Day 3 – Session: 3 Session Title : Preparation of Summary Statement Nos. 1 and 2.

Session Overview In this session, we will discuss about the preparation of the statements Nos. 1 and 2. Various sources from which the data for the Statement No. 1 and 2 are prepared will be discussed.

Learning Objective By the end of the session, we will be enlightened with the preparation of the statements Nos. 1 and 2 from the Consolidated Abstracts. How the information regarding Taxation Changes are collected from the State Government, the reasons for increase and decrease of Revenue Receipts and Revenue Expenditure are ascertained from the Budget Memorandum Vol. I of Next year and the data from Statement No. 11, 12, 13 and 16 are referred back for the confirmation of the figures entered in the Statement Nos. 1 and 2 will be discussed. Additional checks prescribed by the Headquarters for these two statements will be discussed along with the keys used for preparation of these statements. (Chapter 2 of MSO (A&E) – Vo. II)

Statement No.1 - Summary of Transactions This statement gives an account of the transactions of the year relating to the Consolidated Fund, Contingency Fund and the Public Account. Figures of the previous year are also depicted for comparative study. The statement also discloses the amount of Revenue Surplus/Deficit for the year. In the explanatory notes, particulars are shown regarding the nature and the quantum of the receipts from the Union Government and also the taxation changes made by the State Government are also projected. Important variation, if any, under Revenue receipts and Revenue Expenditure as compared to the actuals for the previous year are given explaining the reasons therefor. Format: Figures to be depicted in lakhs of rupees.

Additional checks to be exercised on “Statement No. 1” as prescribed by the Headquarters Office. (1)If the closing of cash balance is a minus figure a suitable note may be added to explain the reason for the minus balance. (2)If the closing cash balance with R.B.I. mentioned in the Finance Accounts differs from the figure intimated by the Reserve Bank, a foot note should be added. (3)A suitable footnote may be given in the Accounts if “Grants-in-Aid” is booked under Capital Expenditure instead of Revenue Expenditure.

Additional checks to be exercised on “Statement No. 1” as prescribed by the Headquarters Office (contd..) (4) Suitable footnotes may be given about: (a) Expenditure met out of advance from the Contingency Fund during earlier years and recouped to the Fund during the current year against 8000-Contingency Fund on receipt side. (b) Expenditure met of Advances from Contingency Fund during current year by not recouped to the Fund till the close of the year against 8000-Contingency Fund on payment side. (c) Any book transfers between Revenue Receipt and Revenue expenditure heads i.e. receipts shown under Interest Receipts by booking expenditure under 2701-Medium Irrigation and 2711-Flood Control.

Additional checks to be exercised on “Statement No. 1” as prescribed by the Headquarters Office (contd..) (5) In the Explanatory notes the following checks need to be exercised: (a) If the amount of extraordinary receipts realized by any Government every year is considerable and appears to be a continuous source of revenue, the nature of the receipts and the important factors affecting the revenue under this head may be elucidated. (b) Any significant variations in Receipt and Expenditure figures should be suitably analysed and reasons explained.

Statement No.2-Capital outlay during and to end of the year. Indicates the total expenditure incurred upto the end of previous year and expenditure incurred during the year under Capital Heads. In the explanatory notes, the details of investments made under various departmental institutions, proforma accounts to bring out the financial results of each undertaking is given. The details are given in Statement No.13. Format: Figures are in lakhs of rupees.

Additional checks to be exercised on “Statement No. 2” as communicated by Headquarters Office: (i)Progressive Capital Outlay to end of year (ii) Explanatory Notes (1)If balances shown in the column “expenditure up to previous year” differ from the figures in Statement 2 of the previous years Finance Accounts, reasons should be explained giving guide marks and footnotes. (2) Minus figure should be explained suitably.