19 Subsidies 20Share of taxes / duties 21Motor Vehicles/hiring charges 22Machinery and Equipment 23Major Works 24 Write off / losses 25 Deduct recoveries 26 Maintenance 80Other Expenditure Standardised Object Head

Salaries: includes in these object head (i) Pay of officers, (ii) Dearness pay of officers, (iii) Dearness Allowance of Officers, (iv)Pay of establishment, (v) Dearness pay of establishment, (vi) Dearness Allowance of establishment, (vii) Bonus, (viii) Interim relief, (ix) Other allowances (CCA, HRA & other fixed allowances), (x) Children education allowances, (xi) LTC, (xii) Transport allowance. Other Expenses (2) includes in these object head (i) Local purchase of stationery, (ii) Liveries, (iii) Telephone & trunk calls, (iv) Furniture, (v) Service postage stamps, (vi) Purchase of books & publications, (vii) Office expenses and miscellaneous, (viii) Staff car, (ix) Water cooler, (x) Typewriter, (xi) Purchase of accounting machine, (xii) Charges paid to the State Government for Police Guards, (xiii) Hot and cold weather charges, (xiv) Electricity & water charges, (xv) Purchase of photo copier, (xvi) Purchase of computer & laser printer. Items included in Salary & OE

PART II - Other Heads 7610 Loans to Panchayat Employees 8009 Provident Fund 8011 Insurance 8443 Civil Deposit 8550 Civil Advances 8658 Suspense Accounts 4000Capital Receipts Capital Heads relate to Revenue Heads

Preparation of Accounts Budget in prescribed (new 3-tier) classification. Accounts : Initially accounts are to be prepared on cash basis. Built in features: Subsequent switching over to accrual system. Period of accounts : Financial year. (1 st April ending 31 st March) Provision for all prescribed (8) Report formats. ICT has the key role in adopting these formats. Data/ Reports through IT Applications, PRIASoft developed by NIC

Simplified Accounting Procedure: a)The accounts are prepared on cash basis i.e. a transaction is only recorded when cash is received or paid. b)Period of accounts is a financial year as a period of 12 months ending 31st March in any year. c)Daily transactions shall be recorded in Cash Book. –The receipts be recorded on receipts side and payments on payments side. –Every day the cash book shall be closed and Closing Balance worked out would then form the Opening Balance for next day. –Classification / head of account for each transaction shall be clearly mentioned. d)Every day the details of transactions as recorded in the cash book. ‒ Transferred to Register of Receipts if the transaction is receipts ‒ Transferred to Register of Payments if it is payment. Contd..

e)Bank Reconciliation:  At the end of the month the bank and treasury reconciliation should be completed.  Differences between cash book, bank and treasury balances are to be rectified.  Corrections should be made then & there in the Register of Receipts and Register of Payments.  Totals in Register of Receipts and Payments can be struck which would give the total expenditure under each head of account for the month.  Where PRIs and Bank / Treasury are computerized, online reconciliation with Bank/Treasury may be followed. Simplified Accounting Procedure: Contd..

Data Maintenance/ 8 - Formats 1.Format I : Monthly/Annual Receipts & Payment Accounts 2.Format II : Consolidated abstract register 3.Format III : Reconciliation Statement with Bank and Treasury 4.Format IV : Statement of Receivable and Payable 5.Format V : Register of Immovable of Property 6.Format VI : Register of Movable property 7.Format VII: Inventory Register 8.Format VIII: Register of Demand, Collection and Balance Above formats designed to facilitate Switch Over to Accrual System

Government of Orissa Panchayati Raj Department Thanks …. Simplified Accounting Structure for PRIs